[August 02, 2017] |
|
Marchex Announces Second Quarter 2017 Results
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 second quarter ended June 30, 2017.
Q2 2017 Financial Highlights
-
Revenue was $22.0 million for the second quarter of 2017, compared to
$34.4 million for the second quarter of 2016.
-
Net loss was $1.3 million for the second quarter of 2017 or $0.03 per
diluted share. For the second quarter of 2016, net loss was $68.8
million or $1.65 per diluted share.
|
|
|
Q2 2016
|
|
|
Q2 2017
|
Revenue
|
|
|
$34.4 million
|
|
|
$22.0 million
|
Non-GAAP Results1:
|
|
|
|
|
|
|
Enterprise Revenue2
|
|
|
$26.3 million
|
|
|
$17.2 million
|
Adjusted OIBA
|
|
|
($1.6) million
|
|
|
($0.3) million
|
Adjusted EBITDA
|
|
|
($0.8) million
|
|
|
$0.4 million
|
Cash Balance
|
|
|
$106 million
|
|
|
$102 million
|
-
Adjusted non-GAAP earnings (loss) per share1 for the second
quarter of 2017 was ($0.01), compared to ($0.02) for the second
quarter of 2016.
-
During the second quarter of 2017, YP contributed $4.8 million in
revenue, compared to $8.1 million in the second quarter of 2016.
|
|
|
|
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.
|
2
|
|
|
Enterprise Revenue represents total revenue less revenue
generated from our contracts with YP.
|
|
|
|
|
Strategic Priorities Update
-
Accelerate Product Innovation. Marchex Audience Targeting
launched in July 2017 is a new solution that leverages real customer
interactions to automatically build high value audience segments for
display and social media platforms. By helping brands
understand who is calling, and what they're calling about, Marchex
Audience Targeting empowers marketers with the ability to target high
intent audiences with their Facebook and display campaigns. Marketers
can fine-tune campaigns down to specific audience segments that are
most likely to convert to customers, or find new segments and
opportunities that haven't been targeted before.
Marchex
Search Essentials launched in June 2017 is a new
version of our leading Search Analytics previously targeted to
enterprise-level companies with large marketing budgets. Marchex
Search Essentials is available to all companies of all sizes to
maximize spend and increase ROI on paid search campaigns. Marchex
Search Essentials helps eliminate a major blind spot for marketers by
attributing inbound phone calls to paid search keywords and as a
result, marketers have the insights they need to make real time
adjustments to drive stronger, more efficient performance for their
paid search campaigns.
Independent Research Study highlights
the value of customers that call. In July 2017, Marchex
announced the results of an industry survey that helps marketers
invest their marketing spend and increase their return on investment.
Based on a survey of marketing decision makers, the study from
Forrester Consulting showed that customers who call a business are the
most valuable prospects for a business. The report found that phone
customers convert faster, spend more, and have a higher retention rate
than customers who contact brands via other channels such as in-store
or on-line. The report can be downloaded
here.
-
Expand Strategic Partnerships. New integrations with Adobe
Analytics Cloud, announced in June 2017, enable marketers to both
increase sales and retain customers by better understanding how
customers and prospects interact with their brands. Marchex was also
promoted to Business partner in the Adobe Exchange partner program for
Adobe Experience Cloud.
"While we have continued to focus on stabilizing the business and laying
the foundation to return the company to growth, I am pleased to report
that the company returned to positive operating cash generation in the
second quarter," said Michael Arends, Chief Financial Officer. "We are
expanding our product pipeline and strategic partnership base while we
continue to focus on adding to and growing our base of customer
relationships. These initiatives are building blocks for putting Marchex
back on a path to long term growth."
Business Outlook
The following forward-looking statements reflect Marchex's expectations
as of August 2, 2017.
Financial Guidance for the Third Quarter
ending September 30, 2017
|
|
|
|
Revenue
|
|
$21 million or more
|
Adjusted OIBA1
|
|
a loss of $1 million or better
|
Adjusted EBITDA1
|
|
breakeven or better
|
Conference Call and Webcast Information
Management will hold a conference call, starting at 5:00 p.m. ET on
Wednesday, August 2, 2017, to discuss its second quarter ended June 30,
2017 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, beginning 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 August 2, 2017 and Marchex undertakes no duty to update
the information provided herein.
This press release may contain links to third party websites or
materials. These 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 OIBA, Adjusted OIBA, Adjusted EBITDA, and Adjusted
non-GAAP earnings (loss) per share. Marchex also provides Enterprise
Revenue, which represents revenue excluding Yellowpages.com LLC ("YP")
revenue generating contracts and other Archeo related transition
activities which were insignificant.
