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01/11 03:39
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The company shows stable financial performance with slight revenue growth and improved gross margins, but it still reports a net loss and negative EBITDA. The capital raise and investment shift towards sales could indicate potential growth, but lack of formal guidance and ongoing financial challenges introduce uncertainty. The Q&A section suggests confidence in sales strategy and customer acquisition, but management's unclear response on AOV pricing and the absence of a new partnership announcement keep the overall sentiment neutral. The market cap's absence prevents a more precise prediction.
Total Revenue $3.9 million, an increase from $3.8 million in the prior-year period.
Subscription and License Revenue $3.1 million, compared to $3.0 million in the prior-year period, representing 79% of total revenue.
Services Revenue $800,000, increased 4% from $800,000 in the prior-year period, accounting for 21% of total revenue.
Cost of Revenue $1.3 million, down 2% from $1.3 million in the prior-year period.
Gross Profit $2.6 million, an increase from $2.5 million in the prior-year period, with a gross profit margin of 68% compared to 66% in the prior-year period.
Subscription and License Gross Margins 72% for the quarter, compared to 71% in the prior-year period.
Services Gross Margins 52% for the quarter, compared to 47% in the prior-year period.
Operating Expenses $3.4 million, compared to $3 million in the prior-year period, including additional sales and marketing spend and some restructuring expenses.
Net Loss $700,000 for the quarter, compared to a net loss of $600,000 in the prior-year period.
Adjusted EBITDA Negative $239,000, compared to negative $83,000 in March '24.
Cash Over $2.7 million as of March 31, 2025.
Accounts Receivable $1.4 million as of March 31, 2025.
Total Debt Outstanding EUR 374,000 (approximately USD 406,000) with a weighted average interest rate of 3.8%.
Total Assets $17 million as of March 31, 2025.
Total Liabilities $6.4 million as of March 31, 2025.
Outstanding Shares 11.9 million as of March 2025.
Warrants 862,000 as of March 2025.
Options 2.1 million as of March 2025.
New Product Launches: HawkSearch expanded its Hawk AI feature set with the launch of Smart Conversation and a new Smart Response component that transforms traditional search into an interactive dialogue. Released Rapid UI 2.0 product, supporting the latest Hawk AI products including Smart Response and Smart Conversation. Launched a new software development kit for BigCommerce's Catalyst connector, enhancing capabilities within the BigCommerce customer base.
Market Expansion: Signed 20 licensed sales in Q2 FY '25, adding $1.7 million in new contracts and $700,000 in annual recurring revenue. Year-to-date, booked $4.2 million in contracts with $1.6 million in annual recurring revenue. Partnered with Shopware and Groove Commerce to integrate AI-powered search technology into their solutions for B2B merchants.
Operational Efficiencies: Sales cycle is 120 days with a 19% win rate on qualified leads. Achieved $4.2 million in contracts with less than $250,000 per quarter in ad spend. Marketing automation allows for increased lead generation without a large headcount increase.
Strategic Shifts: Conducted a $2.2 million capital raise to expand sales and marketing efforts. Doubling investment in ad spend to increase lead generation and sales. Focus on core products, with core revenue expected to grow significantly in FY '26.
Forward-Looking Statements: The company acknowledges that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from projections.
Economic Factors: Changes in economic conditions could impact Bridgeline's actual results, affecting revenue and growth.
Competitive Pressures: The company operates in a competitive market for AI-powered e-commerce solutions, which may affect its market share and pricing strategies.
Regulatory Issues: Potential regulatory changes could impact business operations and compliance costs.
Supply Chain Challenges: The company may face supply chain challenges that could affect product delivery and operational efficiency.
Sales and Marketing Investment: Increased investment in sales and marketing carries the risk of not achieving the expected return on investment, potentially impacting financial performance.
Net Loss: The company reported a net loss of $700,000 for the quarter, indicating ongoing financial challenges.
Debt Obligations: The company has total debt of approximately $406,000, which may impact financial flexibility.
Sales Growth: In Q2 FY '25, Bridgeline signed 20 licensed sales, adding $1.7 million in new contracts and $700,000 in annual recurring revenue.
Capital Raise: The Board and executive team led a $2.2 million capital raise to expand sales and marketing.
Marketing Investment: Doubling the investment in ad spend is intended to double the leads and in turn, double sales.
Product Development: HawkSearch expanded its AI feature set with Smart Conversation and Smart Response components.
Partnerships: HawkSearch partnered with Shopware and Groove Commerce to enhance its market presence.
Revenue Expectations: Expect core revenue growth to outpace noncore impact in Q1 for FY '26.
Sales Cycle Impact: Increased ad spend from April 2025 is expected to impact bookings in August 2025.
Market Position: Bridgeline is positioned for growth in 2026, expanding its reach in B2B e-commerce.
Financial Projections: Total revenue for Q2 FY '25 was $3.9 million, with subscription and license revenue at $3.1 million.
Gross Margin: Overall gross profit margin was 68% for Q2 FY '25, up from 66% in the prior-year period.
Capital Raise: Bridgeline's Board and executive team led a $2.2 million capital raise, which was straight common stock and above market.
Outstanding Shares: As of March 2025, the cap table included 11.9 million outstanding shares.
Warrants: The remaining 861,000 warrants consist primarily of 167,000 warrants with a $2.85 exercise price expiring in May '26 and another 592,000 warrants at $2.51 expiring in November 2026.
The earnings call reveals mixed signals: strong comprehensive income growth and asset increase are positive, but negative EPS and unclear guidance on key projects like the Christina Lake transition and data center expansions temper optimism. The Q&A highlights slow progress in strategic initiatives and management's vague responses, adding uncertainty. Given the lack of market cap data, the prediction is neutral, as positive financial metrics are offset by guidance issues and uncertainties in strategic execution.
The earnings call presents a mixed picture: stable total revenue, slight increase in subscription revenue, and consistent gross profit margins suggest a steady performance. However, the unchanged net loss and decline in adjusted EBITDA reflect financial challenges. The positive outlook for HawkSearch, including reduced sales cycles and increased ARR, balances concerns about reliance on partnerships and unclear management responses. The Q&A section highlights cautious optimism but lacks significant catalysts for strong stock movement. Overall, the sentiment is neutral, with potential for slight positive movement if HawkSearch growth materializes as expected.
Despite some positive aspects like increased subscription license revenue and strategic marketing adjustments, the overall sentiment is negative due to declining total revenue, increased net loss, and decreased gross profit margin. The Q&A section did not provide sufficient positive insights to counterbalance these financial challenges. The increased operating expenses, significant decline in adjusted EBITDA, and continued decline in services revenue further contribute to a negative outlook, suggesting a potential stock price decrease in the near term.
The earnings call revealed an EPS miss, lack of guidance, and concerns about sales conversion despite increased marketing spend. Analysts expressed skepticism about the timeline for revenue growth, and the absence of a share buyback program or dividend hikes suggests limited shareholder returns. These factors overshadowed the positive aspects such as new contracts and efficient ad spend, leading to a negative sentiment prediction.
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