Marchex(MCHX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section details Marchex's unaudited financial statements, management's analysis, market risk disclosures, and internal controls Item 1. Consolidated Financial Statements (Unaudited) Marchex's unaudited consolidated financial statements, encompassing balance sheets, operations, equity, cash flows, and detailed notes, are presented Consolidated Balance Sheets (Unaudited) Total assets and equity slightly decreased by June 30, 2025, driven by reduced cash and increased accumulated deficit | Metric | June 30, 2025 (in Thousands) | December 31, 2024 (in Thousands) | | :-------------------------- | :--------------------------- | :--------------------------- | | Total Assets | $41,984 | $43,200 | | Cash and Cash Equivalents | $10,491 | $12,767 | | Total Liabilities | $9,941 | $10,567 | | Total Stockholders' Equity | $32,043 | $32,633 | | Accumulated Deficit | $(328,075) | $(326,178) | Consolidated Statements of Operations (Unaudited) Marchex achieved net income of $85 thousand for Q2 2025, improving from a prior-year loss, but reported a $1.9 million net loss for the six months Three Months Ended June 30 | Metric | 2025 (in Thousands) | 2024 (in Thousands) | Change | | :------------------------------------------ | :------------------ | :------------------ | :----- | | Revenue | $11,655 | $12,074 | -$419 (-3.5%) | | Net Income (Loss) applicable to common stockholders | $85 | $(756) | +$841 | | Basic and diluted net income (loss) per share | $0.00 | $(0.02) | +$0.02 | Six Months Ended June 30 | Metric | 2025 (in Thousands) | 2024 (in Thousands) | Change | | :------------------------------------------ | :------------------ | :------------------ | :----- | | Revenue | $23,058 | $23,646 | -$588 (-2.5%) | | Net Income (Loss) applicable to common stockholders | $(1,897) | $(2,206) | +$309 | | Basic and diluted net income (loss) per share | $(0.04) | $(0.05) | +$0.01 | Consolidated Statements of Stockholders' Equity (Unaudited) Total stockholders' equity decreased to $32.0 million by June 30, 2025, primarily due to the net loss, partially offset by stock-based compensation | Metric | December 31, 2024 (in Thousands) | June 30, 2025 (in Thousands) | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Total Stockholders' Equity | $32,633 | $32,043 | | Stock-based compensation (six months ended) | N/A | $1,011 | | Net loss (six months ended March 31, 2025) | N/A | $(1,982) | | Net income (three months ended June 30, 2025) | N/A | $85 | Consolidated Statements of Cash Flows (Unaudited) Cash used in operating activities decreased to $1.8 million for H1 2025, with $0.5 million used in investing and $0.1 million generated from financing Six Months Ended June 30 (in Thousands) | Cash Flow Activity | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash from (used in) operating activities | $(1,819) | $(2,361) | | Net cash from (used in) investing activities | $(542) | $(81) | | Net cash from (used in) financing activities | $85 | $(188) | | Cash and cash equivalents at end of period | $10,491 | $11,977 | - Cash used in investing activities for 2025 was primarily attributable to software development costs for new products[89] Notes to Consolidated Financial Statements (Unaudited) These notes provide detailed information supporting the consolidated financial statements, covering business description, accounting policies, revenue recognition, segment reporting, concentrations, fair value measurements, equity, earnings per share, property and equipment, leases, commitments, taxes, and a domain asset sale Note 1: Description of Business and Basis of Presentation Marchex is a conversation intelligence company leveraging AI and data analytics to provide actionable insights for B2B2C vertical markets - Marchex is an AI-powered conversational intelligence company focused on providing actionable insights for operational excellence and revenue acceleration in B2B2C vertical markets[21] - The company is assessing the impact of ASU 2023-09 (Improvements to Income Tax Disclosures, effective after Dec 15, 2024) and ASU 2025-01 (Disaggregation of Income Statement Expenses, effective after Dec 15, 2026) on its financial statement disclosures[26][27] Note 2: Revenue Recognition Marchex generates revenue from its AI-powered conversational analytics platform by charging fees for call/text data elements or tracked phone numbers, recognized over time - Revenue is generated from fees for call/text related data elements or per phone number tracked, based on pre-negotiated rates, and recognized over time as services are provided[28] Accounts Receivable, Net (in Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Billed | $5,937 | $5,420 | | Unbilled | $1,657 | $1,736 | | Allowance for expected credit losses | $(33) | $(84) | | Accounts receivable, net | $7,561 | $7,072 | Deferred Revenue (in Thousands) | Metric | Amount | | :-------------------------- | :----- | | Balance at December 31, 2024 | $1,093 | | Deferral of revenue | $438 | | Revenue earned from deferred revenue | $(725) | | Balance at June 30, 2025 | $806 | Note 3: Segment Reporting and Geographic Information Marchex operates as a single segment focused on conversational analytics and related solutions. The vast majority of its revenue (98-99%) and long-lived assets are derived from and located in the United States - The Company operates in a single segment comprised of its conversational analytics and related solutions[30] Revenues by Geographic Region (Percentages) | Region | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :-------------------- | :------------------------------- | :----------------------------- | | United States | 98% | 99% | | Canada and other countries | 2% | 1% | | Total | 100% | 100% | Note 4: Concentrations Marchex has significant customer concentration, with one customer (Customer A) accounting for 11% of consolidated revenue for both the three and six months ended June 30, 2025, and 21% of consolidated accounts receivable Customer A Revenue Concentration (Percentages) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | 11% | 10% | | Six Months Ended June 30 | 11% | 11% | Accounts Receivable Concentration (Percentages) as of June 30, 2025 | Concentration Type | Percentage | | :------------------------ | :--------- | | Customer A | 21% | | Independent dealer network A | 14% | Note 5: Fair Value of Financial Instruments The carrying values of Marchex's financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate their fair values due to their liquidity and short-term nature Cash and Cash Equivalents (in Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Cash | $5,308 | $7,615 | | Money market funds | $5,183 | $5,152 | | Total | $10,491 | $12,767 | Note 6: Stockholders' Equity Marchex authorized a new share repurchase program in May 2025 for up to 3.0 million Class B common shares, though no repurchases have been made - A new share repurchase program was authorized in May 2025 for up to 3,000,000 shares of Class B common stock; no repurchases have been made under this or prior programs as of June 30, 2025[34][173] Total Stock-based Compensation Expense (in Thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | $556 | $437 | | Six Months Ended June 30 | $1,011 | $870 | - As of June 30, 2025, unrecognized compensation costs related to stock options were $2.3 million (expected to be recognized over 2.28 years) and for restricted stock were $0.7 million (expected over 0.78 years)[38] Note 7: Net Income (Loss) Per Share Marchex computes net income (loss) per share using the two-class method, allocating undistributed income/losses proportionately between Class A and Class B common shares, which have identical dividend rights Basic Net Income (Loss) Per Share (Three Months Ended June 30) | Class | 2025 EPS | 2024 EPS | | :---- | :------- | :------- | | Class A | $0.00 | $(0.02) | | Class B | $0.00 | $(0.02) | Diluted Net Income (Loss) Per Share (Three Months Ended June 30) | Class | 2025 EPS | 2024 EPS | | :---- | :------- | :------- | | Class A | $0.00 | $(0.02) | | Class B | $0.00 | $(0.02) | Basic Net Loss Per Share (Six Months Ended June 30) | Class | 2025 EPS | 2024 EPS | | :---- | :------- | :------- | | Class A | $(0.04) | $(0.05) | | Class B | $(0.04) | $(0.05) | Note 8: Property and Equipment Net property and equipment decreased slightly to $1.7 million at June 30, 2025, with $0.7 million in depreciation for the six months Property and Equipment, Net (in Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Computer and other related equipment | $1,229 | $1,198 | | Purchased software | $3,276 | $3,276 | | Furniture and fixtures | $262 | $262 | | Software development costs | $144 | — | | Software development costs - in progress | $510 | $72 | | Less: accumulated depreciation and amortization | $(3,685) | $(2,997) | | Property and equipment, net | $1,736 | $1,811 | Depreciation and Amortization Expense (in Thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | $335 | $309 | | Six Months Ended June 30 | $713 | $618 | Note 9: Leases Marchex maintains an operating lease for its corporate office and terminated an office lease in Wichita, Kansas, during Q2 2025 - The company terminated an operating lease for office space in Wichita, Kansas, during the second quarter of 2025[46] Total Lease Cost (in Thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | $144 | $161 | | Six Months Ended June 30 | $308 | $337 | Future Lease Payments as of June 30, 2025 (in Thousands) | Year | Operating Leases | Finance Leases | | :--- | :--------------- | :------------- | | 2025 | $190 | $191 | | 2026 | $397 | — | | 2027 and thereafter | $380 | — | | Gross future lease payments | $967 | $191 | Note 10: Commitments and Contingencies Marchex has contractual obligations totaling $8.5 million, primarily for outside service providers, and