Marchex Announces Fourth Quarter and Full Year 2018 Results
Q4 and Full Year 2018 Financial Highlights
-
Revenue was
$23.1 million for the fourth quarter of 2018, compared to$21.8 million for the fourth quarter of 2017. Revenue was$85.3 million for 2018, compared to$90.3 million for 2017. -
Core analytics revenue was
$10.9 million for the fourth quarter of 2018, compared to$7.4 million for the fourth quarter of 2017. Core analytics revenue was$35.4 million for 2018, compared to$29.4 million for 2017. -
Net loss applicable to common stockholders was
$0.6 million for the fourth quarter of 2018 or$0.01 per diluted share, compared to a net loss of$0.8 million or$0.02 per diluted share for the fourth quarter of 2017. Net loss applicable to common stockholders was$2.7 million for 2018 or$0.06 per diluted share, compared to a net loss of$6.4 million or$0.15 per diluted share for 2017.
Q4 2017 | Q4 2018 | FY 2017 | FY 2018 | ||||||||||||||
Revenue | $ | 21.8 million | $ | 23.1 million | $ | 90.3 million | $ | 85.3 million | |||||||||
Net cash provided by operating activities | $ | 0.0 million | $ | 1.0 million | $ | 1.7 million | $ | 5.1 million | |||||||||
Cash Balance | $ | 104 million | $ | 45 million | |||||||||||||
Non-GAAP Results1: | |||||||||||||||||
Adjusted EBITDA | $ | 1.0 million | $ | 1.2 million | $ | 1.0 million | $ | 2.2 million | |||||||||
-
Adjusted non-GAAP income (loss) per share1 for the fourth
quarter of 2018 was
$0.02 , compared to$0.01 for the fourth quarter of 2017. Adjusted non-GAAP income (loss) per share1 for 2018 was$0.00 , compared to($0.03) for 2017.
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 Client Relationships. In the fourth
quarter, with the addition of Callcap and Telmetrics,
Accelerate Product Innovation. In 2018,
During the year, the company significantly grew its data science
organization and also launched the
Expanded conversational analytics leadership with the acquisition of
Callcap. In addition to the company’s previously announced
acquisition of Telmetrics, in November,
“In 2018, we made considerable progress in building a leading
conversation analytics company through a combination of product
innovation, customer progress and strategic initiatives, which is
helping to accelerate our growth,” said
Business Outlook
The following forward-looking statements reflect
-
For the first quarter, the Company anticipates
$12.5 million or more in Marchex’s core analytics revenue, representing a more than 50% increase year-over-year. - For the first quarter, the Company anticipates seeing stabilization or potentially a modest increase in revenue related to Marchex’s marketplace products as compared to the fourth quarter 2018.
Financial Guidance for the First Quarter ending
Total Revenue | $25 million or more | ||||
Income (loss) from operations | ($3) million or better | ||||
Adjusted OIBA1,2 | breakeven or better | ||||
Adjusted EBITDA1,2 | $1 million or better | ||||
2 |
First 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 and $3 million for the quarter. |
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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. 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 | Twelve Months Ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||
Revenue | $ | 21,847 | $ | 23,131 | $ | 90,291 | $ | 85,251 | ||||||||||||
Expenses: | ||||||||||||||||||||
Service costs (1) | 11,649 | 12,720 | 49,339 | 47,804 | ||||||||||||||||
Sales and marketing (1) | 3,577 | 3,513 | 15,652 | 13,788 | ||||||||||||||||
Product development (1) | 4,285 | 4,041 | 18,094 | 15,423 | ||||||||||||||||
General and administrative (1) | 2,999 | 2,798 | 13,567 | 10,881 | ||||||||||||||||
Amortization of intangible assets from acquisitions | — | 781 | — | 781 | ||||||||||||||||
Acquisition related costs | — | 352 | — | 462 | ||||||||||||||||
Total operating expenses | 22,510 | 24,205 | 96,652 | 89,139 | ||||||||||||||||
