Marchex Announces First Quarter 2016 Results
-
First Quarter Call-Driven Revenue of
$36.0 million , up 3% Year-Over-Year, and 13% Year-Over-Year excluding YP2 - Launched new premium features Transcription and Keyword Spotting to further build out Marchex Call DNA
- New Integrations with Salesforce and Doubleclick
"The initiatives we kicked off last year to lead in mobile analytics and measuring online-to-offline commerce began to pay off in Q1," said Pete Christothoulou, CEO. “We are expanding our category coverage, innovating faster than ever and, most importantly, increasing client engagement and satisfaction.”
Q1 2016 Financial Highlights
-
GAAP revenue was $36.0 million for the first quarter of 2016, compared
to
$35.9 million for the first quarter of 2015. -
GAAP net loss from continuing operations was
$3.7 million for the first quarter of 2016, compared to$330,000 for the first quarter of 2015. -
GAAP net loss from continuing operations attributable to common
stockholders per diluted share was
$0.09 for the first quarter of 2016, compared to$0.01 for the first quarter of 2015.
Q1 2016 | Q1 2015 | |||||
GAAP Revenue | $36.0 million | $35.9 million | ||||
Call-Driven Revenue including YP | $36.0 million | $35.0 million | ||||
Non-GAAP Results1: | ||||||
Enterprise Revenue2 | $27.4 million | $24.3 million | ||||
Call-Driven Adjusted OIBA | ($1.7) million | $2.6 million | ||||
Call-Driven Adjusted EBITDA | ($0.8) million | $3.5 million | ||||
Cash Balance | $107 million | $84 million | ||||
-
Adjusted non-GAAP earnings (loss) per share1 from
continuing operations for the first quarter of 2016 was
($0.03) , compared to$0.04 for the first quarter of 2015. -
During the first quarter of 2016, YP contributed
$8.5 million in Call-Driven Revenue, compared to$10.8 million in the first quarter 2015.
_________________________
1Reconciliations of non-GAAP measures are included in the financial tables attached to this press release and we encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures
2Enterprise Revenue, also referred to as “Call-Driven Revenue excluding YP”, represents Call-Driven revenue excluding revenue generated from our contracts with YP.
Strategic Priorities Update
The following highlights our recent progress:
Grow New and Existing Enterprise Client Relationships
- Added customers across each core vertical in the first quarter and now have more than 100 enterprise customers across the Auto, Communications, Financial Services, Home Services and Travel categories.
-
Expanded international presence in the
United Kingdom by hiring a Managing Director to lead sales efforts. The company now supports customers in 6 international markets and can support 10 markets overall.
Accelerate Product Innovation
- Launched major enhancements to Call DNA, the first automated solution for enterprise marketers to analyze the customer experience on a phone call. The new capabilities allow marketers to fine-tune ad campaigns towards high-converting media channels and uncover actionable insights that improve sales conversion rates. Combined with Marchex Call Analytics, this will drive major improvements in paid search and digital advertising performance.
-
Appointed
Ziad Ismail as Chief Product Officer. Ismail previously served as the Senior Vice President of Product and Engineering atMarchex .
Expand Global Strategic Partnerships
-
Integration with Salesforce that allows clients to seamlessly analyze
and access
Marchex and Salesforce data together. Marchex’s integration uniquely allows clients to amplify their marketing automation effectiveness by integrating call analytics data directly into existing Salesforce workflows. Enterprise marketers can use these to power quick decision-making for continual campaign optimization because they can immediately see all click-to-call activity and data directly in their standard Salesforce field reports and dashboards. - Integration with DoubleClick Search that delivers better return on advertising spend for search marketers that rely upon inbound phone calls to drive revenue. The integration delivers 100% keyword attribution for calls placed directly from paid search ads for an unlimited number of keywords and any campaign structure.
