Thank you for standing by. Welcome to Bridgeline Digital's third quarter 2023 earnings 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 one on your telephone. To remove yourself from the queue, you may press star one again. I would now like to hand the call over to CFO and Treasurer, Thomas Windhausen. Please go ahead. Thank you, good afternoon, everyone. Thank you for joining us today. My name is Thomas Windhausen, I'm the Chief Financial Officer at Bridgeline. I'm pleased to welcome you to our fiscal 2023 third quarter conference call. This afternoon is Ari Kahn, Bridgeline's President and CEO, who will begin the call with a discussion of our business highlights. I'll then update you on our financial results for the quarter, we also 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, 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 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 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. Please note that on the call this afternoon, we'll 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'd like now to turn the call over to Ari Kahn, Bridgeline's President and CEO. Thank you, Tom, good afternoon, everybody. In the third quarter, we made $1.2 million in new sales, including $600,000 in licenses, which will add $200,000 to our subscription license annual recurring revenue. Most new customers sign an initial subscription term for 3 years and typically renew for 2 successive 1-year terms, totaling 5 years with the subscription. Bridgeline's core, including HawkSearch and Recommendations, grew by over 15% CAGR and now accounts for 44% of our revenue. Our core products have over 98% revenue renewal. We also have legacy platform products, which we pivoted from in our e360 strategy, as they had too expensive of a sales cycle and competed with companies like Salesforce, who we prefer to make a partner. These products have great growth margins to fund innovation, but are not a focus of our company's sales teams and declined this year, with large customers reducing but not eliminating their eliminating their license. Although this decline hits the growth of our core products, we expect our core product line to outstrip the decline of legacy products in the near future, as its 15% CAGR will soon cause it to dominate our overall revenue, especially in license and subscription, where nearly 50% of our revenue is already core. Not only will revenue soon be dominated by our growing core products, but that growth rate is expected to increase with some important upcoming events. Bridgeline will launch native integration with Optimizely Configured Commerce in October. This integration allows for touchless sales to over 1,000 Optimizely customers, where they can upgrade to HawkSearch with the click of a button. We already have 8 pre-signed customers, and this will make us the only search product for the more than 1,000 Optimizely Configured Commerce customers. Many of these prospective customers are large businesses in need of our premier products. We will make a joint announcement with Optimizely at their October Optimizely user conference. Bridgeline's Bronco release is another important revenue driver for our core products that has already reduced our sales cycle from 12 weeks to less than 10 weeks, and increases our total addressable market to now include companies who need a simple implementation without sacrificing features. Bronco accelerates sales with its out-of-the-box UI and its self-service portal. Another important core growth area that will be announced and released in November is our Advanced Analytics system, which is an upsell opportunity to our customers, like Hewlett-Packard, who needs more detailed information about the contribution of HawkSearch to their online revenue. Bridgeline will also release its franchise search solution this year, making it the first site search provider to offer a site search product specifically for the franchise market. Bridgeline has already pre-signed its first customer with our franchise solution, and with our deep experience in this segment, we expect to accelerate growth by being the only provider in this market. HawkSearch sales are largely driven through our platform partnerships with BigCommerce, Salesforce, and Optimizely. We also have agency partners, including Xngage and Americaneagle.com, to drive new HawkSearch sales. This quarter, we announced a partnership with oBundle, a specialist in BigCommerce, with over 500 BigCommerce customers who are now candidates to upgrade to HawkSearch. Sales in our third quarter included Aaron Equipment, one of the world's leading dealers in the packaging industry. Aaron Equipment selected HawkSearch for their B2B e-commerce site because of its real-time product indexing that allows customers to search and index data as it's being created or changed. We also signed Seattle Aviation, a worldwide aviation supplier, who chose HawkSearch in partnership with Salesforce for personalized recommendations on its B2B commerce site. Valken Sports, a B2B paintball and sports retailer, selected HawkSearch to drive online business over its five e-commerce sites using HawkSearch Multi-Storefront. Valken will be delivered in partnership with BigCommerce and oBundle. Designerie, an importer and distributor of European designer-focused furniture, also purchased HawkSearch's Multi-Storefront to power multiple eCommerce sites powered with eCommerce. A big sale for this quarter included Repli, who's a property technology company that selected WooRank to power SEO for 500 websites to improve their keyword tracking, to analyze competitors, and report on Core Web Vitals. While Byrne Shoes chose our AI-driven search to power its online business on the AB Commerce platform in partnership with Magico. Now we've got several shoe customers, including Converse, Reebok, Adidas. Voltus, an electrical online distributor, selected Bridgeline for its multilingual artificial intelligence and natural language processing search capabilities to power its online B2B catalog with over 80,000 products. There were several other ones this quarter as well. Many of these new customers are, are the result of our go-to-market strategy that targets underserviced verticals with Be Everywhere campaigns. These verticals include B2B electrical supply, footwear, franchise, and B2B plumbing distribution. 