Marchex Announces Third Quarter 2018 Results
Q3 2018 Financial Highlights
-
Revenue was
$20.0 million for the third quarter of 2018, compared to$22.1 million for the third quarter of 2017. -
Net loss was
$0.5 million for the third quarter of 2018 or$0.01 per diluted share. For the third quarter of 2017, net loss was$0.8 million or$0.02 per diluted share.
Q3 2017 | Q3 2018 | ||||
Revenue | $22.1 million | $20.0 million | |||
Net cash provided by operating activities | $2.3 million | $2.3 million | |||
Cash Balance | $104 million | $79 million | |||
Non-GAAP Results1: | |||||
Adjusted EBITDA | $1.1 million | $0.5 million | |||
-
Adjusted non-GAAP loss per share1 for the third quarter of
2018 was
($0.00) , compared to$0.00 for the third quarter of 2017.
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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. |
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Strategic Priorities Update
Grow New and Existing Enterprise Client Relationships. During the
third quarter,
Continued Growth in Call Volume. During the third quarter,
Accelerate Product Innovation.
Expanded Call Analytics Leadership with the addition of Telmetrics.
Telmetrics 2018 Financial Summary. On a
standalone basis, Telmetrics is projecting
“In the third quarter, we saw growth with several recently signed
conversation analytics relationships, while we continued to build our
customer pipeline and add new analytics relationships,” said
Business Outlook
The following forward-looking statements reflects the Company’s current
outlook as of
- For the fourth quarter, the Company anticipates the continuation of double digit percentage year-over-year growth in Marchex’s core analytics revenue, and that this trend will continue into the first quarter of 2019 as well. For a breakout of Marchex’s historical core analytics revenue, please refer to the financial tables included in this press release.
- For the fourth quarter, the Company expects to see stabilization in Marchex’s marketplace revenue as compared to the third quarter.
-
For the partial fourth quarter, Telmetrics is anticipated to
contribute
$1.25 million in core analytics revenue and$0.2 million to Adjusted OIBA.
Financial Guidance (including Telmetrics) for
the Fourth Quarter ending
Total Revenue | $22 million or more | |||
Income (loss) from operations | loss of ($1.1) million or better | |||
Adjusted OIBA1,2 | $0.2 million or more | |||
Adjusted EBITDA1,2 | $0.8 million or more |
2 |
Fourth quarter GAAP income (loss) from operations is expected to be ($1.1) million or better, assuming stock-based compensation between $0.9 and $1.1 million for the quarter. Fourth quarter includes estimated addbacks of $1.0 million related to depreciation and amortization and Telmetrics amortization of intangible assets from acquisition. |
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-
In 2019, the Company believes Telmetrics will contribute
$8.5 million or more in core analytics revenue and$1 million or more in Adjusted OIBA. In 2020, the Company anticipates realization of potential increased annualized cost synergies of an incremental$1 million or more.
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 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
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 represents income
(loss) from operations excluding stock-based compensation expense,
amortization of intangible assets from acquisition, and acquisition
related costs. 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 |
Nine Months Ended |
|||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||
Revenue | $ | 22,053 | $ | 20,006 | $ | 68,444 | $ | 62,120 | ||||||||
Expenses: | ||||||||||||||||
Service costs (1) | 11,917 | 10,877 | 37,690 | 35,084 | ||||||||||||
Sales and marketing (1) | 3,612 | 3,330 | 12,075 | 10,275 | ||||||||||||