is involved in ongoing litigation Future Minimum Payments on Other Contractual Obligations (in Thousands) | Year | Amount | | :---------------- | :----- | | 2025 | $2,069 | | 2026 | $4,798 | | 2027 | $1,668 | | 2028 | $13 | | 2029 and thereafter | — | | Total minimum payments | $8,548 | - The company is a defendant in litigation filed October 21, 2022, by Telmetrics, Inc. shareholders, asserting claims for an earnout of up to $3.0 million and $1.0 million from an escrow agreement related to a 2018 acquisition[53] Note 11: Taxes Marchex maintains a 100% valuation allowance against most deferred tax assets due to historical losses and is evaluating new tax legislation - A 100% valuation allowance is recorded against gross deferred tax assets as of June 30, 2025, and December 31, 2024, due to historical taxable losses and uncertainty of future taxable income[55][86] Income Tax Expense (in Thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | $5 | $3 | | Six Months Ended June 30 | $114 | $62 | - The 'One Big Beautiful Bill Act,' signed July 4, 2025, includes changes allowing more favorable deductibility of R&D expenditures, 100% bonus depreciation, and favorable business interest expense rules starting in 2025[57] Note 12: Domain Asset Sale In April 2025, Marchex sold a domain asset for $0.8 million, recognizing a $0.6 million gain in Q2 2025 - In April 2025, a domain asset was sold for $0.8 million, yielding approximately $0.7 million in net cash proceeds after a 15% commission fee[58] - Approximately $0.6 million was recognized as a gain in Q2 2025, and $48.2K will be recognized as interest income over the four-year payment period due to the financing component[58] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Marchex's financial performance, liquidity, and capital resources, detailing revenue and expense trends Overview Marchex leverages AI and data analytics to provide actionable insights, optimize customer journeys, and accelerate revenue for B2B2C brands - Marchex harnesses AI and conversational intelligence to provide actionable insights, driving operational excellence and revenue acceleration for B2B2C vertical markets[60] - The company's mission is to create intelligence around all types of business conversations and be a leader in vertical market conversational intelligence leveraging generative AI and data analytics[61] Components of the Results of our Operations This section outlines the primary drivers of Marchex's financial results, including revenue, cost of revenue, and various operating expenses Revenue Marchex generates most revenue from its AI-powered conversational analytics platform, charging fees for call/text data elements or tracked phone numbers - The majority of revenue is generated from AI-powered conversational intelligence product offerings[63] - Revenue is recognized when customers pay a fee for call/text related data elements or for each phone number tracked, based on a pre-negotiated rate, and is recognized over time as services are performed[63] Cost of Revenue Cost of revenue primarily consists of telecommunication costs, bandwidth, software license fees, network operations, and personnel expenses - Cost of revenue includes telecommunication costs, bandwidth and software license fees, network operations, and payroll and related expenses of personnel, including stock-based compensation[65] Sales and Marketing Sales and marketing expenses mainly comprise payroll, advertising, promotional expenditures, customer systems costs, and stock-based compensation - Sales and marketing expenses consist primarily of payroll and related expenses for personnel, advertising and promotional expenditures, costs of systems, and stock-based compensation[66] Product Development Product development costs include expenses for research, development, and enhancement of products and services, with eligible costs capitalized - Product development costs primarily consist of payroll and related expenses for personnel, costs of computer hardware and software, and stock-based compensation[67] - Product development costs are expensed as incurred or capitalized into property and equipment in accordance with U.S. GAAP[68] General and Administrative General and administrative expenses cover payroll for executive/administrative personnel, professional services, bad debt provisions, and facilities costs - General and administrative expenses consist primarily of payroll and related expenses for executive and administrative personnel, professional services, bad debt provisions, facilities costs, and stock-based compensation[69] Stock-Based Compensation Stock-based compensation cost is measured at grant date fair value and recognized as expense over the vesting or service period using the straight-line method - Stock-based compensation cost is measured at grant date fair value and recognized as expense over the vesting or service period using the straight-line