July 23, 2024

SEATTLE–(BUSINESS WIRE)–Marchex, Inc. (NASDAQ: MCHX), which 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, today announced its financial results for the fourth quarter and full year ended December 31, 2023.

Q4 2023 and Full Year 2023 Financial Highlights

  • GAAP revenue was $12.4 million for the fourth quarter of 2023, compared to $12.3 million for the fourth quarter of 2022.
  • Net loss was $1.1 million for the fourth quarter of 2023 or $(0.02) per diluted share, compared to a net loss of $3.6 million or $(0.08) per diluted share for the fourth quarter of 2022. Net loss was $9.9 million for 2023 or $(0.23) per diluted share, compared to a net loss of $8.2 million or $(0.19) per diluted share for 2022.

 

 

Q4 2022

 

Q4 2023

 

FY 2022

 

FY 2023

GAAP Revenue

 

$ 12.3 million

 

$ 12.4 million

 

$ 52.2 million

 

$ 49.9 million

Non-GAAP Results:

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$ (1.7) million

 

$ 0.1 million

 

$ (1.4) million

 

$ (3.4) million *

*

 

Adjusted EBITDA for full year 2023 includes approximately $1,620,000 of reorganization costs. Excluding these amounts would result in Adjusted EBITDA for full year 2023 totaling $(1,780,000).

  • Adjusted non-GAAP loss per share for the fourth quarter of 2023 was $0.00 compared to ($0.05) for the fourth quarter of 2022. Adjusted non-GAAP loss per share for 2023 was $(0.12) compared to $(0.08) for 2022.

Fourth Quarter Summary:

  • New Customer Traction and Existing Customer Expansion. During the fourth quarter, Marchex signed new customers across multiple verticals including automotive, home services and health care. In addition, the company saw continued traction by signing up more than a hundred auto dealers through direct or channel partners sales initiatives over the last twelve months.
  • Conversation Volumes. Overall conversation volumes were down in the fourth quarter compared to the third quarter of 2023 due to typical seasonality and as some customers faced pressure due to certain inflationary and overall consumer-related macroeconomic factors.

Strategic Priorities and Growth Initiatives For 2024:

  • Existing Customer Expansion and New Customer Traction to Drive Growth in 2024. In 2024, the company expects to add meaningfully to its base of customer relationships across multiple verticals, including home services, healthcare, auto services and auto, as well as expand some of its most significant existing large enterprise relationships. The company expects to continue to build its pipeline of customers utilizing AI features and products.
  • Accelerate Product Innovation. The company expects to expand its success with recent product launches such as AI call summaries and sentiment analysis with more AI features and capabilities launched throughout the year. The company believes its continued product innovation will accelerate revenue growth and deepen vertical penetration across all of its core verticals from new and existing customers.
  • Complete Technology Initiatives to Enable Faster Innovation and New Initiatives. The company expects it will complete its primary cloud-based infrastructure initiatives as well as complete its single sign on and unified user interface by the third quarter, which will advance the rate of overall product innovation and customer facing sales initiatives.

2023 was a year of great foundational progress for Marchex. We moved aggressively to position the company to take advantage of our robust conversational data and position ourselves to emerge as a leader in conversational intelligence across our core vertical markets,” said Edwin Miller, CEO. “After meeting with many of our customers through 2023 and already in 2024, I firmly believe there is a significant opportunity to build a nine-figure business. This year, we are continuing to complete our key initiatives to enable Marchex to take advantage of our robust generative AI product opportunities. We are putting the pieces in place to achieve our growth ambitions and accelerate the business. Marchex is ideally positioned to help Fortune 500 businesses understand and act on their data. We are focused on driving the future of conversational AI in our verticals and opening up new avenues for growth, some of which will launch in the course of this year.

Business Outlook

The following forward-looking statements reflect Marchex’s expectations as of ​March 14, 2024​.

For the first quarter ending March 31, 2024:

  • Revenue is anticipated to be somewhat lower than fourth quarter 2023 levels.
  • Adjusted EBITDA is anticipated to be somewhat lower than the fourth quarter 2023 levels, with improvements sequentially throughout the year.

For the fiscal year 2024:

  • The company anticipates revenue growth for the full year with sequential revenue progress throughout the year.
  • The company anticipates that gross margins can increase by 5 percent or more by the end of 2024.
  • Adjusted EBITDA is anticipated to be at or above break-even for the full year.
  • The company anticipates 2024 year end cash balances to be at or near year end 2023 levels.

