Marchex, Inc. (NASDAQ:MCHX), a leading provider of call
analytics that drive, measure, and convert callers into customers,
today announced its financial results for the fourth quarter and
full year ended December 31, 2018.
Q4 and Full Year 2018 Financial
Highlights
- Revenue was $23.1 million for
the fourth quarter of 2018, compared to $21.8 million for the
fourth quarter of 2017. Revenue was $85.3 million for
2018, compared to $90.3 million for 2017.
- Core analytics revenue was $10.9
million for the fourth quarter of 2018, compared to $7.4
million for the fourth quarter of 2017. Core analytics revenue was
$35.4 million for 2018, compared to $29.4 million for
2017.
- Net loss applicable to common
stockholders was $0.6 million for the fourth quarter of 2018 or
$0.01 per diluted share, compared to a net loss of $0.8 million or
$0.02 per diluted share for the fourth quarter of 2017. Net loss
applicable to common stockholders was $2.7 million for 2018 or
$0.06 per diluted share, compared to a net loss of $6.4 million or
$0.15 per diluted share for 2017.
Q4 2017 Q4 2018 FY 2017 FY 2018
Revenue $ 21.8 million $ 23.1 million $ 90.3 million $ 85.3
million
Net cash provided by operating activities $ 0.0
million $ 1.0 million $ 1.7 million $ 5.1 million
Cash
Balance $ 104 million $ 45 million
Non-GAAP
Results1: Adjusted EBITDA $ 1.0 million $
1.2 million $ 1.0 million $ 2.2 million
- Adjusted non-GAAP income (loss) per
share1 for the fourth quarter of 2018 was $0.02, compared to
$0.01 for the fourth quarter of 2017. Adjusted non-GAAP income
(loss) per share1 for 2018 was $0.00, compared to ($0.03) for
2017.
1
Reconciliations of non-GAAP measures are
included in the financial tables attached to this press release and
we encourage investors to examine the reconciling adjustments
between the GAAP and non-GAAP measures.
Strategic Priorities
Update
Grow New and Existing Client Relationships. In the fourth
quarter, with the addition of Callcap and Telmetrics, Marchex added
more than 300 new clients, including enterprise brands in verticals
like Auto, Healthcare, Home Services, Telecommunications and Small
and Medium-Sized Business Resellers.
Accelerate Product Innovation. In 2018, Marchex
expanded its conversational data footprint to more than one billion
minutes of consumer-to-business conversations. This foundational
asset gives Marchex one of the largest data sets to leverage as a
building block for innovation in developing new sales acceleration
solutions to help businesses grow.
During the year, the company significantly grew its data science
organization and also launched the Marchex Innovation
Development (MIND) Lab, a new research and development group, to
support product innovation and help businesses engage and nurture
customer relationships across communications channels, including
voice and text. The MIND Lab is incubating new
technologies and products utilizing Marchex’s continuing investment
in speech technology, artificial intelligence, personalized
customer solutions and conversational analytics. Marchex
appointed Dr. Junmei Zhong, a pioneer in artificial
intelligence (AI) and natural language processing (NLP), as the
Company’s Chief AI Scientist.
Expanded conversational analytics leadership with the
acquisition of Callcap. In addition to the company’s previously
announced acquisition of Telmetrics, in November, Marchex announced
the acquisition of Callcap, a leading call monitoring and analytics
company. With the addition of Callcap, Marchex adds a team that
specializes in call monitoring and analytics solutions for more
than twelve industry verticals, including home services,
healthcare, automotive, and telecommunications. Callcap’s
innovative technology powers complex, custom evaluations of
millions of calls each month, providing deep insights into consumer
and business conversations with numerous integrations into the call
center environments of many franchise businesses.
