Marchex Announces Third Quarter 2019 Results
Q3 2019 Financial Highlights
- Revenue was
$24.8 million for the third quarter of 2019, compared to$20.0 million for the third quarter of 2018. - Core analytics revenue was
$13.5 million for the third quarter of 2019, compared to$8.9 million for the third quarter of 2018. - Net loss was
$1.2 million for the third quarter of 2019 or$0.03 per diluted share. For the third quarter of 2018, net loss was$0.5 million or$0.01 per diluted share.
|
|
Q3 2018 |
|
Q3 2019 |
||
Revenue |
|
$20.0 million |
|
$24.8 million |
||
Net cash provided by operating activities |
|
$2.3 million |
|
$1.9 million |
||
Cash Balance |
|
$78.6 million |
|
$52.5 million |
||
|
|
|
|
|
||
Non-GAAP Results1: |
|
|
|
|
||
Adjusted EBITDA |
|
$0.5 million |
|
$1.1 million |
- Adjusted non-GAAP income (loss) per share1 for the third quarter of 2019 was
$0.01 , compared to($0.00) for the third quarter of 2018.
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. |
Strategic Priorities Update
Grow New and Existing Client Relationships. In the third quarter,
Accelerate Product Innovation.
In the third quarter,
During the third quarter,
“Marchex is evolving to meet the growing needs of our customers, who are just beginning to understand the power and impact of unlocking consumer intent with Marchex’s AI-driven technologies,” said
Business Outlook
The following forward-looking statements reflect
- “Although the fourth quarter generally sees a meaningful sequential season decline in call volume, we anticipate core analytics to reflect continued growth on a year-over-year basis and be only modestly down or potentially in-line on a sequential basis with third quarter core analytics revenue of
$13.5 million ,” said Arends.
Financial Guidance for the Fourth Quarter ending
Revenue |
|
$26 million or more |
||
Income (loss) from operations |
|
($3) million or better |
||
Adjusted OIBA1,2 |
|
break-even or better |
||
Adjusted EBITDA1,2 |
|
in the range of $1 million |
2 |
Fourth quarter GAAP income (loss) from operations is expected to be ($3) million or better, assuming stock-based compensation and amortization of intangibles between $2.8 million and $3 million for the quarter. |
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 acquisitions, and acquisition related costs (benefit). 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, |
|||||||||||||||||
|
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|||||||||||||
Revenue |
|
$ |
|
20,006 |
|
|
$ |
|
24,794 |
|
|
$ |
|
62,120 |
|
|
$ |
|
77,541 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Service costs (1) |
|
|
10,877 |
|
|
|
12,770 |
|
|
|
35,084 |
|
|
|
40,951 |
|
|||||
Sales and marketing (1) |
|
|
3,330 |
|
|
|
3,971 |
|
|
|
10,275 |
|
|
|
12,172 |
|
|||||
Product development (1) |
|
|
3,861 |
|
|
|
5,135 |
|
|
|
11,382 |
|
|
|
14,708 |
|
|||||
General and administrative (1) |
|
|
2,570 |
|
|
|
3,130 |
|
|
|
8,083 |
|
|
|
9,939 |
|
|||||
Amortization of intangible assets from acquisitions |
|
|
— |
|
|
|
1,568 |
|
|
|
— |
