UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
EXPLANATORY NOTE
Item 2.02 Results of Operations and Financial Condition.
On May 7, 2024, Marchex, Inc. (“Marchex”) is issuing a press release and holding a conference call regarding its financial results for the first quarter ended March 31, 2024 (the “Press Release”). The full text of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 2.02 (including Exhibit 99.1) is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. Such information shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Marchex is referencing non-GAAP financial information in both the Press Release and on the conference call. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached Press Release. Disclosures regarding definitions of these financial measures used by Marchex and why Marchex’s management believes these financial measures provide useful information to investors is also included in the Press Release.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
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Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Marchex has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
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MARCHEX, INC. |
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Date: May 8, 2024 |
By: |
/s/ HOLLY A. AGLIO |
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Name: |
Holly A. Aglio |
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Title: |
Chief Financial Officer (Principal Financial Officer) |
Exhibit 99.1
Marchex Announces First Quarter Results
SEATTLE – May 7, 2024 – Marchex, Inc. (NASDAQ: MCHX), which harnesses the power of AI and conversational intelligence to drive operational excellence and revenue acceleration, today announced its financial results for the first quarter ended March 31, 2024.
Q1 2024 Financial Highlights
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Q1 2023 |
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Q1 2024 |
GAAP Revenue |
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$ 12.2 million |
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$ 11.6 million |
Non-GAAP Results: |
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Adjusted EBITDA* |
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$ (2.8) million |
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$ (0.4) million |
*Adjusted EBITDA for Q1 2024 includes approximately $235,000 of reorganization costs. Excluding these amounts would result in Adjusted EBITDA totaling $(171,000).
Recent Business Highlights:
“In the first quarter and so far into the second quarter, we have continued to make substantial progress with the key initiatives that will drive our business for the balance of 2024 and into the future, including our infrastructure, innovation and go-to-market initiatives,” said Edwin Miller, CEO. “We are seeing our sales pipeline gain momentum as everything we are doing is building toward our future as a prescriptive analytics company that leverages our industry leading vertical market data. We are highly focused on accelerating our business and enhancing Marchex’s overall growth and profitability, and we believe our current progress is moving solidly in this direction.”
Business Outlook
The following forward-looking statements reflect Marchex's expectations as of May 7, 2024.
For the second quarter ending June 30, 2024:
“Despite the noted lower volumes in certain areas to start the year, we believe that those factors should be more than offset by our new sales wins, such as the recently added and expanded customer relationships, as well previously won opportunities ramping over the course of the year. In addition, we have seen strong initial interest in our AI product pilots and are working to convert those to full programs. The combination of these factors reinforce our belief that we can and will grow sequential revenue as we move forward in 2024, as well as see ongoing bottom line progress. Furthermore, as our OneStack initiatives continue to advance, combined with other technology cost-saving initiatives, we believe we are well positioned to enable greater overall operating leverage in the business. Additionally, as our growth initiatives gain further traction, we believe we are in a strong position to see ongoing improvements in profitability measures into the future,” said Miller.
Management will hold a conference call, starting at 5:00 p.m. ET on Tuesday, May 7, 2024, to discuss its first quarter 2024, financial results and other company updates. Access to the live webcast of the conference call will be available online from the Investors section of Marchex’s website at www.marchex.com. An archived version of the webcast will also be available at the same location two hours after completion of the call.
About Marchex
Marchex harnesses the power of AI and conversational intelligence to provide actionable insights aligned with prescriptive vertical market data analytics, driving operational excellence and revenue acceleration. Marchex enables executive, sales and marketing teams to optimize customer journey experiences across all communication channels. Through our prescriptive analytics solutions, we enable the alignment of enterprise strategy, empowering businesses to increase revenue through informed decision-making and strategic execution. Marchex provides AI-powered conversational intelligence solutions for market-leading companies in many leading B2B2C vertical markets, including several of the world’s most innovative and successful brands.
Please visit http://www.marchex.com, www.marchex.com/blog or @marchex on Marchex X (formally known as Twitter), where Marchex discloses material information from time to time about the company, its financial information, and its business.
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 Marchex's actual results to differ materially from those indicated by such forward-looking statements including but not limited to product demand, order cancellations and delays, competition and general economic conditions. These factors are described in greater detail in the "Risk Factors" section of our most recent periodic report and registration statement filed with the SEC. All of the information provided in this release is as of May 7, 2024, and Marchex undertakes no duty to update the information provided herein.