“In 2018, we made considerable progress in building a leading
conversation analytics company through a combination of product
innovation, customer progress and strategic initiatives, which is
helping to accelerate our growth,” said Mike Arends, Chief
Financial Officer. “In 2019, we expect to leverage our industry
leading conversational data assets based on hundreds of millions of
consumers-to-businesses conversations to introduce new sales
acceleration solutions that solve critical pain points for our
customers. As we expand to include new communication channels
across voice and text, we will continue to invest in our artificial
intelligence and data science initiatives to create more long-term
growth opportunities for Marchex.”
Business Outlook
The following forward-looking statements reflect Marchex's
expectations as of February 13, 2019.
- For the first quarter, the Company
anticipates $12.5 million or more in Marchex’s core analytics
revenue, representing a more than 50% increase year-over-year.
- For the first quarter, the Company
anticipates seeing stabilization or potentially a modest increase
in revenue related to Marchex’s marketplace products as compared to
the fourth quarter 2018.
Financial Guidance for
the First Quarter ending March 31, 2019
Total Revenue $25 million or more
Income (loss) from operations ($3) million or better Adjusted
OIBA1,2 breakeven or better Adjusted EBITDA1,2 $1 million or better
2
First quarter GAAP income (loss) from
operations is expected to be ($3) million or better, assuming
stock-based compensation and amortization of intangibles between
$2.8 and $3 million for the quarter.
Conference Call and Webcast
Information
Management will hold a conference call, starting at 5:00 p.m. ET
on Wednesday, February 13, 2019 to discuss its fourth quarter and
year ended December 31, 2018 financial results and other company
updates. Access to the live webcast of the conference call will be
available online from the Investors section of Marchex’s website at
www.marchex.com. An archived
version of the webcast will also be available at the same location
two hours after completion of the call.
About Marchex
Marchex understands the best customers are those who call your
company - they convert faster, buy more, and churn less. Marchex
provides solutions that help companies drive more calls, understand
what happens on those calls, and convert more of those callers into
customers. Our actionable intelligence strengthens the connection
between companies and their customers, bridging the physical and
digital world, to help brands maximize their marketing investments
and operating efficiencies to acquire the best customers.
Please
visit http://www.marchex.com, www.marchex.com/blog or @marchex
on Twitter (Twitter.com/Marchex), where Marchex discloses
material information from time to time about the company, its
financial information, and its business.
Forward-Looking
Statements:
This press release contains forward-looking statements that
involve substantial risks and uncertainties. All statements, other
than statements of historical facts, included in this press release
regarding our strategy, future operations, future financial
position, future revenues, other financial guidance, acquisitions,
dispositions, projected costs, prospects, plans and objectives of
management are forward-looking statements. We may not actually
achieve the plans, intentions, or expectations disclosed in our
forward-looking statements and you should not place undue reliance
on our forward-looking statements. Actual results or events could
differ materially from the plans, intentions and expectations
disclosed in the forward-looking statements we make. There are a
number of important factors that could cause Marchex's actual
results to differ materially from those indicated by such
forward-looking statements including but not limited to product
demand, order cancellations and delays, competition and general
economic conditions. These factors are described in greater detail
in the "Risk Factors" section of our most recent periodic report
and registration statement filed with the SEC. All of the
information provided in this release is as of February 13, 2019 and
Marchex undertakes no duty to update the information provided
herein.
In the event the press release contains links to third party
websites or materials, the links are provided solely as a
convenience to you. Marchex is not responsible for the content of
linked third-party sites or materials and does not make any
representations regarding the content or accuracy thereof.
Non-GAAP Financial
Information:
To supplement Marchex's consolidated financial statements
presented in accordance with GAAP and to provide clarity internally
and externally, Marchex uses certain non-GAAP measures of financial
performance and liquidity, including Adjusted OIBA, Adjusted
EBITDA, and Adjusted non-GAAP income (loss) per share. Marchex also
provides Enterprise Revenue, which represents revenue excluding
Yellowpages.com LLC (“YP”) revenue generating contracts and,
subsequent to Dex Media, Inc.’s acquisition of YP (collectively
“DexYP”), DexYP revenue generating contracts.