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 identify and fix website compliance issues with the Americans with Disabilities Act and similar legislation in Canada and Europe. Bridgeline will sell accessiBe into our 600 customers, many of whom have active interest in accessibility, which not only increases their online sales ability, but also reduces litigation risk associated with compliance legislation. In the third quarter, Bridgeline delivered $3.9 million in revenue, including $3.2 million in subscription and license revenue, and $700,000 in services. Subscription revenue was influenced this quarter by the full quarter reduction of a large customer we mentioned earlier, who's renewing for their 9th consecutive year on a legacy Bridgeline product, restructured their website, which reduced their subscription revenue. This quarter, over 200 of our customers whose subscription was eligible for renewal, renewed totaling $1 million in licenses. Our core product customers renewed at over 98%. Many customers renewed their subscription with a rate increase. Most customers start with a 36-month subscription, as mentioned earlier, and renew for 2 successive terms. Our subscription license revenue is 81% of total revenue for the quarter, with new contracts signing 3 years. At this time, I'd like to turn the call over to our Chief Financial Officer, Tom Windhausen. Tom? Thanks, Ari. I'll start an update on our financial results for the third quarter of fiscal 2023, which ended June 30th, 2023. Total revenue for the quarter ended June 30th, 2023, was $3.9 million, compared to $4.2 million in the prior year period. Now, going into each component of revenue, our subscription and license revenue, which is comprised of SaaS licenses, maintenance and hosting revenue, and perpetual license revenue for the quarter ended June 30th, 2023, was $2.2 million. As a percentage of total revenue, our subscription and licenses revenue was 81% of total revenue for the quarter ended June 30th, 2023. Services revenue was over $700,000 for the quarter ended June 2023, a slight decrease from $800,000 in the prior year quarter. As a percentage of total revenue, services revenue accounted for 19% of total revenue for the quarter. Our cost of revenue was $1.3 million for the quarter ended June 2023, consistent with the $1.2 million in the prior year period. As a result, gross profit was $2.6 million for the quarter ended June 2023, as compared to $2.9 million for the prior year period. Our overall gross margin, our overall gross profit margin was 68% for the quarter ended June 2023, compared to 70% in the prior year period. Our subscription and license gross margins were 73% for the quarter ended June 2023, compared to 75% in the prior year period, and our services gross margins were 44% for the quarter, compared to 46% in the same period in 2022. Operating expenses were $3.3 million for the quarter ended June 2023, consistent with $3.2 million in the prior year period. The change in our fair value of our liability-classified warrants resulted in non-cash charge of $100,000 compared to income of $400,000 in the prior year period. Changes in share price are the primary driver of the change in fair value of these warrants. Our net loss was $800,000 for the fiscal quarter ended June 30th, 2023, compared to net income of $400,000 in the prior year period. Moving to EBITDA, our adjusted EBITDA for the quarter was a negative $163,000, compared to a positive $63,000 in the prior year period. Moving on to the balance sheet. At June 30, 2023, we had $2.6 million of cash and accounts receivable of $1.0 million. Our total debt outstanding was EUR 680,000, or about $740,000, with a weighted average interest rate of 4.5% and principal payments due extending through 2028. We have no remaining earnouts from any previous acquisitions, and our total assets were $25.9 million, with total liabilities of $6.7 million. We look forward to continued growth and success in fiscal 2023 and beyond, and we're keen that we will continue to focus on our revenue growth, product innovation, customer success, and delivering shareholder value. Thank you for joining us on the call today. At this time, we'd like to open the call to questions and answers. Moderator? As a reminder, to ask a question, you will need to press star one one on your telephone. Again, that's star one one on your telephone to ask a question. To remove yourself from the question queue, you may press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Howard Halpern of Taglich Brothers. Good afternoon, guys. Good afternoon, Howard. Do you, do you anticipate that this quarter should be the low point, at least for the subscription and perpetual license, you know, revenue line, and that we should begin to see sequential growth from this point going forward? Our low quarter for subscription license is probably going to be next quarter. There's another $45,000 in subscription and license burn-off from that one customer. That will be in next quarter, and that'll be it. Okay. Depending on our sales right now, it'll be flat or down. Okay, then for next year, you anticipate then you should start to see it, some sequential... Exactly. You know, so our strategy on all of this, Howard, is, and for everybody, is that we've got a set of products from recent acquisitions and innovation that are really selling. We talk a lot about Hawk and Boomerang, Hawk especially, because that is selling really well. We've got some legacy products that are generating EBITDA for us, and we're treating those customers really well, but