Business Outlook
The following forward-looking statements reflect
Total Call-Driven financial guidance for the
Second Quarter ending
Call-Driven Revenue Including YP | $35 million or more | |
Call-Driven Adjusted OIBA1 | a loss of ($0.5) million to a loss of ($2.0) million | |
Call-Driven Adjusted EBITDA1 | $0.5 million to a loss of ($1.0) million | |
Total Enterprise financial guidance for the
year ending
Enterprise Revenue1,2 | $117 million or more | |
Conference Call and Webcast Information
Management will hold a conference call, starting at
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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
Non-GAAP Financial Information:
To supplement
OIBA represents income (loss) from
operations plus stock-based compensation expense. This measure, among
other things, is one of the primary metrics by which
Call-Driven Adjusted OIBA and EBITDA
include the above descriptions of Adjusted OIBA and EBITDA for the
Call-Driven segment. The Call-Driven Adjusted OIBA and EBITDA assign all
MARCHEX, INC. AND SUBSIDIARIES | |||||||||
Condensed Consolidated Statements of Operations | |||||||||
(in thousands, except per share data) | |||||||||
(unaudited) | |||||||||
Three months ended | |||||||||
March 31, | |||||||||
2015 | 2016 | ||||||||
Revenue | $ | 35,916 | $ | 35,985 | |||||
Expenses: | |||||||||
Service costs (1) | 19,366 | 21,982 | |||||||
Sales and marketing (1) | 3,458 | 5,522 | |||||||
Product development (1) | 7,693 | 7,472 | |||||||
General and administrative (1) | 5,699 | 4,662 | |||||||
Disposition related costs | - | 4 | |||||||
Total operating expenses | 36,216 | 39,642 | |||||||
Loss from operations | (300 | ) | (3,657 | ) | |||||
Interest expense and other, net | (25 | ) | (7 | ) | |||||
Loss from continuing operations before provision for income taxes | (325 | ) | (3,664 | ) | |||||
Income tax expense | 5 | 13 | |||||||
Net loss from continuing operations | (330 | ) | (3,677 | ) | |||||
Discontinued operations, net of tax | 4,913 | - | |||||||
Net income (loss) | 4,583 | (3,677 | ) | ||||||
Dividends paid to participating securities | (19 | ) | - | ||||||
Net income (loss) applicable to common stockholders | $ | 4,564 | $ | (3,677 | ) | ||||
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders: | |||||||||
Continuing operations | $ | (0.01 | ) | $ | (0.09 | ) | |||
Discontinued operations, net of tax | $ | 0.12 | $ | - | |||||
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders | $ | 0.11 | $ | (0.09 | ) | ||||
Dividends paid per share | $ | 0.02 | $ | - | |||||
Shares used to calculate basic net income (loss) per share applicable to common stockholders | |||||||||
Class A | 5,233 | 5,233 | |||||||
Class B | 35,766 | 35,977 | |||||||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | |||||||||
Class A | 5,233 | 5,233 | |||||||
Class B | 40,999 | 41,210 | |||||||
(1 | ) | Includes stock-based compensation allocated as follows: | |||||||
Service costs | $ | 220 | $ | 198 | |||||
Sales and marketing | 245 | 439 | |||||||
Product development | 579 | 532 | |||||||
General and administrative | 1,747 | 797 | |||||||
Total | $ | 2,791 | $ | 1,966 | |||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
December 31, | March 31, | |||||||||
Assets | 2015 | 2016 | ||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 109,155 | $ | 106,603 | ||||||
Accounts receivable, net | 24,621 | 26,497 | ||||||||
Prepaid expenses and other current assets | 1,784 | 2,515 | ||||||||
Refundable taxes | 127 | 117 | ||||||||
Total current assets | 135,687 | 135,732 | ||||||||
Property and equipment, net | 5,778 | 5,133 | ||||||||
Intangibles and other assets, net | 222 | 216 | ||||||||
Goodwill | 63,305 | 63,305 | ||||||||