Adjusted OIBA represents
income (loss) from operations excluding stock-based compensation
expense, amortization of intangible assets from acquisitions, and
acquisition related costs. This measure, among other things, is one
of the primary metrics by which Marchex evaluates the performance
of its business. Adjusted OIBA is the basis on which Marchex's
internal budgets are based and by which Marchex's management is
currently evaluated. Marchex believes these measures are useful to
investors because they represent Marchex's consolidated operating
results, taking into account depreciation and other intangible
amortization, which Marchex believes is an ongoing cost of doing
business, but excluding the effects of certain other expenses such
as stock-based compensation, amortization of intangible assets from
acquisitions, and acquisition related costs. Adjusted EBITDA represents income (loss)
before interest, income taxes, depreciation, amortization, stock
compensation expense and acquisition related costs. Marchex
believes that Adjusted EBITDA is another alternative measure of
liquidity to GAAP net cash provided by (used in) operating
activities that provides meaningful supplemental information
regarding liquidity and is used by Marchex's management to measure
its ability to fund operations and its financing obligations.
Financial analysts and investors may use Adjusted OIBA and Adjusted
EBITDA and Enterprise Revenue to help with comparative financial
evaluation to make informed investment decisions. Adjusted non-GAAP income (loss) per share
represents Adjusted non-GAAP income (loss) divided by GAAP diluted
shares outstanding. Adjusted non-GAAP income (loss) generally
captures those items on the statement of operations that have been,
or ultimately will be, settled in cash exclusive of certain items
that are not indicative of Marchex’s recurring core operating
results and represents net income (loss) applicable to common
stockholders plus the net of tax effects of: (1) stock-based
compensation expense, (2) acquisition related costs, (3) interest
and other income (expense), and (4) amortization of intangible
assets from acquisitions. Financial analysts and investors may
use Adjusted non-GAAP income (loss) per share to analyze Marchex's
financial performance since these groups have historically used EPS
related measures, along with other measures, to estimate the value
of a company, to make informed investment decisions, and to
evaluate a company's operating performance compared to that of
other companies in its industry.
Marchex's management believes that investors should have access
to, and Marchex is obligated to provide, the same set of tools that
management uses in analyzing the company's results. These non-GAAP
measures should be considered in addition to results prepared in
accordance with GAAP, and should not be considered in isolation, as
a substitute for, or superior to, GAAP results. Marchex’s non-GAAP
financial measures may be defined differently from time to time and
may be defined differently than similar titled terms used by other
companies, and accordingly, care should be exercised in
understanding how Marchex defines its non-GAAP financial measures
in this release. Marchex endeavors to compensate for the
limitations of the non-GAAP measures presented by providing the
comparable GAAP measure with equal or greater prominence, GAAP
financial statements, and detailed descriptions of the reconciling
items and adjustments, including quantifying such items, to derive
the non-GAAP measure.