|
|
|
4,704 |
|
|||||
Acquisition-related costs (benefit) |
|
|
110 |
|
|
|
(432 |
) |
|
|
110 |
|
|
|
(710 |
) |
|||||
Total operating expenses |
|
|
20,748 |
|
|
|
26,142 |
|
|
|
64,934 |
|
|
|
81,764 |
|
|||||
Loss from operations |
|
|
(742 |
) |
|
|
(1,348 |
) |
|
|
(2,814 |
) |
|
|
(4,223 |
) |
|||||
Interest income and other, net |
|
|
296 |
|
|
|
189 |
|
|
|
805 |
|
|
|
592 |
|
|||||
Loss before provision for income taxes |
|
|
(446 |
) |
|
|
(1,159 |
) |
|
|
(2,009 |
) |
|
|
(3,631 |
) |
|||||
Income tax expense |
|
|
11 |
|
|
|
56 |
|
|
|
32 |
|
|
|
(3 |
) |
|||||
Net loss applicable to common stockholders |
|
$ |
|
(457 |
) |
|
$ |
|
(1,215 |
) |
|
$ |
|
(2,041 |
) |
|
$ |
|
(3,628 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted net loss per Class A and Class B share applicable to common stockholders |
|
$ |
|
(0.01 |
) |
|
$ |
|
(0.03 |
) |
|
$ |
|
(0.05 |
) |
|
$ |
|
(0.08 |
) |
|
Shares used to calculate basic net loss per share applicable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Class A |
|
|
5,056 |
|
|
|
4,661 |
|
|
|
5,056 |
|
|
|
4,838 |
|
|||||
Class B |
|
|
36,127 |
|
|
|
40,984 |
|
|
|
37,243 |
|
|
|
40,459 |
|
|||||
Shares used to calculate diluted net loss per share applicable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Class A |
|
|
5,056 |
|
|
|
4,661 |
|
|
|
5,056 |
|
|
|
4,838 |
|
|||||
Class B |
|
|
41,183 |
|
|
|
45,645 |
|
|
|
42,299 |
|
|
|
45,297 |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(1) Includes stock-based compensation allocated as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Service costs |
|
$ |
|
108 |
|
|
$ |
|
36 |
|
|
$ |
|
338 |
|
|
$ |
|
131 |
|
|
Sales and marketing |
|
|
125 |
|
|
|
180 |
|
|
|
411 |
|
|
|
529 |
|
|||||
Product development |
|
|
94 |
|
|
|
72 |
|
|
|
276 |
|
|
|
215 |
|
|||||
General and administrative |
|
|
375 |
|
|
|
535 |
|
|
|
1,310 |
|
|
|
1,275 |
|
|||||
Total |
|
$ |
|
702 |
|
|
$ |
|
823 |
|
|
$ |
|
2,335 |
|
|
$ |
|
2,150 |
|
|
MARCHEX, INC. AND SUBSIDIARIES |
|||||||||||||
Condensed Consolidated Balance Sheets |
|||||||||||||
(in thousands) |
|||||||||||||
(unaudited) |
|||||||||||||
|
|
December 31, |
|
September 30, |
|||||||||
|
|
2018 |
|
2019 |
|||||||||
Assets |
|
|
|
|
|
|
|||||||
Current assets: |
|
|
|
|
|
|
|||||||
Cash and cash equivalents |
|
$ |
|
45,230 |
|
|
$ |
|
52,467 |
|
|||
Accounts receivable, net |
|
|
16,198 |
|
|
|
14,100 |
|
|||||
Prepaid expenses and other current assets |
|
|
2,657 |
|
|
|
2,428 |
|
|||||
Total current assets |
|
|
64,085 |
|
|
|
68,995 |
|
|||||
Property and equipment, net |
|
|
2,921 |
|
|
|
3,205 |
|
|||||
Right-of-use lease asset |
|
|
— |
|
|
|
6,146 |
|
|||||
Other assets, net |
|
|
917 |
|
|
|
275 |
|
|||||
Goodwill |
|
|
24,442 |
|
|
|
24,503 |
|
|||||
Intangible assets from acquisitions, net |
|
|
20,697 |
|
|
|
15,993 |
|
|||||
Total assets |
|
$ |
|
113,062 |
|
|
$ |
|
119,117 |
|
|||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|||||||
Current liabilities: |
|
|
|
|
|
|
|||||||
Accounts payable |
|
$ |
|
5,968 |
|
|
