Marchex Announces Fourth Quarter and Full Year 2022 Results
Marchex (NASDAQ: MCHX) announced its financial results for Q4 and the full year ended December 31, 2022. Q4 revenue was $12.3 million, down from $12.8 million in Q4 2021, while annual revenue reached $52.2 million, a decline from $53.5 million in 2021. The net loss for Q4 2022 was $3.6 million ($0.08 per diluted share), compared to a loss of $2.0 million in Q4 2021. For 2022, the company reported a net loss of $8.2 million ($0.19 per diluted share), increasing from a loss of $4.4 million in 2021. Despite challenges with conversation volumes due to macroeconomic factors, Marchex anticipates growth in customer relationships and product innovation in 2023.
- Signed a multi-year extension with a large auto OEM partner, indicating strong growth potential.
- Acquired over 300 new auto dealer customers in the past year, enhancing revenue sources.
- Plans to accelerate customer expansion and product innovation in 2023, potentially leading to double-digit growth.
- GAAP revenue decreased in Q4 2022 and for the full year, indicating declining sales.
- Net losses increased both quarterly and annually, raising concerns about profitability.
- Overall conversation volumes fell compared to the previous year due to inflation and customer churn.
Q4 2022 and Full Year 2022 Financial Highlights
-
GAAP revenue was
for the fourth quarter of 2022, compared to$12.3 million for the fourth quarter of 2021. GAAP revenue was$12.8 million for 2022, compared to$52.2 million for 2021.$53.5 million
-
Net loss was
for the fourth quarter of 2022 or$3.6 million per diluted share, compared to a net loss of$0.08 or$2.0 million per diluted share for the fourth quarter of 2021. Net loss was$0.04 for 2022 or$8.2 million per diluted share, compared to a net loss of$0.19 or$4.4 million per diluted share for 2021.$0.10
|
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Q4 2021 |
|
Q4 2022 |
|
FY 2021 |
|
FY 2022 |
||||||||||||||||
GAAP Revenue |
|
$ |
12.8 |
|
|
million |
|
$ |
12.3 |
|
|
million |
|
$ |
53.5 |
|
|
million |
|
$ |
52.5 |
|
|
million |
Non-GAAP Results: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
60,000 |
|
|
|
|
$ |
(1.7 |
) |
|
million |
|
$ |
(3.5 |
) |
|
million |
|
$ |
(1.4 |
) |
|
million |
-
Adjusted non-GAAP income (loss) per share for the fourth quarter of 2022 was (
) compared to ($0.05 ) for the fourth quarter of 2021. Adjusted non-GAAP income (loss) per share for 2022 was ($0.01 ) compared to ($0.08 ) for 2021.$0.12
Fourth Quarter Summary:
-
New Customer Traction and Existing Customer Expansion. During the fourth quarter of 2022,
Marchex signed a long-term, multi-year extension with a large auto OEM partner. Under the parameters of the arrangement, there is significant growth potential over time. In addition, the company saw continued traction by signing up more than 300 auto dealers through direct or channel partners sales initiatives over the last twelve months as well as new enterprise customers across multiple verticals that the company expects to onboard throughout 2023.
- Conversation Volumes. Overall conversation volumes in the fourth quarter of 2022 were down on a year-over-year basis, as some customers faced inflationary pressures, customer churn and pressure from other overall macroeconomic factors. Despite this, conversation volume trends in some of the largest verticals were up modestly from the year ago period largely due to the expansion of relationships with existing customers in these verticals.
Strategic Priorities and Growth Initiatives For 2023
- Existing Customer Expansion and New Customer Traction to Drive Growth in 2023. In 2023, the company expects to add meaningfully to its base of customer relationships across multiple verticals as well as expand some of its most significant existing large enterprise relationships. The company expects this progress can drive accelerating double-digit growth in its largest vertical exiting the year.