we're not adding new customers, and over time, those customers are declining. Our core revenue is going to be more than 50% soon, and that growth that we see, which this quarter was 15% CAGR, will shine through. Okay. In one of the, you know, I guess, partnership deals that you had with the, you know, selling over 500 Boomerang licenses through one, through one, partner, are there other type of deals out there that you could get chunks of customers? Yeah, there are. We signed a partnership with a company called Duda that has 10,000-plus customers and is selling in bulk to those. Those are opportunities. Then also, when we sell into the franchise space, we actually are winning chunks of customers, so to speak. There's, there's 4 big things that are coming down the pipe in the near term that are going to reduce our sales cycle and increase our total addressable market, both of which are going to drive growth for those core products. One of them is our franchise search solution called Multi-Engine Management. That's going to allow us to be the only search solution that has features specific for the franchise industry, and that's gonna win chunks of customers, so to speak. The other one is Advanced Analytics, which is actually an upsell opportunity with substantial MRR that's going to allow us to sell into our existing customer base, a new product that many of them need. The third one is Bronco, which gives us an out-of-the-box UI and a self-service portal so that we can sell into companies that need to launch right away, rather than wait a few weeks for an implementation. The fourth, and the big one, is the Optimizely Configured Commerce, where we'll, at with the click of a button, have access to 1,000 Optimizely customers who can purchase Hawk and, and recommended- ... Okay. Also, do you see out there the potential for other types of partnerships like you described, where, you know, software that your customer base needs, that you could bring into the fold and integrate with your software? You know, that's interesting, so we did that with accessiBe, and we're selling accessiBe with a revenue share into our customer base. We'll also be doing that with other partners. We'll be announcing those along the way. We're in negotiation with a couple right now. One of the things that we want to do strategically is to leverage our customer base and to be able to sell more into it. That's both by innovation, acquisition, and by partnering and reselling. You're seeing the opportunities in partnering. What is the landscape in the acquisition area? Is partnering a little bit easier at this point in time? Well, partnering is easier, not just at this point in time, in general it is, but you get a smaller cut of the overall revenue, so you gotta be careful in terms of your own sales costs. The M&A industry is, I think a buyer's market right now. We're starting to see private company valuations going down as low as, like, 1.5x revenue or lower. Finally, it's starting to get into the area where we think it ought to be. Okay. Well, I'm excited about- We like to be in this market in the long term. Okay. I'm excited, on, what's to come, and you guys keep up the great work. Thank you, Howard. Much appreciated. Thank you. Please stand by for our next question. Our next question comes from the line of Per Jacobsen. Hi, guys. How are you doing? Good, Per. How are you? Doing well. Thanks. Hey, I was wondering, a couple of things. Just a small thing first. How many net new direct customers did you gain in, in this quarter? Is that something you could share? The new customers that we gained, I don't have the notes in front of me, but I, I wanna say 14. That would be new logos that were acquired. We also upsell into existing customers each quarter in addition to that, but 14 new logos, I believe. Okay. Hey, thanks for, for sharing the information about the... I mean, as I think I expect before, there's definitely a growth story hidden somewhere in the legacy numbers. Thanks for sort of starting to dissect that. Following up on Howard's question, it, it's hard to sort of, grasp, because you're talking about, an incline and a decline. When do you think that, materially the incline will exceed the decline? I mean, when do you- Yeah, I think that, I think that that's coming in our Q1. Absolute worst case would be our Q2, so that would be either in the quarter ending December, worst case, the quarter ending March. We had a customer who, we announced this actually at the beginning of the year, that removed, that reduced their license size. It was a large customer, and they couldn't do it all at once, and they ramped it down, and that have caused successive quarter declines. There's $45,000 in subscription revenue left next quarter. I guess in the current quarter, in our fourth quarter. We'll see quarter-over-quarter, if nothing were to change, a $45K decline. inning customers as well, and it'll be less than that, we expect. But then at that point, we're done with that particular customer, and that was the largest impact. We do have currently, in terms of subscription revenue, which is really the primary focus, about half of our revenue right now from legacy products. I hate to say that because we do respect these products, and we keep them current. We're just not focusing on bringing new customers in those spaces, so overall, things do decline. The and 50% in the core products. With the 50% in core products growing at this quarter, 15% CAGR, and last quarter, 18%, summers tend to be light quarters for us, a little bit Doing that math, you can see the increase in, in those core. Also, the reason why I kind of wanted to focus on some of these future growth initiatives, like Optimizely Configured Commerce, Bronco, Advanced Analytics, and franchise search, we do expect faster sales cycle and a larger total addressable market, for our core products, and we're hopeful to see that allow us to grow at even faster rates. Okay. Thank you. I may have missed