mchx-10q_20200630.htm
false 2020 Q2 0001224133 --12-31 Accelerated Filer 1 P24M P24M P24M P1Y 2020 P3Y P4Y P3Y P4Y P4Y us-gaap:ServiceMember us-gaap:ServiceMember us-gaap:ServiceMember P4Y P4Y P6Y3M P4Y P6Y3M P4Y P6Y3M 0.0182 0.0017 0.0222 0.0122 0.39 0.46 0.39 0.49 0.53 0.49 P5Y9M25D P5Y9M29D 0.00 0.00 0.00 0.00 0 0001224133 2020-01-01 2020-06-30 xbrli:shares 0001224133 us-gaap:CommonClassAMember 2020-08-05 0001224133 us-gaap:CommonClassBMember 2020-08-05 iso4217:USD 0001224133 2019-12-31 0001224133 2020-06-30 0001224133 us-gaap:CommonClassAMember 2019-12-31 0001224133 us-gaap:CommonClassAMember 2020-06-30 0001224133 us-gaap:CommonClassBMember 2019-12-31 0001224133 us-gaap:CommonClassBMember 2020-06-30 iso4217:USD xbrli:shares 0001224133 2019-01-01 2019-06-30 0001224133 2019-04-01 2019-06-30 0001224133 2020-04-01 2020-06-30 0001224133 us-gaap:CommonClassAMember 2019-01-01 2019-06-30 0001224133 us-gaap:CommonClassAMember 2020-01-01 2020-06-30 0001224133 us-gaap:CommonClassAMember 2019-04-01 2019-06-30 0001224133 us-gaap:CommonClassAMember 2020-04-01 2020-06-30 0001224133 us-gaap:CommonClassBMember 2019-01-01 2019-06-30 0001224133 us-gaap:CommonClassBMember 2020-01-01 2020-06-30 0001224133 us-gaap:CommonClassBMember 2019-04-01 2019-06-30 0001224133 us-gaap:CommonClassBMember 2020-04-01 2020-06-30 0001224133 us-gaap:ServiceMember 2019-01-01 2019-06-30 0001224133 us-gaap:ServiceMember 2020-01-01 2020-06-30 0001224133 us-gaap:ServiceMember 2019-04-01 2019-06-30 0001224133 us-gaap:ServiceMember 2020-04-01 2020-06-30 0001224133 us-gaap:SellingAndMarketingExpenseMember 2019-01-01 2019-06-30 0001224133 us-gaap:SellingAndMarketingExpenseMember 2020-01-01 2020-06-30 0001224133 us-gaap:SellingAndMarketingExpenseMember 2019-04-01 2019-06-30 0001224133 us-gaap:SellingAndMarketingExpenseMember 2020-04-01 2020-06-30 0001224133 us-gaap:GeneralAndAdministrativeExpenseMember 2019-01-01 2019-06-30 0001224133 us-gaap:GeneralAndAdministrativeExpenseMember 2020-01-01 2020-06-30 0001224133 us-gaap:GeneralAndAdministrativeExpenseMember 2019-04-01 2019-06-30 0001224133 us-gaap:GeneralAndAdministrativeExpenseMember 2020-04-01 2020-06-30 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2018-12-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2018-12-31 0001224133 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001224133 us-gaap:RetainedEarningsMember 2018-12-31 0001224133 2018-12-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2019-01-01 2019-03-31 0001224133 us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0001224133 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001224133 2019-01-01 2019-03-31 0001224133 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2019-03-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2019-03-31 0001224133 us-gaap:TreasuryStockMember 2019-03-31 0001224133 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001224133 us-gaap:RetainedEarningsMember 2019-03-31 0001224133 2019-03-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2019-04-01 2019-06-30 0001224133 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2019-04-01 2019-06-30 0001224133 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0001224133 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2019-06-30 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2019-06-30 0001224133 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001224133 us-gaap:RetainedEarningsMember 2019-06-30 0001224133 2019-06-30 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2019-12-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2019-12-31 0001224133 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001224133 us-gaap:RetainedEarningsMember 2019-12-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2020-01-01 2020-03-31 0001224133 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001224133 2020-01-01 2020-03-31 0001224133 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2020-03-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2020-03-31 0001224133 