SEATTLE--(BUSINESS WIRE)--Marchex, Inc. (NASDAQ: MCHX), which harnesses the power of AI and conversa...


        SEATTLE--(BUSINESS WIRE)--Marchex, Inc. (NASDAQ: MCHX), which harnesses the power of AI and conversational intelligence to drive operational excellence and revenue acceleration, today announced its financial results for the third quarter ended September 30, 2024.

Q3 2024 Financial Highlights


GAAP revenue was $12.6 million for the third quarter of 2024, compared to $12.8 million for the third quarter of 2023.


Net loss was $0.8 million for the third quarter of 2024 or $0.02 per diluted share, compared to a net loss of $1.5 million or $0.04 per diluted share for the third quarter of 2023.








Q3 2024





Q3 2023





GAAP Revenue





$ 12.6 million





$ 12.8 million





Non-GAAP Results:













Adjusted EBITDA





$ 0.3 million





$ 0.4 million





Adjusted non-GAAP loss per share for the third quarter of 2024 was ($0.01) compared to ($0.01) for the third quarter of 2023.


Recent Business Highlights:


New Customer Traction and Existing Customer Expansion. The company has continued to make progress in growing the Auto and Auto Services verticals, as well as adding relationships in the Home Services and Healthcare verticals. The company also continues to make progress expanding its pipeline of opportunities and accelerating product cross-selling to existing and new customers across multiple verticals.


Product Innovation. Marchex recently announced the phased rollout of its vertical-specific advanced AI solutions tailored for automotive OEMs and dealers, home services, medical, dental, and automotive services, beginning in the fourth quarter. These AI solutions include innovation for lead identification, lead value assessment, and trending topics discovery. They deliver descriptive and prescriptive insights that enable businesses to improve return on ad spend, understand the primary elements driving changes in customer behavior, and increase sales.


DealerOn Partnership. During the quarter, the Company announced its partnership with DealerOn, a leading automotive marketing technology company. DealerOn will deploy Marchex's call analytics and attribution platform to optimize marketing campaigns for their customers by leveraging conversational intelligence from calls, including attribution to marketing sources.


“As we position Marchex for future growth, we are utilizing the power of our vast direct first-party conversational data to expand our capabilities while making significant progress across the key initiatives that drive Marchex's future," said Edwin Miller, CEO. “In the third quarter of 2024, we completed important milestones in our foundational infrastructure initiatives and have continued resourcing our key growth opportunities that we believe will power Marchex in 2025 and beyond. We are laser focused on growth initiatives that include product innovation, sales team and channel expansion, and the next phase of our infrastructure initiatives that we believe will enable Marchex to achieve leadership in AI-driven prescriptive analytics. We believe that we are on target to build a much larger company with a compelling growth and profitability profile."

Business Outlook

The following forward-looking statements reflect Marchex's expectations as of ​October 31, 2024​.

For the fourth quarter ending December 31, 2024:


Revenue is anticipated to be in the range of $12.0 million due to expected typical seasonality of call volumes in the fourth quarter.


Adjusted EBITDA is anticipated to be a loss in the range of $(0.4) million, due to the overlap in timing of expenses related to the completion of our foundational OneStack initiatives.


Gross margin is anticipated to be slightly lower than Q3 2024, which trended consistent with Q2 and was somewhat higher than anticipated due to timing of certain expense items.


Initial fiscal 2025:


Revenue for the first quarter of 2025 is anticipated to be higher than the first quarter of 2024 and sequentially higher than the fourth quarter of 2024.


Revenue in 2025 is anticipated to grow over 2024, with the opportunity for accelerating sequential growth rates during 2025.


We anticipate gross margins for 2025 will be higher than 2024, with the opportunity for improvement during 2025.


We also anticipate that Adjusted EBITDA for the first quarter of 2025 will be improved from the fourth quarter of 2024 levels.


“In the third quarter, we made significant progress with our OneStack initiatives and in AI-powered product innovations. Additionally, based on current progress, we believe we are very well positioned to drive growth in 2025,” said Miller.

Management will hold a conference call, starting at 5:00 p.m. ET on Thursday, October 31, 2024​, to discuss its ​third quarter 2024 financial results and other company updates. Access to the live webcast of the conference call will be available online from the Investors section of Marchex’s website at www.marchex.com. An archived version of the webcast will also be available at the same location two hours after completion of the call.

About Marchex

Marchex harnesses the power of AI and conversational intelligence to provide actionable insights aligned with prescriptive vertical market data analytics, driving operational excellence and revenue acceleration. Marchex enables executive, sales, and marketing teams to optimize customer journey experiences across communication channels. Through our prescriptive analytics solutions, we enable the alignment of enterprise strategy, empowering businesses to increase revenue through informed decision-making and strategic execution. Marchex provides conversational intelligence AI-powered solutions for market-leading companies in leading B2B2C vertical markets, including several of the world’s most innovative and successful brands.