method[70] - Forfeitures are accounted for as they occur, and the expense is included in the same lines as compensation paid to the same employees in the Consolidated Statements of Operations[70] Amortization of Intangibles from Acquisitions Amortization of intangible assets from acquisitions ceased in 2025 as these assets were fully amortized by December 31, 2024 - Intangible assets from acquisitions (customer relationships, acquired technology, non-competition agreements, trade names) were fully amortized by December 31, 2024[71] - Consequently, there was no amortization expense for these assets in 2025[71][84] Provision for Income Taxes Marchex uses the asset and liability method for income taxes, with the effective tax rate differing from 21% due to valuation allowance and non-deductible compensation - The company uses the asset and liability method of accounting for income taxes, recognizing deferred tax assets and liabilities[72] - The effective tax rate differed from the expected 21% primarily due to the valuation allowance and non-deductible stock-based compensation[85] Results of Operations This section details Marchex's financial performance for the three and six months ended June 30, 2025, showing revenue declines but improved operating loss Revenue Revenue decreased by 3% to $11.7 million for the three months and 2% to $23.1 million for the six months ended June 30, 2025 Revenue (in Thousands) | Period | 2025 | 2024 | Change | | :-------------------------- | :----- | :----- | :----- | | Three Months Ended June 30 | $11,655 | $12,074 | -$419 (-3%) | | Six Months Ended June 30 | $23,058 | $23,646 | -$588 (-2%) | - Revenue decrease was impacted by lower call volumes, customer corporate development activities, customer migration revenue dilution, and the current uncertain macroeconomic environment (including new federal tariffs)[75] Expenses Overall operating expenses decreased for both periods, primarily due to reduced product development costs and cessation of acquisition-related amortization Cost of Revenue Cost of revenue decreased by 2% to $4.1 million for the three months and 3% to $8.3 million for the six months ended June 30, 2025 Cost of Revenue (in Thousands) | Period | 2025 | 2024 | % of Revenue 2025 | % of Revenue 2024 | Change | | :-------------------------- | :----- | :----- | :---------------- | :---------------- | :----- | | Three Months Ended June 30 | $4,058 | $4,152 | 35% | 34% | -$0.1M (-2%) | | Six Months Ended June 30 | $8,246 | $8,566 | 36% | 36% | -$0.3M (-3%) | - The decrease was primarily attributable to a decrease in costs from personnel and outside labor due to reorganization and realignment in 2025[76][77] Sales and Marketing Sales and marketing expenses increased by 19% to $3.2 million for the three months and 16% to $6.4 million for the six months ended June 30, 2025 Sales and Marketing Expenses (in Thousands) | Period | 2025 | 2024 | % of Revenue 2025 | % of Revenue 2024 | Change | | :-------------------------- | :----- | :----- | :---------------- | :---------------- | :----- | | Three Months Ended June 30 | $3,165 | $2,742 | 27% | 23% | +$0.5M (+19%) | | Six Months Ended June 30 | $6,431 | $5,529 | 28% | 23% | +$0.9M (+16%) | - The increase was primarily attributable to higher payroll and benefit related charges, contract asset amortization charges, and depreciation charges[78][79] Product Development Product development expenses decreased significantly by 22% to $2.5 million for the three months and 20% to $5.2 million for the six months ended June 30, 2025 Product Development Expenses (in Thousands) | Period | 2025 | 2024 | % of Revenue 2025 | % of Revenue 2024 | Change | | :-------------------------- | :----- | :----- | :---------------- | :---------------- | :----- | | Three Months Ended June 30 | $2,501 | $3,223 | 21% | 26% | -$0.7M (-22%) | | Six Months Ended June 30 | $5,173 | $6,468 | 23% | 28% | -$1.3M (-20%) | - The change was primarily attributable to lower personnel and outside labor costs due to the capitalization of software development costs and personnel reorganization in 2025[80][81] General and Administrative General and administrative expenses remained flat at $2.5 million for Q2 2025 but increased by 17% to $5.6 million for the six months General and Administrative Expenses (in Thousands) | Period | 2025 | 2024 | % of Revenue 2025 | % of Revenue 2024 | Change | | :-------------------------- | :----- | :----- | :---------------- | :---------------- | :----- | | Three Months Ended June 30 | $2,457 | $2,528 | 21% | 21% | Unchanged | | Six Months Ended June 30 | $5,604 | $4,817 | 24% | 20% | +$0.8M (+17%) | - The increase for the six months was primarily attributable to higher payroll costs, largely one-time reorganization charges, and the timing of professional services costs[83] Amortization of Intangible Assets from Acquisitions Amortization expense for intangible assets from acquisitions was $0 