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001224133 us-gaap:RetainedEarningsMember 2020-03-31 0001224133 2020-03-31 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2020-04-01 2020-06-30 0001224133 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001224133 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassAMember 2020-06-30 0001224133 us-gaap:CommonStockMember us-gaap:CommonClassBMember 2020-06-30 0001224133 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001224133 us-gaap:RetainedEarningsMember 2020-06-30 0001224133 us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-06-30 0001224133 us-gaap:AccountsReceivableMember 2020-01-01 2020-06-30 0001224133 mchx:TelmetricsIncMember 2020-01-01 2020-06-30 0001224133 mchx:CallCapMember 2020-01-01 2020-06-30 0001224133 us-gaap:CashMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001224133 us-gaap:CashMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001224133 us-gaap:MutualFundMember us-gaap:FairValueInputsLevel1Member 2019-12-31 0001224133 us-gaap:MutualFundMember us-gaap:FairValueInputsLevel1Member 2020-06-30 0001224133 us-gaap:FairValueInputsLevel1Member 2019-12-31 0001224133 us-gaap:FairValueInputsLevel1Member 2020-06-30 0001224133 us-gaap:AdvertisingMember 2019-04-01 2019-06-30 0001224133 us-gaap:AdvertisingMember 2019-01-01 2019-06-30 0001224133 us-gaap:AdvertisingMember 2020-04-01 2020-06-30 0001224133 us-gaap:AdvertisingMember 2020-01-01 2020-06-30 0001224133 us-gaap:ServiceOtherMember 2019-04-01 2019-06-30 0001224133 us-gaap:ServiceOtherMember 2019-01-01 2019-06-30 0001224133 us-gaap:ServiceOtherMember 2020-04-01 2020-06-30 0001224133 us-gaap:ServiceOtherMember 2020-01-01 2020-06-30 0001224133 srt:MaximumMember 2020-07-01 2020-06-30 0001224133 us-gaap:CustomerRelationshipsMember 2020-01-01 2020-06-30 0001224133 us-gaap:CustomerContractsMember srt:MaximumMember 2020-01-01 2020-06-30 0001224133 us-gaap:CustomerContractsMember 2019-12-31 0001224133 us-gaap:CustomerContractsMember 2020-06-30 0001224133 us-gaap:CustomerContractsMember 2020-04-01 2020-06-30 0001224133 us-gaap:CustomerContractsMember 2020-01-01 2020-06-30 0001224133 mchx:ServiceCostsMember 2019-01-01 2019-06-30 0001224133 mchx:ServiceCostsMember 2020-01-01 2020-06-30 0001224133 mchx:ServiceCostsMember 2019-04-01 2019-06-30 0001224133 mchx:ServiceCostsMember 2020-04-01 2020-06-30 0001224133 mchx:ProductDevelopmentMember 2019-01-01 2019-06-30 0001224133 mchx:ProductDevelopmentMember 2020-01-01 2020-06-30 0001224133 mchx:ProductDevelopmentMember 2019-04-01 2019-06-30 0001224133 mchx:ProductDevelopmentMember 2020-04-01 2020-06-30 0001224133 mchx:TimeVestedStockOptionsMember srt:MinimumMember 2019-01-01 2019-06-30 0001224133 mchx:TimeVestedStockOptionsMember srt:MaximumMember 2019-01-01 2019-06-30 0001224133 mchx:TimeVestedStockOptionsMember srt:MinimumMember 2020-01-01 2020-06-30 0001224133 mchx:TimeVestedStockOptionsMember srt:MaximumMember 2020-01-01 2020-06-30 0001224133 mchx:TimeVestedStockOptionsMember srt:MinimumMember 2019-04-01 2019-06-30 0001224133 mchx:TimeVestedStockOptionsMember srt:MaximumMember 2019-04-01 2019-06-30 0001224133 mchx:TimeVestedStockOptionsMember 2020-04-01 2020-06-30 xbrli:pure 0001224133 mchx:TimeVestedStockOptionsMember 2019-04-01 2019-06-30 0001224133 mchx:TimeVestedStockOptionsMember 2019-01-01 2019-06-30 0001224133 mchx:TimeVestedStockOptionsMember 2020-01-01 2020-06-30 0001224133 2019-01-01 2019-12-31 0001224133 us-gaap:RestrictedStockMember 2019-12-31 0001224133 us-gaap:RestrictedStockMember 2020-01-01 2020-06-30 0001224133 us-gaap:RestrictedStockMember 2020-06-30 0001224133 us-gaap:CommonClassBMember us-gaap:EmployeeStockOptionMember 2019-04-01 2019-06-30 0001224133 us-gaap:CommonClassBMember us-gaap:EmployeeStockOptionMember 2020-04-01 2020-06-30 0001224133 us-gaap:CommonClassBMember us-gaap:EmployeeStockOptionMember 2019-01-01 2019-06-30 0001224133 us-gaap:CommonClassBMember us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0001224133 us-gaap:RestrictedStockMember