Loss from operations | (663 | ) | (1,074 | ) | (6,361 | ) | (3,888 | ) | ||||||||||||
Interest income and other, net | 182 | 249 | 316 | 1,054 | ||||||||||||||||
Loss before provision for income taxes | (481 | ) | (825 | ) | (6,045 | ) | (2,834 | ) | ||||||||||||
Income tax expense (benefit) | 5 | (188 | ) | 42 | (156 | ) | ||||||||||||||
Net loss | (486 | ) | (637 | ) | (6,087 | ) | (2,678 | ) | ||||||||||||
Dividends applicable to participating securities | (355 | ) | — | (355 | ) | — | ||||||||||||||
Net loss applicable to common stockholders | $ | (841 | ) | $ | (637 | ) | $ | (6,442 | ) | $ | (2,678 | ) | ||||||||
Basic and diluted net loss per Class A share applicable to common stockholders | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.16 | ) | $ | (0.06 | ) | ||||||||
Basic and diluted net loss per Class B share applicable to common stockholders | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.15 | ) | $ | (0.06 | ) | ||||||||
Dividends per share | $ | 0.50 | $ | — | $ | 0.50 | $ | — | ||||||||||||
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 | 37,930 | 37,823 | 37,657 | 37,389 | ||||||||||||||||
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 | 42,987 | 42,880 | 42,713 | 42,446 | ||||||||||||||||
(1) Includes stock-based compensation allocated as follows: | ||||||||||||||||||||
Service costs | $ | 130 | $ | 97 | $ | 515 | $ | 435 | ||||||||||||
Sales and marketing | 246 | 152 | 1,014 | 563 | ||||||||||||||||
Product development | 182 | 80 | 679 | 356 | ||||||||||||||||
General and administrative | 539 | 376 | 2,389 | 1,686 | ||||||||||||||||
Total | $ | 1,097 | $ | 705 | $ | 4,597 | $ | 3,040 | ||||||||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
December 31, | December 31, | |||||||||
2017 | 2018 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 104,190 | $ | 45,230 | ||||||
Accounts receivable, net | 14,860 | 15,486 | ||||||||
Prepaid expenses and other current assets | 2,041 | 3,369 | ||||||||
Total current assets | 121,091 | 64,085 | ||||||||
Property and equipment, net | 2,405 | 2,921 | ||||||||
Other assets, net | 326 | 917 | ||||||||
Goodwill | — | 24,692 | ||||||||
Intangible assets from acquisitions, net | — | 20,697 | ||||||||
Total assets | $ | 123,822 | $ | 113,312 | ||||||
Liabilities and Stockholders’ Equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 4,928 | $ | 5,968 | ||||||
Accrued expenses and other current liabilities | 5,585 | 7,195 | ||||||||
Deferred revenue and deposits | 313 | 1,782 | ||||||||
Dividends payable | 21,907 | — | ||||||||
Total current liabilities | 32,733 | 14,945 | ||||||||
Other non-current liabilities | 1,090 | 3,341 | ||||||||
Total liabilities | 33,823 | 18,286 | ||||||||
Stockholders’ equity: | ||||||||||
Class A common stock | 53 | 53 | ||||||||
Class B common stock | 387 | 370 | ||||||||
Additional paid-in capital | 343,268 | 350,801 | ||||||||
Accumulated deficit | (253,709 | ) | (256,198 | ) | ||||||
Total stockholders’ equity | 89,999 | 95,026 | ||||||||
Total liabilities and stockholders’ equity | $ | 123,822 | $ | 113,312 | ||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Reconciliation of GAAP Loss from Operations to Adjusted Operating Income Before Amortization (OIBA) | ||||||||||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||
Loss from operations | $ | (663 | ) | $ | (1,074 | ) | $ | (6,361 | ) | $ | (3,888 | ) | ||||||||
Stock-based compensation | 1,097 | 705 | 4,597 | 3,040 | ||||||||||||||||
Amortization of intangible assets from acquisitions | — | 781 | — | 781 | ||||||||||||||||
Acquisition related costs | — | 352 | — | 462 | ||||||||||||||||
Adjusted operating income before amortization (Adjusted OIBA)1 | $ | 434 | $ | 764 | $ | (1,764 | ) | $ | 395 | |||||||||||
Reconciliation from Net Cash provided by Operating Activities to Adjusted EBITDA |
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Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||