$ |
|
5,611 |
|
|||
Accrued expenses and other current liabilities |
|
|
5,807 |
|
|
|
6,265 |
|
|||||
Current portion of acquisition-related liabilities |
|
|
1,215 |
|
|
|
844 |
|
|||||
Deferred revenue and deposits |
|
|
1,782 |
|
|
|
1,902 |
|
|||||
Lease liability current |
|
|
— |
|
|
|
1,506 |
|
|||||
Total current liabilities |
|
|
14,772 |
|
|
|
16,128 |
|
|||||
Other non-current liabilities |
|
|
1,287 |
|
|
|
30 |
|
|||||
Deferred tax liabilities |
|
|
1,531 |
|
|
|
1,537 |
|
|||||
Lease liability non-current |
|
|
— |
|
|
|
6,034 |
|
|||||
Non-current portion of acquisition-related liabilities |
|
|
446 |
|
|
|
— |
|
|||||
Total liabilities |
|
|
18,036 |
|
|
|
23,729 |
|
|||||
Stockholders’ equity: |
|
|
|
|
|
|
|||||||
Class A common stock |
|
|
53 |
|
|
|
49 |
|
|||||
Class B common stock |
|
|
370 |
|
|
|
384 |
|
|||||
Additional paid-in capital |
|
|
350,801 |
|
|
|
354,781 |
|
|||||
Accumulated deficit |
|
|
(256,198 |
) |
|
|
(259,826 |
) |
|||||
Total stockholders’ equity |
|
|
95,026 |
|
|
|
95,388 |
|
|||||
Total liabilities and stockholders’ equity |
|
$ |
|
113,062 |
|
|
$ |
|
119,117 |
|
|||
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 |
|||||||||||||||||
|
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|||||||||||||
Loss from operations |
|
$ |
|
(742 |
) |
|
$ |
|
(1,348 |
) |
|
$ |
|
(2,814 |
) |
|
$ |
|
(4,223 |
) |
|
Stock-based compensation |
|
|
702 |
|
|
|
823 |
|
|
|
2,335 |
|
|
|
2,150 |
|
|||||
Amortization of intangible assets from acquisitions |
|
|
— |
|
|
|
1,568 |
|
|
|
— |
|
|
|
4,704 |
|
|||||
Acquisition-related costs (benefit) |
|
|
110 |
|
|
|
(432 |
) |
|
|
110 |
|
|
|
(710 |
) |
|||||
Adjusted OIBA |
|
$ |
|
70 |
|
|
$ |
|
611 |
|
|
$ |
|
(369 |
) |
|
$ |
|
1,921 |
|
|
Reconciliation from Net Cash provided by (used in) Operating Activities to Adjusted EBITDA |
|||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||||||
|
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|||||||||||||
Net cash provided by (used in) operating activities |
|
$ |
|
2,325 |
|
|
$ |
|
1,883 |
|
|
$ |
|
4,062 |
|
|
$ |
|
6,843 |
|
|
Changes in assets and liabilities |
|
|
(1,655 |
) |
|
|
(227 |
) |
|
|
(2,409 |
) |
|
|
(2,195 |
) |
|||||
Income tax expense |
|
|
11 |
|
|
|
56 |
|
|
|
32 |
|
|
|
(3 |
) |
|||||
Acquisition-related costs (benefit) |
|
|
110 |
|
|
|
(432 |
) |
|
|
110 |
|
|
|
(710 |
) |
|||||
Interest income and other, net |
|
|
(296 |
) |
|
|
(189 |
) |
|
|
(805 |
) |
|
|
(592 |
) |
|||||
Adjusted EBITDA |
|
$ |
|
495 |
|
|
$ |
|
1,091 |
|
|
$ |
|
990 |
|
|
$ |
|
3,343 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net cash used in investing activities |
|
$ |
|
(545 |
) |
|
$ |
|
(577 |
) |
|
$ |
|
(2,156 |
) |
|
$ |
|
(1,447 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net cash provided by (used in) financing activities |
|
$ |
|
22 |
|
|
$ |
|
145 |
|
|
$ |
|
(27,491 |
) |
|
$ |
|
1,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue Reconciliation |
|||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
||||||||||||