- Accelerate Product Innovation. The company expects to expand on its award-winning suite of conversational intelligence products, including launching new products in 2023, which it believes will be accelerants for deeper customer penetration and revenue growth.
- Expand Channel Opportunities. In 2022, the company added several hundred new customers through channel partnerships and integrations with leading vertical CRM and UCaaS providers. The company expects it will add to and deepen its integrations with new channel partners and various CRM and UCaaS providers, continuing to open new channels and opportunities for growth.
“I am excited to join
“In 2023,
Business Outlook
The following forward-looking statements reflect
“Throughout January and the first part of
In 2023, as we execute on our sales initiatives, including expanding our existing customer opportunities, we believe
Management will hold a conference call, starting at
About
Marchex’s award-winning conversation intelligence platform, featuring AI-powered sales engagement and marketing solutions, helps businesses turn strategic insights into the actions that drive their most valued sales outcomes. Our multichannel voice and text capabilities enable sales and marketing teams to deliver the buying experiences that today’s customers expect.
Please visit http://www.marchex.com, www.marchex.com/blog or @marchex on
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
In the event the press release contains links to third party websites or materials, the links are provided solely as a convenience to you.
Non-GAAP Financial Information:
To supplement
Adjusted EBITDA represents net income (loss) before (1) gain on loan extinguishment, (2) interest, (3) income taxes, (4) amortization of intangible assets from acquisitions, (5) depreciation and amortization, (6) stock-based compensation expense, (7) acquisition and disposition-related costs (benefit), and (8) foreign government assistance subsidies.
Adjusted OIBA represents Adjusted EBITDA adjusted for depreciation and amortization. This measure, among other things, is another metric by which
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 and disposition related costs (benefit), (3) amortization of intangible assets from acquisitions, (4) gain on loan extinguishment, (5) interest income and other, net, and (6) foreign government paycheck assistance and rent subsidies. Financial analysts and investors may use Adjusted non-GAAP income (loss) per share to analyze
Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (unaudited) |
||||||||||||||||
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|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
(In Thousands) |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
||||||||
Revenue |
|
$ |
12,790 |
|
|
$ |
12,292 |
|
|
$ |
53,476 |
|
|
$ |
52,170 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Service costs (1) |
|
|
5,305 |
|
|
|
5,671 |
|
|
|
21,694 |
|
|
|
20,462 |
|
Sales and marketing (1) |
|
|
3,304 |
|
|
|
3,345 |
|
|
|
13,549 |
|
|
|
13,517 |
|
Product development (1) |
|
|
2,823 |
|
|
|
3,840 |
|
|
|
16,112 |
|
|
|
14,355 |
|
General and administrative (1) |
|
|
2,334 |
|
|
|
2,390 |
|
|
|
9,294 |
|
|
|
9,787 |
|
Amortization of intangible assets from acquisitions |
|
|
773 |
|
|
|
531 |
|
|
|
4,481 |
|
|
|
2,124 |
|
