Bridgeline Digital, Inc.

Thank you for standing by, and welcome to Bridgeline Digital's fourth quarter 2023 earnings conference call. At this time, all participants are on 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 1-1 on your telephone. To remove yourself from the question queue, you may press star 1-1 again. I would now like to hand the call over to CFO Thomas Windhausen.

please go ahead thank you and good afternoon everyone thank you for joining us today my name is tom windhouse and i'm the chief financial officer of bridge line digital i'm pleased to welcome you to our fiscal 2023 fourth quarter conference call on the call list this afternoon is ari khan bridge line's president and ceo who will begin the call 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 that we report today should not be considered 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 have an impact on our business, please review the reports and documents filed from time to time by Bridgeline Digital with the Security and Exchange Commission. Also, please note 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 gap financials to these non-gap measures in our earnings release. You can obtain a copy of our earnings release by visiting our website. I'd now like to turn the call over to Ari Kahn, BridgeLine's president and CEO. Ari?

Thank you, Tom. Good afternoon, everyone. In fiscal 23, BridgeLine signed more than $6 million in sales and had a revenue renewal rate of more than 90%. The HawkSearch product line led the company's sales with Hawk Search growing to nearly 50% of Ridgeline's revenue with a renewal rate of more than 95%. In our fourth quarter, Ridgeline booked an additional 27 sales for $900,000 in contract value that adds $375,000 in annual recurring revenue. Ridgeline closed the fourth quarter with a 92% revenue renewal rate for $2 million in renewed contracts, totaling $9 million in renewals for the year. Earlier this year, we explained that a large customer on a legacy product was winding down its license over 2023, which impacted the year's revenue. But at the same time, we delivered strong sales with our core products, especially HawkSearch. And our revenue mix is now driven by our core product line, which has seen over 6 million in new customer contracts with a 95% renewal rate. This positions us for growth in 2024, and we expect HawkSearch to lead the way with our recently released AI capabilities such as our Smart Search module. Hawk Search sales are largely driven through our platform partnerships with BigCommerce, Salesforce, and Optimizely. We also have agency partners including XEngage and AmericanEagle.com to drive new Hawk Search sales. Sales in our fourth quarter included Digible, a top multifamily apartments marketing agency who uses WooRank to grow online revenue for their customers. The agency will deliver WooRank SEO to accelerate its clients' online presence and help businesses access their digital reach, recognize areas for growth, and implement fast and effective strategies for improvement. FiltersFast, a number one filtration retail in the United States, licensed HawkSearch to power their online search and recommendations. The HawkSearch Rapid UI feature was integrated with their custom e-commerce platform, which allowed FiltersFast to quickly launch their site. Another new customer is Trident Enterprises. Trident Enterprises, a leading live stock fencing supplier, selected HawkSearch to grow online revenue on their big commerce website. HawkSearch will help Trident's customers quickly find products in their massive catalog using artificial intelligence-powered search and natural language processing. The prominent franchise listed in the Franchise 500 list selected Bridgeline's TruePresence franchise software to host local pages for their over 1,800 locations through TruePresence's high-performance local page system. And another important win was a top financial institution who selected Bridgeline's accessibility product, Powered by Accessibility, to ensure its website is accessible to all and compliant with the American Disabilities Act. Our partnerships with Optimizely and Xengage is an important part of our future growth. In October, we joined Optimizely in their annual user conference where we jointly announced HawkSearch's integration with Optimizely's Configured Commerce using the Xengage connector. This announcement was followed with online webinars to further promote sales. HawkSearch is now in a unique position to provide site search for more than a thousand Optimizely Configured Commerce customers. and several have already purchased a license for this integration. We recently announced a reseller partnership with AccessiBe, the market leader in web accessibility. AccessiBe helps over 180,000 companies, including PlayStation, Johnson & Johnson, and NBC, to improve compliance with the American Disability Act and similar legislation in Canada and in Europe. BridgeLine's engineering team has focused on artificial intelligence to improve usability and productivity for both end users and site visitors. Unbound added the AI Assistant to help content creation with GenAI capabilities to create new content for websites, and this same capability is now available in the HawkSearch landing page creator. HawkSearch announced an important AI-based capability called SmartSearch as part of the Keywords to Concepts initiative. Smart Search has two core capabilities that improve sales conversions for Hawk Search-powered websites, Concept Search and Visual Search. Concept Search uses large language models to enable online shoppers to describe their goals in natural language rather than describe the product that they're searching for. For example, a shopper on a sporting goods site may search, I am going camping, rather than waterproof tents. And concept search will return a wet waterproof tent as well as additional items that they may need to purchase. This is important as many shoppers may not know what specific products they need and instead only know the goal that they have, such as the fact that they're going camping. One great part of concept search is that it's largely language independent. It supports 50 languages, even for sites that have not yet been translated. Visual search allows online shoppers to upload an image or even take a picture with their iPhone to find visually similar products. Industries like fashion retail require this because customers want to find a product that is similar to the one that they've seen before, but not exactly the same. Furthering our focus on the franchise market with true presence, Bridgeline released multi-engine management in partnership with an enterprise franchise customer. Multi-engine management allows franchisors to tune search and merchandising features across thousands of franchisee sites and then allow individual franchisees to further refine their individual sites. For example, when a change of clothing retailers wants to boost certain seasonal products to the top of their search results, they can do so from the multi-engine console to automatically boost sales in every single one of their stores who have those items in stock. Going forward, we expect HawkSearch and TruePresence to be important parts of our growth with investments in AI across both product lines that will drive new sales and upgrades in our existing customer base. SmartSearch has been especially strong with seven sales in just the last two months and a pipeline of more than 700,000 in ARR since its release in September. This time, I'd like to turn the call over to our Chief Financial Officer, Tom Woodhouse. Tom?