Marchex(MCHX)

Search documents
Marchex(MCHX) - 2022 Q3 - Earnings Call Transcript
2022-11-06 17:06
Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $13.2 million, a decrease from $13.7 million in the same quarter last year, indicating a mixed performance due to macroeconomic pressures [19][25] - GAAP net loss for Q3 2022 was $1.6 million or $0.03 per diluted share, compared to a gain of $3.3 million or $0.07 per diluted share in Q3 2021 [24] - Adjusted EBITDA was positive $10,000, remaining consistent with Q3 2021, while adjusted non-GAAP loss was $0.01 per share, also consistent with the previous year [24] Business Line Data and Key Metrics Changes - Conversation volumes faced pressure due to macroeconomic events and inflation, particularly affecting small business listing providers and marketing services [5][19] - The automotive sector remained stable, while home services did not experience the usual seasonal uptick [32] Market Data and Key Metrics Changes - The auto industry is undergoing significant changes, with a shift towards direct-to-consumer sales and electronic vehicle sales, creating opportunities for Marchex [8][10] - There is a growing demand for conversational intelligence software across various sectors, including healthcare and home services, indicating a positive market trend [12][28] Company Strategy and Development Direction - Marchex is focusing on expanding its cloud-based product suite and enhancing its conversational intelligence capabilities to meet customer needs [11][12] - The company aims to leverage its technology to optimize costs and improve customer experiences, positioning itself as a leader in conversational intelligence [15][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain economic climate but expressed confidence in the company's ability to emerge stronger, driven by ongoing investments and customer engagement [16][26] - The outlook for Q4 2022 anticipates a seasonal decline in revenue but expects to maintain similar revenue levels compared to the previous year, with a focus on sequential progress in 2023 [25][28] Other Important Information - Marchex won the APPEALIE SaaS award for customer success, highlighting its effectiveness in helping businesses recover lost opportunities [11] - The company ended Q3 2022 with over $23 million in cash on hand, providing a solid financial foundation for future growth [24] Q&A Session Summary Question: Revenue mix between verticals - Management noted that automotive remained stable, while home services did not see the expected seasonal uptick, with small business listing providers experiencing significant impacts [32] Question: Visibility on product rollout and monetization - Management confirmed that some new customers have been secured, and existing relationships are expanding, with expectations for sequential progress in 2023 [33][34] Question: Operating leverage and cost management - Management indicated that gross margin is expected to expand with increased revenue, and that sales and marketing costs may grow in line with revenue opportunities [35] Question: Growth of text messaging sales - Text messaging remains a small but growing part of the business, with plans to integrate it more fully into the product suite in 2023 [38] Question: Year-on-year growth in bookings - Management reported growth in secured new arrangements and increased activity in the pipeline across various verticals [39][40] Question: Gross margin trends and levers - Management expects gross margins to remain stable in the near term, with potential for significant improvement as new products contribute to revenue [41]
Marchex(MCHX) - 2022 Q3 - Quarterly Report
2022-11-04 20:07
Revenue Performance - For the nine months ended September 30, 2022, revenue was $39.9 million, a decrease of $808,000, or 2%, compared to $40.7 million for the same period in 2021[90] - The decrease in revenue is primarily due to lower conversational volumes compared to the recovery period in 2021, along with ongoing impacts from COVID-19 variants, supply chain disruptions, inflation, and labor shortages[90] - Revenue decreased by $808,000 or 2%, from $40.7 million for the nine months ended September 30, 2021 to $39.9 million for the same period in 2022[104] - The company expects revenues to be slightly lower in the near term due to reduced seasonal call volume, particularly in the latter part of the fourth quarter[105] - The company expects revenues to recover if macroeconomic conditions improve and business interruptions subside, but potential disruptions from COVID-19 and supply chain issues could lower revenues[127] Operating Expenses - Service costs decreased by $1.6 million or 10%, from $16.4 million for the nine months ended September 30, 2021 to $14.8 million for the same period in 2022, representing 40% and 37% of revenue respectively[108] - Product development expenses decreased by $2.8 million or 21%, from $13.3 million for the nine months ended September 30, 2021 to $10.5 million for the same period in 2022, accounting for 33% and 26% of revenue respectively[114] - General and administrative expenses increased by $413,000 or 6%, from $7.0 million for the nine