Marchex(US:MCHX)2020-11-05 01:28Financial Data and Key Metrics Changes - For Q3 2020, revenues were $26.5 million, reflecting the impact of the COVID-19 pandemic, with call volumes partially recovering in the summer [21][10] - Adjusted operating loss before amortization for the third quarter was $1.7 million, and adjusted EBITDA was a loss of $1.3 million [32] - Net loss applicable to common stockholders was $3.7 million for Q3 2020, or $0.08 per diluted share, compared to a net loss of $1.2 million or $0.03 per diluted share for Q3 2019 [32] Business Line Data and Key Metrics Changes - Core analytics and solutions revenue was $13.6 million for the quarter, with an adjusted figure of approximately $12.9 million when excluding a disrupted auto customer [26] - Marketplace and local leads platform revenues were down slightly on a sequential and year-over-year basis, primarily due to the decline from the legacy local leads platform [28] Market Data and Key Metrics Changes - The speech analytics market is expected to grow to more than $2 billion in the next two years, indicating a significant opportunity for the company [8] - There were increases in appointment trends in verticals like home services, dental, and auto, which historically peak in summer [24] Company Strategy and Development Direction - The company has transitioned to focus on conversational intelligence and sales engagement, separating its media assets for a clearer strategic direction [6] - Marchex aims to capitalize on the emerging multibillion-dollar market by delivering customizable, visual analytics to help businesses understand customer engagement [9] Management's Comments on Operating Environment and Future Outlook - Management noted that despite the fluid economic conditions due to COVID-19, there are signs of recovery in certain verticals and increasing willingness from customers to plan for future opportunities [10] - The company anticipates organic double-digit annual revenue growth for core analytics and solutions as the business environment normalizes in 2021 [37] Other Important Information - The company ended Q3 with approximately $39 million in cash on hand, net of current debt obligations, which was reduced to approximately $28 million after a tender offer [33] - The company has made significant investments in research and development, totaling over $100 million, and holds more than 40 patents [17] Q&A Session Summary Question: Inquiry about the Sonar acquisition and its integration timeline - Management indicated that the acquisition of Sonar has accelerated product development, with integrated voice and text solutions expected to be delivered to market shortly [45] Question: Clarification on the assumptions for achieving double-digit organic growth - Management acknowledged uncertainty regarding the full impact of COVID but expressed optimism about progress in 2021, even if the pandemic is not completely behind [48][49] Question: Call volume trends from June to October - Management reported that call volumes were lowest in April, with recovery seen in May and June, but seasonal declines were noted in September and October [53] Question: Adjustments made for customer pricing during the pandemic - Management confirmed that they provided pricing breaks and modified packages during the pandemic, but conditions have largely returned to normal [56]