Marchex Announces First Quarter 2021 Results
Q1 2021 Financial Highlights1
- GAAP revenue was
$13.0 million for the first quarter of 2021, compared to$12.0 million for the first quarter of 2020. - Net loss from continuing operations was
$5.3 million for the first quarter of 2021 or$0.12 per diluted share, compared to a net loss of$25.5 million or$0.54 per diluted share for the first quarter of 2020.
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Q1 2020 |
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Q1 2021 |
GAAP Revenue |
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Non-GAAP Results2: |
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|
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Adjusted EBITDA from continuing operations |
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|
|
|
- Adjusted non-GAAP income (loss) per share2 from continuing operations for the first quarter of 2021 was (
$0.08 ), compared to ($0.07 ) for the first quarter of 2020.
_______________ | ||
1
|
The Company sold its interest in the Local Leads Platform, |
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2
|
Reconciliations 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. |
First Quarter and Recent Highlights
Following the company’s divestiture of its call marketplace business in the fourth quarter,
Strategic Priorities and Growth Initiatives
Marchex’s focus on accelerating growth in 2021 is anticipated to be driven by:
- New customer traction and existing customer expansion. In the first quarter of 2021,
Marchex signed or onboarded more new customers across multiple product lines and verticals and had more upsells to existing customers than in any quarter during the prior year. - Expansion of market opportunities:
- With the recent launch of Marchex Engage for Automotive,
Marchex can now offer thousands of auto dealers advanced dealer-specific conversation analytics and sales engagement capabilities, opening up a new important channel for growth. Marchex continues to broaden its text solution capabilities to include an expanding array of multi-channel customer use cases as interest and urgency with adopting text solutions continues to grow.- The company also intends to add additional sales channel partnerships and new technology platform integrations to further expand product reach and opportunity footprint throughout 2021.
Marchex believes the combination of its expanded opportunities in the Auto vertical, increased adoption of texting solutions, and its pipeline of opportunities in other core verticals such as Home Services, have it well positioned in 2021 to build momentum towards and it is anticipated deliver on its goals of achieving and extending double digit growth rates.
- With the recent launch of Marchex Engage for Automotive,
- Conversation volume growth. In
March 2021 ,Marchex saw customer conversation volumes sequentially increase to levels that approachedMarch 2019 volumes. This progress continued inApril 2021 .
Accelerate Product Innovation
Marchex Engage for Automotive: Recently,
Technology Platform Integrations:
“In the first quarter,
Business Outlook
The following forward-looking statements reflect
“During the first quarter of 2021, we saw positive developments in the key drivers of our business, including increases in existing customer conversation volumes and also important sales pipeline development. We are seeing this progress extend into the second quarter and assuming these trends continue, and there is an unwinding of the business impact from the pandemic, we believe second quarter revenue growth rates can sequentially accelerate from those achieved in the first quarter. We also continue to believe we can achieve double-digit growth in the course of 2021, and that we can deliver progressive, sequential growth in revenue, profitability and customer wins. As we launch new products and they begin to contribute, we continue to believe there is a potential path to reach break-even or better on an Adjusted EBITDA basis at some point during 2021,” said
Management will hold a conference call, starting at
About
Please visit http://www.marchex.com, www.marchex.com/blog or @marchex on Twitter (Twitter.com/Marchex), where
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
In the event the press release contains links to third-party websites or materials, the links are provided solely as a convenience to you.
Non-GAAP Financial Information:
To supplement
Adjusted OIBA from continuing operations represents income (loss) from operations, excluding (1) stock-based compensation expense, (2) amortization of intangible assets from acquisitions, (3) acquisition and disposition related costs (benefit), (4) impairment of intangibles assets and goodwill from acquisitions and (5) foreign government assistance subsidies. This measure, among other things, is one of the primary metrics by which
Adjusted EBITDA from continuing operations represents income (loss) from continuing operations before (1) interest, (2) income taxes, (3) depreciation, (4) stock-based compensation expense, (5) amortization of intangible assets from acquisitions, (6) acquisition and disposition related costs (benefit), (7) impairment of intangibles assets and goodwill from acquisitions, and (8) foreign government assistance subsidies.