Total Assets | $ | 204,992 | $ | 204,386 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 9,460 | $ | 10,692 | ||||||
Accrued expenses and other current liabilities | 6,712 | 6,875 | ||||||||
Deferred revenue | 692 | 319 | ||||||||
Total current liabilities | 16,864 | 17,886 | ||||||||
Other non-current liabilities | 662 | 543 | ||||||||
Total Liabilities | 17,526 | 18,429 | ||||||||
Class A common stock | 55 | 55 | ||||||||
Class B common stock | 368 | 368 | ||||||||
Treasury stock | (238 | ) | (0 | ) | ||||||
Additional paid-in capital | 350,799 | 352,729 | ||||||||
Accumulated deficit | (163,518 | ) | (167,195 | ) | ||||||
Total Stockholders' Equity | 187,466 | 185,957 | ||||||||
Total Liabilities and Stockholders' Equity | $ | 204,992 | $ | 204,386 | ||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||
(in thousands) | |||||||||||
(unaudited) | |||||||||||
Reconciliation of GAAP Income (loss) from Operations to Operating Income Before Amortization (OIBA) | |||||||||||
and Adjusted Operating Income Before Amortization (Adjusted OIBA) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2015 | 2016 | ||||||||||
Loss from operations | $ | (300 | ) | $ | (3,657 | ) | |||||
Stock-based compensation | 2,791 | 1,966 | |||||||||
Operating income before amortization (OIBA) | 2,491 | (1,691 | ) | ||||||||
Disposition related costs | - | 4 | |||||||||
Adjusted operating income before amortization (Adjusted OIBA) - Consolidated | $ | 2,491 | $ | (1,687 | ) | ||||||
Less: Archeo and Other Adjusted OIBA1 | (141 | ) | 16 | ||||||||
Call-Driven Adjusted OIBA1 | $ | 2,632 | $ | (1,703 | ) | ||||||
Reconciliation from Net Cash provided by (used in) Operating Activities to Adjusted EBITDA | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2015 | 2016 | ||||||||||
Net cash provided by (used in) operating activities | $ | 6,200 | $ | (2,267 | ) | ||||||
Changes in asset and liabilities | 2,054 | 1,432 | |||||||||
Income tax expense | 5 | 13 | |||||||||
Disposition related costs | - | 4 | |||||||||
Interest expense and other, net | 25 | 7 | |||||||||
Income on discontinued operations, net of tax | (4,931 | ) | - | ||||||||
Adjusted EBITDA - Consolidated | $ | 3,353 | $ | (811 | ) | ||||||
Less: Archeo and Other Adjusted EBITDA1 | (141 | ) | 16 | ||||||||
Call-DrivenAdjusted EBITDA1 | $ | 3,494 | $ | (827 | ) | ||||||
Net cash used in investing activities | $ | (877 | ) | $ | (475 | ) | |||||
Net cash provided by (used in) financing activities | $ | (1,697 | ) | $ | 190 | ||||||
(1) |
The financial results have been derived from the condensed consolidated financial statements. The Call-Driven financial results | ||||||||||
include certain direct operating expenses and general corporate overhead expenses. In 2015, the Archeo financial results include | |||||||||||
direct operating expenses. In 2016, Other operating results related primarily to transition activities provided to the buyer of | |||||||||||
the Archeo assets and were not material. | |||||||||||
In April 2015, Marchex divested certain Archeo domain name and related assets. The operating results of the divested assets are | |||||||||||
included in discontinued operations, net of tax, in the condensed consolidated financial statements. In December 2015, Marchex | |||||||||||
sold the remaining Archeo assets and its operating results are included in continuing operations for 2015. Unless otherwise | |||||||||||
|
|
indicated, information presented in these financial tables relates only to Marchex's continuing operations. | |||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||
Reconciliation of GAAP earnings (loss) per share to Adjusted Non-GAAP earnings (loss) per share | |||||||||||
