Marchex Announces Third Quarter 2022 Results
Marchex reported its Q3 2022 financials, showing GAAP revenue of $13.2 million, down from $13.7 million in Q3 2021. The net loss was $1.6 million or $0.04 per share, contrasting with a net income of $3.3 million or $0.07 per share in the same quarter last year. Despite a decline in overall conversation volumes due to macroeconomic pressures, the company saw new enterprise customer traction and maintained profitability metrics at break-even Adjusted EBITDA levels. Marchex also received the 2022 APPEALIE SaaS Customer Success Award for innovation in customer service.
- New enterprise customer traction across multiple verticals.
- Maintained profitability with break-even Adjusted EBITDA.
- Recognition with the 2022 APPEALIE SaaS Customer Success Award.
- GAAP revenue decreased by 3.6% year-over-year.
- Net loss of $1.6 million compared to a net income in the prior year.
- Overall conversation volumes declined due to supply chain issues and inflation.
Q3 2022 Financial Highlights
-
GAAP revenue was
for the third quarter of 2022, compared to$13.2 million for the third quarter of 2021.$13.7 million -
Net loss was
for the third quarter of 2022 or$1.6 million per diluted share, compared to a net income of$0.04 or$3.3 million per diluted share for the third quarter of 2021.$0.07
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Q3 2021 |
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Q3 2022 |
GAAP Revenue |
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Non-GAAP Results: |
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Adjusted EBITDA |
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Break Even |
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Break Even |
-
Adjusted non-GAAP income (loss) per share for the third quarter of 2022 was (
) compared to ($0.01 ) for the third quarter of 2021.$0.01
Strategic Priorities and Growth Initiatives
-
New Customer Traction and Existing Customer Expansion.
Marchex saw traction with new enterprise customers across multiple product lines in several verticals, including Home Services, Auto and others. -
Company Maintains Profitability Metrics in the Third Quarter. In the third quarter of 2022,
Marchex continued to be at break-even Adjusted EBITDA levels. - Conversation Volumes. Overall conversation volumes in the third quarter were down on a year-over-year basis, as some customers faced pressure from inventory shortages, inflationary pressures and 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.
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Accelerate Product Innovation.
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Marchex Releases White Paper on the findings from a Major Study to assess the Current State of Car-buying. Global supply chain crises have transformed how
U.S. consumers buy vehicles. With ongoing shortages, consumers are making clear that it is more important than ever that phone calls focused on vehicle availability precede traditional in-person dealership visits. That is, consumers want to call and have conversations with dealers ahead of visiting to simply find out what is available and at what price, or to understand how to purchase a vehicle. The study reveals the analysis of more than 60,000 consumer conversations with car dealerships and insights on how dealerships and auto equipment manufacturers can address critical customer communication challenges that are impacting the industry and business performance. -
Marchex Wins 2022 APPEALIE SaaS Customer Success Award. The APPEALIE SaaS Awards honor customer-obsessed SaaS platforms and success stories that deliver extraordinary experiences and results. The SaaS Customer Success Award category winners are selected from entrants who are able to demonstrate the best customer success stories and outcomes.
Marchex received the award for the use of its conversation intelligence capabilities to go "above and beyond" and help a national computer repair and support services company who relies heavily on phone calls to land new customers and drive new business in a competitively accelerating space. The company was able to obtain actionable conversation insights processed by Marchex’s conversation intelligence platform that identified time sensitive missed sales opportunities that were able to be rescued. This saved more than in sales in a single month as well as improved overall call handling performance results. This success was possible through Marchex Anywhere, our integrations and applications hub that makes our suite of industry-leading conversational intelligence services available through partnerships with third party communications platforms.$50,000