Acquisition and disposition related costs (benefit) |
|
|
39 |
|
|
|
37 |
|
|
|
142 |
|
|
|
74 |
|
Total operating expenses |
|
|
14,578 |
|
|
|
15,814 |
|
|
|
65,272 |
|
|
|
60,319 |
|
Loss from operations |
|
|
(1,788 |
) |
|
|
(3,522 |
) |
|
|
(11,796 |
) |
|
|
(8,149 |
) |
Gain on loan extinguishment |
|
|
— |
|
|
|
— |
|
|
|
5,185 |
|
|
|
— |
|
Interest income (expense) and other, net |
|
|
— |
|
|
|
55 |
|
|
|
2,453 |
|
|
|
88 |
|
Loss before provision for income taxes |
|
|
(1,788 |
) |
|
|
(3,467 |
) |
|
|
(4,158 |
) |
|
|
(8,061 |
) |
Income tax expense (benefit) |
|
|
247 |
|
|
|
107 |
|
|
|
232 |
|
|
|
184 |
|
Net loss applicable to common stockholders |
|
$ |
(2,035 |
) |
|
$ |
(3,574 |
) |
|
$ |
(4,390 |
) |
|
$ |
(8,245 |
) |
Basic and diluted net loss per Class A and Class B share applicable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Basic and diluted net loss per Class A and Class B share applicable to common stockholders |
|
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Shares used to calculate basic net loss per share applicable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Class A |
|
|
4,661 |
|
|
|
4,661 |
|
|
|
4,661 |
|
|
|
4,661 |
|
Class B |
|
|
39,527 |
|
|
|
38,042 |
|
|
|
39,256 |
|
|
|
38,560 |
|
Shares used to calculate diluted net loss per share applicable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Class A |
|
|
4,661 |
|
|
|
4,661 |
|
|
|
4,661 |
|
|
|
4,661 |
|
Class B |
|
|
44,188 |
|
|
|
42,703 |
|
|
|
43,917 |
|
|
|
43,221 |
|
(1) Includes stock-based compensation allocated as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Service costs |
|
$ |
34 |
|
|
$ |
46 |
|
|
$ |
49 |
|
|
$ |
171 |
|
Sales and marketing |
|
|
207 |
|
|
|
200 |
|
|
|
870 |
|
|
|
796 |
|
Product development |
|
|
66 |
|
|
|
77 |
|
|
|
296 |
|
|
|
293 |
|
General and administrative |
|
|
360 |
|
|
|
289 |
|
|
|
1,459 |
|
|
|
1,386 |
|
Total |
|
$ |
667 |
|
|
$ |
612 |
|
|
$ |
2,674 |
|
|
$ |
2,646 |
|
Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
||||||||
|
|
|
|
|
||||
(In Thousands) |
|
2021 |
|
2022 |
||||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
27,086 |
|
|
$ |
20,474 |
|
Accounts receivable, net |
|
|
8,021 |
|
|
|
8,396 |
|
Prepaid expenses and other current assets |
|
|
2,407 |
|
|
|
2,015 |
|
Total current assets |
|
|
37,514 |
|
|
|
30,885 |
|
Property and equipment, net |
|
|
2,817 |
|
|
|
4,050 |
|
Other assets, net |
|
|
986 |
|
|
|
973 |
|
Right-of-use lease asset |
|
|
2,238 |
|
|
|
738 |
|
|
|
|
17,558 |
|
|
|
17,558 |
|
Intangible assets from acquisitions, net |
|
|
4,714 |
|
|
|
2,590 |
|
Total assets |
|
$ |
65,827 |
|
|
$ |
56,794 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
1,363 |
|
|
$ |
2,037 |
|
Accrued benefits and payroll |
|
|
3,631 |
|
|
|
3,566 |
|
Other accrued expenses and current liabilities |
|
|
3,869 |
|
|
|
3,825 |
|
Deferred revenue and deposits |
|
|
2,016 |
|
|
|
1,384 |
|
Lease liability current |
|
|
1,794 |
|
|
|
1,252 |
|
Total current liabilities |
|
|
12,673 |
|
|
|
12,064 |
|
Deferred tax liabilities |
|
|
186 |
|
|
|
233 |
|
Lease liability non-current |
|
|
1,466 |
|
|
|
385 |
|
Total liabilities |
|
|
14,325 |
|
|
|
12,682 |
|
Stockholders’ equity: |
|
|
|
|
|
|
||
Class A common stock |
|
|
49 |
|
|
|
49 |
|
Class B common stock |
|
|
374 |
|
|
|
385 |
|
Additional paid-in capital |
|
|
354,155 |
|
|
|
354,999 |
|