In the event the press release contains links to third party websites or materials, the links are provided solely as a convenience to you. Marchex is not responsible for the content of linked third-party sites or materials and does not make any representations regarding the content or accuracy thereof.
Non-GAAP Financial Information:
To supplement Marchex's consolidated financial statements presented in accordance with GAAP and to provide clarity internally and externally, Marchex uses certain non-GAAP measures of financial performance and liquidity, including Adjusted EBITDA, Adjusted OIBA, and Adjusted non-GAAP income (loss) per share. Financial analysts and investors may use Adjusted EBITDA and Adjusted OIBA to help with comparative financial evaluation to make informed investment decisions. Financial analysts and investors may use Adjusted non-GAAP income (loss) per share to analyze Marchex's financial performance since these groups have historically used EPS related measures, along with other measures, to estimate the value of a company, to make informed investment decisions, and to evaluate a company's operating performance compared to that of other companies in its industry.
Adjusted EBITDA represents net income (loss) before (1) interest, (2) income taxes, (3) amortization of intangible assets from acquisitions, (4) depreciation and amortization, (5) stock-based compensation expense, and (6) acquisition and disposition-related costs. Adjusted EBITDA is an alternative measure used by our management to understand and evaluate our core operating performance and trends, and management believes it provides meaningful supplemental information regarding the company's liquidity and ability to fund its operations and financing obligations.
Adjusted OIBA represents Adjusted EBITDA adjusted for depreciation and amortization. This measure, among other things, is another metric by which Marchex has evaluated the performance of its business, to include being the basis on which Marchex's internal budgets have been based and by which Marchex's management has been evaluated. This measure represents Marchex's consolidated operating results, taking into account depreciation and other intangible amortization, but excluding the effects of certain other expenses removed in arriving at Adjusted EBITDA, as detailed above.
Adjusted non-GAAP income (loss) per share represents Adjusted non-GAAP income (loss) divided by GAAP diluted shares outstanding. Adjusted non-GAAP income (loss) generally captures those items on the statement of operations that have been, or ultimately will be, settled in cash exclusive of certain items that are not indicative of Marchex’s recurring core operating results and represents net income (loss) applicable to common stockholders plus the net of tax effects of: (1) stock-based compensation expense, (2) acquisition and disposition related costs (benefit), (3) amortization of intangible assets from acquisitions, and (4) interest income and other, net.
Marchex's management believes that investors should have access to, and Marchex is obligated to provide, the same set of tools that management uses in analyzing the company's results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, and should not be considered in isolation, as a substitute for, or superior to, GAAP results. Marchex’s non-GAAP financial measures may be defined differently from time to time and may be defined differently than similar titled terms used by other companies, and accordingly, care should be exercised in understanding how Marchex defines its non-GAAP financial measures in this release. Marchex endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measure with equal or greater prominence, GAAP financial statements, and detailed descriptions of the reconciling items and adjustments, including quantifying such items, to derive the non-GAAP measure.