us-gaap:CommonClassBMember 2019-04-01 2019-06-30 0001224133 us-gaap:RestrictedStockMember us-gaap:CommonClassBMember 2020-04-01 2020-06-30 0001224133 us-gaap:RestrictedStockMember us-gaap:CommonClassBMember 2019-01-01 2019-06-30 0001224133 us-gaap:RestrictedStockMember us-gaap:CommonClassBMember 2020-01-01 2020-06-30 0001224133 us-gaap:RestrictedStockUnitsRSUMember 2019-04-01 2019-06-30 0001224133 us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001224133 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-06-30 0001224133 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-06-30 mchx:Entity 0001224133 mchx:AdvertiserAMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-06-30 0001224133 mchx:AdvertiserAMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-06-30 0001224133 mchx:AdvertiserAMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-04-01 2019-06-30 0001224133 mchx:AdvertiserAMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-04-01 2020-06-30 0001224133 mchx:AdvertiserBMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-06-30 0001224133 mchx:AdvertiserBMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-06-30 0001224133 mchx:AdvertiserBMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-04-01 2019-06-30 0001224133 mchx:AdvertiserBMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-04-01 2020-06-30 0001224133 mchx:AdvertiserAMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2019-01-01 2019-12-31 0001224133 mchx:AdvertiserAMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2020-01-01 2020-06-30 0001224133 mchx:AdvertiserBMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2019-01-01 2019-12-31 0001224133 mchx:AdvertiserBMember us-gaap:CustomerConcentrationRiskMember us-gaap:AccountsReceivableMember 2020-01-01 2020-06-30 mchx:Agency 0001224133 us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2019-04-01 2019-06-30 0001224133 us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-06-30 0001224133 us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2020-04-01 2020-06-30 0001224133 us-gaap:RevenueFromContractWithCustomerMember us-gaap:CustomerConcentrationRiskMember 2020-01-01 2020-06-30 0001224133 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-12-31 0001224133 us-gaap:AccountsReceivableMember us-gaap:CustomerConcentrationRiskMember 2020-01-01 2020-06-30 mchx:Distributor 0001224133 srt:MinimumMember 2019-04-01 2019-06-30 0001224133 srt:MinimumMember 2019-01-01 2019-06-30 0001224133 srt:MinimumMember 2020-04-01 2020-06-30 0001224133 srt:MinimumMember 2020-01-01 2020-06-30 mchx:Segment 0001224133 country:US us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-06-30 0001224133 country:US us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-06-30 0001224133 country:US us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-04-01 2019-06-30 0001224133 country:US us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-04-01 2020-06-30 0001224133 country:CA us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-06-30 0001224133 country:CA us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-06-30 0001224133 country:CA us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-04-01 2019-06-30 0001224133 country:CA us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-04-01 2020-06-30 0001224133 mchx:OtherCountriesMember us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-06-30 0001224133 mchx:OtherCountriesMember us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-06-30 0001224133 mchx:OtherCountriesMember us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-04-01 2019-06-30 0001224133 mchx:OtherCountriesMember us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-04-01 2020-06-30 0001224133 us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-06-30 0001224133 us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-06-30 0001224133 us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-04-01 2019-06-30 0001224133 us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-04-01 2020-06-30 