Marchex Announces Fourth Quarter and Full Year 2016 Results
Q4 and Full Year 2016 Financial Highlights
-
GAAP revenue was $28.4 million for the fourth quarter of 2016,
compared to
$34.9 million for the fourth quarter of 2015. GAAP revenue was $129.5 million for 2016, compared to$143.0 million for 2015. -
GAAP net loss from continuing operations was
$5.7 million for the fourth quarter of 2016 or$0.14 per diluted share. For the fourth quarter of 2015, GAAP net income from continuing operations was$1.2 million or$0.03 per diluted share. GAAP net loss from continuing operations was$84.1 million for 2016 or$2.01 per diluted share. For 2015, GAAP net loss from continuing operations was$597,000 or$0.01 per diluted share.
Q4 2015 | Q4 2016 | FY 2015 | FY 2016 | ||||||||||||||
GAAP Revenue | $ | 34.9 million | $ | 28.4 million | $ | 143.0 million | $ | 129.5 million | |||||||||
Call-Driven Revenue1 | $ | 34.3 million | $ | 28.4 million | $ | 139.9 million | $ | 129.5 million | |||||||||
Non-GAAP Results2: |
|||||||||||||||||
Enterprise Revenue3 | $ | 25.3 million | $ | 22.4 million | $ | 99.7 million | $ | 100.1 million | |||||||||
Call-Driven Adjusted OIBA | $ | 1.6 million | $ |
(2.9) million |
$ | 7.8 million | $ |
(9.9) million |
|||||||||
Call-Driven Adjusted EBITDA | $ | 2.5 million | $ |
(2.1) million |
$ | 11.5 million | $ |
(6.7) million |
|||||||||
Cash Balance | $ | 109 million | $ | 104 million | |||||||||||||
-
Adjusted non-GAAP earnings (loss) per share2 from
continuing operations for the fourth quarter of 2016 was
($0.04) . For the fourth quarter of 2015, adjusted non-GAAP earnings (loss) per share2 was$0.03 . Adjusted non-GAAP earnings (loss) per share2 from continuing operations for 2016 was($0.16) . For 2015, adjusted non-GAAP earnings (loss) per share2 was$0.13 . -
During the fourth quarter of 2016, YP contributed
$6.0 million in Call-Driven Revenue, compared to$9.0 million in the fourth quarter of 2015. During 2016, YP contributed$29.4 million in Call-Driven Revenue compared to$40.2 million in 2015.
_______________________ |
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1 |
Call-Driven revenue includes revenue generated from our contracts with YP. |
|||||
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. |
|||||
3 |
Enterprise Revenue represents Call-Driven revenue excluding revenue generated from our contracts with YP. |
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Strategic Priorities Update
- Secure New Enterprise Clients and Grow Existing Relationships. Continued progress with our customer initiatives, including adding 30 new clients in 2016.
-
Accelerate Product Innovation. Marchex Omnichannel Analytics
Cloud launched this month to help marketers connect customer
conversions driven from all paid media channels – including search,
display and video, social and sites – to phone calls made to a
business. The results are smarter media spend and lower new customer
acquisition costs, higher phone call conversion rates based on
optimized media, and increased customer conversion and revenue to
businesses. This integrated solution gives marketers a full and
accurate understanding of which marketing activity is most successful
to optimize overall marketing spend and ROI for industries that rely
heavily on phone calls to schedule appointments and close sales, such
as insurance, automotive, travel, and cable.
Video and Display Analytics launched to general availability, which measures the impact of display and video advertising campaigns on inbound phone calls to call centers and stores. Marketers can expand their visibility into these campaigns by measuring video advertising units in both premium and programmatic video publishers.
-
Expand Strategic Partnerships. Our partnership with
Facebook announced this month gives marketers a deeper understanding of what happens on a phone call that stems from aFacebook ad. This partnership will integrate across Facebook’s social analytics solution into the Marchex Omnichannel Analytics Cloud. Marketers can now quickly optimize their marketing spend across all paid media channels based on actionable insights into which channel drove offline consumer interactions, thereby boosting the efficiency ofFacebook ads.