In January we saw continued pressure on conversational volumes consistent with the fourth quarter in certain verticals such as our small business resellers, which we expect to flow through in the first part of the year. However, based on the current pipeline of customers and ongoing pilots, we believe we will grow the business sequentially from the first quarter revenue levels. In addition, the completion of our infrastructure initiatives should enable us to scale our gross margins and accelerate our go-to-market initiatives in the latter half of the year, positioning Marchex for accelerating growth,” said Miller.

Management will hold a conference call, starting at 5:00 p.m. ET on Thursday, March 14, 2024​, to discuss its ​fourth quarter and Full Year 2023,​ 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 conversational intelligence AI powered 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 Twitter (Twitter.com/Marchex), 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 ​March 14, 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, (6) acquisition and disposition-related costs, and (7) foreign government assistance subsidies. 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 were based and by which Marchex’s management was evaluated in 2023. 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, (4) interest income and other, net, and (5) foreign government assistance subsidies.

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.

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,

(In Thousands)

 

2022

 

2023

 

2022

 

2023

Revenue

 

$

12,292

 

 

 

$

12,395

 

 

 

$

52,170

 

 

 

$

49,910

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Service costs (1)

 

 

5,671

 

 

 

 

4,683

 

 

 

 

20,462

 

 

 

 

20,582

 

Sales and marketing (1)

 

 

3,345

 

 

 

 

2,492

 

 

 

 

13,517

 

 

 

 

11,412

 

Product development (1)

 

 

3,840

 

 

 

 

3,154

 

 

 

 

14,355

 

 

 

 

15,355

 

General and administrative (1)

 

 

2,390

 

 

 

 

2,792

 

 

 

 

9,787

 

 

 

 

10,205

 

Amortization of intangible assets from acquisitions

 

 

531

 

 

 

 

394

 

 

 

 

2,124

 

 

 

 

1,987

 

Acquisition and disposition related costs

 

 

37

 

 

 

 

 

 

 

 

74

 

 

 

 

12

 

Total operating expenses

 

 

15,814

 

 

 

 

13,515

 

 

 

 

60,319

 

 

 

 

59,553

 

Loss from operations

 

 

(3,522

)

 

 

(1,120

)

 

 

(8,149

)

 

 

(9,643

)

Interest income (expense) and other, net

 

 

55

 

 

 

 

19

 

 

 

 

88

 

 

 

 

(173

)

Loss before provision for income taxes

 

 

(3,467

)

 

 

(1,101

)

 

 

(8,061

)

 

 

(9,816

)

Income tax expense

 

 

107

 

 

 

 

42

 

 

 

 

184

 

 

 

 

94

 

Net loss applicable to common stockholders

 

$

(3,574

)

 

$

(1,143

)

 

$

(8,245

)

 

$

(9,910

)

Basic and diluted net loss per Class A and Class B share applicable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per Class A and Class B share applicable to common stockholders

 

$

(0.08

)

 

$

(0.02

)

 

$

(0.19

)

 

$

(0.23

)

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to calculate basic net loss per share applicable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

4,661

 

 

 

 

4,661

 

 

 

 

4,661

 

 

 

 

4,661

 

Class B

 

 

38,042

 

 

 

 

38,059

 

 

 

 

38,560

 

 

 

 

37,960

 

Shares used to calculate diluted net loss per share applicable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

4,661

 

 

 

 

4,661

 

 

 

 

4,661

 

 

 

 

4,661

 

Class B

 

 

42,703

 

 

 

 

42,720

 

 

 

 

43,221

 

 

 

 

42,621

 

(1) Includes stock-based compensation allocated as follows:

 

 

 

 

 

 

 

 

 

 

 

Service costs

 

$

46

 

 

 

$

3

 

 

 

$

171

 

 

 

$

2

 

Sales and marketing

 

 

200

 

 

 

 

83

 

 

 

 

796

 

 

 

 

663

 

Product development

 

 

77

 

 

 

 

20

 

 

 

 

293

 

 

 

 

114

 

General and administrative

 

 

289

 

 

 

 

380

 

 

 

 

1,386

 

 

 

 

1,613

 

Total

 

$

612

 

 

 

$

486

 

 

 

$

2,646

 

 

 

$

2,392

 

MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

December 31,

 

December 31,

(In Thousands)

 

2022

 

2023

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

20,474

 

 

 

$

14,607

 

 

Accounts receivable, net

 

 

8,396

 

 

 

 

7,394

 

 

Prepaid expenses and other current assets

 

 

2,015

 

 

 

 

1,805

 

 

Total current assets

 

 

30,885

 

 

 

 

23,806

 

 

Property and equipment, net

 

 

4,050

 

 

 

 

2,398

 

 

Other assets, net

 

 

973

 

 

 

 

1,482

 

 

Right-of-use lease asset

 

 

738

 