0001224133 us-gaap:ComputerEquipmentMember 2019-12-31 0001224133 us-gaap:ComputerEquipmentMember 2019-06-30 0001224133 us-gaap:SoftwareDevelopmentMember 2019-12-31 0001224133 us-gaap:SoftwareDevelopmentMember 2019-06-30 0001224133 us-gaap:FurnitureAndFixturesMember 2019-12-31 0001224133 us-gaap:FurnitureAndFixturesMember 2019-06-30 0001224133 us-gaap:LeaseholdImprovementsMember 2019-12-31 0001224133 us-gaap:LeaseholdImprovementsMember 2019-06-30 0001224133 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001224133 2018-01-01 2018-03-31 0001224133 2018-04-30 0001224133 2019-04-01 2019-04-30 0001224133 us-gaap:LetterOfCreditMember us-gaap:CertificatesOfDepositMember us-gaap:OtherNoncurrentAssetsMember 2019-03-31 0001224133 mchx:MississaugaCanadaMember 2020-01-01 2020-06-30 0001224133 mchx:MississaugaCanadaMember 2020-06-30 0001224133 mchx:WichitaKansasMember 2020-01-01 2020-06-30 0001224133 mchx:TelmetricsIncMember 2018-11-30 0001224133 mchx:SonarIncMember us-gaap:CommonClassBMember srt:MaximumMember 2019-12-01 2019-12-31 0001224133 mchx:SonarIncMember 2019-12-31 0001224133 mchx:SonarIncMember 2020-06-30 0001224133 mchx:StrategicTechnologyMember 2020-06-30 0001224133 mchx:TelmetricsIncMember 2018-11-01 2018-11-30 0001224133 mchx:TelmetricsIncMember 2020-06-30 0001224133 mchx:SonarMember 2019-01-01 2019-12-31 0001224133 mchx:TelmetricsIncMember 2019-01-01 2019-12-31 0001224133 mchx:TelmetricsIncMember srt:MinimumMember 2020-01-01 2020-06-30 0001224133 mchx:TelmetricsIncMember srt:MaximumMember 2020-01-01 2020-06-30 0001224133 mchx:CallCapMember 2018-11-30 0001224133 mchx:CallCapMember 2018-11-01 2018-11-30 0001224133 us-gaap:CommonClassBMember mchx:CallCapMember 2018-11-01 2018-11-30 0001224133 mchx:CallCapMember 2020-06-30 0001224133 srt:MinimumMember mchx:CallCapMember 2020-01-01 2020-06-30 0001224133 srt:MaximumMember mchx:CallCapMember 2020-01-01 2020-06-30 0001224133 mchx:SonarMember 2019-12-31 0001224133 mchx:SonarMember 2019-12-01 2019-12-31 0001224133 mchx:SonarMember us-gaap:CommonClassBMember 2019-12-01 2019-12-31 0001224133 mchx:SonarMember us-gaap:CommonClassBMember 2020-01-01 2020-06-30 0001224133 mchx:SonarMember 2020-06-01 2020-06-30 0001224133 mchx:SonarMember 2020-01-01 2020-06-30 0001224133 mchx:SonarMember us-gaap:CommonClassBMember srt:MaximumMember 2019-12-01 2019-12-31 0001224133 mchx:SonarMember us-gaap:CommonClassBMember srt:MaximumMember 2019-12-31 0001224133 mchx:SonarMember srt:MinimumMember 2019-12-01 2019-12-31 0001224133 mchx:SonarMember 2020-06-30 0001224133 srt:MinimumMember mchx:SonarMember 2020-01-01 2020-06-30 0001224133 srt:MaximumMember mchx:SonarMember 2020-01-01 2020-06-30 0001224133 us-gaap:FairValueInputsLevel3Member 2019-01-01 2019-12-31 0001224133 us-gaap:FairValueInputsLevel3Member 2020-04-01 2020-06-30 0001224133 us-gaap:FairValueInputsLevel3Member 2020-01-01 2020-06-30 0001224133 us-gaap:FairValueInputsLevel3Member 2019-12-31 0001224133 us-gaap:FairValueInputsLevel3Member 2020-06-30 0001224133 us-gaap:OtherOperatingIncomeExpenseMember 2020-01-01 2020-03-31 0001224133 us-gaap:CustomerRelationshipsMember 2019-12-31 0001224133 us-gaap:TechnologyBasedIntangibleAssetsMember 2019-12-31 0001224133 us-gaap:NoncompeteAgreementsMember 2019-12-31 0001224133 us-gaap:TradeNamesMember 2019-12-31 0001224133 us-gaap:CustomerRelationshipsMember 2020-06-30 0001224133 us-gaap:TechnologyBasedIntangibleAssetsMember 2020-06-30 0001224133 us-gaap:NoncompeteAgreementsMember 2020-06-30 0001224133 us-gaap:TradeNamesMember 2020-06-30 0001224133 us-gaap:TechnologyBasedIntangibleAssetsMember 2020-01-01 2020-06-30 0001224133 us-gaap:TradeNamesMember 2020-01-01 2020-06-30 0001224133 us-gaap:NoncompeteAgreementsMember srt:MinimumMember 2020-01-01 2020-06-30 0001224133 us-gaap:NoncompeteAgreementsMember srt:MaximumMember 2020-01-01 2020-06-30 0001224133 mchx:SonarMember 2020-01-01 2020-06-30 0001224133 us-gaap:CommonClassBMember 2014-11-30 0001224133 mchx:CARESActMember 2020-01-01 2020-06-30 0001224133 mchx:CARESActMember 2020-06-30