Adjusted non-GAAP income (loss) per share from continuing operations represents Adjusted non-GAAP income (loss) from continuing operations 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 (benefit), and (3) amortization of intangible assets from acquisitions, and (4) impairment of intangibles assets and goodwill from acquisitions, (5) interest income and other, net, (6) net income from discontinued operations, net of tax, and (7) estimated impact of income taxes. Financial analysts and investors may use Adjusted non-GAAP income (loss) per share to analyze
Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
||||||||
|
|
Three Months Ended |
||||||
|
|
2020 |
|
2021 |
||||
Revenue |
|
$ |
12,008 |
|
|
$ |
12,980 |
|
Expenses: |
|
|
|
|
|
|
||
Service costs (1) |
|
|
4,828 |
|
|
|
5,422 |
|
Sales and marketing (1) |
|
|
4,170 |
|
|
|
3,637 |
|
Product development (1) |
|
|
5,358 |
|
|
|
5,322 |
|
General and administrative (1) |
|
|
3,453 |
|
|
|
2,620 |
|
Amortization of intangible assets from acquisitions |
|
|
1,763 |
|
|
|
1,181 |
|
Acquisition and disposition-related costs (benefit) |
|
|
(635 |
) |
|
|
45 |
|
Total operating expenses |
|
|
18,937 |
|
|
|
18,227 |
|
Impairment of goodwill |
|
|
(14,688 |
) |
|
|
— |
|
Impairment of intangible assets from acquisitions |
|
|
(4,959 |
) |
|
|
— |
|
Loss from operations |
|
|
(26,576 |
) |
|
|
(5,247 |
) |
Interest income (expense) and other, net |
|
|
110 |
|
|
|
(12 |
) |
Loss before provision for income taxes |
|
|
(26,466 |
) |
|
|
(5,259 |
) |
Income tax expense (benefit) |
|
|
(943 |
) |
|
|
73 |
|
Net loss from continuing operations |
|
|
(25,523 |
) |
|
|
(5,332 |
) |
Income from discontinued operations, net of tax |
|
|
648 |
|
|
|
— |
|
Net loss applicable to common stockholders |
|
$ |
(24,875 |
) |
|
$ |
(5,332 |
) |
|
|
|
|
|
|
|
||
Basic and diluted net loss per Class A and Class B share applicable to common stockholders: |
|
|
|
|
|
|
||
Continuing operations |
|
$ |
(0.54 |
) |
|
$ |
(0.12 |
) |
Discontinued operations, net of tax |
|
|
0.01 |
|
|
|
— |
|
Basic and diluted net loss per Class A and Class B share applicable to common stockholders |
|
$ |
(0.53 |
) |
|
$ |
(0.12 |
) |
Shares used to calculate basic net loss per share applicable to common stockholders |
|
|
|
|
|
|
||
Class A |
|
|
4,661 |
|
|
|
4,661 |
|
Class B |
|
|
42,179 |
|
|
|
39,087 |
|
Shares used to calculate diluted net loss per share applicable to common stockholders: |
|
|
|
|
|
|
||
Class A |
|
|
4,661 |
|
|
|
4,661 |
|
Class B |
|
|
46,840 |
|
|
|
43,748 |
|
|
|
|
|
|
|
|
||
(1) Includes stock-based compensation allocated as follows: |
|
|
|
|
|
|
||
Service costs |
|
$ |
16 |
|
|
$ |
8 |
|
Sales and marketing |
|
|
261 |
|
|
|
229 |
|
Product development |
|
|
81 |
|
|
|
97 |
|
General and administrative |
|
|
604 |
|
|
|
410 |
|
Total |
|
$ |
962 |
|
|
$ |
744 |
|
Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
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|
||||
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2020 |
|
2021 |
||||
Assets |
|
|
|
|
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|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
33,851 |
|
|
$ |
28,169 |
|
Accounts receivable, net |
|
|
6,331 |
|
|
|
6,869 |
|
Prepaid expenses and other current assets |
|
|
2,160 |
|
|
|
2,514 |
|
Total current assets |
|
|
42,342 |
|
|
|
37,552 |
|
Property and equipment, net |
|
|
2,747 |
|
|
|
2,477 |
|
Right-of-use lease asset |
|
|
3,744 |
|
|
|
3,358 |
|
Other assets, net |
|
|
1,345 |
|
|
|
1,318 |
|
|
|