 

 

 

1,631

 

 

Goodwill

 

 

17,558

 

 

 

 

17,558

 

 

Intangible assets from acquisitions, net

 

 

2,590

 

 

 

 

602

 

 

Total assets

 

$

56,794

 

 

 

$

47,477

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

2,037

 

 

 

$

1,533

 

 

Accrued benefits and payroll

 

 

3,566

 

 

 

 

3,294

 

 

Other accrued expenses and current liabilities

 

 

3,825

 

 

 

 

3,217

 

 

Deferred revenue and deposits

 

 

1,384

 

 

 

 

1,214

 

 

Lease liability current

 

 

1,252

 

 

 

 

462

 

 

Total current liabilities

 

 

12,064

 

 

 

 

9,720

 

 

Deferred tax liabilities

 

 

233

 

 

 

 

249

 

 

Finance lease, non-current

 

 

 

 

 

 

421

 

 

Lease liability non-current

 

 

385

 

 

 

 

1,217

 

 

Total liabilities

 

 

12,682

 

 

 

 

11,607

 

 

Stockholders’ equity:

 

 

 

 

 

 

Class A common stock

 

 

49

 

 

 

 

49

 

 

Class B common stock

 

 

385

 

 

 

 

386

 

 

Additional paid-in capital

 

 

354,999

 

 

 

 

356,666

 

 

Accumulated deficit

 

 

(311,321

)

 

 

(321,231

)

Total stockholders’ equity

 

 

44,112

 

 

 

 

35,870

 

 

Total liabilities and stockholders’ equity

 

$

56,794

 

 

 

$

47,477

 

 

MARCHEX, INC. AND SUBSIDIARIES

(in thousands)

(unaudited)

 

Reconciliation of GAAP Net Loss to Adjusted EBITDA and Adjusted Operating Income (Loss) Before Amortization (OIBA)

 

 

 

Three Months Ended

Twelve Months Ended

 

 

December 31,

December 31,

(In Thousands)

 

2022

 

 

2023

2022

 

2023

Net loss applicable to common stockholders

 

$

(3,574

)

 

$

(1,143

)

$

(8,245

)

 

$

(9,910

)

Interest income (expense) and other, net

 

 

(55

)

 

 

(19

)

 

 

(88

)

 

 

173

 

 

 

Income tax expense

 

 

107

 

 

 

 

 

42

 

 

 

 

184

 

 

 

 

94

 

 

 

Amortization of intangible assets from acquisitions

 

 

531

 

 

 

 

 

394

 

 

 

 

2,124

 

 

 

 

1,987

 

 

 

Depreciation and amortization

 

 

608

 

 

 

 

 

352

 

 

 

 

1,910

 

 

 

 

1,886

 

 

 

Stock-based compensation

 

 

612

 

 

 

 

 

486

 

 

 

 

2,646

 

 

 

 

2,392

 

 

 

Acquisition and disposition-related costs

 

 

37

 

 

 

 

 

 

 

 

 

74

 

 

 

 

12

 

 

 

Foreign government paycheck assistance and rent subsidies1

 

 

 

 

 

 

 

 

 

 

 

(10

)

 

 

 

 

 

Adjusted EBITDA

 

$

(1,734

)

 

$

112

 

 

 

$

(1,405

)

 

$

(3,366

)

Depreciation and amortization

 

 

608

 

 

 

 

 

352

 

 

 

 

1,910

 

 

 

 

1,886

 

 

 

Adjusted OIBA

 

$

(2,342

)

 

$

(240

)

$

(3,315

)

 

$

(5,252

)

1

 

Includes pandemic related wage and rent relief subsidies, recognized as a reduction of wages or rent during the period received.

MARCHEX, INC. AND SUBSIDIARIES

(in thousands)

(unaudited)

 

Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP Loss1

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

2022

 

2023

 

2022

 

2023

Net loss applicable to common stockholders, diluted

 

$

(0.08

)

 

$

(0.02

)

 

$

(0.19

)

 

$

(0.23

)

Stock-based compensation

 

 

0.02

 

 

 

 

0.01

 

 

 

 

0.06

 

 

 

 

0.06

 

 

Acquisition and disposition-related costs (benefit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets from acquisitions

 

 

0.01

 

 

 

 

0.01

 

 

 

 

0.05

 

 

 

 

0.05

 

 

Interest income and other, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted non-GAAP loss per share

 

$

(0.05

)

 

$

 

 

 

$

(0.08

)

 

$

(0.12

)

Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss per share

 

 

42,703

 

 

 

 

42,720

 

 

 

 

43,221

 

 

 

 

42,621

 

 

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.

 

Contacts

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

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