Bridgeline Digital, Inc. Q1 FY2026 earnings call

• Core products led by HawkSearch Suite and AI products drive growth, with customers increasing investment in HawkSearch subscriptions and add-on products.
• Net revenue retention for core products is 107%, demonstrating strong customer satisfaction and product adoption.
• New customer acquisition grows, with average ARR per customer increasing to $33,000 from $30,000 last quarter. Sold 13 new licenses with $1.2 million in total contract value.
• Won several new customers in B2B manufacturing, distribution, etc., leveraging HawkSearch's capabilities.
• Released Spark, contextual fields, advanced analytics API, and AI content extractor to drive innovation and customer value.
• Expect HawkSearch and core products to become over 70% of overall revenue this year, driving faster, more profitable growth.

Core products at Bridgeline are 60% of total revenue, growing 17% to $2.4 million this quarter from $2.0 million last quarter, with a trailing 12-month basis of $9.2 million versus $8.8 million prior. HawkSearch is 63% of subscription revenue, at $2 million this quarter compared to $1.9 million last quarter. Net revenue retention for the core product line was 107%.

• Expect HawkSearch and core products to be over 70% of overall revenue this year.
• Goal to increase HawkSearch growth rate to 20% this year, driven by solid pipeline of new customers and add-on growth from existing customer base.
• Marketing dollars to continue investment as campaigns and conferences (e.g., B2B online Chicago, customer conference) are effective and efficient.

• Forward-looking statements subject to risks and uncertainties as they may differ materially from actual future events or results.
• Changes in economic, business, competitive, technological, regulatory and other factors could cause results to differ from projections or forward-looking statements.

Q: About ARR figures and trends, including how ARR blends into future numbers and impact A: Discussed ARR per customer growth (from $25,000 to $33,000), net revenue retention at 107%, and market differentiation via AI and data lake for better agent performance Q: About competitive landscape and gross margin A: Talked about continuing competition with same top competitors, differentiation via data lake for AI agents, and expected gross margin range of mid-65% to mid-67% for combined services and subscriptions