Marchex(MCHX) - 2025 Q1 - Quarterly Results

First Quarter 2025 Performance and Corporate Announcements Marchex reported its Q1 2025 financial results, including a net loss and adjusted EBITDA loss, alongside the authorization of a new share repurchase program Q1 2025 Financial Highlights Marchex reported Q1 2025 GAAP revenue of $11.4 million, a net loss of $2.0 million, and an adjusted EBITDA loss of $0.8 million Q1 2025 Key Financial Metrics (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | GAAP Revenue | $11.4 | $11.6 | | Net Loss | $(2.0) | $(1.5) | | Net Loss per Diluted Share | $(0.05) | $(0.03) | | Adjusted EBITDA | $(0.8) | $(0.4) | | Adjusted Non-GAAP Loss per Share | $(0.04) | $(0.02) | - Excluding reorganization costs of $0.6 million in Q1 2025 and $0.2 million in Q1 2024, the adjusted EBITDA loss would have been flat year-over-year at $0.2 million for both quarters[4] - CEO Edwin Miller stated that Q1 revenue was affected by seasonal factors and timing of new sales, but expects sequential revenue growth and positive adjusted EBITDA in Q2 2025[3] New Share Repurchase Program The Board of Directors authorized a new share repurchase program for up to 3,000,000 shares of Class B common stock - The 2025 Repurchase Program authorizes the repurchase of up to 3,000,000 shares of the Company's Class B common stock[3] - Repurchases can be made through open market transactions, privately negotiated transactions, or under a Rule 10b5-1 plan[3] - The program has no expiration date and can be modified or terminated at any time without prior notice[3] Business Update and Outlook The company outlined its 2025 business outlook with financial targets, detailed recent strategic expansions and new growth initiatives, and reported on other corporate developments 2025 Business Outlook and Financial Targets Marchex targets an annual revenue run rate of $50.0 million and adjusted EBITDA of over $6.0 million for 2025, focusing on strategic product launches and market expansion 2025 Financial Run Rate Targets (in millions) | Metric | Target Run Rate | | :--- | :--- | | Annual Revenue | $50.0+ | | Quarterly Revenue | $12.5+ | | Annual Adjusted EBITDA | $6.0+ | | Quarterly Adjusted EBITDA | $1.5+ | - Key strategic priorities for 2025 include: Launching new products on the Marchex Engage Platform, increasing investment in sales and marketing including expanding the sales force and entering new channels like the Microsoft Azure Marketplace, leveraging proprietary first-party data in Auto, Auto Services, Home Services, and Healthcare verticals, and expanding gross profit margins through SaaS revenue growth and efficiency gains[6] - The company acknowledges that the current macroeconomic environment creates uncertainty, which could cause variability in actual financial results[7] Recent Strategic and Operational Expansion Marchex expanded its Auto OEM relationship to over 3,000 dealers, launched a unified UI, and introduced new AI-powered solutions for auto and home services - Expanded a relationship with a Fortune 500 auto OEM, providing access to over 3,000 franchised dealers for its sales and service products[9] - Launched a comprehensive unified interface (UI) for customers, enabling a unified experience and seamless upsell opportunities with 'click-to-buy' functionality[9] - Introduced Marchex Engage for Service, an AI-powered solution for auto service centers, and new AI-driven solutions for the Home Services industry focused on lead outcomes and topic analysis[9] Additional New Growth Initiatives Planned for 2025 Marchex plans 2025 growth initiatives including expanding sales channels, leveraging its 'OneStack' platform, and launching new AI products like Marchex GPT - Marchex has launched its initial product in the Microsoft Azure Marketplace and plans to add more products and partners to expand its sales channels[12] - The company completed its 'OneStack' platform unification, consolidating its technology into a single cloud-based architecture to power generative AI applications and improve customer experience[12] - Upcoming product launches in 2025 include: - AI Benchmarking: Providing industry-specific sales and marketing insights - AgentAI Optimizer: Analyzing the performance of third-party AI agents - Marchex GPT: A business-specific large language model for searching structured data[12][16] Other Corporate Developments Marchex sold the domain phonenumbers.com for $0.8 million and continues to explore monetization of other non-core assets - The company sold the domain name phonenumbers.com for $0.8 million in proceeds before commissions[8] - Marchex is continuing to review its portfolio of unused domain assets for other potential monetization opportunities[8] Financial Statements and Reconciliations Detailed financial statements for Q1 2025 are presented, including consolidated statements of operations, balance sheets, and non-GAAP reconciliations Consolidated Statements of Operations Marchex reported Q1 2025 revenue of $11.4 million and a net loss of $2.0 million, with increased operating expenses Q1 2025 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $11,402 | $11,573 | | Total operating expenses | $13,273 | $12,886 | | Loss from operations | $(1,871) | $(1,313) | | Net loss | $(1,982) | $(1,450) | | Diluted net loss per share | $(0.05) | $(0.03) | Consolidated Balance Sheets As of March 31, 2025, Marchex reported $10.0 million in cash, total assets of $40.6 million, and total stockholders' equity of $31.4 million Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $10,020 | $12,767 | | Total current assets | $19,928 | $22,278 | | Total assets | $40,633 | $43,200 | | Total current liabilities | $7,965 | $9,267 | | Total liabilities | $9,259 | $10,567 | | Total stockholders' equity | $31,374 | $32,633 | Non-GAAP Reconciliations The company provided reconciliations for non-GAAP financial measures, including adjusted EBITDA and adjusted non-GAAP loss per share Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(1,982) | $(1,450) | | Depreciation and amortization | $633 | $324 | | Stock-based compensation | $455 | $433 | | Other adjustments | $111 | $288 | | Adjusted EBITDA | $(783) | $(405) | Reconciliation of Net Loss per Share to Adjusted Non-GAAP Loss per Share (in dollars) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss per share, diluted | $(0.05) | $(0.03) | | Stock-based compensation | $0.01 | $0.01 | | Adjusted non-GAAP loss per share | $(0.04) | $(0.02) |