it, and, and I didn't have access to the, the quarterly report before the call. What does the cash position look like now? I think cash at June 30 was $2.6 million. Okay. $1.1 million of accounts receivable. Okay. Hey, as usual, you guys are doing a good job. can we ask that we get a little bit more notice, a little lag between the, the, the release of the, of the, the quarterly and, and, and the, the call? It's like it's, it didn't even come through before the call, so. Okay. Okay. You know what? That hasn't been on my radar, and thanks for bringing that up, and we'll see what we can do. Okay, thank you. I appreciate it, and thanks for everything you do, guys. Appreciate it. Thank you. We appreciate your support. Thanks. Thank you. Again, to ask a question, please press star one one on your telephone. Again, that's star one one on your telephone to ask a question. Our next question comes from the line of Leo Carpio of Joseph Gunnar. Afternoon, gentlemen. I just have two quick questions. The first one, could you provide us an update on the industry environment in terms of what you're seeing or particular trends? Is the economy or concerns of the economy having any impact on your sales cycle? Thanks. Thanks, Leo. You know, first of all, with the caveat, I hate to think, especially for a company the size of Bridgeline, in terms of macroeconomics, because the market overall is so large relative to us, that the impact of macro deals tend to have less of, to be a little bit smaller. We see sort of on two sides, one, on the valuation side, the private companies, becoming significantly cheaper than last year. On the new sales side, in terms of trends, we personally have not felt an appreciable change in demand, either, neither in Europe nor in North America. We sell, you know, into both those markets. We haven't felt that yet, although we do see a lot of people kind of talk about it. Our sales cycle is the same length, and our pipeline and our cost per lead in our pipeline hasn't changed. On the M&A side, you mentioned that the valuations are coming down and seem to be more appealing. Any particular technologies that you're looking at or considering that would be nice add-on to your platform, or are you just satisfied with what you have right now in the near term? Yeah. Okay. Well, we're not satisfied with what we have right now. We think that one of the key factors of growth is -- efficient growth, is an ability to upsell existing customers. We think in terms of our customer acquisition costs. That is significantly less to sell into existing customers. Now, we want to stay focused. I am still seeing a couple of deals a month come to me. I spent a lot of time in 2020 and 2021 making sure that every investment banker knew my name and would throw anything my way, even if they didn't think that it was relevant, and I could quickly triage it. I see a lot of deals coming, but our focus is all about helping our customers increase their online revenue. We wanna do so with products that are easy to sell, meaning that they don't require significant professional services to implement. Ideally, point and click to purchase touchless sales, as we said. We look to customer or to prospective companies that can increase traffic to our customers' websites. We see products like this probably every quarter as candidates for acquisitions. We look for products that can help our customers convert more of their site visitors into site buyers, and in particular, we see competitors, some, some of our existing products, competitors to HawkSearch, for example, that come to us for acquisitions. We haven't pulled the trigger on any of those. We did buy two sites search solutions, Celebros and HawkSearch, we would consider that because we think that we could integrate the customer bases and the technologies. We also look at products that increase the average purchase price, similar to our own Recommendations tool, that makes impulse purchase recommendations on your checkout screen. Those three broader categories that all are synergistic in their ability to drive customers' revenue are what we're looking for. We're looking for companies that are generally $5 million in revenue. In this market, we think that deals happen at less than 2x revenue, which is a little bit of a challenge for us because we're not trading at that point. Leveraged buyouts with debt could make something make sense. Okay, just 1 quick follow-up. The competitive environment, is it still the same? Any new players or pretty much static as you've seen in the last few quarters? There's two aspects to the competitive environment: the partners and the competitors. On the competitors side, in our space, things haven't changed. However, Algolia has spent a lot of money on marketing and has done some great things from a technical perspective, and we see a fair amount of them, more of them this year than we did last year, and that's competing directly with HawkSearch. On the partnership side, what we've seen is that the leads that we're getting from Optimizely, in particular, and from BigCommerce as well, have increased substantially. That might just be because we've spent so much time and had so many success stories with them, that we've got a certain amount of, of mind share within their customer base. It might also be because they're realizing that our products are, are, are better value and for, for, for their customers and are choosing us. All right. Thank you. Thank you, Leo. Thank you. I would now like to turn the conference back to management for closing remarks. Great. Well, thank you for joining us today. We really appreciate the continued support of all of our customers, partners, and of course, our shareholders. We're excited about our business and ongoing growth prospects, and we look forward to speaking to you again on our fourth quarter fiscal conference call, which will be in December of 2023. Be well, and thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.