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Marchex Releases White Paper on the findings from a Major Study to assess the Current State of Car-buying. Global supply chain crises have transformed how
“The third quarter was characterized by Marchex’s continued focus on innovation and unlocking the power of conversational intelligence to help businesses improve customer experience and grow revenue,” said
Business Outlook
The following forward-looking statements reflect
“In the third quarter, we saw customer impacts from supply chain disruptions, inflationary pressures and other macroeconomic events weigh on aggregate conversation volumes compared to the year-ago period (a trend that has continued into the October timeframe),” said
“As we look to the future, we are continuing to make progress with many of our largest customer relationships and believe they can serve as a foundation for long-term growth for
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 Twitter (Twitter.com/Marchex), where
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, 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, (3) amortization of intangible assets from acquisitions, (4) interest income and other, net, and (5) foreign government assistance 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 |
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|
Nine Months Ended |
|
||||||||||
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
||||
Revenue |
|
$ |
13,700 |
|
|
$ |
13,197 |
|
|
$ |
40,686 |
|
|
$ |
39,878 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs (1) |
|
|
5,507 |
|
|
|
4,992 |
|
|
|
16,389 |
|
|
|
14,791 |
|
Sales and marketing (1) |
|
|
3,906 |
|
|
|
3,388 |
|
|
|
10,245 |
|
|
|
10,172 |
|
Product development (1) |
|
|
3,178 |
|
|
|
3,524 |
|
|
|
13,289 |
|
|
|
10,515 |
|
General and administrative (1) |
|
|
1,875 |
|
|
|
2,351 |
|
|
|
6,960 |
|
|
|
7,397 |
|
Amortization of intangible assets from acquisitions |
|
|
1,149 |
|
|
|
531 |
|
|
|
3,708 |
|
|
|
1,593 |
|
Acquisition and disposition-related costs |
|
|
(18 |
) |
|
|
10 |
|
|
|
103 |
|
|
|
37 |
|
Total operating expenses |
|
|
15,597 |
|
|
|
14,796 |
|
|
|
50,694 |
|
|
|
44,505 |
|
Loss from operations |
|
|
(1,897 |
) |
|
|
(1,599 |
) |
|
|
(10,008 |
) |
|
|
(4,627 |
) |
Gain on loan extinguishment |
|
|
5,185 |
|
|
|
— |
|
|
|
5,185 |
|
|
|
- |
|
Interest income (expense) and other, net |
|
|
(21 |
) |
|
|
37 |
|
|
|
2,453 |
|
|
|
33 |
|
Income (loss) before provision for income taxes |
|
|
3,267 |
|
|
|
(1,562 |
) |
|
|
(2,370 |
) |
|
|
(4,594 |
) |
Income tax expense (benefit) |
|
|
(43 |
) |
|
|
(4 |
) |
|
|
(15 |
) |
|
|
77 |
|
Net income (loss) applicable to common stockholders |
|
$ |
3,310 |
|
|
$ |
(1,558 |
) |
|
$ |
(2,355 |
) |
|
$ |
(4,671 |
) |
Basic and diluted net loss per Class A and Class B share applicable to common stockholders |
|
$ |
0.07 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.11 |
) |
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 |
|
|
39,246 |
|
|
|
38,861 |
|
|
|
39,213 |
|
|
|
38,735 |
|
Shares used to calculate diluted net income (loss) per share applicable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A |
|
|
4,661 |
|
|
|
4,661 |
|
|
|
4,661 |
|
|
|
4,661 |
|
Class B |
|
|
44,385 |
|
|
|
43,522 |
|
|
|
43,874 |
|
|
|
43,396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation allocated as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs |
|
$ |
3 |
|
|
$ |
46 |
|
|
$ |
15 |
|
|
$ |
125 |
|
Sales and marketing |
|
|
213 |
|
|
|
205 |
|
|
|
663 |
|
|
|
596 |
|
Product development |
|
|
45 |
|
|
|
58 |
|
|
|
230 |
|
|
|
216 |
|
General and administrative |
|
|
347 |
|
|
|
316 |
|
|
|
1,099 |
|
|
|
1,097 |
|
Total |
|
$ |
608 |
|
|
$ |
625 |
|
|
$ |
2,007 |
|
|
$ |
2,034 |
|
Condensed Consolidated Balance Sheets (in thousands) (unaudited) |