“Marchex continues to expand the unique insights we can deliver to
enterprise advertisers as we build out a broad mobile advertising
analytics solution,” said
Business Outlook
The following forward-looking statements reflect Marchex’s expectations
as of
- Reduced budget from an ongoing relationship with a large financial services customer.
- Renegotiated economic terms of our extended relationship with YP.
- Acquired customers referenced on our 2016 second quarter conference call.
Total Call-Driven financial guidance for the First Quarter ending March 31, 2017
Call-Driven Revenue1 | $22.5 million or more | |||
Call-Driven Adjusted OIBA2 | a loss of ($4) million to ($4.5) million | |||
Call-Driven Adjusted EBITDA2 | a loss of ($3) million to ($3.5) million | |||
The guidance includes estimated reorganizational costs of
approximately
“While we remain vulnerable to shifting media tactics from some of our
large customers, particularly on our Call Marketplace media product, we
believe our analytics product area is a unique strategic asset with a
strong customer base and favorable operating characteristics. As we
progress through our strategic review, we expect that our overall
corporate strategy may evolve, and that we can unlock value in our
assets,” said
Conference Call and Webcast Information
Management will hold a conference call, starting at
About
Please visit www.marchex.com,
www.marchex.com/blog/
or @marchex
on Twitter (Twitter.com/
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 excluding stock-based compensation expense. This measure,
among other things, is one of the primary metrics by which
Call-Driven Adjusted OIBA and EBITDA
and Archeo and Other Adjusted OIBA and EBITDA
include the above descriptions of Adjusted OIBA and EBITDA for the
Call-Driven and Archeo segments. The Call-Driven Adjusted OIBA and
EBITDA includes all
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||||||
Revenue | $ | 34,900 | $ | 28,401 | $ | 143,013 | $ | 129,547 | |||||||||||
Expenses: | |||||||||||||||||||
Service costs (1) | 19,601 | 16,006 | 78,767 | 76,970 | |||||||||||||||
Sales and marketing (1) | 4,493 | 5,574 | 16,462 | 22,307 | |||||||||||||||
Product development (1) | 7,450 | 6,587 | 31,058 | 28,446 | |||||||||||||||
General and administrative (1) | 3,585 | 5,939 | 18,510 | 21,754 | |||||||||||||||
Acquisition and disposition related costs | 20 | — | 219 | 662 | |||||||||||||||
Total operating expenses | 35,149 | 34,106 | 145,016 | 150,139 | |||||||||||||||
Impairment of goodwill | — | — | — | (63,305 | ) | ||||||||||||||
Gain on sale of Archeo assets | 1,496 | — | 1,496 | — | |||||||||||||||
Income (loss) from operations | 1,247 | (5,705 | ) | (507 | ) | (83,897 | ) | ||||||||||||
Interest expense and other, net | (11 | ) | (25 | ) | (63 | ) | (115 | ) | |||||||||||
Income (loss) from continuing operations before provision for income taxes | 1,236 | (5,730 | ) | (570 | ) | (84,012 | ) | ||||||||||||
Income tax expense | 16 | 14 | 27 | 54 | |||||||||||||||
Net income (loss) from continuing operations | 1,220 | (5,744 | ) | (597 | ) | (84,066 | ) | ||||||||||||
Discontinued operations: | |||||||||||||||||||
Income from discontinued operations, net of tax | 38 | — | 5,123 | — | |||||||||||||||
Gain on sale of discontinued operations, net of tax | — | — | 22,195 | — | |||||||||||||||