for both periods, as these assets were fully amortized by end of 2024 Amortization of Intangible Assets from Acquisitions (in Thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | $0 | $151 | | Six Months Ended June 30 | $0 | $301 | - Intangible assets acquired from acquisitions reached the end of their useful lives during 2024, resulting in no amortization expense in 2025[71][84] Income Tax Income tax expense was minimal for both periods, primarily deferred tax and U.S. state income taxes, with a full valuation allowance impacting the effective rate Income Tax Expense (in Thousands) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | $5 | $3 | | Six Months Ended June 30 | $114 | $62 | - The effective tax rate differed from the expected 21% primarily due to a full valuation allowance and non-deductible stock-based compensation[85] Liquidity and Capital Resources Cash and cash equivalents decreased to $10.5 million at June 30, 2025, with $1.8 million used in operating activities Cash and Cash Equivalents (in Millions) | Date | Amount | | :---------------- | :----- | | June 30, 2025 | $10.5 | | December 31, 2024 | $12.8 | Cash Flow Activities (Six Months Ended June 30, in Millions) | Activity | 2025 | 2024 | | :-------------------- | :--- | :--- | | Operating Activities | $(1.8) | $(2.4) | | Investing Activities | $(0.5) | $(0.1) | | Financing Activities | $0.1 | $(0.2) | - Management believes current resources will be sufficient to fund operations for at least twelve months, but additional equity and debt financing may be needed to support acquisition strategy and long-term obligations[91] Critical Accounting Policies Marchex's financial statements conform to U.S. GAAP, relying on estimates, with no significant changes in critical accounting policies during H1 2025 - Financial statements are prepared in conformity with U.S. GAAP, requiring management to make estimates and assumptions[92][93] - No significant changes in critical accounting policies and estimates occurred during the three and six months ended June 30, 2025[94] Recent Accounting Pronouncements Not Yet Effective This section refers to Note 1 for details on recent accounting pronouncements not yet effective, including ASUs on income tax and expense disclosures - Refer to Note 1: Description of Business and Basis of Presentation for details on recent accounting pronouncements not yet effective[95] Website Marchex's website provides access to SEC filings and investor relations, utilizing social media for material information disclosure - The company's website, www.marchex.com, provides access to annual, quarterly, and current reports filed with the SEC[96] - Marchex uses its investor relations website, press releases, SEC filings, public conference calls, webcasts, and social media channels (X, Company Blog, LinkedIn) to disclose material financial information[96][97] Item 3. Quantitative and Qualitative Disclosures about Market Risk Marchex is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company - Marchex is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company[98] Item 4. Controls and Procedures Officers concluded Marchex's disclosure controls were effective as of June 30, 2025, with no material changes to internal controls Evaluation of Disclosure Controls and Procedures Marchex's disclosure controls and procedures were concluded to be effective as of June 30, 2025, based on officer evaluation - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[99] Changes in Internal Control over Financial Reporting No material changes to internal controls over financial reporting occurred during the three and six months ended June 30, 2025 - No changes were made to internal controls over financial reporting during the three and six months ended June 30, 2025, that materially affected or are reasonably likely to materially affect them[100] Limitations on the Effectiveness of Controls Management acknowledges inherent limitations in controls, meaning they cannot provide absolute assurance or detect all misstatements - Management acknowledges that controls cannot provide absolute assurance and that internal controls over financial reporting may not prevent or detect all misstatements due to inherent limitations[101][102] PART II. OTHER INFORMATION This section details Marchex's legal proceedings, comprehensive risk factors, equity transactions, and other required disclosures Item 1. Legal Proceedings Information regarding legal proceedings, including ongoing litigation from a 2018 acquisition, is detailed in Note 10 - Information regarding legal proceedings is provided in Note 10: Commitments and Contingencies of the Notes to Consolidated Financial Statements[105] Item 1A. Risk Factors This section outlines various financial, strategic, operational, legal, compliance, and general risks that could materially and adversely affect Marchex's business FINANCIAL RISKS Key financial risks include Marchex's