 

f

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                      to                     .

 

Commission File Number 000-50658

 

Marchex, Inc.

(Exact name of Registrant as specified in its charter)

 

 

Delaware

35-2194038

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

520 Pike Street, Suite 2000

 

Seattle, WA

(Address of Principal Executive Offices)

98101

(Zip Code)

Registrant’s telephone number, including area code: (206331-3300

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

Emerging growth company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class B Common Stock

 

MCHX

 

The Nasdaq Global Select Market

As of August 5, 2020, the registrant had 4,660,927 shares of Class A common stock, $.01 par value per share, and 39,896,634 shares Class B common stock, $.01 par value per share, outstanding, respectively.

 

 

 

 


 

Marchex, Inc.

Form 10-Q

Table of Contents

 

 

 

Page

PART I.

FINANCIAL INFORMATION

 

Item 1.

Condensed Consolidated Financial Statements (unaudited)

1

 

Condensed Consolidated Balance Sheets

1

 

Condensed Consolidated Statements of Operations

2

 

Condensed Consolidated Statements of Stockholders’ Equity

3

 

Condensed Consolidated Statements of Cash Flows

4

 

Notes to Condensed Consolidated Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

47

Item 4.

Controls and Procedures

47

 

 

 

PART II.

OTHER INFORMATION

 

Item 1.

Legal Proceedings

49

Item 1A.

Risk Factors

49

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

70

Item 4.

Mine Safety Disclosures

70

Item 6.

Exhibits

71

Signature

72

 

 


 

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

December 31,

 

 

June 30,

 

 

 

2019

 

 

2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

42,526

 

 

$

46,777

 

Accounts receivable, net

 

 

17,809

 

 

 

16,148

 

Prepaid expenses and other current assets

 

 

2,084

 

 

 

2,444

 

Total current assets

 

 

62,419

 

 

 

65,369

 

Property and equipment, net

 

 

3,028

 

 

 

3,206

 

Right-of-use lease asset

 

 

5,801

 

 

 

6,221

 

Other assets, net

 

 

335

 

 

 

1,076

 

Goodwill

 

 

33,433

 

 

 

19,132

 

Intangible assets from acquisitions, net

 

 

19,485

 

 

 

10,614

 

Total assets

 

$

124,501

 

 

$

105,618

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

7,082

 

 

$

8,321

 

Accrued expenses and other current liabilities

 

 

6,679

 

 

 

9,699

 

Current portion of acquisition-related liabilities

 

 

1,111

 

 

 

277

 

Deferred revenue and deposits

 

 

1,173

 

 

 

1,911

 

Lease liability current

 

 

1,500

 

 

 

1,675

 

Loan obligations, current

 

 

 

 

 

5,292

 

Total current liabilities

 

 

17,545

 

 

 

27,175

 

Deferred tax liabilities

 

 

981

 

 

 