|
17,558 |
|
|
|
17,558 |
|
Intangible assets from acquisitions, net |
|
|
9,196 |
|
|
|
8,015 |
|
Total assets |
|
$ |
76,932 |
|
|
$ |
70,278 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
2,424 |
|
|
$ |
1,737 |
|
Accrued benefits and payroll |
|
|
5,975 |
|
|
|
5,139 |
|
Other accrued expenses and current liabilities |
|
|
4,210 |
|
|
|
4,054 |
|
Deferred revenue and deposits |
|
|
1,393 |
|
|
|
1,309 |
|
Lease liability current |
|
|
1,827 |
|
|
|
1,807 |
|
Loan obligations, current |
|
|
5,123 |
|
|
|
5,135 |
|
Total current liabilities |
|
|
20,952 |
|
|
|
19,181 |
|
Deferred tax liabilities |
|
|
156 |
|
|
|
223 |
|
Lease liability non-current |
|
|
3,136 |
|
|
|
2,742 |
|
Total liabilities |
|
|
24,244 |
|
|
|
22,146 |
|
Stockholders’ equity: |
|
|
|
|
|
|
||
Class A common stock |
|
|
49 |
|
|
|
49 |
|
Class B common stock |
|
|
365 |
|
|
|
367 |
|
Additional paid-in capital |
|
|
350,960 |
|
|
|
351,734 |
|
Accumulated deficit |
|
|
(298,686 |
) |
|
|
(304,018 |
) |
Total stockholders’ equity |
|
|
52,688 |
|
|
|
48,132 |
|
Total liabilities and stockholders’ equity |
|
$ |
76,932 |
|
|
$ |
70,278 |
|
(in thousands) (unaudited) |
||||||||
Reconciliation of GAAP Loss from Operations to Adjusted Operating Income (Loss) Before Amortization (OIBA) from Continuing Operations and Adjusted EBITDA from Continuing Operations |
||||||||
|
|
Three Months Ended |
||||||
|
|
2020 |
|
2021 |
||||
Loss from operations |
|
$ |
(26,576 |
) |
|
$ |
(5,247 |
) |
Stock-based compensation |
|
|
962 |
|
|
|
744 |
|
Amortization of intangible assets from acquisitions |
|
|
1,763 |
|
|
|
1,181 |
|
Acquisition and disposition-related costs (benefit) |
|
|
(635 |
) |
|
|
45 |
|
Impairment of goodwill |
|
|
14,688 |
|
|
|
— |
|
Impairment of intangible assets from acquisitions |
|
|
4,959 |
|
|
|
— |
|
Foreign government paycheck assistance and rent subsidies1 |
|
|
— |
|
|
|
(151 |
) |
Adjusted OIBA from continuing operations |
|
$ |
(4,839 |
) |
|
$ |
(3,428 |
) |
Depreciation and amortization |
|
|
506 |
|
|
|
427 |
|
Adjusted EBITDA from continuing operations |
|
$ |
(4,333 |
) |
|
$ |
(3,001 |
) |
1 |
Includes pandemic related wage and rent relief subsidies, recognized as a reduction of wages or rent during the period received. |
(in thousands) (unaudited) |
||||||||
Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP Loss from Continuing Operations per Share |
||||||||
|
|
Three Months Ended |
||||||
|
|
2020 |
|
2021 |
||||
Adjusted Non-GAAP loss per share |
|
$ |
(0.07 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
||
Net loss per share applicable to common stockholders - diluted (GAAP loss per share) |
|
$ |
(0.53 |
) |
|
$ |
(0.12 |
) |
Shares used to calculate diluted net loss per share applicable to common stockholders |
|
|
46,840 |
|
|
|
43,748 |
|
|
|
|
|
|
|
|
||
Net loss applicable to common stockholders |
|
$ |
(24,875 |
) |
|
$ |
(5,332 |
) |
Stock-based compensation |
|
|
962 |
|
|
|
744 |
|
Acquisition and disposition-related costs (benefit) |
|
|
(635 |
) |
|
|
45 |
|
Amortization of intangible assets from acquisitions |
|
|
1,763 |
|
|
|
1,181 |
|
Impairment of goodwill |
|
|
14,688 |
|
|
|
— |
|
Impairment of intangible assets from acquisitions |
|
|
4,959 |
|
|
|
— |
|
Interest income and other, net |
|
|
(110 |
) |
|
|
12 |
|
Income from discontinued operations, net of tax |
|
|
(648 |
) |
|
|
— |
|
Estimated impact of income taxes |
|
|
691 |
|
|
|
— |
|
Adjusted Non-GAAP loss from continuing operations |
|
$ |
(3,205 |
) |
|
$ |
(3,350 |
) |