MARCHEX, INC. AND SUBSIDIARIES Condensed
Consolidated Statements of Operations (in thousands, except
per share amounts) (unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, 2017
2018 2017 2018 Revenue $ 21,847
$ 23,131 $ 90,291 $ 85,251 Expenses: Service costs (1) 11,649
12,720 49,339 47,804 Sales and marketing (1) 3,577 3,513 15,652
13,788 Product development (1) 4,285 4,041 18,094 15,423 General
and administrative (1) 2,999 2,798 13,567 10,881 Amortization of
intangible assets from acquisitions — 781 — 781 Acquisition related
costs — 352 — 462
Total operating expenses 22,510 24,205
96,652 89,139 Loss from
operations (663 ) (1,074 ) (6,361 ) (3,888 ) Interest income and
other, net 182 249 316
1,054 Loss before provision for income taxes (481 )
(825 ) (6,045 ) (2,834 ) Income tax expense (benefit) 5
(188 ) 42 (156 ) Net loss (486 )
(637 ) (6,087 ) (2,678 ) Dividends applicable to participating
securities (355 ) — (355 ) —
Net loss applicable to common stockholders $ (841 ) $ (637 )
$ (6,442 ) $ (2,678 ) Basic and diluted net loss per Class A
share applicable to common stockholders $ (0.02 ) $ (0.01 ) $ (0.16
) $ (0.06 ) Basic and diluted net loss per Class B share applicable
to common stockholders $ (0.02 ) $ (0.01 ) $ (0.15 ) $ (0.06 )
Dividends per share $ 0.50 $ — $ 0.50 $ — Shares used to calculate
basic net loss per share applicable to common stockholders: Class A
5,056 5,056 5,056 5,056 Class B 37,930 37,823 37,657 37,389 Shares
used to calculate diluted net loss per share applicable to common
stockholders: Class A 5,056 5,056 5,056 5,056 Class B 42,987 42,880
42,713 42,446 (1) Includes stock-based compensation
allocated as follows: Service costs $ 130 $ 97 $ 515 $ 435 Sales
and marketing 246 152 1,014 563 Product development 182 80 679 356
General and administrative 539 376
2,389 1,686 Total $ 1,097 $ 705
$ 4,597 $ 3,040
MARCHEX, INC.
AND SUBSIDIARIES Condensed Consolidated Balance Sheets
(in thousands) (unaudited)
December 31, December 31, 2017
2018 Assets Current assets: Cash and cash equivalents
$ 104,190 $ 45,230 Accounts receivable, net 14,860 15,486 Prepaid
expenses and other current assets 2,041 3,369
Total current assets 121,091 64,085 Property and equipment,
net 2,405 2,921 Other assets, net 326 917 Goodwill — 24,692
Intangible assets from acquisitions, net —
20,697 Total assets $ 123,822 $ 113,312
Liabilities and Stockholders’ Equity Current liabilities:
Accounts payable $ 4,928 $ 5,968 Accrued expenses and other current
liabilities 5,585 7,195 Deferred revenue and deposits 313 1,782
Dividends payable 21,907 — Total
current liabilities 32,733 14,945 Other non-current liabilities
1,090 3,341 Total liabilities 33,823
18,286 Stockholders’ equity: Class A common stock 53 53 Class B
common stock 387 370 Additional paid-in capital 343,268 350,801
Accumulated deficit (253,709 ) (256,198 ) Total
stockholders’ equity 89,999 95,026
Total liabilities and stockholders’ equity $ 123,822 $
113,312
MARCHEX, INC. AND SUBSIDIARIES
(in thousands) (unaudited) Reconciliation
of GAAP Loss from Operations to Adjusted Operating Income Before
Amortization (OIBA)
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2017 2018 2017
2018 Loss from operations $ (663 ) $ (1,074 ) $ (6,361 ) $
(3,888 ) Stock-based compensation 1,097 705 4,597 3,040
Amortization of intangible assets from acquisitions — 781 — 781
Acquisition related costs — 352
— 462 Adjusted operating income before
amortization (Adjusted OIBA)1 $ 434 $ 764 $ (1,764 )
$ 395
Reconciliation from Net Cash provided
by Operating Activities to Adjusted EBITDA
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2017 2018 2017
2018 Net cash provided by operating activities $ 0 $ 989 $
1,692 $ 5,051 Changes in assets and liabilities 1,136 317 (392 )
(2,092 ) Income tax expense (benefit) 5 (188 ) 42 (156 )
Acquisition related costs — 352 — 462 Interest income and other,
net (182 ) (249 ) (316 ) (1,054 )
Adjusted EBITDA1 $ 959 $ 1,221 $ 1,026 $ 2,211
Net cash used in investing activities $ (288 ) $
(34,407 ) $ (1,577 ) $ (36,563 ) Net cash provided by (used
in) financing activities $ 101 $ 43 $ 125 $
(27,448 ) 1 Includes reorganization costs of
approximately $700,000 in Q1 2017.