Product development (1) | 4,256 | 3,861 | 13,809 | 11,382 | ||||||||||||
General and administrative (1) | 3,144 | 2,570 | 10,568 | 8,083 | ||||||||||||
Acquisition related costs | — | 110 | — | 110 | ||||||||||||
Total operating expenses | 22,929 | 20,748 | 74,142 | 64,934 | ||||||||||||
Loss from operations | (876 | ) | (742 | ) | (5,698 | ) | (2,814 | ) | ||||||||
Interest income and other, net | 77 | 296 | 134 | 805 | ||||||||||||
Loss before provision for income taxes | (799 | ) | (446 | ) | (5,564 | ) | (2,009 | ) | ||||||||
Income tax expense | 12 | 11 | 37 | 32 | ||||||||||||
Net loss applicable to common stockholders | $ | (811 | ) | $ | (457 | ) | $ | (5,601 | ) | $ | (2,041 | ) | ||||
Basic and diluted net loss per Class A and Class B share applicable
to common stockholders |
$ | (0.02 | ) | $ | (0.01 | ) | $ | (0.13 | ) | $ | (0.05 | ) | ||||
Shares used to calculate basic net loss per share applicable to
common stockholders: |
||||||||||||||||
Class A | 5,056 | 5,056 | 5,056 | 5,056 | ||||||||||||
Class B | 37,820 | 36,127 | 37,565 | 37,243 | ||||||||||||
Shares used to calculate diluted net loss per share applicable
to common stockholders: |
||||||||||||||||
Class A | 5,056 | 5,056 | 5,056 | 5,056 | ||||||||||||
Class B | 42,876 | 41,183 | 42,621 | 42,299 | ||||||||||||
(1) Includes stock-based compensation allocated as follows: | ||||||||||||||||
Service costs | $ | 130 | $ | 108 | $ | 385 | $ | 338 | ||||||||
Sales and marketing | 299 | 125 | 768 | 411 | ||||||||||||
Product development | 199 | 94 | 497 | 276 | ||||||||||||
General and administrative | 534 | 375 | 1,850 | 1,310 | ||||||||||||
Total | $ | 1,162 | $ | 702 | $ | 3,500 | $ | 2,335 | ||||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
December 31, | September 30, | |||||||
2017 | 2018 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 104,190 | $ | 78,605 | ||||
Accounts receivable, net | 14,860 | 13,646 | ||||||
Prepaid expenses and other current assets | 2,041 | 2,322 | ||||||
Total current assets | 121,091 | 94,573 | ||||||
Property and equipment, net | 2,405 | 2,797 | ||||||
Other assets, net | 326 | 919 | ||||||
Total assets | $ | 123,822 | $ | 98,289 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 4,928 | $ | 5,258 | ||||
Accrued expenses and other current liabilities | 5,585 | 5,804 | ||||||
Deferred revenue and deposits | 313 | 1,165 | ||||||
Dividends payable | 21,907 | — | ||||||
Total current liabilities | 32,733 | 12,227 | ||||||
Other non-current liabilities | 1,090 | 1,155 | ||||||
Total liabilities | 33,823 | 13,382 | ||||||
Stockholders’ equity: | ||||||||
Class A common stock | 53 | 53 | ||||||
Class B common stock | 387 | 368 | ||||||
Additional paid-in capital | 343,268 | 340,047 | ||||||
Accumulated deficit | (253,709 | ) | (255,561 | ) | ||||
Total stockholders’ equity | 89,999 | 84,907 | ||||||
Total liabilities and stockholders’ equity | $ | 123,822 | $ | 98,289 | ||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||||||||
(in thousands) | |||||||||||||||||
(unaudited) | |||||||||||||||||
Reconciliation of GAAP Loss from Operations to Adjusted Operating Income (Loss) Before Amortization (OIBA) | |||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||||
Loss from operations | $ | (876 | ) | $ | (742 | ) | $ | (5,698 | ) | $ | (2,814 | ) | |||||
Stock-based compensation | 1,162 | 702 | 3,500 | 2,335 | |||||||||||||
Acquisition related costs | — | 110 | — | 110 | |||||||||||||
Adjusted OIBA1 | $ | 286 | $ | 70 | $ | (2,198 | ) | $ | (369 | ) | |||||||
Reconciliation from Net Cash provided by Operating Activities to Adjusted EBITDA |
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Three Months Ended |
Nine Months Ended |
||||||||||||||||
2017 | 2018 | 2017 | 2018 | ||||||||||||||
Net cash provided by operating activities | $ | 2,316 | $ | 2,325 | $ | 1,692 | $ | 4,062 | |||||||||