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|
|
|
|
|
|
|
||
|
|
2021 |
|
|
2022 |
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Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
27,086 |
|
|
$ |
23,329 |
|
Accounts receivable, net |
|
|
8,021 |
|
|
|
8,437 |
|
Prepaid expenses and other current assets |
|
|
2,407 |
|
|
|
2,554 |
|
Total current assets |
|
|
37,514 |
|
|
|
34,320 |
|
Property and equipment, net |
|
|
2,817 |
|
|
|
3,839 |
|
Right-of-use lease asset |
|
|
2,238 |
|
|
|
1,119 |
|
Other assets, net |
|
|
986 |
|
|
|
1,009 |
|
|
|
|
17,558 |
|
|
|
17,558 |
|
Intangible assets from acquisitions, net |
|
|
4,714 |
|
|
|
3,121 |
|
Total assets |
|
$ |
65,827 |
|
|
$ |
60,966 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,363 |
|
|
$ |
1,315 |
|
Accrued benefits and payroll |
|
|
3,631 |
|
|
|
4,228 |
|
Other accrued expenses and current liabilities |
|
|
3,869 |
|
|
|
3,480 |
|
Deferred revenue and deposits |
|
|
2,016 |
|
|
|
878 |
|
Lease liability, current |
|
|
1,794 |
|
|
|
1,520 |
|
Total current liabilities |
|
|
12,673 |
|
|
|
11,421 |
|
Deferred tax liabilities |
|
|
186 |
|
|
|
217 |
|
Lease liability non-current |
|
|
1,466 |
|
|
|
433 |
|
Total liabilities |
|
|
14,325 |
|
|
|
12,071 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Class A common stock |
|
|
49 |
|
|
|
49 |
|
Class B common stock |
|
|
374 |
|
|
|
378 |
|
Additional paid-in capital |
|
|
354,155 |
|
|
|
356,215 |
|
Accumulated deficit |
|
|
(303,076 |
) |
|
|
(307,747 |
) |
Total stockholders’ equity |
|
|
51,502 |
|
|
|
48,895 |
|
Total liabilities and stockholders’ equity |
|
$ |
65,827 |
|
|
$ |
60,966 |
|
(in thousands) (unaudited)
Reconciliation of GAAP Net Loss to Adjusted EBITDA and Adjusted Operating Income (Loss) Before Amortization (OIBA) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
||||
Net loss applicable to common stockholders |
|
$ |
3,310 |
|
|
$ |
(1,558 |
) |
|
$ |
(2,355 |
) |
|
$ |
(4,671 |
) |
Gain on loan extinguishment |
|
|
(5,185 |
) |
|
|
— |
|
|
|
(5,185 |
) |
|
|
— |
|
Interest income (expense) and other, net |
|
|
21 |
|
|
|
(37 |
) |
|
|
(2,453 |
) |
|
|
(33 |
) |
Income tax expense (benefit) |
|
|
(43 |
) |
|
|
(4 |
) |
|
|
(15 |
) |
|
|
77 |
|
Amortization of intangible assets from acquisitions |
|
|
1,149 |
|
|
|
531 |
|
|
|
3,708 |
|
|
|
1,593 |
|
Depreciation and amortization |
|
|
305 |
|
|
|
443 |
|
|
|
1,108 |
|
|
|
1,301 |
|
Stock-based compensation |
|
|
608 |
|
|
|
625 |
|
|
|
2,007 |
|
|
|
2,034 |
|
Acquisition and disposition-related costs (benefit) |
|
|
(18 |
) |
|
|
10 |
|
|
|
103 |
|
|
|
37 |
|
Foreign government paycheck assistance and rent subsidies1 |
|
|
(134 |
) |
|
|
— |
|
|
|
(433 |
) |
|
|
(10 |
) |
Adjusted EBITDA |
|
$ |
13 |
|
|
$ |
10 |
|
|
$ |
(3,515 |
) |
|
$ |
328 |
|
Depreciation and amortization |
|
|
305 |
|
|
|
443 |
|
|
|
1,108 |
|
|
|
1,301 |
|
Adjusted OIBA |
|
$ |
(292 |
) |
|
$ |
(433 |
) |
|
$ |
(4,623 |
) |
|
$ |
(973 |
) |
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 Operations per Share |
||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
||||
Net loss applicable to common stockholders, diluted |
|
$ |
0.07 |
|
|
$ |
(0.04 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.11 |
) |
Stock-based compensation |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.05 |
|
|
|
0.05 |
|
Amortization of intangible assets from acquisitions |
|
|
0.03 |
|
|
|
0.01 |
|
|
|
0.08 |
|
|
|
0.04 |
|
Gain on loan extinguishment |
|
|
(0.12 |
) |
|
|
- |
|
|
|
(0.12 |
) |
|
|
- |
|
Interest income and other, net |
|
|
- |
|
|
|
- |
|
|
|
(0.06 |
) |
|
|
- |
|
Foreign government paycheck assistance and rent subsidies |
|
|
- |
|
|
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
Adjusted non-GAAP loss per share |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.02 |
) |
Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss per share |
|
|
44,385 |
|
|
|
43,522 |
|
|
|
43,874 |
|
|
|
43,396 |
|
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/20221103005902/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 Q3 2022 financial results?
How did last year's Q3 performance compare to Q3 2022 for MCHX?
What factors impacted Marchex's conversation volumes in Q3 2022?
What recognition did Marchex receive in 2022?