Bridgeline Digital, Inc.

Good day and welcome to the Bridgeline Digital first quarter 2023 earnings. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand has been raised. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce Chief Financial Officer Thomas Windhausen.

Thank you, and good afternoon, everyone. Thank you for joining us on the call today. My name is Tom Windhausen, Bridgeline's Chief Financial Officer. I'm pleased to welcome you to our fiscal 2023 first quarter conference call. On the call with us this afternoon is Ari Kahn, Bridgeline's President and CEO. We'll begin the call with a discussion of our business highlights. I'll then update you on our financial results for the quarter, and we'll conclude by taking questions. Before I begin, I'd like to remind listeners that during the conference call today, 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. Results of the 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 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. 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 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, and good afternoon, everyone. Happy Valentine's Day. In the first quarter, we won 22 license sales totaling over half a million in total contract value with a quarter million dollars in annual recurring revenue and three quarters of a million dollars in consulting services. Our customer base continues to expand their investment in our software with 10 subscription license sales to existing customers. Search is our strongest selling product line with better than 18% organic CAGR, renewal rates in the high 90s, and Search is now more than half of our subscription revenue. Search sales are driven by partnerships with Optimizely, BigCommerce, SiteSendMe, and other platforms, as well as agencies and system integrators. We've taken a vertical approach to sales and marketing and search with especially strong results in the B2B Electrical Distribution Center. Our recent partnership with Duda is an exciting opportunity where more than 1 million websites can now add our WooRank SEO optimization product to their site with the click of a button. Also, Duda partners with 20,000 digital agencies who can now make bulk purchases of WooRank for their customer bases. Since the last month alone, since January, our partnership with DUDA has sold more than 150 WU rank licenses. In the first quarter, BridgeLine delivered $4.1 million in revenue, including $3.2 million of subscription and license, and another $900,000 in services. Excluding non-recurring perpetual license sales of $100,000 in our prior year, comparable period. Total revenue decreased by $100,000 overall versus the first quarter of fiscal 22. This was driven by a single large customer who, while renewing for their ninth consecutive year on a legacy BridgeLite product, restructured their website, which reduced their subscription by half from $150,000 to $75,000 per quarter. Independent of this single customer reducing their subscription, our subscription renewal rate is over 90%, with more than 125 renewing customers, including Dairy Queen, Ron John, and Guardian Life. Our subscription and license revenue is 79% of total revenue, and our search products have grown to be more than half of our SaaS revenue. We ended our first quarter with $2.5 million in cash. During the quarter, we made the final earn-out payment of $250,000 from the Hawk Search acquisition, and now we have no remaining earn-outs due for any of our previous acquisitions. Bridgeline announced that its E360 dashboard is now available in the Shopify App Store. Shopify has partnered with Bridgeline to power analytics and prescribe new revenue strategies for their 4 million users across 175 countries. Shopify users can now use the Bridgeline E360 dashboard to grow their online revenue directly within the Shopify administrative interface. Bridgeline delivered several technological advances in its first quarter, including its HawkSearch Rapid User Interface Framework. The Rapid UI Framework reduces the time and expense of launching new HawkSearch-powered websites. The framework not only reduces the total cost of ownership for our new HawkSearch customers, but also accelerates Bridgeline's customer acquisition sales cycle by allowing prospective customers to see how HawkSearch improves search within their site before purchasing. We also expanded our natural language processing and machine learning capabilities in HawkSearch. to allow industry-specific intelligence to be bundled and loaded into sites with NLP industry knowledge packs. Knowledge packs allow us to offer additional value to customers in key industries by pre-configuring their site with synonyms, soft words, unit conversion, and other natural language intelligence commonly used by their specific customer base. For example, A hardware store site that sells paint may need to know that cotton and dove are versions of white and a search for either of those words should return all white tone products. Similarly, a US shoe store needs to understand that a search for sizes over 30 are European and should be converted to the US size before returning the search results. Our NLP search allows you to configure this type of intelligence And our NLP industry knowledge packs allow you to take this intelligence out of the box for key industries to increase your e-commerce conversion rate. We're off to a great start for 2023 and intend to continue to make investments in our products and marketing to grow market share, especially for site search, where we have enjoyed so much strong growth and customer success. At this time, I'll turn the call over to our Chief Financial Officer, Tom Winhausen. Tom?