Bridgeline Digital, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Bridge Line Digital third quarter 2020 earnings conference call. At this time, all participants are now listening on and loud. After the speaker's presentation, there will be a question and answer session. To ask the question during that portion of the call, you will need to press star one on your telephone. Please, the advice at today's conference may be recorded. If you require any further assistance, please press star and zero. I will now hand the conference over to Mark Downey, Chief Financial Officer of BridgeLine Digital. Please go ahead, sir.

Thank you and good afternoon, everyone. My name is Mark Downey and I am the Chief Financial Officer for BridgeLine Digital. I am pleased to welcome you to our fiscal 2020 third quarter conference call. Before we begin, I would like to remind listeners that during this conference call, comments that we make regarding BridgeLine Digital that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 and are subject to risks and uncertainties that could cause such statements to differ from actual future events or results. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 The internal projections and beliefs upon which we base our expectations today may change over time and we expressly disclaim and assume no obligation to inform you if they do. Results that we report today should not be considered as an indication of future performance. Changes in economic, business, competitive, technological, regulatory, and other factors such as the impact of the COVID-19 pandemic and related public health measures could cause Bridgeline's actual results to differ from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact our business, please review the reports and documents filed from time to time by Bridgeline Digital with the Securities and Exchange Commission. Also, please note that on the call today we will discuss some non-GAAP Thank you, Mark. Good afternoon, everyone. Ridgeline delivered 22% growth in recurring revenue

positive operating income, and positive adjusted EBITDA in our third quarter. In Q4, we expect continued growth in recurring revenue and to repeat our bottom line performance with positive operating income and positive adjusted EBITDA again. Q3 closed more sales than we had in our previous two quarters combined. Q4 is off to a great start. and so far we've closed more sales in the first half of our Q4 than we did in our entire third quarter. Many of our new customers are online retailers in the United States and Europe. We recently launched a newly designed e-commerce site for a global consumer electronics manufacturer that enables them to sell direct to consumer while also continuing to support their traditional B2B channel of dealers and distributors. We've seen significant investments from the healthcare industry with hospitals enhancing their websites to incorporate virtual events, as well as implementing messaging systems in response to the COVID-19 pandemic. Recently, two top regional healthcare networks extended their professional services retainers for ongoing enhancements to their websites. We've also had several online pharmacies who sell protective personal equipment, acquire Celebros licenses, to improve search and conversion for their e-commerce sites. We even had a veterinary pharmacy buy licenses just this month to further improve its online sales. We recently won NyGlasses Manufacture with operations in Europe and in the United States. We also won a sale to a sporting goods retailer in Asia with more than 2,300 retail stores. In our third quarter, We had sales in three continents and across several verticals, including healthcare, pharmaceutical, education, franchise, and manufacturing. The value we deliver to our customers is more relevant than ever. Several of our customers renewed their subscription agreements for multi-year terms, including both a Fortune 10 multinational oil and gas company and one of the world's largest pharmacy chains. We have also seen several license expansions within our customer base where customers have grown to higher tiers of our software as their usage has increased. Bridgeline experienced very few business delays due to COVID. In April, we saw slower professional services when some customers paused work to reset their remote office policies and reassess their budgets. This had a small impact on our services revenue, which we expect to recoup as these customers return to the delayed service priorities. We saw no significant impact from COVID on licenses. Our customers continue to buy our software, and in fact, sales have even picked up. Just as importantly, our customer base continues to invest in Bridgeline products, and we see both cross-sales as well as expansions from our online for our longtime customers. Before the COVID outbreak, Bridgeline launched an initiative to leverage the Unbound platform along with the Momentum and Celebro sales to deliver even greater out-of-the-box value to customers. We call this initiative Revenue 360. Revenue 360 pivots towards telephonic sales and partnerships in online marketplaces. This has allowed us to streamline our sales and marketing budgets win more sales and faster sales cycles, grow subscription revenue, and deliver stronger gross margins, which increased 29% in our third quarter. Revenue 360 is not only a sales strategy. It also guides our research and development. With Revenue 360, we are expanding our technologies to help customers grow their online revenue and to do so with out-of-the-box tools that drive all three components of e-commerce, We increase site traffic, we increase shopper conversion rate, and we increase the average order value. Our software has grown each of these three revenue components for hundreds of customers over the years, and our focus now is to package all of our solutions into discrete, out-of-the-box applications that are compatible with any platform and bring this value to market faster and to an even wider audience. We recently announced a new product called Unbound Pages. Unbound Pages help franchises increase their online and in-store traffic with out-of-the-box store locator pages. Unbound Pages makes it easy to share locator maps, store hours, and contact information with your customers in a way that is both desktop and mobile friendly and has outstanding search engine rankings. Unlike other locator pages, Unbound pages are unique in that they include email marketing and online commerce, two capabilities that we're able to easily include because of our broader Unbound product suite. We will be making more announcements this year as we expand our Revenue360 strategy with additional products. We also intend to continue evaluating strategic growth opportunities through M&A with Revenue360 guiding our focus. We continue to evaluate SaaS companies whose products help their customers grow online revenues and have efficient sales cycles themselves. We finished our third quarter with a strong cash position, which we expect to remain strong. Furthermore, the company no longer needs to allocate cash for dividends to preferred stockholders, as 100% of our investors who held dividend-producing preferred stock have converted that preferred stock into common. Finally, the company received a $1 million PPP loan that we expect to be forgiven. In short, we are well positioned to execute on any strategic opportunities that arise and are well situated to wait for just the right ones. We have sales momentum, happy customers, positive bottom line, and strong cash. This is the foundation for an exciting software company, and our revenue 360 strategy has proven to win new customers while delivering even greater value to our customer base. I'm excited to show you even more success on our Q4 call. At this time, I'd like to turn the call over to our Chief Financial Officer, Mark Downey.