Digital marketing is a rapidly expanding sector and businesses need to act fast to grab customers and interact with them, in order to increase their growth.
One company that is helping transform how brands interact with their customers is NASDAQ-listed Bridgeline Digital Inc (NASDAQ:BLIN).
The firm provides software solutions that bridge the gaps between marketing, content, commerce, social & insights. It enables marketers to deliver exceptional customer experiences, engage prospects and build customer relationships across multiple channels.
Bridgeline helps customers maximize the performance of their complete digital experience from websites and intranets to online stores and marketing campaigns, enabling its customers to maximize revenue, improve their customer loyalty, enhance employee knowledge, and reduce operational costs.
The Woburn, Massachusetts-based technology firm posted $4.3 million in revenue in the three-month period to end December 31, 2021, an increase from $2.8 million in the same year-ago period and also swung to a profit in 1Q at $1.9 million.
Subscription and licenses revenue, which is made up of Software as a Service (SaaS) licenses, maintenance and hosting revenue, and perpetual license revenue, came in at $3.4 million, up 71% on the prior-year period.
Proactive caught up with Bridgeline CEO Ari Kahn to find out more about the company.
Proactive: Bridgeline helps customers maximize the performance of their digital products, from websites and intranets to online stores and marketing campaigns. How does it achieve this?
Ari Kahn: We help our customers grow revenue in three ways: We help drive more traffic to their website; we help convert that traffic from visitors into actual buyers; and we help increase the average order value of each buy.
We've got a suite of products that offer several solutions for each of these three components - traffic, conversion, and average order value. And all of those components are tied together with an intelligent dashboard that analyzes the performance of your site and makes recommendations as to which of the tools from Bridgeline you can use to grow faster.
The company saw its revenue rise by 51% year-over-year in the first quarter of 2022 off the back of strength in its subscription and licenses revenue. Will this be the main driver going forward?
That's right. So right now, subscriptions and licenses account for 80% of our revenue, and it's going to remain in the 80% to 85% range.
Our software is increasingly out of the box. The other 20% of revenue is professional services which customizes that software. However, strategically, we want our customers to be able to do as much of the customization themselves without engaging with our services.
Bridgeline credited the increase in subscription revenue to the acquisitions of Hawksearch and Woorank in fiscal year 2021. Are any further acquisitions to be expected?
Yes. So our strategy has two components, organic growth and inorganic growth, and on the inorganic side that means acquisitions. We are in a target rich environment, with more than 10,000 apps that help companies grow their revenue. And many of these apps are really not companies, their just products, and they are better suited to be in the context of a larger business like Bridgeline.
So we're going to consolidate several companies each year for the next few years, and bring those into the Bridgeline family.
During the quarter, Bridgeline signed a multi-year agreement with a sales intelligence company and also strengthened its ties with a Fortune 100 client. Can more such deals be expected?
Absolutely. On the Fortune 100 we have several customers today such as AstraZeneca, GE, Hewlett Packard. And we have two opportunities, one is acquiring more Fortune 100 customers, and in addition to that, as we have more and more products to offer, we're able to up-sell to our existing customers and drive even more revenue from them.
Helping the sales intelligence side is a product of ours called DataBravo, which we just launched last summer, and it received great demand right out of the gates. DataBravo accumulates information about how well websites are performing and what technologies they use. So, with it, sales intelligence companies can mine that information and determine which websites are likely to be candidates for their customers to sell software into. So we're putting a lot of focus behind DataBravo, and we expect to see more wins.
So, what do you think you personally bring to the company as its CEO?
Well, I love Bridgline - I am a Bridgeliner through and through. My background is in artificial intelligence (AI), I have a PhD in AI. I'm also an entrepreneur, and I have launched several companies, including Fat Wire in 1996. That was one of the first marketing technology companies. So, what I'm bringing to Bridgeline is in-depth knowledge about how marketing technology works.
I’ve been there at the very beginning and know how to bring artificial intelligence into the game so that the software that we deliver, can self-analyze what our customers need, and make intelligent prescriptive recommendations to them to help them grow even faster.
And what should Bridgeline shareholders expect in the near to medium term?
I think that most companies our size in this space should be trading at a multiple of revenue, generally three times revenue or higher. Bridgeline is trading below that multiple. I think that therefore we have a great opportunity to grow in the near term, and to see our stock increase into the $4 or even $5 range.
I think that everyone should be watching Bridgeline in 2022. For more acquisitions and an expansion of our product suite. In particular, TruPresence - https://www.trupresence.com/ - is a brand that we're just launching right now to focus on the franchise space and you're going to see a lot of exciting things in franchise for Bridgeline.
Contact the author at jon.hopkins@proactiveinvestors.com