Please visit http://www.marchex.com, www.marchex.com/blog or @marchex on X (formally known as Twitter), where Marchex discloses material information from time to time about the company, its financial information, and its business.

Forward-Looking Statements:

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenues, other financial guidance, acquisitions, dispositions, projected costs, prospects, plans and objectives of management are forward-looking statements. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. There are a number of important factors that could cause Marchex's actual results to differ materially from those indicated by such forward-looking statements including but not limited to product demand, order cancellations and delays, competition and general economic conditions. These factors are described in greater detail in the "Risk Factors" section of our most recent periodic report and registration statement filed with the SEC. All of the information provided in this release is as of ​October 31, 2024,​ and Marchex undertakes no duty to update the information provided herein.

In the event the press release contains links to third party websites or materials, the links are provided solely as a convenience to you. Marchex is not responsible for the content of linked third-party sites or materials and does not make any representations regarding the content or accuracy thereof.

Non-GAAP Financial Information:

To supplement Marchex's consolidated financial statements presented in accordance with GAAP and to provide clarity internally and externally, Marchex uses certain non-GAAP measures of financial performance and liquidity, including Adjusted EBITDA, Adjusted OIBA, and Adjusted non-GAAP income (loss) per share. Financial analysts and investors may use Adjusted EBITDA and Adjusted OIBA to help with comparative financial evaluation to make informed investment decisions. Financial analysts and investors may use Adjusted non-GAAP income (loss) per share to analyze Marchex's financial performance since these groups have historically used EPS related measures, along with other measures, to estimate the value of a company, to make informed investment decisions, and to evaluate a company's operating performance compared to that of other companies in its industry.

Adjusted EBITDA represents net income (loss) before (1) interest, (2) income taxes, (3) amortization of intangible assets from acquisitions, (4) depreciation and amortization, (5) stock-based compensation expense, and (6) acquisition and disposition-related costs. Adjusted EBITDA is an alternative measure used by our management to understand and evaluate our core operating performance and trends, and management believes it provides meaningful supplemental information regarding the company's liquidity and ability to fund its operations and financing obligations.

Adjusted OIBA represents Adjusted EBITDA adjusted for depreciation and amortization. This measure, among other things, is another metric by which Marchex has evaluated the performance of its business, to include being the basis on which Marchex's internal budgets have been based and by which Marchex's management has been evaluated. This measure represents Marchex's consolidated operating results, taking into account depreciation and other intangible amortization, but excluding the effects of certain other expenses removed in arriving at Adjusted EBITDA, as detailed above.

Adjusted non-GAAP income (loss) per share represents Adjusted non-GAAP income (loss) divided by GAAP diluted shares outstanding. Adjusted non-GAAP income (loss) generally captures those items on the statement of operations that have been, or ultimately will be, settled in cash exclusive of certain items that are not indicative of Marchex’s recurring core operating results and represents net income (loss) applicable to common stockholders plus the net of tax effects of: (1) stock-based compensation expense, (2) acquisition and disposition related costs, (3) amortization of intangible assets from acquisitions, and (4) interest (income) expense and other, net.

Marchex's management believes that investors should have access to, and Marchex is obligated to provide, the same set of tools that management uses in analyzing the company's results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, and should not be considered in isolation, as a substitute for, or superior to, GAAP results. Marchex’s non-GAAP financial measures may be defined differently from time to time and may be defined differently than similar titled terms used by other companies, and accordingly, care should be exercised in understanding how Marchex defines its non-GAAP financial measures in this release. Marchex endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measure with equal or greater prominence, GAAP financial statements, and detailed descriptions of the reconciling items and adjustments, including quantifying such items, to derive the non-GAAP measure.



MARCHEX, INC. AND SUBSIDIARIES


Condensed Consolidated Statements of Operations


(in thousands, except per share amounts)


(unaudited)





















Three Months Ended September 30,





Nine Months Ended September 30,









2024





2023





2024





2023





Revenue





$



12,553







$



12,778







$



36,200







$



37,516







Expenses:





















Service costs (1)







4,224









5,057









12,790









15,899







Sales and marketing (1)







3,224









2,319









8,753









8,920







Product development (1)







3,106









3,942









9,573









12,202







General and administrative (1)







2,673









2,249









7,492









7,412







Amortization of intangible assets from acquisitions







151









531









452









1,593







Acquisition and disposition related costs







—









—









—









12







Total operating expenses







13,378









14,098









39,060









46,038







Loss from operations







(825



)







(1,320



)







(2,860



)







(8,522



)





Interest income (expense) and other, net







19









(218



)







(90



)







(192



)





Loss before provision for income taxes







(806



)







(1,538



)







(2,950



)







(8,714



)





Income tax expense







25









9









87









53







Net loss applicable to common stockholders





$



(831



)





