Loading...
01/11 03:34
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Total Revenue $3.8 million for the quarter ended June 30, 2025, compared to $3.9 million in the prior year period, showing a slight decline. The decline is attributed to a decrease in services revenue, despite an increase in subscription license revenue.
Subscription License Revenue $3.1 million for the quarter ended June 30, 2025, compared to $3.0 million in the prior year period, reflecting an increase. This growth is driven by SaaS licenses, maintenance, and hosting revenue.
Services Revenue $700,000 for the quarter ended June 30, 2025, compared to $900,000 in the prior year period, showing a decline. The decrease is part of the reason for the overall revenue decline.
Cost of Revenue $1.3 million for the quarter ended June 30, 2025, compared to $1.2 million in the prior year period, showing a slight increase.
Gross Profit $2.5 million for the quarter ended June 30, 2025, with an overall gross profit margin of 66%, compared to 72% in the prior year period. The decline in gross profit margin is due to lower services margins.
Operating Expenses $3.2 million for the quarter ended June 30, 2025, compared to $3.1 million in the prior year period, showing a slight increase.
Net Loss $800,000 for the quarter ended June 30, 2025, compared to a net loss of $300,000 in the prior year period, reflecting a larger loss. This is due to increased operating expenses and lower gross profit margins.
Adjusted EBITDA Negative $330,000 for the quarter ended June 30, 2025, compared to positive $3,000 in the prior year period, showing a significant decline. This is attributed to the increased net loss and operating expenses.
Cash $2.1 million as of June 30, 2025.
Accounts Receivable $1.4 million as of June 30, 2025.
Total Debt Outstanding Under EUR 300,000 (approximately USD 348,000) as of June 30, 2025, with a weighted average interest rate of 3.4% and principal payments due through 2028.
HawkSearch: HawkSearch contributed to over 60% of total revenue with double-digit growth. It has a net revenue retention of 114% and is recognized as the #1 B2B search software provider by Gartner. New features like AI-powered Smart Search and Model Context Protocol (MCP) have been introduced, enhancing customer control and insights.
New Customers and Licenses: More than 20 new customers were added, and over 30 licenses were sold to existing customers, primarily for Hawk AI.
Do It Best Hardware Launch: HawkSearch was launched to power over 3,000 stores with real-time inventory and AI-enhanced search results.
Market Positioning: HawkSearch is ranked as the #1 B2B search software provider by Gartner, driven by its ability to solve complex sites at scale and deliver out-of-the-box value.
Strategic Partnerships: Expanded lead generation programs through partnerships with companies like Hewlett Packard, BigCommerce, and others. Hosted events like Insight25 Virtual Summit and B2B Online in Chicago to generate qualified leads.
Marketing Budget: Doubled marketing budget from $250,000 to $500,000 per quarter, resulting in more than double the qualified lead generation and a reduced sales cycle from 125 days to 112 days.
Sales Cycle: Sales cycle reduced to 112 days, with some contracts signed in less than 60 days.
AI Integration: Introduced Model Context Protocol (MCP) to HawkSearch, allowing AI agents to assist human teams in managing search results and providing advanced analytics.
Customer Expansion: Existing customers are expanding their contracts, with average additional ARR of $50,000 for advanced features like AI-powered Smart Search.
Decline in Legacy Products: The company is experiencing a decline in revenue from its legacy products, which is flattening overall revenue growth. This poses a risk to achieving consistent revenue growth until newer products like HawkSearch can fully offset the decline.
Increased Operating Expenses: Operating expenses have increased to $3.2 million from $3.1 million in the prior year period, contributing to a net loss of $800,000 for the quarter. This could strain financial resources if revenue growth does not accelerate.
Negative Adjusted EBITDA: The company reported a negative adjusted EBITDA of $330,000 for the quarter, compared to a positive $3,000 in the prior year period. This indicates a decline in operational profitability, which could impact financial stability.
Dependence on HawkSearch for Growth: HawkSearch now accounts for more than 60% of total revenue and is growing at a double-digit pace. However, this heavy reliance on a single product line increases vulnerability to market or operational disruptions affecting HawkSearch.
Marketing Budget Expansion: The company has doubled its marketing budget to $500,000 per quarter to drive lead generation. While this has shown early success, it represents a financial risk if the increased spending does not result in proportional revenue growth.
Decline in Services Revenue: Services revenue decreased to $700,000 from $900,000 in the prior year period, reducing its contribution to total revenue. This decline could impact overall revenue diversification and stability.
Net Loss Increase: The net loss for the quarter increased to $800,000 from $300,000 in the prior year period, reflecting financial challenges that could hinder long-term sustainability.
Revenue Growth: HawkSearch is expected to continue its double-digit growth and outshine the decline in legacy products as early as Q1 of 2026. The increased marketing budget, faster sales cycle, and analyst recognition are expected to fuel stronger growth in upcoming quarters.
Marketing and Lead Generation: The company has doubled its marketing budget from $250,000 to $500,000 per quarter, resulting in more than doubling qualified lead generation. This investment is expected to drive stronger growth in the future.
Sales Cycle: The sales cycle has reduced from 125 days to 112 days, with some contracts closing in less than 60 days. This trend is expected to contribute to faster revenue realization.
Product Development and AI Integration: The introduction of Model Context Protocol (MCP) to HawkSearch is expected to enhance customer control and insight, making enterprise-grade AI more accessible and impactful. This is anticipated to drive further adoption and revenue growth.
Customer Expansion: Existing customers are expanding their contracts, with average additional ARR being double the initial contract size. This trend is expected to continue, demonstrating strong customer satisfaction and value delivery.
The selected topic was not discussed during the call.
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.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