162

 

Lease liability non-current

 

 

5,664

 

 

 

5,834

 

Non-current portion of acquisition-related liabilities

 

 

473

 

 

 

 

Total liabilities

 

 

24,663

 

 

 

33,171

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock, $0.01 par value, Authorized 137,500 shares

 

 

 

 

 

 

 

 

Class A: 12,500 shares authorized; 4,661 shares issued and

   outstanding at December 31, 2019 and June 30, 2020

 

 

49

 

 

 

49

 

Class B: 125,000 shares authorized; 39,610 shares issued and

   outstanding at December 31, 2019, including 1,030 shares

   of restricted stock; and 38,892 shares issued and outstanding at

   June 30, 2020, including 1,077 shares of restricted stock

 

 

396

 

 

 

399

 

Additional paid-in capital

 

 

359,633

 

 

 

361,622

 

Accumulated deficit

 

 

(260,240

)

 

 

(289,623

)

Total stockholders’ equity

 

 

99,838

 

 

 

72,447

 

Total liabilities and stockholders’ equity

 

$

124,501

 

 

$

105,618

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 

 

1

 


 

MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

 

 

 

Six Months Ended

June 30,

 

 

Three Months Ended

June 30,

 

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

Revenue

 

$

52,747

 

 

$

50,632

 

 

$

26,341

 

 

$

25,847

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service costs(1)

 

 

28,181

 

 

 

29,702

 

 

 

13,923

 

 

 

15,204

 

Sales and marketing(1)

 

 

8,201

 

 

 

10,429

 

 

 

4,088

 

 

 

5,438

 

Product development(1)

 

 

9,573

 

 

 

11,929

 

 

 

5,005

 

 

 

5,886

 

General and administrative(1)

 

 

6,809

 

 

 

6,775

 

 

 

3,489

 

 

 

3,038

 

Amortization of intangible assets from acquisitions(2)

 

 

3,136

 

 

 

2,969

 

 

 

1,568

 

 

 

1,206

 

Acquisition and disposition-related costs (benefit)

 

 

(278

)

 

 

(996

)

 

 

(460

)

 

 

(361

)

Total operating expenses

 

 

55,622

 

 

 

60,808

 

 

 

27,613

 

 

 

30,411

 

Impairment of goodwill

 

 

 

 

 

(14,213

)

 

 

 

 

 

 

Impairment of intangible assets from acquisitions

 

 

 

 

 

(5,903

)

 

 

 

 

 

 

Loss from operations

 

 

(2,875

)

 

 

(30,292

)

 

 

(1,272

)

 

 

(4,564

)

Interest income and other, net

 

 

403

 

 

 

142

 

 

 

218

 

 

 

32

 

Loss before provision for income taxes

 

 

(2,472

)

 

 

(30,150

)

 

 

(1,054

)

 

 

(4,532

)

Income tax expense (benefit)

 

 

(59

)

 

 

(767

)

 

 

60

 

 

 

(24

)

Net loss applicable to common stockholders

 

$

(2,413

)

 

$

(29,383

)

 

$

(1,114

)

 

$

(4,508

)

Basic and diluted net loss per Class A and Class B share applicable

   to common stockholders

 

$

(0.05

)

 

$

(0.62

)

 

$

(0.02

)

 

$

(0.09

)

Shares used to calculate basic net loss per share applicable to

   common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

4,927

 

 

 

4,661

 

 

 

4,800

 

 

 

4,661

 

Class B

 

 

40,193

 

 

 

42,382

 

 

 

40,554

 

 

 

42,385

 

Shares used to calculate diluted net loss per share applicable

   to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

4,927

 

 

 

4,661

 

 

 

4,800

 

 

 

4,661

 

Class B

 

 

45,120

 

 

 

47,043

 

 

 

45,354

 

 

 

47,046

 

(1) Excludes amortization of intangibles from acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Components of amortization of intangibles from acquisitions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       Service costs

 

$

1,148

 

 

$

1,384

 

 

$

574

 

 

$

628

 

       Sales and marketing

 

 

1,237

 

 

 

1,179

 

 

 

618

 

 

 

437

 

       General and administrative

 

 

751

 

 

 

406

 

 

 

376

 

 

 

141

 

         Total

 

$

3,136

 

 

$

2,969

 

 

$

1,568

 

 

$

1,206

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying Notes to Condensed Consolidated Financial Statements.

