Marchex Announces Third Quarter 2017 Results
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Q3 2017 Financial Highlights
-
Revenue was $22.1 million for the third quarter of 2017, compared to
$30.7 million for the third quarter of 2016. -
Net loss was
$811,000 for the third quarter of 2017 or$0.02 per diluted share. For the third quarter of 2016, net loss was$5.9 million or$0.14 per diluted share.
Q3 2016 | Q3 2017 | ||||
Revenue | $30.7 million | $22.1 million | |||
Non-GAAP Results1: | |||||
Enterprise Revenue2 | $24.0 million | $17.5 million | |||
Adjusted OIBA | ($3.7) million | $0.3 million | |||
Adjusted EBITDA | ($2.9) million | $1.1 million | |||
Cash Balance | $105 million | $104 million | |||
-
Adjusted non-GAAP income (loss) per share1 for the third
quarter of 2017 was
$0.00 , compared to($0.06) for the third quarter of 2016. -
During the third quarter of 2017, YP contributed
$4.6 million in revenue, compared to$6.7 million in the third quarter of 2016.
1 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. |
2 Enterprise Revenue represents total revenue less revenue generated from contracts with YP. |
Strategic Priorities Update
Grow New and Existing Enterprise Client Relationships. Positive
progress in the development of its sales pipeline.
Accelerate Product Innovation. In
-
Marchex Institute Study. In
October 2017 ,Marchex released an industry index report that benchmarks the call-handling performance of 16 major car brands. The study leveraged Marchex’s proprietary Speech Analytics solution to analyze millions of anonymized calls inthe United States and found that more than 19% of calls go unanswered by the dealer or are abandoned by the customer. Poor handling of any phone call can result in lost or delayed opportunities that could otherwise have been appointments, sales, or positive customer experiences which could cost auto dealers potential sales opportunities.
“We continue to focus relentlessly on our customers, which is enabling
us to develop new opportunities and open the door for long-term growth,”
said
Business Outlook
The following forward-looking statements reflect
Financial Guidance for the Fourth Quarter
ending
Revenue | $21 million or more | |
Adjusted OIBA1 | loss of $0.5 million or better | |
Adjusted EBITDA1 | $0.5 million or better |
Conference Call and Webcast Information
Management will hold a conference call, starting at
About
Please visit http://www.marchex.com, www.marchex.com/blog or @marchex on
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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
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
OIBA represents income (loss) from
operations excluding stock-based compensation expense. This measure,
among other things, is one of the primary metrics by which
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, |
|||||||||||||||
2016 | 2017 | 2016 | 2017 | |||||||||||||
Revenue | $ | 30,749 | $ | 22,053 | $ | 101,146 | $ | 68,444 | ||||||||
Expenses: | ||||||||||||||||
Service costs (1) | 18,505 | 11,917 | 60,964 | 37,690 | ||||||||||||
Sales and marketing (1) | 5,562 | 3,612 | 16,733 | 12,075 | ||||||||||||
Product development (1) | 6,832 | 4,256 | 21,859 | 13,809 | ||||||||||||
General and administrative (1) | 5,320 | 3,144 | 15,815 | 10,568 | ||||||||||||
Acquisition and disposition related costs | 354 | — | 662 | — | ||||||||||||
Total operating expenses | 36,573 | 22,929 | 116,033 | 74,142 | ||||||||||||
Impairment of goodwill | — | — | (63,305 | ) | — | |||||||||||
Loss from operations | (5,824 | ) | (876 | ) | (78,192 | ) | (5,698 | ) | ||||||||