Net cash provided by operating activities | $ | 0 | $ | 989 | $ | 1,692 | $ | 5,051 | ||||||||||||
Changes in assets and liabilities | 1,136 | 317 | (392 | ) | (2,092 | ) | ||||||||||||||
Income tax expense (benefit) | 5 | (188 | ) | 42 | (156 | ) | ||||||||||||||
Acquisition related costs | — | 352 | — | 462 | ||||||||||||||||
Interest income and other, net | (182 | ) | (249 | ) | (316 | ) | (1,054 | ) | ||||||||||||
Adjusted EBITDA1 | $ | 959 | $ | 1,221 | $ | 1,026 | $ | 2,211 | ||||||||||||
Net cash used in investing activities | $ | (288 | ) | $ | (34,407 | ) | $ | (1,577 | ) | $ | (36,563 | ) | ||||||||
Net cash provided by (used in) financing activities | $ | 101 | $ | 43 | $ | 125 | $ | (27,448 | ) | |||||||||||
1 | Includes reorganization costs of approximately $700,000 in Q1 2017. | ||
Revenue Reconciliations |
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Three Months Ended |
Twelve Months Ended |
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2017 |
2018 |
2017 | 2018 | |||||||||||||
Revenue | $ | 21,847 | $ | 23,131 | $ | 90,291 | $ | 85,251 | ||||||||
Less: YP or DexYP Revenue | 4,197 | 6,431 | 19,013 | 19,914 | ||||||||||||
Enterprise Revenue2 | $ | 17,650 | $ | 16,700 | $ | 71,278 | $ | 65,337 | ||||||||
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. | ||
Three Months Ended |
Twelve Months Ended |
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2017 | 2018 | 2017 | 2018 | |||||||||||||
Core Analytics revenue3 | $ | 7,385 | $ | 10,860 | $ | 29,406 | $ | 35,390 | ||||||||
Marketplace, Local Leads, and other analytics4 | 14,462 | 12,271 | 60,885 | 49,861 | ||||||||||||
Total Revenue | $ | 21,847 | $ | 23,131 | $ | 90,291 | $ | 85,251 | ||||||||
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. | ||
4 | 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. | ||
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 |
Twelve Months Ended |
|||||||||||||||||||
2017 | 2018 | 2017 | 2018 | |||||||||||||||||
Adjusted Non-GAAP income (loss) per share | $ | 0.01 | $ | 0.02 | $ | (0.03 | ) | $ | 0.00 | |||||||||||
Net loss per Class B share applicable to common stockholders -
diluted |
$ | (0.02 | ) | $ | (0.01 | ) | $ | (0.15 | ) | $ | (0.06 | ) | ||||||||
Shares used to calculate diluted net loss per share applicable to |
42,987 | 42,880 | 42,713 | 42,446 | ||||||||||||||||
Net loss applicable to common stockholders | $ | (841 | ) | $ | (637 | ) | $ | (6,442 | ) | $ | (2,678 | ) | ||||||||
Stock-based compensation | 1,097 | 705 | 4,597 | 3,040 | ||||||||||||||||
Acquisition related costs | — | 352 | — | 462 | ||||||||||||||||
Amortization of intangible assets from acquisitions | — | 781 | — | 781 | ||||||||||||||||
Interest (income) expense and other, net | (182 | ) | (249 | ) | (316 | ) | (1,054 | ) | ||||||||||||
Dividends applicable to participating securities | 355 | — | 355 | — | ||||||||||||||||
Estimated impact of income taxes | (151 | ) | (231 | ) | 575 | (350 | ) | |||||||||||||
Adjusted Non-GAAP net income (loss) | $ | 278 | $ | 721 | $ | (1,231 | ) | $ | 201 | |||||||||||
Adjusted Non-GAAP income (loss) per share | $ | 0.01 | $ | 0.02 | $ | (0.03 | ) | $ | 0.00 | |||||||||||
Shares used to calculate diluted net loss per Class B share applicable to common stockholders (GAAP) | 42,987 | 42,880 | 42,713 | 42,446 | ||||||||||||||||
Weighted average stock options and common shares subject to purchase or cancellation (if applicable) | 339 | 274 | — | 301 | ||||||||||||||||
Diluted shares used to calculate Adjusted Non-GAAP income (loss) per share 1 | 43,326 | 43,154 | 42,713 | 42,747 | ||||||||||||||||
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/20190213005746/en/
Source:
Trevor Caldwell
Marchex Investor Relations
Telephone:
206.331.3600
Email: ir@marchex.com
or
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INQUIRIES
Marchex Corporate Communications
Telephone:
206.331.3434
Email: marchex@edelman.com