(in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2015 | 2016 | ||||||||||
Adjusted Non-GAAP earnings (loss) per share from continuing operations | $ | 0.04 | $ | (0.03 | ) | ||||||
Net loss from continuing operations applicable to common stockholders - diluted (GAAP loss per share) | $ | (0.01 | ) | $ | (0.09 | ) | |||||
Shares used to calculate diluted net income (loss) from continuing operations per share applicable to common stockholders | 40,999 | 41,210 | |||||||||
Net income (loss) applicable to common stockholders | $ | 4,564 | $ | (3,677 | ) | ||||||
Stock-based compensation | 2,791 | 1,966 | |||||||||
Disposition related costs | - | 4 | |||||||||
Interest expense and other, net | 25 | 7 | |||||||||
Dividends paid to participating securities | 19 | - | |||||||||
Discontinued operations, net of tax | (4,913 | ) | - | ||||||||
Estimated impact of income taxes | (873 | ) | 348 | ||||||||
Adjusted Non-GAAP net income (loss) from continuing operations | $ | 1,613 | $ | (1,352 | ) | ||||||
Adjusted Non-GAAP earnings (loss) per share from continuing operations | $ | 0.04 | $ | (0.03 | ) | ||||||
Shares used to calculate diluted net income (loss) from continuing operations | |||||||||||
per share applicable to common stockholders (GAAP) | 40,999 | 41,210 | |||||||||
Weighted average stock options and common shares subject to purchase or cancellation (if applicable) | 311 | - | |||||||||
Diluted shares used to calculate Adjusted Non-GAAP earnings (loss) per share 1 | 41,310 | 41,210 | |||||||||
(1 | ) | For the purpose of computing the number of diluted shares for Adjusted Non-GAAP earnings (loss) per share, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP earnings (loss) per share. | |||||||||
Certain reclassifications have been made to prior periods to conform to current presentation. | |||||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||
Financial Summary Information | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
NON-GAAP MEASURES | |||||||||
CONSOLIDATED1 | Q115 | Q116 | |||||||
GAAP Revenue | $ | 35,915 | $ | 35,985 | |||||
Adjusted OIBA | $ | 2,491 | $ | (1,687 | ) | ||||
Adjusted EBITDA | $ | 3,353 | $ | (811 | ) | ||||
CALL-DRIVEN | Q115 | Q116 | |||||||
GAAP Revenue | $ | 35,028 | $ | 35,964 | |||||
Adjusted OIBA | $ | 2,632 | $ | (1,703 | ) | ||||
Adjusted EBITDA | $ | 3,494 | $ | (827 | ) | ||||
ENTERPRISE REVENUE2 | Q115 | Q116 | |||||||
Call-Driven GAAP Revenue | $ | 35,028 | $ | 35,964 | |||||
Less: YP Revenue | $ | 10,757 | $ | 8,519 | |||||
Enterprise Revenue | $ | 24,271 | $ | 27,445 | |||||
(1 | ) | In April 2015, Marchex divested certain Archeo domain name and related assets. The operating results of the divested assets are included in discontinued operations, net of tax, in the condensed consolidated financial statements. In December 2015, Marchex sold the remaining Archeo assets and its operating results are included in continuing operations for 2015. In the first quarter of 2016, there were Other operating activities that related primarily to transition activities provided to the buyer of the Archeo assets and were not material. Unless otherwise indicated, information presented in these financial tables relates only to Marchex's continuing operations. | |||||||
(2 | ) | Enterprise Revenue, also referred to as “Call-Driven Revenue excluding YP”, represents Call-Driven revenue excluding revenue generated from our contracts with YP. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20160505006533/en/
Source:
Marchex Investor Relations
Trevor Caldwell, 206-331-3600
ir(at)marchex.com
or
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Marchex Corporate Communications
206-331-3434
pr(at)marchex.com