Interest income (expense) and other, net | (15 | ) | 77 | (90 | ) | 134 | ||||||||||
Loss before provision for income taxes | (5,839 | ) | (799 | ) | (78,282 | ) | (5,564 | ) | ||||||||
Income tax expense | 15 | 12 | 40 | 37 | ||||||||||||
Net loss applicable to common stockholders | $ | (5,854 | ) | $ | (811 | ) | $ | (78,322 | ) | $ | (5,601 | ) | ||||
Basic and diluted net loss per Class A and Class B share applicable
to common stockholders |
$ | (0.14 | ) | $ | (0.02 | ) | $ | (1.88 | ) | $ | (0.13 | ) | ||||
Shares used to calculate basic net loss per share applicable to
common stockholders: |
||||||||||||||||
Class A | 5,233 | 5,056 | 5,233 | 5,056 | ||||||||||||
Class B | 36,639 | 37,820 | 36,372 | 37,565 | ||||||||||||
Shares used to calculate diluted net loss per share applicable
to common stockholders: |
||||||||||||||||
Class A | 5,233 | 5,056 | 5,233 | 5,056 | ||||||||||||
Class B | 41,872 | 42,876 | 41,605 | 42,621 | ||||||||||||
(1) Includes stock-based compensation allocated as follows: | ||||||||||||||||
Service costs | $ | 160 | $ | 130 | $ | 565 | $ | 385 | ||||||||
Sales and marketing | 353 | 299 | 1,321 | 768 | ||||||||||||
Product development | 206 | 199 | 1,367 | 497 | ||||||||||||
General and administrative | 1,060 | 534 | 3,993 | 1,850 | ||||||||||||
Total | $ | 1,779 | $ | 1,162 | $ | 7,246 | $ | 3,500 | ||||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
December 31, | September 30, | |||||||
2016 | 2017 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 103,950 | $ | 104,377 | ||||
Accounts receivable, net | 18,922 | 14,893 | ||||||
Prepaid expenses and other current assets | 1,531 | 1,905 | ||||||
Refundable taxes | 98 | 86 | ||||||
Total current assets | 124,501 | 121,261 | ||||||
Property and equipment, net | 3,557 | 2,538 | ||||||
Other assets, net | 214 | 328 | ||||||
Total assets | $ | 128,272 | $ | 124,127 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 6,811 | $ | 5,265 | ||||
Accrued expenses and other current liabilities | 7,707 | 6,345 | ||||||
Deferred revenue | 349 | 335 | ||||||
Total current liabilities | 14,867 | 11,945 | ||||||
Other non-current liabilities | 134 | 988 | ||||||
Total liabilities | 15,001 | 12,933 | ||||||
Stockholders’ equity: | ||||||||
Class A common stock | 53 | 53 | ||||||
Class B common stock | 380 | 386 | ||||||
Additional paid-in capital | 360,422 | 363,977 | ||||||
Accumulated deficit | (247,584 | ) | (253,222 | ) | ||||
Total stockholders’ equity | 113,271 | 111,194 | ||||||
Total liabilities and stockholders’ equity | $ | 128,272 | $ | 124,127 | ||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Reconciliation of GAAP Loss from Operations to Operating Income (Loss) Before Amortization (OIBA) | ||||||||||||||||
and Adjusted Operating Income (Loss) Before Amortization (Adjusted OIBA) | ||||||||||||||||
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016 | 2017 | 2016 | 2017 | |||||||||||||
Loss from operations | $ | (5,824 | ) | $ | (876 | ) | $ | (78,192 | ) | $ | (5,698 | ) | ||||
Stock-based compensation | 1,779 | 1,162 | 7,246 | 3,500 | ||||||||||||
Operating income (loss) before amortization (OIBA) | (4,045 | ) | 286 | (70,946 | ) | (2,198 | ) | |||||||||
Acquisition and disposition related costs | 354 | — | 662 | — | ||||||||||||
Impairment of goodwill | — | — | 63,305 | — | ||||||||||||
Adjusted operating income (loss) before amortization (Adjusted OIBA)1 | $ | (3,691 | ) | $ | 286 | $ | (6,979 | ) | $ | (2,198 | ) | |||||
Reconciliation from Net Cash provided by (used in) Operating Activities to Adjusted EBITDA |
