Exhibit 99.1

Bridgeline Digital Announces 9.2% SaaS Revenue Increase, Margin Expansion, for Third Quarter of Fiscal 2016

Gross Margin Improved to 54% in the Third Quarter of Fiscal 2016

Burlington, Mass., August 15, 2016 - Bridgeline Digital, Inc. (NASDAQ: BLIN), The Digital Engagement Company™, today announced financial results for its fiscal third quarter, the period ended June 30, 2016.

“Bridgeline continued its transition to a SaaS business model, as evidenced by the 9.2% growth in SaaS revenue, expanding our base of contracted and recurring revenue,” commented Ari Kahn, Bridgeline’s President and Chief Executive Officer. “This transition is accelerating, and driving margin expansion, as we introduce additional solutions and invest in a service-oriented sales organization.”

“Bridgeline accomplished significant milestones this quarter that we believe are critical to driving long term growth and success,” added Mr. Kahn. “We launched our iAPPS Pro product line, made significant investments to our existing enterprise sales team, as well as started building a new inside sales team that will focus entirely on iAPPS Marketier Pro, our new marketing automation solution. While this new team has not yet contributed to our growth, I am encouraged with the talent we recruited and the pace at which they have come up to speed. All of these efforts will help transform our business, generate a more significant license and recurring revenue stream, and ultimately increase shareholder value.”

Third Quarter Highlights:

Other Third Quarter and Recent Highlights

“The progress we are making is evident when you look at the year to date results compared to prior year,” added Mr. Kahn. “Our total license revenue is up 7.4%, our SaaS license revenue is up 12.5%, and our Adjusted EBITDA has improved by over $2.1 million when compared to last year. We are excited to finish fiscal 2016 and complete our transition, and look forward to a strong fiscal 2017.”

Financial Results

Third Quarter

Revenue for the third quarter of fiscal 2016 was $3.7 million, compared to $4.9 million in the third quarter of fiscal 2015. Subscription and perpetual license revenue increased 1.7% to $1.5 million in the third quarter of fiscal 2016, compared to $1.5 million in the third quarter of fiscal 2015. License and hosting revenue combined in the third quarter of fiscal 2016 comprised 50.0% of total revenue, compared to 39.4% of total revenue in the third quarter of fiscal 2015. SaaS revenue increased 9.2% to $1.3 million in the third quarter of fiscal 2016, compared to $1.2 million in the third quarter of fiscal 2015.

Gross margin improved to 54.3% in the third quarter of fiscal 2016, from 45.4% in the third quarter of fiscal 2015, reflecting a larger mix of recurring and service-based revenue. Cost of revenue was reduced by $975,000, or 36.6%, to $1.7 million in the third quarter of fiscal 2016, compared to $2.7 million in the third quarter of fiscal 2015.

Operating expenses remained constant at $3.0 million in the third quarter of fiscal 2016, compared to the third quarter of fiscal 2015, reflecting management’s ongoing expense control initiatives. Loss from Operations was $1.1 million in the third quarter of fiscal 2016, compared to $807,000 in the second quarter of fiscal 2015.

Inclusive of a $726,000 non-cash charge related to the inducement of convertible notes, net loss was $2.0 million in the third quarter of fiscal 2016, compared to $1.1 million in the third quarter of fiscal 2015.

Adjusted EBITDA was a loss of $575,000 in the third quarter of fiscal 2016, compared to a loss of $190,000 in the third quarter of fiscal 2015.

Year to Date

Revenue for the nine months ending June 30 was $12.2 million in fiscal 2016, compared to $14.7 million in fiscal 2015. Subscription and perpetual license revenue increased 7.4% to $4.6 million in fiscal 2016, compared to $4.3 million in fiscal 2015. SaaS revenue increased 12.5% in the first nine months of fiscal 2016 to $3.8 million, compared to $3.4 million in the first nine months of fiscal 2015. Recurring revenue for the first nine months of fiscal 2016 comprised 43.2% of total revenue, compared to 34.7% of total revenue in the first nine months of fiscal 2015.