Accumulated deficit |
|
|
(303,076 |
) |
|
|
(311,321 |
) |
Total stockholders’ equity |
|
|
51,502 |
|
|
|
44,112 |
|
Total liabilities and stockholders’ equity |
|
$ |
65,827 |
|
|
$ |
56,794 |
|
(in thousands) (unaudited) |
||||||||||||||||
Reconciliation of GAAP Net Loss to Adjusted EBITDA and Adjusted Operating Income (Loss) Before Amortization (OIBA) |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
(In Thousands) |
|
2021 |
|
2022 |
|
2021 |
|
2022 |
||||||||
Net loss applicable to common stockholders |
|
$ |
(2,035 |
) |
|
$ |
(3,574 |
) |
|
$ |
(4,390 |
) |
|
$ |
(8,245 |
) |
Gain on loan extinguishment |
|
|
— |
|
|
|
— |
|
|
|
(5,185 |
) |
|
|
— |
|
Interest income (expense) and other, net |
|
|
— |
|
|
|
(55 |
) |
|
|
(2,453 |
) |
|
|
(88 |
) |
Income tax expense (benefit) |
|
|
247 |
|
|
|
107 |
|
|
|
232 |
|
|
|
184 |
|
Amortization of intangible assets from acquisitions |
|
|
773 |
|
|
|
531 |
|
|
|
4,481 |
|
|
|
2,124 |
|
Depreciation and amortization |
|
|
379 |
|
|
|
608 |
|
|
|
1,487 |
|
|
|
1,910 |
|
Stock-based compensation |
|
|
667 |
|
|
|
612 |
|
|
|
2,674 |
|
|
|
2,646 |
|
Acquisition and disposition-related costs (benefit) |
|
|
39 |
|
|
|
37 |
|
|
|
142 |
|
|
|
74 |
|
Foreign government paycheck assistance and rent subsidies1 |
|
|
(10 |
) |
|
|
— |
|
|
|
(444 |
) |
|
|
(10 |
) |
Adjusted EBITDA |
|
$ |
60 |
|
|
$ |
(1,734 |
) |
|
$ |
(3,456 |
) |
|
$ |
(1,405 |
) |
Depreciation and amortization |
|
|
379 |
|
|
|
608 |
|
|
|
1,487 |
|
|
|
1,910 |
|
Adjusted OIBA |
|
$ |
(319 |
) |
|
$ |
(2,342 |
) |
|
$ |
(4,943 |
) |
|
$ |
(3,315 |
) |
1 |
Includes pandemic related wage and rent relief subsidies, recognized as a reduction of wages or rent during the period received. |
|
(in thousands) (unaudited) Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP Loss |
||||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
2021 |
|
2022 |
|
2021 |
|
2022 |
||||||||
Net loss applicable to common stockholders, diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.19 |
) |
Stock-based compensation |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.06 |
|
|
|
0.06 |
|
Acquisition and disposition-related costs (benefit) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Amortization of intangible assets from acquisitions |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.10 |
|
|
|
0.05 |
|
Gain on loan extinguishment |
|
|
— |
|
|
|
— |
|
|
|
(0.12 |
) |
|
|
— |
|
Interest income and other, net |
|
|
— |
|
|
|
— |
|
|
|
(0.05 |
) |
|
|
— |
|
Foreign government paycheck assistance and rent subsidies |
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
Adjusted non-GAAP loss per share |
|
$ |
(0.01 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.08 |
) |
Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss per share |
|
|
44,188 |
|
|
|
42,703 |
|
|
|
43,917 |
|
|
|
43,221 |
|
1 |
For the purpose of computing the number of diluted shares for Adjusted Non-GAAP income (loss) per share, |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230228006079/en/
Marchex Investor Relations
Telephone: 206.331.3600
Email: ir@marchex.com
Or
MEDIA INQUIRIES
Telephone: 206.331.3434
Email: pr(at)marchex.com
Source:
FAQ
What were Marchex's Q4 2022 financial results?
How much did Marchex lose in Q4 2022?
What is the outlook for Marchex in 2023?
Did Marchex's revenue increase or decrease in 2022?