Bridgeline Digital, Inc.

you may press star 1 on your phone to enter the question queue at any time, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Thomas Windhausen. Sir, the floor is yours.

Thank you, and good afternoon, everyone. Thank you for joining us today. My name is Thomas Windhausen. I'm the Chief Financial Officer of Ridgeline Digital, Inc. I'm pleased to welcome you to our fiscal 2025 first quarter conference call. On the call list today is Ari Kahn, BridgeLine's president and CEO. We'll begin the call with a discussion of our business highlights. I will then update you on our financial results for the quarter. 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 results or events. 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 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 form-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 the 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 Q1 of FY25, Bridgeline signed 28 license sales, adding $2.7 million in new contracts and $800,000 in annual contract values. Our sales cycle is now only 105 days with an 18% win rate on qualified leads, world-class numbers. This means it's time to invest in sales. The market is hot. Our products outperform our competition. Last year, we released eight AI-based products that are blowing the competition away, garnering strong analyst support and delivering key value to our customers. We invested in R&D, and it has paid off. We are the leader in AI-powered e-commerce search. Our growth is limited only by our marketing budget, not by market size, not by customer demand, not by competition. Now is the time to reallocate resources from R&D to sales and marketing. It's time to go all in on growth. Our revenue can broadly be broken into two product groups. The core revenue is comes from our Hawk Search product and its e-commerce 360 embedding, including WooRank. This revenue is $2.1 million with double-digit growth, net revenue retention of 107%, CAC payback better than 20 months. Essentially, all of our new sales are core products. Our non-core products that represent the balance of our revenue include most of our professional services, And these products generate strong gross margins with minimal operating expenses, and they help fund growth in court. With momentum in sales, a leading position in AI, and a market shifting to adopt our AI products, we've made bold company-wide changes to invest more into sales and marketing and seize this opportunity. These changes go all the way to the board level. including the addition of healthcare industry veteran and business development expert, Michael Ketzlach, whose expertise and network will help Bridgeline expand into additional markets. I recently had the acronym FOMO, fear of missing out, on my mind. That's exactly the mindset driving our growth strategy. With the market shifting fast, we're seizing the moment to expand our customer base Our board and team are in full growth mode, and I'm committed to investing in new customer wins to ensure that we stay ahead. Let's take a look at Q1 sales, the second-best sales quarter in the company's history. We sold 28 licenses for $2.7 million in total contract value, adding $800,000 in ARR. Here's a few of our new customers. Brady Plus. A leading B2B e-commerce provider is leveraging HawkSearch AI to improve its search functionality and deliver more seamless digital experience. John Dodds, a major supplier in janitorial and restoration industry, has also integrated HawkSearch to enhance product discovery and optimize site navigation. Aftermarket Auto Parts Alliance is using HawkSearch to stream search across its extensive product catalog. Montefiore Health System has chosen HawkSearch to power more intuitive and efficient search experience for its users. The leading supplier of plumbing industry has chosen HawkSearch SmartSearch to power their product discovery experience. The plumbing supplier will leverage SmartSearch's visual and concept search features to enhance customer experience and drive growth. Another major supplier in the plumbing industry successfully launched HawkSearch to power its online search. All this, not to mention expanded subscription of a Fortune 100 consumer electronics customer who's powering over a million dollars an hour in online sales with Hawk Search. This momentum positions us for continued growth in 2025 as we expand our reach in B2B e-commerce and healthcare, providing cutting-edge AI search solutions that drive revenue and enhance customer engagement. Our 2024 investments in R&D have opened the door to partners whose customers need the latest AI-powered e-commerce tools. Our partners bring us customers thanks to our expanded product line and joint marketing events, lowering the cost per lead for both sides. We released our BigCommerce Catalyst connector just this week. The press release announcement will be issued soon. Catalyst will give BigCommerce customers a drag-and-drop tool to seamlessly upgrade their online stores to our HawkSearch suite. BigCommerce has been one of our strongest partners, and we expect our catalyst release to make it even easier for their customers to upgrade to HawkSearch. xEngage and Optimizely continue to be leading partners who bring us large sales that close quickly on HawkSearch. Many of our B2B manufacturing distributor customers are on this ecosystem. HawkSearch is listed as a top paid app in the Optimizely store. Bridgeline earned Moblico's Partner of the Year Award for its role in advanced mobile engagement for distributors. In this quarter, HawkSearch has also joined forces with Oral Commerce, a leading B2B commerce platform, to bring AI-driven search and merchandising to manufacturers and distributors. Importantly, in partnership with Salesforce, HawkSearch has also launched the HawkSearch AI-powered product discovery engine for Salesforce B2B commerce. Salesforce customers can now access Hawk Search directly from the AppExchange, deploy the connector instantly, and see immediate improvements in e-commerce performance. Partnerships will be an important part of our go-to-market strategy this year, but we're also greatly expanding our marketing budget. We've generated notable sales in recent years by focusing on specific verticals and joining industry conferences and associations. In the fastener industry, we won several customers by attending conferences like the International Franchise Expo and Fastener Fair in Vegas. B2B electronics and plumbing distributors have been strong with conferences such as B2B Online Chicago and Modern Distribution Management Shift Generating Sales. We have expanded our and we'll be targeting new B2B verticals, including advertising and vertical markets and hosting more in-person events to generate even more leads and convert into customers this year. Last year was a transformative year in our product suite with eight AI products being launched. This year is going to be transformative in growth. with our budget reallocated from R&D to sales and marketing so that we can capitalize on the market demand and on the strong competitive position that our innovation efforts have placed us within. This time, I'll turn the call over to our CFO, Tom Wittenhausen. Tom?