months ended September 30, 2021 to $7.4 million for the same period in 2022, representing 17% and 19% of revenue respectively[117] - Stock-based compensation expense totaled $2.034 million for the nine months ended September 30, 2022, compared to $2.007 million for the same period in 2021[103] - The company anticipates stable to modestly higher expenditures for product development initiatives in the near and intermediate term[129] Financial Position - The net loss for the nine months ended September 30, 2022, was $4.7 million, an increase from a net loss of $2.4 million for the same period in 2021[124] - Cash used in operating activities was $1.8 million for the nine months ended September 30, 2022, compared to $5.8 million for the same period in 2021[126] - Cash used in investing activities increased to $2.0 million for the nine months ended September 30, 2022, from $504,000 in the same period in 2021[128] - Cash provided by financing activities was $30,000 for the nine months ended September 30, 2022, down from $252,000 in the same period in 2021[130] - The company had cash and cash equivalents of $23.3 million as of September 30, 2022, down from $27.1 million as of December 31, 2021[125] - Long-term contractual obligations as of September 30, 2022, totaled $4.9 million, including $2.0 million for rent under facility operating leases[125] - The company believes its resources will be sufficient to fund operations for at least twelve months, but additional financing may be needed for acquisitions and long-term obligations[131] Strategic Initiatives - Marchex's primary product offerings include Marchex Call Analytics, which helps businesses optimize advertising expenditures and measure call outcomes[80] - Marchex launched Marchex Conversation DNA in March 2022, enabling voice and text conversation decoding and scoring across its products, utilizing over one billion minutes of voice conversations[89] - Marchex plans to expand its conversational intelligence technology and invest in AI, data science, and machine learning capabilities[83] - The company aims to grow its customer base by integrating its products with existing communication providers, enhancing accessibility for businesses[84] - Marchex is pursuing selective acquisition opportunities to enhance its strategic position and increase shareholder value[85] - The company continues to focus on improving marketing performance through its conversational analytics solutions, which received the MarTech Best Marketing Attribution Solution award in 2021[81] Market Outlook - The global conversational AI market is projected to grow at a compounded annual growth rate of 22%, from $6.8 billion in 2021 to $18.4 billion by 2026[81] - The company anticipates volatility in results due to the ongoing impacts of the coronavirus pandemic and macroeconomic conditions[105] - The company believes new product releases and growth initiatives may provide opportunities for potential revenue growth in the longer term[106] Tax and Valuation - As of September 30, 2022, the company recorded a 100% valuation allowance of $54.7 million against its net deferred tax assets, compared to $53.0 million at December 31, 2021[123] - Amortization of intangible assets from acquisitions was $3.7 million for the nine months ended September 30, 2021, decreasing to $1.6 million for the same period in 2022[120] - Interest income decreased significantly from $2.5 million for the nine months ended September 30, 2021 to $33,000 for the same period in 2022[121] Lease Accounting - The company has elected the short-term lease recognition exemption for all qualifying leases, meaning no ROU assets or lease liabilities are recognized for these leases[154] - Operating lease ROU assets and liabilities are recognized at commencement based on the present value of lease payments over the lease term[153] - The company primarily leases office facilities classified as operating leases and does not have finance leases[153] - Lease payments included in the measurement of lease liability are comprised of fixed payments[153] - The company uses its incremental borrowing rate to determine the present value of lease payments as the implicit interest rate is not readily determinable[153] - The lease term includes the non-cancellable period of the lease, with options for lease renewals excluded from the lease term[153] Investor Relations - The company provides access to its financial reports and material information through its investor relations website and social media channels[156] - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk[157]
Marchex(MCHX) - 2022 Q2 - Earnings Call Transcript
2022-08-13 19:32
Marchex, Inc. (NASDAQ:MCHX) Q2 2022 Results Conference Call August 9, 2022 5:00 PM ET Company Participants Trevor Caldwell - Senior Vice President-Strategic Initiatives and Investor Relations Michael Arends - Co-Chief Executive Officer Russell Horowitz - Co-Chief Executive Officer Conference Call Participants Austin Vetterick - ROTH Capital Partners Operator Good afternoon. Thank you for attending today's Marchex' Second Quarter Earnings Conference Call. My name is Tamia, and I will be your moderator for to ...