Gross margin improved to 52.6% through the first nine months of fiscal 2016, from 40.2% through the first nine months of fiscal 2015. Cost of revenue was reduced by $3.0 million, or 34.3% to $5.8 million in fiscal 2016, from $8.8 million in fiscal 2015.

Excluding $795,000 in restructuring charges related to headcount and facility reductions, operating expenses through the first nine months of fiscal 2016 were reduced by $2.1 million, or 20.1%, to $8.4 million, from $10.5 million through the first nine months of fiscal 2015.

Inclusive of a $726,000 non-cash charge related to the inducement of convertible notes, net loss improved by 17.2% to $4.4 million through the first nine months of fiscal 2016, from a net loss of $5.3 million for the first nine months of fiscal 2015.

Adjusted EBITDA improved by 81.8% to a loss of $484,000 for the first nine months of fiscal 2016, from a loss of $2.7 million for the first nine months of fiscal 2015.

Conference Call Information

Bridgeline Digital will host a conference call to discuss third quarter 2016 results at 4:30 p.m. ET today. To listen to the conference call, please dial (877) 837-3910 within the U.S. or (973) 796-5077 for international callers.

Non-GAAP Financial Measures

This press release contains the following non-GAAP financial measures: non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted share, Adjusted EBITDA and Adjusted EBITDA per diluted share.

Non-GAAP adjusted net income and non-GAAP adjusted earnings per diluted share are calculated as net income or net income per share on a diluted basis, excluding, where applicable, amortization of intangible assets, stock-based compensation, restructuring charges, preferred stock dividends and any related tax effects.

Adjusted EBITDA and Adjusted EBITDA per diluted share are defined as earnings before interest and charges on conversion of debt, taxes, depreciation and amortization, stock-based compensation charges, restructuring charges, preferred stock dividends and any related tax effects. Bridgeline uses non-GAAP adjusted net income and Adjusted EBITDA as supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”).

Bridgeline’s management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, Bridgeline management presents non-GAAP financial measures in connection with GAAP results. Bridgeline urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which is included in this press release, and not to rely on any single financial measure to evaluate Bridgeline's financial performance.

Our definitions of non-GAAP adjusted net income and Adjusted EBITDA may differ from and therefore may not be comparable with similarly titled measures used by other companies, thereby limiting their usefulness as comparative measures. As a result of the limitations that non-GAAP adjusted net income and Adjusted EBITDA have as an analytical tool, investors should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," or similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions, including, but not limited to, the impact of the weakness in the U.S. and international economies on our business, our inability to manage our future growth effectively or profitably, fluctuations in our revenue and quarterly results, our license renewal rate, the impact of competition and our ability to maintain margins or market share, the limited market for our common stock, the volatility of the market price of our common stock, the performance of our products, our ability to respond to rapidly evolving technology and customer requirements, our ability to protect our proprietary technology, the security of our software, our dependence on our management team and key personnel, our ability to hire and retain future key personnel, or our ability to maintain an effective system of internal controls as well as other risks described in our filings with the Securities and Exchange Commission. Any of such risks could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. We expressly disclaim any obligation to update any forward-looking statement.

About Bridgeline Digital

Bridgeline Digital, The Digital Engagement Company™, helps customers maximize the performance of their full digital experience – from websites and intranets to online stores and campaigns. Bridgeline’s iAPPS® platform deeply integrates Web Content Management, eCommerce, eMarketing, Social Media management, and Web Analytics to help marketers deliver digital experiences that attract, engage and convert their customers across all channels. Headquartered in Burlington, Mass., Bridgeline has thousands of quality customers that range from small- and medium-sized organizations to Fortune 1000 companies. To learn more, please visit www.bridgeline.com or call (800) 603-9936.

Contact:

Bridgeline Digital, Inc.

Michael D. Prinn

Executive Vice President

& Chief Financial Officer

781.497.3016

mprinn@bridgeline.com

BRIDGELINE DIGITAL, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

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CONSOLIDATED STATEMENTS OF OPERATIONS

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CONSOLIDATED BALANCE SHEETS

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