Discontinued operations, net of tax | 38 | — | 27,318 | — | |||||||||||||||
Net income (loss) | 1,258 | (5,744 | ) | 26,721 | (84,066 | ) | |||||||||||||
Dividends paid to participating securities | — | — | (37 | ) | — | ||||||||||||||
Net income (loss) applicable to common stockholders | $ | 1,258 | $ | (5,744 | ) | $ | 26,684 | $ | (84,066 | ) | |||||||||
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders: | |||||||||||||||||||
Continuing operations | $ | 0.03 | $ | (0.14 | ) | $ | (0.01 | ) | $ | (2.01 | ) | ||||||||
Discontinued operations, net of tax | $ | 0.00 | $ | — | $ | 0.66 | $ | — | |||||||||||
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders | $ | 0.03 | $ | (0.14 | ) | $ | 0.65 | $ | (2.01 | ) | |||||||||
Dividends paid per share | $ | — | $ | — | $ | 0.04 | $ | — | |||||||||||
Shares used to calculate basic net income (loss) per share applicable to common stockholders: | |||||||||||||||||||
Class A | 5,233 | 5,062 | 5,233 | 5,190 | |||||||||||||||
Class B | 35,804 | 37,076 | 35,935 | 36,550 | |||||||||||||||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders: | |||||||||||||||||||
Class A | 5,233 | 5,062 | 5,233 | 5,190 | |||||||||||||||
Class B | 41,599 | 42,138 | 41,168 | 41,740 | |||||||||||||||
(1) Includes stock-based compensation allocated as follows: | |||||||||||||||||||
Service costs | $ | 143 | $ | 128 | $ | 1,189 | $ | 693 | |||||||||||
Sales and marketing | 414 | 417 | 1,307 | 1,738 | |||||||||||||||
Product development | 567 | 202 | 2,410 | 1,569 | |||||||||||||||
General and administrative | 1,091 | 2,190 | 5,118 | 6,183 | |||||||||||||||
Total | $ | 2,215 | $ | 2,937 | $ | 10,024 | $ | 10,183 | |||||||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
December 31, | December 31, | |||||||||
2015 | 2016 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 109,155 | $ | 103,950 | ||||||
Accounts receivable, net | 24,621 | 18,922 | ||||||||
Prepaid expenses and other current assets | 1,784 | 1,531 | ||||||||
Refundable taxes | 127 | 98 | ||||||||
Total current assets | 135,687 | 124,501 | ||||||||
Property and equipment, net | 5,778 | 3,557 | ||||||||
Other assets, net | 222 | 214 | ||||||||
Goodwill | 63,305 | — | ||||||||
Total assets | $ | 204,992 | $ | 128,272 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 9,460 | $ | 6,811 | ||||||
Accrued expenses and other current liabilities | 6,712 | 7,707 | ||||||||
Deferred revenue | 692 | 349 | ||||||||
Total current liabilities | 16,864 | 14,867 | ||||||||
Other non-current liabilities | 662 | 134 | ||||||||
Total liabilities | 17,526 | 15,001 | ||||||||
Class A common stock | 55 | 53 | ||||||||
Class B common stock | 368 | 380 | ||||||||
Treasury Stock | (238 | ) | — | |||||||
Additional paid-in capital | 350,799 | 360,422 | ||||||||
Accumulated deficit | (163,518 | ) | (247,584 | ) | ||||||
Total stockholders’ equity | 187,466 | 113,271 | ||||||||
Total liabilities and stockholders’ equity | $ | 204,992 | $ | 128,272 | ||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(unaudited) | |||||||||||||||||||||
Reconciliation of GAAP Income (Loss) from Operations to Operating Income (Loss) Before Amortization (OIBA) | |||||||||||||||||||||
and Adjusted Operating Income (Loss) Before Amortization (Adjusted OIBA) | |||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2015 |