Marchex(MCHX) - 2022 Q2 - Quarterly Report
2022-08-10 20:09
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, 2022 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 ...
Marchex(MCHX) - 2022 Q1 - Quarterly Report
2022-05-13 20:07
Revenue Growth and Market Trends - Revenue grew by $191,000, or 1%, year-on-year, driven by an increase in conversational volumes despite challenges from COVID-19 variants and supply chain disruptions [81]. - The global conversational AI market is projected to grow at a compounded annual growth rate of 22%, from $6.8 billion in 2021 to $18.4 billion by 2026 [72]. - Revenue increased by 1% from $12.98 million for the three months ended March 31, 2021 to $13.17 million for the same period in 2022, driven by higher call volumes [95]. - The company expects revenues to remain stable or modestly increase in the near term, contingent on macroeconomic conditions and pandemic-related disruptions [111]. Operating Expenses and Financial Performance - Operating expenses are benefiting from advancements in technology infrastructure and cloud initiatives, allowing for innovation through scale [82]. - Service costs decreased by $487,000, or 9%, from $5.42 million in Q1 2021 to $4.93 million in Q1 2022, with service costs as a percentage of revenue dropping from 42% to 37% [99]. - Sales and marketing expenses decreased by 13% from $3.64 million in Q1 2021 to $3.17 million in Q1 2022, representing 28% and 24% of revenue, respectively [101]. - Product development expenses decreased by 35% from $5.32 million in Q1 2021 to $3.46 million in Q1 2022, with expenses as a percentage of revenue falling from 41% to 26% [102]. - General and administrative expenses remained flat at $2.6 million for both Q1 2021 and Q1 2022, maintaining a consistent 20% of revenue [103]. - Net loss improved from $5.3 million in Q1 2021 to $1.6 million in Q1 2022, primarily due to lower operating expenses totaling $3.5 million [107]. - Cash used in operating activities was $1.4 million for Q1 2022, compared to $5.6 million for Q1 2021, reflecting a significant reduction in cash outflow [109][110]. - Cash used in investing activities increased from $100,000 in Q1 2021 to $1.1 million in Q1 2022, primarily for technology infrastructure and capitalized software development costs [112]. Strategic Initiatives and Product Development - Marchex plans to expand its conversational intelligence technology and invest in AI, data science, and machine learning capabilities [74]. - The company aims to grow its customer base by integrating its products with existing communication providers, enhancing accessibility for businesses [75]. - Marchex is pursuing selective acquisition opportunities to enhance its strategic position and increase shareholder value [76]. - The company launched Marchex Conversation DNA in March 2022, enabling voice and text conversation decoding and scoring across its products, utilizing over one billion minutes of voice conversations [80]. - Marchex's solutions include features to block robocalls and spam calls, saving businesses time and expense [71]. Financial Reporting and Valuation - A 100% valuation allowance of $54 million was recorded against deferred tax assets as of March 31, 2022, indicating uncertainty regarding future realizability [106]. - The majority of the company's revenue is generated from core analytics and solutions services, primarily through a call analytics technology platform, with revenue recognized over time as services are performed [120][121]. - Revenue contracts typically include variable elements, such as the number of transactions, which significantly influence total revenue [120]. - Goodwill is tested annually for impairment, with potential adverse effects on financial results if impairment charges are recognized [131][132]. - The company primarily leases office facilities classified as operating leases, with lease payments recognized as expense on a straight-line basis over the lease term [137]. - The company utilizes the Black-Scholes option pricing model for stock-based compensation, which is subject to various assumptions that could materially affect future expenses [125][126]. - Accounts receivable balances are presented net of allowance for doubtful accounts, which is reviewed quarterly based on historical trends and current economic conditions [127]. - The company has not recognized any finance leases and has opted for short-term lease recognition exemptions for qualifying leases [138]. - The amortization periods for intangible assets from acquisitions range from one year to five years, reflecting the expected economic value realization [129]. - The company’s financial statements are subject to reviews by various tax authorities, but any required adjustments are not expected to be material [135].