||||||||||||||||
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016 | 2017 | 2016 | 2017 | |||||||||||||
Net cash provided by (used in) operating activities | $ | (220 | ) | $ | 2,316 | $ | (2,873 | ) | $ | 1,692 | ||||||
Changes in assets and liabilities | (3,085 | ) | (1,178 | ) | (2,438 | ) | (1,528 | ) | ||||||||
Income tax expense | 15 | 12 | 40 | 37 | ||||||||||||
Acquisition and disposition related costs | 354 | — | 662 | — | ||||||||||||
Interest (income) expense and other, net | 12 | (77 | ) | 87 | (134 | ) | ||||||||||
Adjusted EBITDA1 | $ | (2,924 | ) | $ | 1,073 | $ | (4,522 | ) | $ | 67 | ||||||
Net cash used in investing activities | $ | (235 | ) | $ | (377 | ) | $ | (829 | ) | $ | (1,289 | ) | ||||
Net cash provided by (used in) financing activities | $ | (47 | ) | $ | 9 | $ | (178 | ) | $ | 24 |
1 Includes reorganization costs of approximately $700,000 in Q1 2017. |
Reconciliation from Revenue to Enterprise Revenue |
|||||||||||||||
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||||
2016 | 2017 | 2016 | 2017 | ||||||||||||
Revenue | $ | 30,749 | $ | 22,053 | $ | 101,146 | $ | 68,444 | |||||||
Less: YP Revenue | 6,747 | 4,584 | 23,357 | 14,816 | |||||||||||
Less: Other | — | — | 21 | — | |||||||||||
Enterprise Revenue2 | $ | 24,002 | $ | 17,469 | $ | 77,768 | $ | 53,628 |
2 Enterprise Revenue represents total revenue less revenue generated from contracts with YP and other Archeo related transition activities. |
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||||||||
Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP Income (Loss) per Share | ||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2016 | 2017 | 2016 | 2017 | |||||||||||||
Adjusted Non-GAAP income (loss) per share | $ | (0.06 | ) | $ | 0.00 | $ | (0.11 | ) | $ | (0.04 | ) | |||||
Net loss per share applicable to common stockholders - diluted
(GAAP loss per share) |
$ | (0.14 | ) | $ | (0.02 | ) | $ | (1.88 | ) | $ | (0.13 | ) | ||||
Shares used to calculate diluted net loss per share applicable to
common stockholders |
41,872 | 42,876 | 41,605 | 42,621 | ||||||||||||
Net loss applicable to common stockholders | $ | (5,854 | ) | $ | (811 | ) | $ | (78,322 | ) | $ | (5,601 | ) | ||||
Stock-based compensation | 1,779 | 1,162 | 7,246 | 3,500 | ||||||||||||
Acquisition and disposition related costs | 354 | — | 662 | — | ||||||||||||
Impairment of goodwill | — | — | 63,305 | — | ||||||||||||
Interest (income) expense and other, net | 15 | (77 | ) | 90 | (134 | ) | ||||||||||
Estimated impact of income taxes | 1,248 | (104 | ) | 2,342 | 725 | |||||||||||
Adjusted Non-GAAP income (loss) | $ | (2,458 | ) | $ | 170 | $ | (4,677 | ) | $ | (1,510 | ) | |||||
Adjusted Non-GAAP income (loss) per share | $ | (0.06 | ) | $ | 0.00 | $ | (0.11 | ) | $ | (0.04 | ) | |||||
Shares used to calculate diluted net loss per share applicable to
common stockholders (GAAP) |
41,872 | 42,876 | 41,605 | 42,621 | ||||||||||||
Weighted average stock options and common shares subject to
purchase or cancellation (if applicable) |
— | 186 | — | — | ||||||||||||
Diluted shares used to calculate Adjusted Non-GAAP income (loss) per share 1 | 41,872 | 43,062 | 41,605 | 42,621 |
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. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171102006587/en/
Source:
Marchex Investor Relations
Trevor Caldwell
Telephone:
206-331-3600
Email: ir(at)marchex.com
Or
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Marchex Corporate Communications
Telephone:
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Email: pr(at)marchex.com