history of net losses, significant customer concentration, and the need for additional funding - Marchex had an accumulated deficit of $328.1 million as of June 30, 2025, and may incur net losses in the foreseeable future[107] - The five largest customers accounted for approximately 35% of total revenues for both the three and six months ended June 30, 2025, posing a risk if one or more are lost[110] - Quarterly results may fluctuate due to seasonality, with call volumes generally higher in spring/summer and lower in late Q4[115] STRATEGIC RISKS Strategic risks include intense competition, slower market development for conversational analytics, evolving business strategy, and acquisition risks - Marchex operates in a highly competitive and rapidly changing market, facing competition from companies like Twilio, Invoca, and Google, requiring continuous product enhancement[119][120] - The market for conversational analytics solutions may develop more slowly than expected, which could harm the business[121] - Acquisitions involve risks such as diversion of management's attention, ownership dilution, decreased earnings, integration difficulties, and potential for unknown liabilities[123][124] OPERATIONAL RISKS Operational risks include challenges in securing phone numbers, system vulnerabilities, cybersecurity threats, and reliance on third-party providers - Dependence on securing sufficient phone numbers and associated telecommunication services, subject to FCC rules and carrier requirements, including new registration fees and screening technologies[127][128] - Technical systems and operations are vulnerable to damage or interruption from various events (e.g., natural disasters, cyber-attacks), potentially causing service disruptions and data loss[129][130] - Reliance on third-party cloud providers, hardware/software vendors, telecommunications carriers, and other service providers, where a failure or limitation could adversely affect business and reputation[132][133] LEGAL AND COMPLIANCE RISKS Legal and compliance risks involve protecting IP, potential liabilities for customer activities, third-party IP claims, and evolving telecommunications/data privacy regulations - Inability to protect intellectual property rights (patents, trademarks, copyrights, trade secrets) could adversely affect competitive position[135][137][138] - Potential liabilities for customer activities, such as improper sending of text messages or voice calls, under consumer protection laws like the TCPA[140] - Exposure to federal, state, and foreign telecommunications and data privacy regulations, including TCPA, STIR/SHAKEN, call recording consent laws, GDPR, CPRA, and potential new AI regulations, which could increase compliance costs and risks[147][148][149][150][151] GENERAL RISKS General risks include macroeconomic conditions, climate change, personnel retention, stock volatility, founder's voting control, and anti-takeover provisions - Operating results are susceptible to general economic conditions (e.g., labor shortages, inflation, tariffs), climate change, natural catastrophic events, and public health crises[156][157][158] - The company is heavily dependent on its senior management and key personnel; loss or difficulty in attracting/retaining them could harm operations[159][160] - The trading prices of Class B common stock have been and are likely to continue to be highly volatile[163][164] - The founder beneficially owns 100% of Class A common stock, representing 75% of voting power, which could control corporate actions and adversely affect the price of Class B common stock[168][169] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Marchex established a new share repurchase program for up to 3.0 million Class B common shares, with no repurchases made in H1 2025 - The 2025 Repurchase Program authorizes the repurchase of up to 3,000,000 shares of Class B common stock[173] - No share repurchases were made under this program or any superseded program during the three and six months ended June 30, 2025[173] Item 4. Mine Safety Disclosures This item is not applicable to Marchex, Inc - This item is not applicable to the Registrant[174] Item 5. Other Information No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in H1 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three and six months ended June 30, 2025[175] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents - Exhibits include certifications of the Principal Executive Officer (31.1) and Principal Financial Officer (31.2), a certification pursuant to 18 U.S.C. Section 1350 (32), and Inline XBRL documents (101.INS, 101.SCH, 104)[177] Signature The report was signed by Brian Nagle, Senior Vice President, Controller, on behalf of Marchex, Inc. on August 13, 2025 - The report was signed by Brian Nagle, Senior Vice President, Controller (Principal Financial Officer and Principal Accounting Officer) on August 13, 2025[183]