2016 |
2015 | 2016 | ||||||||||||||||||
Income (loss) from operations |
$ |
1,247 |
$ |
(5,705 |
) |
$ |
(507 |
) |
$ |
(83,897 |
) |
||||||||||
Stock-based compensation | 2,215 | 2,937 | 10,024 | 10,183 | |||||||||||||||||
Operating income (loss) before amortization (OIBA) | 3,462 | (2,768 | ) | 9,517 | (73,714 | ) | |||||||||||||||
Acquisition and disposition related costs | 20 | — | 219 | 662 | |||||||||||||||||
Impairment of goodwill | — | — | — | 63,305 | |||||||||||||||||
Gain on sale of Archeo assets | (1,496 | ) | — | (1,496 | ) | — | |||||||||||||||
Adjusted operating income (loss) before amortization (Adjusted OIBA) - Consolidated |
$ |
1,986 |
$ |
(2,768 |
) |
$ |
8,240 |
$ |
(9,747 |
) |
|||||||||||
Less: Archeo and Other Adjusted OIBA1 | 386 | 82 | 431 | 127 | |||||||||||||||||
Call-Driven Adjusted OIBA1 | $ | 1,600 | $ | (2,850 | ) | $ | 7,809 | $ | (9,874 | ) | |||||||||||
Reconciliation from Net Cash provided by (used in) Operating Activities to Adjusted EBITDA |
|||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||||||||
Net cash provided by (used in) operating activities |
$ |
753 |
$ |
(796 |
) |
$ |
12,753 |
$ |
(3,669 |
) |
|||||||||||
Changes in assets and liabilities | 2,150 | (1,273 | ) | 3,963 | (3,711 | ) | |||||||||||||||
Income tax expense | 16 | 14 | 27 | 54 | |||||||||||||||||
Acquisition and disposition related costs | 20 | — | 219 | 662 | |||||||||||||||||
Interest expense and other, net | 11 | 25 | 63 | 112 | |||||||||||||||||
Income from discontinued operations, net of tax | (38 | ) | — | (5,140 | ) | — | |||||||||||||||
Adjusted EBITDA - Consolidated | $ | 2,912 | $ | (2,030 | ) | $ | 11,885 | $ | (6,552 | ) | |||||||||||
Less: Archeo and Other Adjusted EBITDA1 | 386 | 82 | 431 | 127 | |||||||||||||||||
Call-Driven Adjusted EBITDA1 |
$ | 2,526 | $ | (2,112 | ) | $ | 11,454 | $ | (6,679 | ) | |||||||||||
Net cash provided by (used in) investing activities | $ | 242 | $ | 395 | $ | 21,822 | $ | (1,224 | ) | ||||||||||||
Net cash used in financing activities | $ | (776 | ) | $ | (134 | ) | $ | (5,452 | ) | $ | (312 | ) | |||||||||
1 | The financial results have been derived from the condensed consolidated financial statements. In April 2015, Marchex divested certain Archeo domain name and related assets and the operating results of these 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. In 2016, Other operating results related primarily to transition activities provided to the buyer of the Archeo assets and were not significant. | |||
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 | Twelve Months Ended | ||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||
2015 | 2016 | 2015 | 2016 | ||||||||||||||||||
Adjusted Non-GAAP earnings (loss) per share from continuing operations |
$ |
0.03 |
$ |
(0.04 |
) |
$ |
0.13 |
$ |
(0.16 |
) |
|||||||||||
Net Income (loss) from continuing operations applicable to common stockholders - diluted (GAAP earnings (loss) per share) |
$ |
0.03 |
$ |
(0.14 |
) |
$ |
(0.01 |
) |
$ |
(2.01 |
) |
||||||||||
Shares used to calculate diluted net income (loss) from continuing operations per share applicable to common stockholders |
41,599 | 42,138 | 41,168 | 41,740 | |||||||||||||||||