$



(1,547



)





$



(3,037



)





$



(8,767



)





Basic and diluted net loss per Class A and Class B share applicable to common stockholders





$



(0.02



)





$



(0.04



)





$



(0.07



)





$



(0.21



)

























Shares used to calculate basic net loss per share applicable to common stockholders:





















Class A







4,661









4,661









4,661









4,661







Class B







38,539









38,103









38,445









37,927







Shares used to calculate diluted net loss per share applicable to common stockholders:





















Class A







4,661









4,661









4,661









4,661







Class B







43,200









42,764









43,106









42,588







(1) Includes stock-based compensation allocated as follows:





















Service costs





$



8







$



—







$



14







$



—







Sales and marketing







41









89









217









580







Product development







13









(39



)







35









94







General and administrative







349









357









1,015









1,233







Total





$



411







$



407







$



1,281







$



1,907








MARCHEX, INC. AND SUBSIDIARIES


Condensed Consolidated Balance Sheets


(in thousands)


(unaudited)





















September 30,





December 31,









2024





2023





Assets













Current assets:













Cash and cash equivalents





$



12,078







$



14,607







Accounts receivable, net







7,760









7,394







Prepaid expenses and other current assets







1,971









1,805







Total current assets







21,809









23,806







Property and equipment, net







2,067









2,398







Other assets, net







1,213









1,482







Right-of-use lease assets







1,277









1,631







Goodwill







17,558









17,558







Intangible assets from acquisitions, net







151









602







Total assets





$



44,075







$



47,477







Liabilities and Stockholders’ Equity













Current liabilities:













Accounts payable





$



1,200







$



1,533







Accrued benefits and payroll







2,641









3,294







Other accrued expenses and current liabilities







3,465









3,217







Deferred revenue and deposits







859









1,214







Operating lease liability, current







499









462







Total current liabilities







8,664









9,720







Deferred tax liabilities







289









249







Finance lease liability, non-current







170









421







Operating lease liability, non-current







837









1,217







Total liabilities







9,960









11,607







Stockholders’ equity:













Class A common stock







49









49







Class B common stock







390









386







Additional paid-in capital







357,944









356,666







Accumulated deficit







(324,268



)







(321,231



)





Total stockholders’ equity







34,115









35,870







Total liabilities and stockholders’ equity





$



44,075







$



47,477








MARCHEX, INC. AND SUBSIDIARIES


(in thousands)


(unaudited)



Reconciliation of GAAP Net Loss to Adjusted EBITDA and Adjusted Operating Income (Loss) Before Amortization (OIBA)

























Three Months Ended September 30,





Nine Months Ended September 30,









2024





2023





2024





2023





Net loss applicable to common stockholders





$



(831



)





$



(1,547



)





$



(3,037



)





$



(8,767



)





Interest (income) expense and other, net







(19



)







218









90









192







Income tax expense







25









9









87









53







Amortization of intangible assets from acquisitions







151









531









452









1,593







Depreciation and amortization







576









752









1,284









1,533







Stock-based compensation







411









407









1,281









1,907







Acquisition and disposition-related costs







—









—









—









12







Adjusted EBITDA





$



313







$



370







$



157







$



(3,477



)





Depreciation and amortization







576









752









1,284









1,533







Adjusted OIBA





$



(263



)





$



(382



)





$



(1,127



)





$



(5,010



)






MARCHEX, INC. AND SUBSIDIARIES


(in thousands)


(unaudited)



Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP Loss1





















Three Months Ended September 30,





Nine Months Ended September 30,









2024





2023





2024





2023





Net loss applicable to common stockholders, diluted





$



(0.02



)





$



(0.04



)





$



(0.07



)





$



(0.21



)





Stock-based compensation







0.01









0.02









0.03









0.05







Acquisition and disposition-related costs







-









-









-









-







Amortization of intangible assets from acquisitions







-









0.01









0.01









0.04







Interest (income) expense and other, net







-









-









-









-







Adjusted non-GAAP loss per share





$



(0.01



)





$



(0.01



)





$



(0.03



)





$



(0.12



)





Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss per share







43,200









42,764









43,106









42,588








1




For the purpose of computing the number of diluted shares for Adjusted non-GAAP income (loss) per share, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP net income (loss) per share.




        
      

MCHX

Marchex Announces Third Quarter 2024 Results

Marchex reported Q3 2024 revenue of $12.6 million, down slightly from Q3 2023.
Net loss narrowed to $0.8 million compared to $1.5 million last year.
New customer traction in Auto and Home Services verticals indicates growth potential.
Partnership with DealerOn expected to enhance marketing capabilities and improves sales.
Positive outlook for Q4 and fiscal 2025 with anticipated revenue growth.

News insight

Marchex Announces Third Quarter 2024 Results

AI summary

Sentiment rationale

Key facts

Earnings