Marchex(MCHX) - 2022 Q1 - Earnings Call Transcript
2022-05-13 01:34
Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $13.2 million, an increase from $12.7 million in the same quarter last year, reflecting mid-single digit percentage growth when excluding certain pandemic-related revenue adjustments [28][25] - Adjusted EBITDA was positive $150,000, improving from the previous quarter, while GAAP net loss was $1.6 million or $0.04 per diluted share, compared to a net loss of $5.3 million or $0.12 per diluted share for Q1 2021 [33][33] - Adjusted non-GAAP loss was $0.01 per share for the quarter, compared to an adjusted non-GAAP loss of $0.08 per share for Q1 2021 [33] Business Line Data and Key Metrics Changes - The company saw sales traction with large customers and is onboarding new relationships, particularly in the home services vertical [9][29] - Service costs for Q1 were $4.9 million, showing leverage year-over-year due to technology infrastructure initiatives [30] - Sales and marketing costs were approximately $3 million, down from the previous year due to lower customer acquisition costs [32] Market Data and Key Metrics Changes - Conversation volumes were suppressed in Q1 2022, particularly in the automotive and auto services verticals, due to pandemic and geopolitical factors [21][21] - The company anticipates that as supply chain disruptions unwind, it will benefit from increased conversation volumes, particularly in the automotive sector [10][44] Company Strategy and Development Direction - The company is focused on enhancing customer experiences through conversational intelligence and plans to launch new sales engagement products and channel partnerships [19][36] - The integration with Twilio is expected to expand the reach of Marchex's conversational intelligence capabilities [12] - The company aims to leverage its data asset of over a billion conversational minutes to provide actionable insights for businesses [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business's growth potential, citing new customer relationships and product innovations as key drivers [15][35] - The company expects to achieve sequential growth in Q2 2022 compared to Q1, despite ongoing macroeconomic challenges [34] - Management believes that the economic headwinds from the pandemic will eventually abate, providing a potential driver for growth [36] Other Important Information - The company received recognition from the Business Intelligence Group for its conversational intelligence and AI technology [14] - The company ended Q1 2022 with approximately $25 million in cash on hand [33] Q&A Session Summary Question: Are new prospects looking mainly for voice or voice messaging service? - Management indicated that there is strong interest in both voice and text messaging services, with ongoing discussions about expanding into other communication channels [40][41][42] Question: What verticals are improving or slowing? - Management noted that the automotive and automotive services verticals are significantly impacted by supply chain disruptions and inflationary pressures, but they expect improvements as these issues unwind [43][44]
Marchex(MCHX) - 2021 Q4 - Annual Report
2022-03-29 20:16
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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 | | --- | --- | | (Sta ...
Marchex(MCHX) - 2021 Q4 - Earnings Call Transcript
2022-03-03 02:17
Marchex, Inc. (NASDAQ:MCHX) Q4 2021 Earnings Conference Call March 2, 2022 5:00 PM ET Corporate Participants Trevor Caldwell - Senior Vice President, Strategic Initiatives and Investor Relations Michael Arends - Chief Financial Officer and Office of the CEO Russell Horowitz - Executive Chairman and Office of the CEO Conference Call Participants Darren Aftahi - ROTH Capital Partners Sharon Kiruba - Northland Capital Markets Operator Ladies and gentlemen, good afternoon and thank you for attending today's Mar ...
Marchex(MCHX) - 2021 Q3 - Earnings Call Transcript
2021-11-12 22:39
Marchex, Inc. (NASDAQ:MCHX) Q3 2021 Earnings Conference Call November 9, 20210 5:00 PM ET Company Participants Trevor Caldwell - Senior Vice President, Strategic Initiatives and Investor Relations Michael Arends - Co-Chief Executive Officer Russell Horowitz - Executive Chairman and Co-CEO Leila Kirske - Chief Financial Officer Conference Call Participants Austin Vetterick - ROTH Capital Partners Operator Hello and welcome to the Marchex???s Third Quarter Earnings Conference Call. My name is Charlie and I wi ...
