Bridgeline Digital, Inc.

Thank you for standing by, and welcome to the Bridgeline Digital Inc. Fourth Quarter 2022 Earnings Call. At this time, all participants are on a listen-only mode. After the speaker's presentations, there will be a question-and-answer session. To ask a question at that time, please press star-1-1 on your touch-tone telephone. As a reminder, today's conference is being recorded. I will now turn the conference to your host, Mr. Tom Windhausen, CFO. Sir, you may begin.

Thank you very much. Thank you, and good afternoon, everyone. Thank you for joining us today. My name is Thomas Windhouse, and I am BridgeLine's Chief Financial Officer. I am pleased to welcome you to our fiscal 2022 fourth quarter conference call. On the call this afternoon is Ari Khan, BridgeLine's President and CEO, who will begin with a discussion of our business highlights. I will then update you on our financial results for the quarter, and we will conclude by taking questions. Before we begin, I'd like to remind listeners that during this conference call, comments that we make regarding BridgeLine 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 materially 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. The results we report today will not be considered as an indication of future performance. Changes in economic, business, competitive, technological, regulatory, and other factors, such as the impact of public health measures, could cause Bridgeline's actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. 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 this afternoon, we will discuss some non-GAAP financial measures when commenting on the company's financial performance. We provide a reconciliation of our GAAP financials to these non-GAAP measures in our earnings release. You can obtain a copy of our earnings release by visiting our website. I would now like to turn the call over to Ari Kahn, our President and CEO. Ari?

Thank you, Tom. Good afternoon, everyone. This year, BridgeLine delivered 27% top line revenue growth, a $3.6 million increase in revenue to end of year with $16.8 million in total revenue. Most of our revenue growth was in subscription and license, which increased by 36% to $3.6 million to $13.6 million. Subscription and license revenue was over 80% of total revenue for the fourth quarter and the year. In the fourth quarter, we booked $1 million in new license ARR from 28 sales with $340,000 in ARR annual recurring revenue. Our cross-sale strategy remained strong and drove 13 license sales to existing customers on top of 15 newly won customers. Existing Bridgeline customers, including HP, 7-Eleven, and Sage Publishing, expanded their commitment to Bridgeline this quarter with further investments in Bridgeline software and services. We ended fiscal 22 with over $2 million in net income and $196,000 in adjusted EBITDA, driven primarily by our subscription and license revenue, which comprised over 80% of our total revenue with gross margins of 75%. We ended our fiscal year with $2.9 million in cash, that being after a prepayment of $1.7 million in the fourth quarter relating to a negotiated $600,000 discount to the earn-out working capital adjustment on the Hawk Search acquisition in consideration for just a six-month early payment. Our cash and projected revenue positions us well to continue our investments in sales and marketing and innovation without additional capital for operations. Our 28 sales in our fourth quarter included a top distributor who committed to more than a quarter million dollar multi-year license for Bridgeline's TruePresence and HawkSearch products to power their site search and recommendations. HawkSearch's AI site search technology was identified to help grow the distributor's massive online catalog with 700 sites, 5 million products, and 15 million monthly queries. A major Asia-Pacific retailer with 150 brands and 2,600 locations selected Bridgeline to power 10 of its brands, including New Balance, Reebok, Converse, Skechers, and Foot Locker. A leading plumber supplier has committed to a more than $60,000 license for Bridgeline's Hawk Search to power personalized recommendations and data quality enhancement capabilities. The supplier will use HawkSearch to power site search for their 28 distributor locations, 15 appliance stores, and distribution for their catalog of over 200,000 products. A garden and pet supply market leader is committed to a more than $80,000 license for Bridgeline HawkSearch to power personalized recommendations and data quality enhancement capabilities. The supplier will use HawkSearch to power site search functionality for two leading websites with millions of search inquiries each month. In addition to our new customer wins, we also had outstanding customer subscription renewals with more than 100 renewing customers, including Caterpillar, AstraZeneca, Hamaker Schlemmer, and Coca-Cola Europe Pacific Partners. As a percentage of revenue, customer subscription renewals were 94%. Partners are an important part of our growth, especially for driving Hawk Search sales. Bridgeline announced in October a new partnership with NITCO, the world's largest optimizely agency, which services 500 customers in 30 countries, including customers such as Panasonic, Heineken, and Electrolux. This partnership is focused on selling and implementing Hawk Search, which is Optimizely's first non-native site search integrated with both their B2B and their B2C platforms. In addition, BridgeLine partnered with Thanks Media, who's a systems integrator that services Fortune 500 customers such as PayPal, Target, and Ulta Beauty. Thanks Media is certified in both the Optimizely and BigCommerce platforms, and it has extensive experience with Hawk Search. This partnership helps Bridgeline sell HawkSearch licenses within the first month after signing. Further, BigCommerce has expanded the availability of Bridgeline's HawkSearch connector to their multi-storefront users, including leading brands such as Ted Baker, Vandy Group, and Aerofit B2B. This strategy has continually led to a strong growth rate and more online revenue for Bridgeline's customers. In our fourth quarter, we released the rapid UI framework for Hawk Search. This release speeds the time to market for our customers and reduces their total cost of ownership. It also accelerates bridge line sales cycle, which in turn improves our win ratio. The solution is built on a JavaScript framework called Handlebars that embeds an entire search experience directly into the website, including the search bar, intelligent autocomplete, and the full search results page. Sales and demo experiences are improved because our sales team can demo HawkSearch within the prospect's website rather than with the generic demo site. We plan to extend the framework to include additional HawkSearch components, such as recommendations and landing pages. BridgeLine expanded its executive team with John Murcott joining the company as EVP of products and strategy. Mr. Murcott brings more than 20 years of experience in the marketing technology sector to Bridgeline. He was a founding member of my first MarTech company, Fatwire, which he helped build and do an industry leader in content management before it was acquired by Oracle in 2011. All of these coming together leaves us really excited for fiscal 23. At this time, I'd like to turn the call over to our Chief Financial Officer, Tom Winhausen. Take it away, Tom.