Net income (loss) applicable to common stockholders |
$ |
1,258 |
$ |
(5,744 |
) |
$ |
26,684 |
$ |
(84,066 |
) |
|||||||||||
Stock-based compensation | 2,215 | 2,937 | 10,024 | 10,183 | |||||||||||||||||
Acquisition and disposition related costs | 20 | — | 219 | 662 | |||||||||||||||||
Impairment of goodwill | — | — | — | 63,305 | |||||||||||||||||
Gain on sale of Archeo assets | (1,496 | ) | — | (1,496 | ) | — | |||||||||||||||
Interest expense and other, net | 11 | 25 | 63 | 115 | |||||||||||||||||
Dividends paid to participating securities | — | — | 37 | — | |||||||||||||||||
Discontinued operations, net of tax | (38 | ) | — | (27,318 | ) | — | |||||||||||||||
Estimated impact of income taxes | (682 | ) | 931 | (2,863 | ) | 3,273 | |||||||||||||||
Adjusted Non-GAAP net income (loss) from continuing operations |
$ | 1,288 | $ | (1,851 | ) | $ | 5,350 | $ | (6,528 | ) | |||||||||||
Adjusted Non-GAAP earnings (loss) per share from continuing operations |
$ | 0.03 | $ | (0.04 | ) | $ | 0.13 | $ | (0.16 | ) | |||||||||||
Shares used to calculate diluted net income (loss) from continuing operations per share applicable to common stockholders (GAAP) | 41,599 | 42,138 | 41,168 | 41,740 | |||||||||||||||||
Weighted average stock options and common shares subject to purchase or cancellation (if applicable) | — | — | 421 | — | |||||||||||||||||
Diluted shares used to calculate Adjusted Non-GAAP earnings (loss) per share 1 | 41,599 | 42,138 | 41,589 | 41,740 | |||||||||||||||||
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. | |||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||||||||||
Financial Summary Information | |||||||||||||||||||
(in thousands) | |||||||||||||||||||
(unaudited) | |||||||||||||||||||
NON-GAAP MEASURES | |||||||||||||||||||
CONSOLIDATED1 | Q415 | Q416 | FY 2015 | FY 2016 | |||||||||||||||
GAAP Revenue | $ | 34,900 | $ | 28,401 | $ | 143,013 | $ | 129,547 | |||||||||||
Adjusted OIBA | $ | 1,986 | $ | (2,768 | ) | $ | 8,240 | $ | (9,747 | ) | |||||||||
Adjusted EBITDA | $ | 2,912 | $ | (2,030 | ) | $ | 11,885 | $ | (6,552 | ) | |||||||||
CALL-DRIVEN | Q415 | Q416 |
|
FY 2015 | FY 2016 | ||||||||||||||
GAAP Revenue | $ | 34,265 | $ | 28,401 | $ | 139,886 | $ | 129,526 | |||||||||||
Adjusted OIBA | $ | 1,600 | $ | (2,850 | ) | $ | 7,809 | $ | (9,874 | ) | |||||||||
Adjusted EBITDA | $ | 2,526 | $ | (2,112 | ) | $ | 11,454 | $ | (6,679 | ) | |||||||||
ENTERPRISE REVENUE2 | Q415 | Q416 | FY 2015 | FY 2016 | |||||||||||||||
Call-Driven GAAP Revenue | $ | 34,265 | $ | 28,401 | $ | 139,886 | $ | 129,526 | |||||||||||
Less: YP Revenue | $ | 8,963 | $ | 6,031 | $ | 40,210 | $ | 29,388 | |||||||||||
Enterprise Revenue | $ | 25,302 | $ | 22,370 | $ | 99,676 | $ | 100,138 | |||||||||||
1 | In April 2015, Marchex divested certain Archeo domain name and related assets and the operating results of these 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 2016, there were Other operating activities that related primarily to transition activities provided to the buyer of the Archeo assets and were not significant. 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/20170216006264/en/
Source:
Marchex Investor Relations
Trevor Caldwell, 206-331-3600
Email:
ir(at)marchex.com
or
MEDIA INQUIRIES
Marchex
Corporate Communications
206-331-3434
Email: pr(at)marchex.com