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
2019 |
||||||
Core Analytics revenue1 |
|
$ |
8,896 |
|
|
$ |
13,466 |
|
|
$ |
24,531 |
|
|
$ |
39,649 |
||
Marketplace, Local Leads, and other analytics2 |
|
|
11,110 |
|
|
|
11,328 |
|
|
|
37,589 |
|
|
|
37,892 |
||
Total Revenue |
|
$ |
20,006 |
|
|
$ |
24,794 |
|
|
$ |
62,120 |
|
|
$ |
77,541 |
1 |
Core analytics revenue includes revenue from analytics customers, including those that are purchasing or buying products derived from the company’s speech technology platform. |
|
2 |
Includes revenue from marketplace, local leads and from tests, consulting services or other analytics revenues that may continue for a limited time but are not anticipated to continue in future periods. |
|
Certain immaterial reclassifications were made to the current presentation. | ||
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 |
|||||||||||||||||||
|
|
2018 |
|
2019 |
|
2018 |
|
2019 |
|||||||||||||||
Adjusted Non-GAAP loss per share |
|
$ |
|
(0.00 |
) |
|
$ |
|
0.01 |
|
|
$ |
|
(0.01 |
) |
|
$ |
|
0.03 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss per share applicable to common stockholders - diluted (GAAP loss per share) |
|
$ |
|
(0.01 |
) |
|
$ |
|
(0.03 |
) |
|
$ |
|
(0.05 |
) |
|
$ |
|
(0.08 |
) |
|||
Shares used to calculate diluted net loss per share applicable to common stockholders |
|
|
41,183 |
|
|
|
45,645 |
|
|
|
42,299 |
|
|
|
45,297 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss applicable to common stockholders |
|
$ |
|
(457 |
) |
|
$ |
|
(1,215 |
) |
|
$ |
|
(2,041 |
) |
|
$ |
|
(3,628 |
) |
|||
Stock-based compensation |
|
|
702 |
|
|
|
823 |
|
|
|
2,335 |
|
|
|
2,150 |
|
|||||||
Acquisition-related costs (benefit) |
|
|
110 |
|
|
|
(432 |
) |
|
|
110 |
|
|
|
(710 |
) |
|||||||
Amortization of intangible assets from acquisitions |
|
|
— |
|
|
|
1,568 |
|
|
|
— |
|
|
|
4,704 |
|
|||||||
Interest income and other, net |
|
|
(296 |
) |
|
|
(189 |
) |
|
|
(805 |
) |
|
|
(592 |
) |
|||||||
Estimated impact of income taxes |
|
|
(192 |
) |
|
|
(192 |
) |
|
|
(119 |
) |
|
|
(596 |
) |
|||||||
Adjusted Non-GAAP income (loss) |
|
$ |
|
(133 |
) |
|
$ |
|
363 |
|
|
$ |
|
(520 |
) |
|
$ |
|
1,328 |
|
|||
Adjusted Non-GAAP income (loss) per share |
|
$ |
|
(0.00 |
) |
|
$ |
|
0.01 |
|
|
$ |
|
(0.01 |
) |
|
$ |
|
0.03 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) |
|
|
41,183 |
|
|
|
45,645 |
|
|
|
42,299 |
|
|
|
45,297 |
|
|||||||
Weighted average stock options and common shares subject to purchase or cancellation (if applicable) |
|
|
— |
|
|
|
545 |
|
|
|
— |
|
|
|
793 |
|
|||||||
Diluted shares used to calculate Adjusted Non-GAAP income (loss) per share 1 |
|
|
41,183 |
|
|
|
46,190 |
|
|
|
42,299 |
|
|
|
46,090 |
|
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/20191106005990/en/
Source:
Trevor Caldwell
Marchex Investor Relations
Telephone: 206.331.3600
Email: ir(at)marchex.com
Or
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Marchex Corporate Communications
Telephone: 206.331.3434
Email: pr(at)marchex.com