 


2

 


 

MARCHEX, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

common stock

 

 

common stock

 

 

Treasury stock

 

 

paid-in

 

 

Accumulated

 

 

stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

equity

 

Balances at December 31, 2018

 

 

5,056

 

 

$

53

 

 

 

36,965

 

 

$

370

 

 

 

 

 

 

 

 

$

350,801

 

 

$

(256,198

)

 

$

95,026

 

Issuance of common stock upon exercise

   of options, issuance and vesting of

   restricted stock and under employee

   stock purchase plan, net

 

 

 

 

 

 

 

 

129

 

 

 

1

 

 

 

(90

)

 

 

(1

)

 

 

194

 

 

 

 

 

 

194

 

Stock compensation from options and

   restricted stock, net of forfeitures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

545

 

 

 

 

 

 

545

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,299

)

 

 

(1,299

)

Balances at March 31, 2019

 

 

5,056

 

 

$

53

 

 

 

37,094

 

 

$

371

 

 

 

(90

)

 

 

(1

)

 

$

351,540

 

 

$

(257,497

)

 

 

94,466

 

Issuance of common stock upon exercise

   of options, issuance and vesting of

   restricted stock and under employee

   stock purchase plan, net

 

 

 

 

 

 

 

 

928

 

 

 

9

 

 

 

 

 

 

 

 

 

1,542

 

 

 

 

 

 

1,551

 

Conversion of Class A common stock to Class B common stock

 

 

(395

)

 

 

(4

)

 

 

395

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock compensation from options and

   restricted stock, net of

   forfeitures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

782

 

 

 

 

 

 

782

 

Retirement of treasury stock

 

 

 

 

 

 

 

 

(90

)

 

 

(1

)

 

 

90

 

 

 

1

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,114

)

 

 

(1,114

)

Balances at June 30, 2019

 

 

4,661

 

 

$

49

 

 

 

38,327

 

 

$

383

 

 

 

 

 

 

 

 

$

353,864

 

 

$

(258,611

)

 

 

95,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Total

 

 

 

common stock

 

 

common stock

 

 

Treasury stock

 

 

paid-in

 

 

Accumulated

 

 

stockholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

deficit

 

 

equity

 

Balances at December 31, 2019

 

 

4,661

 

 

$

49

 

 

 

39,610

 

 

$

396

 

 

 

 

 

 

 

 

$

359,633

 

 

$

(260,240

)

 

 

99,838

 

Issuance of common stock upon exercise

   of options, issuance and vesting of

   restricted stock and under employee

   stock purchase plan, net

 

 

 

 

 

 

 

 

158

 

 

 

2

 

 

 

 

 

 

 

 

 

6

 

 

 

 

 

 

8

 

Stock compensation from options and

   restricted stock, net of forfeitures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,057

 

 

 

 

 

 

1,057

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24,875

)

 

 

(24,875

)

Balances at March 31, 2020

 

 

4,661

 

 

$

49

 

 

 

39,768

 

 

$

398

 

 

 

 

 

$

 

 

$

360,696

 

 

$

(285,115

)

 

$

76,028

 

Issuance of common stock upon exercise

   of options, issuance and vesting of

   restricted stock and under employee

   stock purchase plan, net

 

 

 

 

 

 

 

 

124

 

 

 

1

 

 

 

 

 

 

 

 

 

19

 

 

 

 

 

 

20

 

Stock compensation from options and

   restricted stock, net of forfeitures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

907

 

 

 

 

 

 

907

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,508

)

 

 

(4,508

)

Balances at June 30, 2020

 

 

4,661

 

 

$

49

 

 

 

39,892

 

 

$

399

 

 

 

 

 

$

 

 

$

361,622

 

 

$

(289,623

)

 

$

72,447

 

 

3

 


 

MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

 

 

For the Six Months Ended June 30,

 

 

 

2019

 

 

2020

 

Operating Activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(2,413

)

 

$

(29,383

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Amortization and depreciation

 

 

4,079