Marchex(US:MCHX)2025-11-14 21:15Revenue Performance - Revenue decreased by $1.1 million, or 9%, to $11.5 million for the three months ended September 30, 2025, compared to $12.6 million for the same period in 2024[79] - For the nine months ended September 30, 2025, revenue decreased by $1.6 million, or 4%, to $34.6 million from $36.2 million in the prior year[79] Cost and Expenses - Cost of revenue for the three months ended September 30, 2025, was $4.2 million, representing 37% of revenue, compared to 34% in the same period of 2024[80] - Total operating expenses for the three months ended September 30, 2025, were $12.5 million, which is 108% of revenue, compared to 107% in the same period of 2024[77] - Loss from operations for the three months ended September 30, 2025, was $941,000, or -8% of revenue, compared to a loss of $825,000, or -7% in 2024[77] - Sales and marketing expenses decreased by $0.3 million, or 9%, to $2.9 million for the three months ended September 30, 2025[82] - Product development expenses decreased by $0.7 million, or 23%, to $2.4 million for the three months ended September 30, 2025[84] - General and administrative expenses increased by $0.2 million, or 7%, to $2.9 million for the three months ended September 30, 2025[86] - General and administrative expenses increased by $1.0 million, or 13%, to $8.5 million for the nine months ended September 30, 2025, compared to $7.5 million for the same period in 2024[87] - Stock-based compensation expense totaled $920,000 for the three months ended September 30, 2025, compared to $411,000 in the same period of 2024[78] Cash Flow and Financial Position - Cash used in operating activities was $1.5 million during the nine months ended September 30, 2025, primarily due to a net loss of $2.9 million, adjusted for non-cash items of $3.4 million[92] - Cash used in investing activities was $0.9 million for the nine months ended September 30, 2025, primarily for software development costs for new products[93] - Cash used in financing activities was $25.0 thousand for the nine months ended September 30, 2025, consisting of payments for equipment financing lease obligations[94] - As of September 30, 2025, the company had cash and cash equivalents of $10.3 million, down from $12.8 million as of December 31, 2024[91] - Cash used in operating activities was $2.0 million for the nine months ended September 30, 2024, primarily due to a net loss of $3.0 million[92] Tax and Valuation - The effective tax rate differed from the expected tax rate of 21% due to valuation allowance and non-deductible stock-based compensation[89] - The company recorded a full valuation allowance for deferred tax assets as it is more likely than not that these assets will not be realized[90] Future Outlook - The company aims to leverage AI and data analytics to enhance customer interactions and drive revenue growth[64] - The company believes its resources will be sufficient to fund operations for at least twelve months, but macroeconomic factors could significantly influence this[95] - Intangible amortization expense was $0 for the nine months ended September 30, 2025, as all intangible assets from acquisitions reached the end of their useful lives[88]