Marchex Announces Second Quarter 2023 Results
Q2 2023 Financial Highlights
-
GAAP revenue was
$12.5 million for the second quarter of 2023 compared to$13.5 million for the second quarter of 2022. -
Net loss was
$2.7 million for the second quarter of 2023 or$0.06 per diluted share compared to a net loss of$1.5 million or$0.03 per diluted share for the second quarter of 2022.
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Q2 2022 |
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Q2 2023 |
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GAAP Revenue |
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million |
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million |
Non-GAAP Results: |
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Adjusted EBITDA* |
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million |
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*Adjusted EBITDA includes approximately |
-
Adjusted non-GAAP income (loss) per share for the second quarter of 2023 was
$(0.03) compared to$(0.01) for the second quarter of 2022.
Second Quarter Summary:
-
New Customer Traction and Existing Customer Expansion.
Marchex saw traction with new enterprise customers across multiple product lines in several verticals, including Home Services, Auto, Auto Services and others. - Conversation Volumes. Overall conversation volumes in the second quarter of 2023 were down on a year-over-year basis, due in part to some customers being impacted by customer churn and pressure from other overall macroeconomic factors. However, volumes within certain verticals, like auto, showed progress when compared to the first quarter of 2023.
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Accelerate Product Innovation.
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Marchex Wins 2023 Artificial Intelligence Breakthrough Award for “Best AI-Based Solution for Sales.” AI Breakthrough is a leading market intelligence organization that recognizes the top companies, technologies and products in the global Artificial Intelligence (AI) market today. This year’s program attracted more than 3,200 nominations from over 20 different countries throughout the world. The mission of the AI Breakthrough Awards is to honor excellence and recognize innovation, hard work and success in a range of AI and machine learning related categories, including Generative AI, Computer Vision, AIOps,
Deep Learning , Robotics, Natural Language Processing, industry specific AI applications and many more. Marchex Engage for Automotive is a powerful sales enablement solution that leverages AI, specifically natural language processing and machine learning, to empower dealership sales teams and enhance the buying experience for consumers. By unlocking the content of conversations with car buyers who are highly likely to make a purchase, this solution provides dealership sales teams and vehicle manufacturing customers with the insights and tools they need to close more deals and drive revenue growth. -
Marchex Wins 2023 APPEALIE SaaS Customer Success Award. For the second consecutive year,
Marchex won the customer success award from APPEALIE. APPEALIE SaaS Awards honor customer-obsessed SaaS platforms and success stories that deliver extraordinary experiences and results. The SaaS Customer Success Award category winners are selected from entrants who are able to demonstrate the best customer success stories and outcomes.Marchex received the award for the use of its conversation intelligence capabilities to help a digital marketing agency that runs call-based campaigns on behalf of thousands of local businesses and multi-location organizations across the country who rely on channel attribution with automation and to improve data quality with integration. ThroughMarchex's products, this digital marketing agency is able to reap significant cost and time savings every month that they are able to redeploy for more strategic work. -
During the second quarter,
Marchex launched Spotlight for Automotive, a key addition to the company’s conversation intelligence platform. Spotlight identifies failed calls and enables users to easily measure call handling, campaign, and seller performance results against company benchmarks, to determine how individual locations and teams perform nationally, regionally, and locally. Spotlight can measure across a brand or network of business locations, all the way down to localized dealer and department levels, providing guided observations directing users where to take needed actions to improve performance and increase sales.
-
Marchex Wins 2023 Artificial Intelligence Breakthrough Award for “Best AI-Based Solution for Sales.” AI Breakthrough is a leading market intelligence organization that recognizes the top companies, technologies and products in the global Artificial Intelligence (AI) market today. This year’s program attracted more than 3,200 nominations from over 20 different countries throughout the world. The mission of the AI Breakthrough Awards is to honor excellence and recognize innovation, hard work and success in a range of AI and machine learning related categories, including Generative AI, Computer Vision, AIOps,
“In the second quarter
Business Outlook
The following forward-looking statements reflect
“Consistent with the first quarter of 2023, we continued to face conversation volume pressure in the second quarter of 2023 in certain customer segments,” said
In addition, based on current customer momentum, we continue to believe that we will see revenue growth in our back half of the year versus the first half of 2023 and we continue to believe that our traction within the automotive vertical can lead to double-digit growth on an annualized run rate year-over-year basis by the end of 2023 within that vertical. As we believe we will see sales traction and make further progress on technology infrastructure initiatives for the remainder of this year and into next year, we continue to believe that we can see revenue growth and potentially increase our operating leverage over time,” said Arends.