Marchex(MCHX) - 2021 Q3 - Quarterly Report
2021-11-10 21:08
Revenue and Financial Performance - The allowance for advertiser credits was $227,000 as of December 31, 2020, and decreased to $219,000 by September 30, 2021[38]. - The deferred revenue balance was $1.4 million as of December 31, 2020, and decreased to $1.3 million by September 30, 2021[38]. - Revenue recognized from contract liabilities for the three months ended September 30, 2021, was $176,000, compared to $166,000 for the same period in 2020[38]. - For the nine months ended September 30, 2021, revenue recognized from contract liabilities was $1.3 million, up from $974,000 in 2020[38]. - The majority of the Company's revenue is derived from the United States, accounting for 99% of total revenue for the three months ended September 30, 2021[44]. - There were no customers representing more than 10% of consolidated revenue for the three and nine months ended September 30, 2021[45]. - One customer represented 19% of consolidated accounts receivable as of September 30, 2021[46]. Cash and Expenses - As of September 30, 2021, the total cash and cash equivalents decreased to $27,781,000 from $33,851,000 as of December 31, 2020, representing a decline of approximately 18%[48]. - Stock-based compensation expense for the nine months ended September 30, 2021, was $2,007,000, down from $2,624,000 for the same period in 2020, indicating a reduction of about 23%[51]. - The total stock-based compensation for the three months ended September 30, 2021, was $608,000, down from $817,000 for the same period in 2020, reflecting a decrease of approximately 25%[51]. - The depreciation and amortization expense related to property and equipment for the nine months ended September 30, 2021 was approximately $965 thousand, down from $1.2 million in the same period of 2020[60]. - The company recognized an operating lease cost of $1,381 thousand for the nine months ended September 30, 2021[66]. Net Loss and Earnings Per Share - The basic net loss per share applicable to common stockholders for the nine months ended September 30, 2021, was $(0.70) compared to $(0.70) for the same period in 2020, showing no change year-over-year[57]. - The net loss from continuing operations for Class A common stockholders for the nine months ended September 30, 2021, was $(250,000), compared to $(3,571,000) for the same period in 2020[57]. - For the nine months ended September 30, 2021, the diluted net loss per share applicable to common stockholders was $(0.70) for Class A and Class B shares, compared to $(0.70) for the same period in 2020[58]. - The net loss from continuing operations for the nine months ended September 30, 2021 was $(2,355) thousand, compared to $(36,329) thousand for the same period in 2020[58]. Assets and Liabilities - The Company operated in a single segment focused on core analytics and solutions services for the nine months ended September 30, 2021[42]. - No significant long-lived assets were held by entities outside of the United States as of September 30, 2021[43]. - The balance of stock options at September 30, 2021, was 3,532,000, slightly up from 3,460,000 at December 31, 2020[53]. - The company had gross future operating lease payments of $3,890 thousand as of September 30, 2021[67]. - The total long-term operating lease liabilities as of September 30, 2021 amounted to $1,926 thousand[67]. - The weighted-average remaining lease term for operating leases was 2.1 years as of September 30, 2021[66]. Intangible Assets and Impairments - As of September 30, 2021, total identifiable intangible assets from acquisitions amounted to $5.488 million, down from $9.196 million as of December 31, 2020[78]. - The Company recorded a pre-tax non-cash impairment of $5.0 million in Q1 2020 related to customer relationships, technologies, non-compete agreements, and tradenames[77]. - The balance of goodwill remained unchanged at $17.6 million as of September 30, 2021[79]. - The Company recorded a 100% valuation allowance against deferred tax assets as of September 30, 2021, indicating uncertainty in realizing these assets[73]. Other Financial Activities - The Company secured $5.3 million in promissory notes under the CARES Act, with a remaining balance of $5.1 million as of December 31, 2020, and recognized a gain on extinguishment of $5.2 million in Q3 2021[83]. - The Company received approximately $135,000 and $434,000 in foreign wage subsidy funding during the three and nine months ended September 30, 2021, respectively[84]. - The Company sold certain assets for approximately $2.3 million in October 2020, which were classified as discontinued operations[86]. - The Company entered into an administrative support services agreement with the related party purchaser, generating support services fees of $2.2 million and $5.1 million for the three and nine months ended September 30, 2021, respectively[87]. - The Company has no known legal proceedings that are expected to have a material adverse effect on its financial condition[71]. - The Company performed annual impairment testing for goodwill on November 30, with no additional impairment loss determined after the initial $14.7 million loss in Q1 2020[80].