Bridgeline Digital, Inc.

Thank you for standing by, and welcome to Bridgeline Digital's second quarter 2024 earnings conference call. 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. To remove yourself from the queue, you may press star 11 again. I would now like to hand the call over to Thomas Wenhausen, Chief Financial Officer. Please go ahead.

Thank you, and good afternoon, everyone. Thank you for joining us today. My name is Thomas Windhausen, and I'm the Chief Financial Officer of Bridgeline. I'm pleased to welcome you to our fiscal 2024 second 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 business highlights. I'll then update you on our financial results for the quarter, and we'll conclude by taking questions. Before we begin, I'd like to remind listeners that during the 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, 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 should not be considered as an indication of future performance. Changes in economic, business, competitive, technological, regulatory, and other factors could cause Bridgeline's actual results to differ materially from those expressed or implied by the projections or any 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 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, BridgeLine's President and CEO. Ari?

Thank you, Tom. Good afternoon, everyone. This has been another exciting quarter for Bridgeline with outstanding HawkSearch sales, innovations in artificial intelligence, and excellent recognition and sales in key partnerships. HawkSearch is the best site search product on the market with the strongest artificial intelligence capabilities for product discovery. Because our platform partners see us as instrumental to their customers' success, they have embraced HawkSearch as a must-have app for their commerce sites that they power. Our consolidated numbers include some legacy customers on legacy products, but the underlying demand for HawkSearch, SmartSearch, and our strengthened partnerships with platforms are making this absolutely the most exciting time Bridgeline has seen, and our momentum continues to grow. Today, Search is nearly 60% of subscription revenue, and we expect that percentage to go up even further. We've sold nearly 50 licenses this fiscal year with over $4 million in total contract value. We're launching a new customer every single week. This month, we expect to launch nearly 10 customers. With each launch, we have more references and recognition as leaders in the site search sector. Many of our customers have extensive product catalogs, such as Volta's with 80,000 products, and a building supply chain that selected HawkSearch for its 40,000 product catalog. Several customers select HawkSearch for its AI capabilities with SmartSearch. Others choose us because of our seamless integration to our platform partners with connectors that allow them to easily upgrade to HawkSearch. Our marketing campaigns include a narrow focus on specific industries, including B2B construction sectors like electrical and plumbing supplies. By building a strong presence in these categories, we have accelerated our sales cycle and reduced our customer acquisition costs. Two important platform partners that we expect to continue to generate new customers for HawkSearch are Optimizely and BigCommerce. BigCommerce, HawkSearch is featured on their first page of their website app store. BigCommerce has 60,000 customers generating $350 million in ARR for them, and 20% of their customers have more than 250 products. This 20% is a great total addressable marketplace for us. And then you see HawkSearch in the top page of their own app store on BigCommerce. And as a result, our lead generation and credibility in the BigCommerce ecosystem is outstanding. BigCommerce partnered with HawkSearch at the B2B Online Chicago Conference this month to help their customers understand how HawkSearch can increase online sales, and we continue to see outstanding lead gen within the BigCommerce ecosystem. HawkSearch now has a one-click install for Optimizely and is recognized by Optimizely as a top paid app in their app stores. HawkSearch and Optimizely have partnered in several online webinars and have launched many customer websites recently. HawkSearch is now in a unique position to improve site search for more than 1,000 Optimizely configured commerce customers with several already purchasing licenses today. Furthermore, in the API ecosystem, we partnered with the system integrator Xengage, who is an who is an expert in Optimizely, and they helped build the Optimizely connector. This opens the door for even more sales. Overall, our pipeline has 35% more traffic and 66% more conversions and lead generation than it did last year. We're seeing excellent reviews and analyst recognition that generate leads and expand credibility against our competitors. We're recognized by top analysts such as InfoTech as leaders in the marketing technology sector. BridgeLine is also recognized as one of the top 20 e-commerce solution providers of 2024 by ICON Outlook Tech Magazine. We expect additional analyst recognition this year that will serve as further lead generation and affirmation. BridgeLine is recognized as a leader in AI-powered site search. We have deep expertise in AI. In fact, I have a PhD in AI from the University of Chicago. Our team's deep understanding of this field allows us to recognize new capabilities as soon as they become mature to more quickly include them in our software and make our customers even more successful. In March, we launched Zeus, the Zeus release for our AI-powered smart search. Smart search introduces two new ways to search, concept search and image search. This changes how customers interact with search, leading to increased engagement and revenue for businesses. Smart search uses AI models, vector databases, and large language models to process customer queries, whether typed or through images. Image search allows customers to upload an image of a product, and Hawk search will show similar items for purchase. Concept Search lets users describe their needs in natural language, and the system finds relevant products or information. Goose adds generative AI to summarize search results for online shoppers and improve content for better search engine optimization. Smart Search has already been implemented on several customer sites such as Saviant, Shadler Yesco, Nailgun Depot, Max Warehouse, and Rainbow Resource, with several new sites slated to launch in the upcoming week. This is driving our growth and is the primary focus for the company overall. At this time, I'd like to turn the call over to our Chief Financial Officer, Tom Windhausen. Tom?