For further information, contact:
Trevor Caldwell
Marchex Investor Relations
Telephone: 206.331.3600
Email: ir@marchex.com
Or
MEDIA INQUIRIES
Marchex Corporate Communications
Telephone: 206.331.3434
Email: pr(at)marchex.com
MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
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Three Months Ended |
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March 31, |
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2023 |
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2024 |
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Revenue |
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$ |
12,216 |
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$ |
11,573 |
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Expenses: |
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Service costs (1) |
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5,424 |
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4,414 |
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Sales and marketing (1) |
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3,970 |
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2,787 |
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Product development (1) |
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4,164 |
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3,245 |
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General and administrative (1) |
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2,617 |
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2,289 |
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Amortization of intangible assets from acquisitions |
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531 |
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151 |
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Acquisition and disposition related costs |
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13 |
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— |
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Total operating expenses |
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16,719 |
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12,886 |
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Loss from operations |
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(4,503 |
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(1,313 |
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Interest income (expense) and other, net |
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57 |
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(78 |
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Loss before provision for income taxes |
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(4,446 |
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(1,391 |
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Income tax expense |
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(30 |
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(59 |
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Net loss applicable to common stockholders |
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$ |
(4,476 |
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$ |
(1,450 |
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Basic and diluted net loss per Class A and Class B share applicable to common stockholders |
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$ |
(0.11 |
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$ |
(0.03 |
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Shares used to calculate basic net loss per share applicable to common stockholders: |
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Class A |
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4,661 |
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4,661 |
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Class B |
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37,835 |
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38,393 |
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Shares used to calculate diluted net loss per share applicable to common stockholders: |
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Class A |
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4,661 |
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4,661 |
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Class B |
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42,496 |
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43,054 |
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(1) Includes stock-based compensation allocated as follows: |
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Service costs |
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$ |
45 |
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$ |
3 |
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Sales and marketing |
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263 |
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88 |
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Product development |
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86 |
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8 |
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General and administrative |
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405 |
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333 |
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Total |
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$ |
799 |
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$ |
433 |
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MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
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December 31, |
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March 31, |
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2023 |
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2024 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
14,607 |
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$ |
12,032 |
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Accounts receivable, net |
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7,394 |
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8,145 |
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Prepaid expenses and other current assets |
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1,805 |
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2,298 |
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Total current assets |
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23,806 |
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22,476 |
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Property and equipment, net |
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2,398 |
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2,093 |
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Other assets, net |
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1,482 |
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1,488 |
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Right-of-use lease asset |
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1,631 |
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1,515 |
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Goodwill |
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17,558 |
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17,558 |
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Intangible assets from acquisitions, net |
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602 |
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452 |
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Total assets |
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$ |
47,477 |
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$ |
45,582 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
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$ |
1,533 |
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$ |
1,455 |
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Accrued benefits and payroll |
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3,294 |
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1,565 |
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Other accrued expenses and current liabilities |
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3,217 |
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3,607 |
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Deferred revenue and deposits |
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1,214 |
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1,916 |
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Lease liability current |
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462 |
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472 |
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Total current liabilities |
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9,720 |
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9,016 |
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Deferred tax liabilities |
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249 |
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276 |
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Finance lease, non-current |
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421 |
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340 |
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Lease liability, non-current |
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1,217 |
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1,096 |
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Total liabilities |
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11,607 |
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10,729 |
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Stockholders’ equity: |
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Class A common stock |
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49 |
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49 |
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Class B common stock |
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386 |
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389 |
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Additional paid-in capital |
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356,666 |
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357,096 |
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Accumulated deficit |
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(321,231 |
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(322,681 |
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Total stockholders’ equity |
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35,870 |
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34,853 |
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Total liabilities and stockholders’ equity |
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$ |
47,477 |
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$ |
45,582 |
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MARCHEX, INC. AND SUBSIDIARIES
(in thousands)
(unaudited)
Reconciliation of GAAP Net Loss to Adjusted EBITDA and Adjusted Operating Income (Loss) Before Amortization (OIBA)
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Three Months Ended |
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March 31, |
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2023 |
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2024 |
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Net loss applicable to common stockholders |
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$ |
(4,476 |
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$ |
(1,450 |
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Interest (income) expense and other, net |
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(57 |
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78 |
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Income tax expense |
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30 |
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59 |
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Amortization of intangible assets from acquisitions |
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531 |
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151 |
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Depreciation and amortization |
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359 |
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324 |
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Stock-based compensation |
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799 |
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433 |
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Acquisition and disposition-related costs |
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13 |
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— |
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Adjusted EBITDA |
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$ |
(2,801 |
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$ |
(406 |
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Depreciation and amortization |
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359 |
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324 |
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Adjusted OIBA |
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$ |
(3,160 |
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$ |
(730 |
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MARCHEX, INC. AND SUBSIDIARIES
(in thousands)
(unaudited)
Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP Loss1
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Three Months Ended |
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March 31, |
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2023 |
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2024 |
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Net loss applicable to common stockholders, diluted |
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$ |
(0.11 |
) |
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$ |
(0.03 |
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Stock-based compensation |
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0.02 |
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0.01 |
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Acquisition and disposition-related costs (benefit) |
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- |
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- |
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Amortization of intangible assets from acquisitions |
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0.01 |
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- |
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Interest income and other, net |
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- |
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- |
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Adjusted non-GAAP loss per share |
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$ |
(0.08 |
) |
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$ |
(0.02 |
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Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss per share |
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42,496 |
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43,054 |
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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.