Changes in assets and liabilities | (1,178 | ) | (1,655 | ) | (1,528 | ) | (2,409 | ) | |||||||||
Income tax expense | 12 | 11 | 37 | 32 | |||||||||||||
Acquisition related costs | — | 110 | — | 110 | |||||||||||||
Interest income and other, net | (77 | ) | (296 | ) | (134 | ) | (805 | ) | |||||||||
Adjusted EBITDA1 | $ | 1,073 | $ | 495 | $ | 67 | $ | 990 | |||||||||
Net cash used in investing activities | $ | (377 | ) | $ | (545 | ) | $ | (1,289 | ) | $ | (2,156 | ) | |||||
Net cash provided by (used in) financing activities | $ | 9 | $ | 22 | $ | 24 | $ | (27,491 | ) | ||||||||
1 |
Includes reorganization costs of approximately $700,000 in Q1 2017. |
Revenue Reconciliations |
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Three Months Ended |
Nine Months Ended |
|||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||
Revenue | $ | 22,053 | $ | 20,006 | $ | 68,444 | $ | 62,120 | ||||||||
Less: YP or DexYP Revenue | 4,584 | 5,100 | 14,816 | 13,483 | ||||||||||||
Enterprise Revenue2 | $ | 17,469 | $ | 14,906 | $ | 53,628 | $ | 48,637 | ||||||||
2 |
Enterprise Revenue represents total revenue less revenue generated from contracts with YP, and for the 2018 period, total revenue less revenue generated from contracts with YP and Dex Media, Inc. (collectively “DexYP”). In 2017, Dex Media, Inc. acquired YP Holdings LLC, which is the parent company of YP. |
Q117 | Q217 | Q317 | Q417 | Q118 | Q218 | Q318 | ||||||||||||||||||||||
Core Analytics revenue3 | $ | 7,079 | $ | 7,353 | $ | 7,589 | $ | 7,384 | $ | 7,401 | $ | 8,234 | $ | 8,896 | ||||||||||||||
Marketplace, Local Leads, and other analytics4 | 17,296 | 14,663 | 14,464 | 14,463 | 14,495 | 11,984 | 11,110 | |||||||||||||||||||||
Total revenue | $ | 24,375 | $ | 22,016 | $ | 22,053 | $ | 21,847 | $ | 21,896 | $ | 20,218 | $ | 20,006 | ||||||||||||||
3 |
Core analytics revenue includes revenue from analytics customers, including those that are purchasing or buying products derived from the company’s speech technology platform. |
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4 |
Includes revenue from marketplace, local leads and from tests, consulting services or other analytics revenues that may continue for a limited time but is not anticipated to continue in future periods. |
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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 |
Nine Months Ended |
|||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||
Adjusted Non-GAAP income (loss) per share | $ | 0.00 | $ | (0.00 | ) | $ | (0.04 | ) | $ | (0.01 | ) | |||||
Net loss per share applicable to common stockholders - diluted
(GAAP loss per share) |
$ | (0.02 | ) | $ | (0.01 | ) | $ | (0.13 | ) | $ | (0.05 | ) | ||||
Shares used to calculate diluted net loss per share applicable to
common stockholders |
42,876 | 41,183 | 42,621 | 42,299 | ||||||||||||
Net loss applicable to common stockholders | $ | (811 | ) | $ | (457 | ) | $ | (5,601 | ) | $ | (2,041 | ) | ||||
Stock-based compensation | 1,162 | 702 | 3,500 | 2,335 | ||||||||||||
Acquisition related costs | — | 110 | — | 110 | ||||||||||||
Interest income and other, net | (77 | ) | (296 | ) | (134 | ) | (805 | ) | ||||||||
Estimated impact of income taxes | (104 | ) | (192 | ) | 725 | (119 | ) | |||||||||
Adjusted Non-GAAP income (loss) | $ | 170 | $ | (133 | ) | $ | (1,510 | ) | $ | (520 | ) | |||||
Adjusted Non-GAAP income (loss) per share | $ | 0.00 | $ | (0.00 | ) | $ | (0.04 | ) | $ | (0.01 | ) | |||||
Shares used to calculate diluted net loss per share applicable to
common stockholders (GAAP) and Adjusted Non-GAAP income (loss) per share1 |
42,876 | 41,183 | 42,621 | 42,299 | ||||||||||||
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 | 43,062 | 41,183 | 42,621 | 42,299 | ||||||||||||
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: https://www.businesswire.com/news/home/20181105005904/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