Management will hold a conference call, starting at
About
Marchex’s award-winning conversation intelligence platform, featuring AI-powered sales engagement and marketing solutions, helps businesses turn strategic insights into the actions that drive their most valued sales outcomes. Our multichannel voice and text capabilities enable sales and marketing teams to deliver the buying experiences that today’s customers expect.
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 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, (6) acquisition and disposition-related costs (benefit), and (7) foreign government assistance subsidies.
Adjusted OIBA represents Adjusted EBITDA adjusted for depreciation and amortization. This measure, among other things, is another metric by which
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 (benefit), (3) amortization of intangible assets from acquisitions, (4) interest income and other, net, and (5) foreign government assistance subsidies. 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) |
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Three Months Ended |
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Six Months Ended |
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|
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2022 |
|
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2023 |
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2022 |
|
|
2023 |
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Revenue |
|
$ |
13,510 |
|
|
$ |
12,522 |
|
|
$ |
26,681 |
|
|
$ |
24,738 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service costs (1) |
|
|
4,864 |
|
|
|
5,418 |
|
|
|
9,799 |
|
|
|
10,842 |
|
Sales and marketing (1) |
|
|
3,619 |
|
|
|
2,631 |
|
|
|
6,784 |
|
|
|
6,601 |
|
Product development (1) |
|
|
3,531 |
|
|
|
4,096 |
|
|
|
6,991 |
|
|
|
8,260 |
|
General and administrative (1) |
|
|
2,440 |
|
|
|
2,546 |
|
|
|
5,046 |
|
|
|
5,163 |
|
Amortization of intangible assets from acquisitions |
|
|
531 |
|
|
|
531 |
|
|
|
1,062 |
|
|
|
1,062 |
|
Acquisition and disposition-related costs |
|
|
22 |
|
|
|
(1 |
) |
|
|
27 |
|
|
|
12 |
|
Total operating expenses |
|
|
15,007 |
|
|
|
15,221 |
|
|
|
29,709 |
|
|
|
31,940 |
|
Loss from operations |
|
|
(1,497 |
) |
|
|
(2,699 |
) |
|
|
(3,028 |
) |
|
|
(7,202 |
) |
Interest income (expense) and other, net |
|
|
17 |
|
|
|
(31 |
) |
|
|
(4 |
) |
|
|
26 |
|
Loss before provision for income taxes |
|
|
(1,480 |
) |
|
|
(2,730 |
) |
|
|
(3,032 |
) |
|
|
(7,176 |
) |
Income tax expense |
|
|
51 |
|
|
|
14 |
|
|
|
81 |
|
|
|
44 |
|
Net loss |
|
|
(1,531 |
) |
|
|
(2,744 |
) |
|
|
(3,113 |
) |
|
|
(7,220 |
) |
Net loss applicable to common stockholders |
|
$ |
(1,531 |
) |
|
$ |
(2,744 |
) |
|
$ |
(3,113 |
) |
|
$ |
(7,220 |
) |
Basic and diluted net loss per Class A and Class B share applicable to common stockholders |
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.17 |
) |
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 |
|
|
38,696 |
|
|
|
37,840 |
|
|
|
38,670 |
|
|
|
37,837 |
|
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 |
|
|
43,357 |
|
|
|
42,501 |
|
|
|
43,331 |
|
|
|
42,498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Includes stock-based compensation allocated as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Service costs |
|
$ |
45 |
|
|
$ |
(45 |
) |
|
$ |
79 |
|
|
$ |
— |
|
Sales and marketing |
|
|
200 |
|
|
|
228 |
|
|
|
391 |
|
|
|
491 |
|
Product development |
|
|
76 |
|
|
|
47 |
|
|
|
158 |
|
|
|
133 |
|
General and administrative |
|
|
393 |
|
|
|
471 |
|
|
|
781 |
|
|
|
876 |
|
Total |
|
$ |
714 |
|
|
$ |
701 |
|
|
$ |
1,409 |
|
|
$ |
1,500 |
|
Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
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||
|
|
2022 |
|
|
2023 |
|
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Assets |
|
|
|
|
|
|
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Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
20,474 |
|
|
$ |
14,122 |
|
Accounts receivable, net |
|
|
8,396 |
|
|
|
7,724 |
|
