Bridgeline Digital 2025 Q2 Earnings Misses Targets as Net Income Falls 21.3%

Bridgeline Digital (BLIN) reported its fiscal 2025 Q2 earnings on May 15th, 2025. The total revenue of Bridgeline Digital increased by 1.9% to $3.88 million in 2025 Q2, up from $3.80 million in 2024 Q2. Bridgeline Digital's losses deepened to $0.10 per share in 2025 Q2 from a loss of $0.06 per share in 2024 Q2 (66.7% wider loss). Meanwhile, the company's net loss widened to $-730000 in 2025 Q2, representing a 21.3% increase from the $-602000 loss recorded in 2024 Q2. The company missed analyst expectations for both earnings and revenue, indicating challenges in meeting market performance targets. Bridgeline Digital anticipates modest revenue growth, aiming for $4 million in total revenue for Q3 2025. The company projects an improvement in gross margins, targeting a 70% margin, while maintaining a cautious outlook on operating losses, which may reach approximately $0.6 million.

Revenue

The total revenue of Bridgeline Digital increased by 1.9% to $3.88 million in 2025 Q2, up from $3.80 million in 2024 Q2.

Earnings/Net Income

Bridgeline Digital's losses deepened to $0.10 per share in 2025 Q2 from a loss of $0.06 per share in 2024 Q2 (66.7% wider loss). Meanwhile, the company's net loss widened to $-730000 in 2025 Q2, representing a 21.3% increase from the $-602000 loss recorded in 2024 Q2. The earnings per share indicate a negative trend, showcasing a significant increase in losses.

Price Action

The stock price of Bridgeline Digital has dropped 5.24% during the latest trading day, has dropped 3.42% during the most recent full trading week, and has surged 17.92% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Bridgeline Digital (BLIN) shares after its revenue raise on the financial report release date and holding for 30 days shows poor performance over the past five years. The annualized return is -4.18%, with a total loss of 45.91% since 2020. This strategy significantly underperforms compared to the market and fails to capitalize on momentum. Despite revenue increases, the stock's post-report performance indicates substantial losses, suggesting that investors should reconsider this approach. The negative trend highlights the challenges Bridgeline faces in sustaining growth and profitability, making it crucial for investors to evaluate alternative strategies or focus on long-term fundamentals rather than short-term gains.

CEO Commentary

Ari Kahn, President and Chief Executive Officer of Bridgeline Digital, emphasized the strong demand for the Hawk AI product line, stating, "Our Hawk AI product line has received outstanding demand from both existing and new customers." He acknowledged the modest revenue growth, driven by the addition of 20 new subscription contracts representing $1.7 million in contract value, while also noting the challenge of rising operating expenses, which increased to $3.4 million. Kahn expressed optimism about the company’s strategic investments in AI technology, declaring, "We expect an excellent return in this expansion of our sales and marketing budget."

Guidance

Bridgeline Digital anticipates modest revenue growth, aiming for $4 million in total revenue for Q3 2025. The company projects an improvement in gross margins, targeting a 70% margin, while maintaining a cautious outlook on operating losses, which may reach approximately $0.6 million. The leadership expects continued expansion in Annual Recurring Revenue (ARR) resulting from ongoing customer acquisition efforts and new partnerships.

Additional News

Recently, Bridgeline Digital secured 20 new AI contracts valued at $1.7 million, enhancing their Annual Recurring Revenue by over $700,000. This strategic move highlights Bridgeline's focus on expanding its AI capabilities and customer base. Furthermore, the company successfully launched new Hawk AI features, which include Smart Conversation and streaming API implementations, enabling more dynamic search experiences. Bridgeline's partnerships with Shopware and Groove Commerce signify a broadened market reach, while collaborations with Netformic USA enhance eCommerce platform capabilities. These developments are pivotal as Bridgeline aims to leverage AI innovations to drive growth and market penetration in diverse sectors.