Revenue Reconciliations
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2017
2018
2017 2018 Revenue $ 21,847 $ 23,131 $
90,291 $ 85,251 Less: YP or DexYP Revenue 4,197 6,431
19,013 19,914 Enterprise Revenue2 $ 17,650 $ 16,700 $
71,278 $ 65,337 2 Enterprise Revenue
represents total revenue less revenue generated from contracts with
YP, and for the 2018 period, total revenue less revenue generated
from contracts with YP and Dex Media, Inc. (collectively “DexYP”).
In 2017, Dex Media, Inc. acquired YP Holdings LLC, which is the
parent company of YP.
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2017 2018 2017
2018 Core Analytics revenue3 $ 7,385 $ 10,860 $ 29,406 $
35,390 Marketplace, Local Leads, and other analytics4 14,462
12,271 60,885 49,861 Total Revenue $ 21,847 $
23,131 $ 90,291 $ 85,251 3 Core analytics
revenue includes revenue from analytics customers, including those
that are purchasing or buying products derived from the company’s
speech technology platform. 4 Includes revenue from marketplace,
local leads and from tests, consulting services or other analytics
revenues that may continue for a limited time but are not
anticipated to continue in future periods.
MARCHEX, INC. AND SUBSIDIARIES Reconciliation of
GAAP Net Loss per Share to Adjusted Non-GAAP Income (Loss) per
Share (in thousands, except per share amounts)
(unaudited)
Three Months EndedDecember
31,
Twelve Months EndedDecember
31,
2017 2018 2017
2018 Adjusted Non-GAAP income (loss) per share $ 0.01
$ 0.02 $ (0.03 ) $ 0.00
Net loss per Class B share applicable to
common stockholders - diluted(GAAP loss per share)
$ (0.02 ) $ (0.01 ) $ (0.15 ) $ (0.06 )
Shares used to calculate diluted net loss
per share applicable tocommon stockholders
42,987 42,880 42,713 42,446 Net loss applicable to common
stockholders $ (841 ) $ (637 ) $ (6,442 ) $ (2,678 ) Stock-based
compensation 1,097 705 4,597 3,040 Acquisition related costs — 352
— 462 Amortization of intangible assets from acquisitions — 781 —
781 Interest (income) expense and other, net (182 ) (249 ) (316 )
(1,054 ) Dividends applicable to participating securities 355 — 355
— Estimated impact of income taxes (151 ) (231 )
575 (350 ) Adjusted Non-GAAP net income (loss)
$ 278 $ 721 $ (1,231 ) $ 201 Adjusted Non-GAAP
income (loss) per share $ 0.01 $ 0.02 $ (0.03 ) $
0.00 Shares used to calculate diluted net loss per
Class B share applicable to common stockholders (GAAP) 42,987
42,880 42,713 42,446 Weighted average stock options and common
shares subject to purchase or cancellation (if applicable)
339 274 — 301
Diluted shares used to calculate Adjusted Non-GAAP income (loss)
per share 1 43,326 43,154 42,713
42,747 1 For the purpose
of computing the number of diluted shares for Adjusted Non-GAAP
income (loss) per share, Marchex uses the accounting guidance that
would be applicable for computing the number of diluted shares for
GAAP net income (loss) per share.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190213005746/en/
Trevor CaldwellMarchex Investor RelationsTelephone:
206.331.3600Email: ir@marchex.comorMEDIA INQUIRIESMarchex
Corporate CommunicationsTelephone: 206.331.3434Email:
marchex@edelman.com
Marchex (NASDAQ:MCHX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Marchex (NASDAQ:MCHX)
Historical Stock Chart
From Apr 2023 to Apr 2024