Adjusted Non-GAAP loss from continuing operations per share |
|
$ |
(0.07 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
||
Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss from continuing operations per share |
|
|
46,840 |
|
|
|
43,748 |
|
1
|
For the purpose of computing the number of diluted shares for Adjusted Non-GAAP income (loss) from continuing operations per share, |
(in thousands, except per share amounts) (unaudited) |
||||||||
Reconciliation of GAAP Loss from Continuing Operations to Non-GAAP Loss from Continuing Operations excluding Impairment of |
||||||||
|
|
Three Months Ended |
||||||
|
|
2020 |
|
2021 |
||||
Loss from continuing operations (GAAP) |
|
$ |
(25,523 |
) |
|
$ |
(5,332 |
) |
Impairment of goodwill |
|
|
14,688 |
|
|
|
— |
|
Impairment of intangible assets from acquisitions |
|
|
4,959 |
|
|
|
— |
|
Loss from continuing operations excluding impairment of goodwill and intangible assets (Non-GAAP) |
|
$ |
(5,876 |
) |
|
$ |
(5,332 |
) |
|
|
|
|
|
|
|
||
Loss from continuing operations applicable to common stockholders - diluted (GAAP loss per share) |
|
$ |
(0.54 |
) |
|
$ |
(0.12 |
) |
Impairment of goodwill per diluted share |
|
|
0.31 |
|
|
|
— |
|
Impairment of intangible assets from acquisitions per diluted share |
|
|
0.11 |
|
|
|
— |
|
Loss from continuing operations excluding impairment of goodwill and intangible assets per diluted share (Non-GAAP) |
|
$ |
(0.12 |
) |
|
$ |
(0.12 |
) |
|
|
|
|
|
|
|
||
Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and diluted net loss excluding impairment of goodwill and intangible assets (Non-GAAP) |
|
|
46,840 |
|
|
|
43,748 |
|
(in thousands) (unaudited) |
||||||||
Reconciliation of GAAP Loss from Operations to Adjusted OIBA from Continuing Operations and Adjusted EBITDA from Continuing Operations |
||||||||
|
|
Three Months Ended |
||||||
|
|
2020 |
|
2021 |
||||
Revenue |
|
$ |
12,008 |
|
|
$ |
12,980 |
|
Service costs |
|
|
(4,828 |
) |
|
|
(5,422 |
) |
Sales and marketing |
|
|
(4,170 |
) |
|
|
(3,637 |
) |
Product development |
|
|
(5,358 |
) |
|
|
(5,322 |
) |
General and administrative |
|
|
(3,453 |
) |
|
|
(2,620 |
) |
Amortization of intangible assets from acquisitions |
|
|
(1,763 |
) |
|
|
(1,181 |
) |
Acquisition and disposition related (costs) benefit |
|
|
635 |
|
|
|
(45 |
) |
Impairment of goodwill |
|
|
(14,688 |
) |
|
|
— |
|
Impairment of intangible assets from acquisitions |
|
|
(4,959 |
) |
|
|
— |
|
Loss from operations |
|
|
(26,576 |
) |
|
|
(5,247 |
) |
Stock-based compensation |
|
|
962 |
|
|
|
744 |
|
Amortization of intangible assets from acquisitions |
|
|
1,763 |
|
|
|
1,181 |
|
Acquisition and disposition related costs (benefit) |
|
|
(635 |
) |
|
|
45 |
|
Impairment of goodwill |
|
|
14,688 |
|
|
|
— |
|
Impairment of intangible assets from acquisitions |
|
|
4,959 |
|
|
|
— |
|
Foreign government paycheck assistance and rent subsidies1 |
|
|
— |
|
|
|
(151 |
) |
Adjusted OIBA from continuing operations |
|
|
(4,839 |
) |
|
|
(3,428 |
) |
Depreciation and amortization |
|
|
506 |
|
|
|
427 |
|
|
|
|
|
|
|
|
||
Adjusted EBITDA from continuing operations |
|
$ |
(4,333 |
) |
|
$ |
(3,001 |
) |
1 |
Includes pandemic related wage and rent relief subsidies, recognized as a reduction of wages or rent during the period received. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210513005968/en/
Marchex Investor Relations
Telephone: 206.331.3600
Email: ir@marchex.com
Or
MEDIA INQUIRIES
Telephone: 206.331.3434
Email: pr(at)marchex.com
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