Prepaid expenses and other current assets |
|
|
2,015 |
|
|
|
2,200 |
|
Total current assets |
|
|
30,885 |
|
|
|
24,046 |
|
Property and equipment, net |
|
|
4,050 |
|
|
|
4,669 |
|
Right-of-use lease asset |
|
|
738 |
|
|
|
1,858 |
|
Other assets, net |
|
|
973 |
|
|
|
1,064 |
|
|
|
|
17,558 |
|
|
|
17,558 |
|
Intangible assets from acquisitions, net |
|
|
2,590 |
|
|
|
1,528 |
|
Total assets |
|
$ |
56,794 |
|
|
$ |
50,723 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
2,037 |
|
|
$ |
915 |
|
Accrued benefits and payroll |
|
|
3,566 |
|
|
|
2,903 |
|
Other accrued expenses and current liabilities |
|
|
3,825 |
|
|
|
4,194 |
|
Deferred revenue and deposits |
|
|
1,384 |
|
|
|
1,441 |
|
Right of use liability, current |
|
|
1,252 |
|
|
|
443 |
|
Finance lease, current |
|
|
— |
|
|
|
264 |
|
Total current liabilities |
|
|
12,064 |
|
|
|
10,160 |
|
Deferred tax liabilities |
|
|
233 |
|
|
|
257 |
|
Finance lease, non-current |
|
|
- |
|
|
|
443 |
|
Right of use liability non-current |
|
|
385 |
|
|
|
1,453 |
|
Total liabilities |
|
|
12,682 |
|
|
|
12,313 |
|
Stockholders’ equity: |
|
|
|
|
|
|
||
Class A common stock |
|
|
49 |
|
|
|
49 |
|
Class B common stock |
|
|
385 |
|
|
|
387 |
|
Additional paid-in capital |
|
|
354,999 |
|
|
|
356,515 |
|
Accumulated deficit |
|
|
(311,321 |
) |
|
|
(318,541 |
) |
Total stockholders’ equity |
|
|
44,112 |
|
|
|
38,410 |
|
Total liabilities and stockholders’ equity |
|
$ |
56,794 |
|
|
$ |
50,723 |
|
(in thousands) (unaudited) |
||||||||||||||||
Reconciliation of GAAP Net Loss to Adjusted EBITDA and Adjusted Operating Income (Loss) Before Amortization (OIBA) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
||||
Net loss applicable to common stockholders |
|
$ |
(1,531 |
) |
|
$ |
(2,744 |
) |
|
$ |
(3,113 |
) |
|
$ |
(7,220 |
) |
Interest expense (income) and other, net |
|
|
(17 |
) |
|
|
31 |
|
|
|
4 |
|
|
|
(26 |
) |
Income tax expense |
|
|
51 |
|
|
|
14 |
|
|
|
81 |
|
|
|
44 |
|
Amortization of intangible assets from acquisitions |
|
|
531 |
|
|
|
531 |
|
|
|
1,062 |
|
|
|
1,062 |
|
Depreciation and amortization |
|
|
407 |
|
|
|
422 |
|
|
|
858 |
|
|
|
780 |
|
Stock-based compensation |
|
|
714 |
|
|
|
701 |
|
|
|
1,409 |
|
|
|
1,500 |
|
Acquisition and disposition-related costs |
|
|
22 |
|
|
|
(1 |
) |
|
|
27 |
|
|
|
12 |
|
Foreign government paycheck assistance and rent subsidies1 |
|
|
(10 |
) |
|
|
— |
|
|
|
(10 |
) |
|
|
— |
|
Adjusted EBITDA |
|
$ |
167 |
|
|
$ |
(1,046 |
) |
|
$ |
318 |
|
|
$ |
(3,848 |
) |
Depreciation and amortization |
|
|
407 |
|
|
|
422 |
|
|
|
858 |
|
|
|
780 |
|
Adjusted OIBA |
|
$ |
(240 |
) |
|
$ |
(1,468 |
) |
|
$ |
(540 |
) |
|
$ |
(4,628 |
) |
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 |
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
||||
Net loss applicable to common stockholders, diluted |
|
$ |
(0.03 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.17 |
) |
Stock-based compensation |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.04 |
|
|
|
0.03 |
|
Acquisition and disposition-related costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Amortization of intangible assets from acquisitions |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.03 |
|
Interest income (expense) and other, net |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Foreign government paycheck assistance and rent subsidies |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted non-GAAP loss per share |
|
$ |
(0.01 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.11 |
) |
Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss per share |
|
|
43,357 |
|
|
|
42,501 |
|
|
|
43,331 |
|
|
|
42,498 |
|
1 |
For the purpose of computing the number of diluted shares for Adjusted non-GAAP income (loss) per share, |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230803370525/en/
Marchex Investor Relations
Telephone: 206.331.3600
Email: ir@marchex.com
Or
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Telephone: 206.331.3434
Email: pr(at)marchex.com
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