Q3 2026 Bridgeline Digital Inc Earnings Call Transcript
Key Points
- Bridgeline Digital Inc (BLIN) tied its record for new customer wins with 9 new logos in Q3 2026, alongside 10 existing customers expanding their licenses, resulting in 19 new subscription contracts and $1.7 million in total contract value.
- Core product revenue grew to $2.4 million in Q3 2026, up from $2.2 million in the prior year, with a 13% growth in trailing 12 months and core net revenue retention reaching 106%.
- HawkSearch was ranked number one for B2B search use case in Gartner's Critical Capabilities for Search and Product Discovery for the second consecutive year, reinforcing its market leadership.
- The company's strategic shift toward core products is progressing, with core revenue now representing 62% of total revenue and 66% of subscription revenue, up from 57% and 58% respectively in the prior year.
- Bridgeline Digital Inc (BLIN) improved its net loss to $500,000 in Q3 2026 from $800,000 in the prior year period, and adjusted EBITDA improved to negative $102,000 from negative $330,000, showing progress toward profitability.
- The company maintains a clean balance sheet with low debt of $187,000 and a weighted average interest rate of 3.5%, providing financial stability for future investments.
- Total revenue growth remained modest at $3.9 million in Q3 2026, only slightly up from $3.8 million in the prior year, as legacy product declines continue to offset core growth.
- The company reported a net loss of $500,000 and negative adjusted EBITDA of $102,000 for the quarter, indicating ongoing cash burn despite improvements.
- Gross margins declined slightly, with subscription gross margin falling to 69% from 70% and services margin dropping to 47% from 50% year-over-year.
- Bridgeline Digital Inc (BLIN) expects to remain cash neutral in 2027, with some quarters potentially seeing minor negative cash flow, as it prioritizes growth investments over bottom-line profitability.
- The company's legacy business continues to decline, and management projects it will take until next year for core revenue to exceed 70% of total revenue, delaying the point where overall growth becomes more apparent.
- The company has a significant number of warrants expiring in November 2026 (592,000 at $2.51 exercise price), which could create overhang or dilution concerns for investors.
Good afternoon, and welcome to Bridgeline Digital's third quarter 2026 earnings call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to your host, Tom Windhausen, CFO. The floor is yours.
Thank you. Thank you very much, and good afternoon, everyone. Thanks for joining us today. My name is Tom Windhausen, I'm the Chief Financial Officer of Bridgeline Digital, Inc. I'm pleased to welcome you today to our fiscal 2026 third quarter conference call.
On the call today is Mr. Ari Kahn, Bridgeline's President and CEO. He'll begin the call with a discussion of our business highlights. And then I'll update you on our financial results for the quarter, and we'll conclude by taking some questions.
Before we begin, I'd like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements, and those are based upon current expectations of management and
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