OIBA represents income (loss) from
operations excluding stock-based compensation expense. This measure,
among other things, is one of the primary metrics by which Marchex
evaluates the performance of its business. Additionally, Marchex's
management uses Adjusted OIBA,
which excludes acquisition and disposition related costs and impairment
of goodwill, as these items are not indicative of Marchex's recurring
core operating results. 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, acquisition and disposition related costs, and
impairment of goodwill. Adjusted EBITDA represents
income (loss) before interest, income taxes, depreciation, amortization,
stock compensation expense, acquisition and disposition related costs,
and impairment of goodwill. 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 EBITDA and
Enterprise Revenue to help with comparative financial evaluation to make
informed investment decisions. Adjusted
non-GAAP earnings (loss) per share represents Adjusted
non-GAAP net income (loss) applicable to common stockholders divided by
GAAP diluted shares outstanding. Adjusted non-GAAP net income (loss)
applicable to common stockholders 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) interest and other income (expense), and (4)
impairment of goodwill. Financial analysts and investors may use
Adjusted non-GAAP earnings (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
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
Revenue
|
|
$
|
34,412
|
|
|
$
|
22,016
|
|
|
$
|
70,397
|
|
|
$
|
46,391
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs (1)
|
|
|
20,477
|
|
|
|
12,175
|
|
|
|
42,459
|
|
|
|
25,773
|
|
Sales and marketing (1)
|
|
|
5,649
|
|
|
|
3,471
|
|
|
|
11,171
|
|
|
|
8,463
|
|
Product development (1)
|
|
|
7,555
|
|
|
|
4,283
|
|
|
|
15,027
|
|
|
|
9,553
|
|
General and administrative (1)
|
|
|
5,833
|
|
|
|
3,394
|
|
|
|
10,495
|
|
|
|
7,424
|
|
Acquisition and disposition related costs
|
|
|
304
|
|
|
|
-
|
|
|
|
308
|
|
|
|
-
|
|
Total operating expenses
|
|
|
39,818
|
|
|
|
23,323
|
|
|
|
79,460
|
|
|
|
51,213
|
|
Impairment of goodwill
|
|
|
(63,305
|
)
|
|
|
-
|
|
|
|
(63,305
|
)
|
|
|
-
|
|
Loss from operations
|
|
|
(68,711
|
)
|
|
|
(1,307
|
)
|
|
|
(72,368
|
)
|
|
|
(4,822
|
)
|
Interest income (expense) and other, net
|
|
|
(68
|
)
|
|
|
40
|
|
|
|
(75
|
)
|
|
|
57
|
|
Loss before provision for income taxes
|
|
|
(68,779
|
)
|
|
|
(1,267
|
)
|
|
|
(72,443
|
)
|
|
|
(4,765
|
)
|
Income tax expense
|
|
|
12
|
|
|
|
13
|
|
|
|
25
|
|
|
|
25
|
|
Net loss applicable to common stockholders
|
|
$
|
(68,791
|
)
|
|
$
|
(1,280
|
)
|
|
$
|
(72,468
|
)
|
|
$
|
(4,790
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per Class A and Class B share applicable
to common stockholders
|
|
$
|
(1.65
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(0.11
|
)
|
Shares used to calculate basic net loss per share applicable to
common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
5,233
|
|
|
|
5,056
|
|
|
|
5,233
|
|
|
|
5,056
|
|
Class B
|
|
|
36,499
|
|
|
|
37,698
|
|
|
|
36,238
|
|
|
|
37,435
|
|
Shares used to calculate diluted net loss per share applicable
to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A
|
|
|
5,233
|
|
|
|
5,056
|
|
|
|
5,233
|
|
|
|
5,056
|
|
Class B
|
|
|
41,732
|
|
|
|
42,754
|
|
|
|
41,471
|
|
|
|
42,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation allocated as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs
|
|
$
|
207
|
|
|
$
|
130
|
|
|
$
|
405
|
|
|
$
|
255
|
|
Sales and marketing
|
|
|
529
|
|
|
|
63
|
|
|
|
968
|
|
|
|
469
|
|
Product development
|
|
|
629
|
|
|
|
207
|
|
|
|
1,161
|
|
|
|
298
|
|
General and administrative
|
|
|
2,136
|
|
|
|
581
|
|
|
|
2,933
|
|
|
|
1,316
|
|
Total
|
|
$
|
3,501
|
|
|
$
|
981
|
|
|
$
|
5,467
|
|
|
$
|
2,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARCHEX, INC. AND SUBSIDIARIES
|
|
Condensed Consolidated Balance Sheets
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
June 30,
|
|
|
|
2016
|
|
|
2017
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
103,950
|
|
|
$
|
102,429
|
|
Accounts receivable, net
|
|
|
18,922
|
|
|
|
15,461
|
|
Prepaid expenses and other current assets
|
|
|
1,531
|
|
|
|
2,004
|
|
Refundable taxes
|
|
|
98
|
|
|
|
94
|
|
Total current assets
|
|
|
124,501
|
|
|
|
119,988
|
|
Property and equipment, net
|
|
|
3,557
|
|
|
|
2,962
|
|
Other assets, net
|
|
|
214
|
|
|
|
329
|
|
Total assets
|
|
$
|
128,272
|
|
|
$
|
123,279
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
6,811
|
|
|
$
|
5,098
|
|
Accrued expenses and other current liabilities
|
|
|
7,707
|
|
|
|
6,469
|
|
Deferred revenue
|
|
|
349
|
|
|
|
337
|
|
Total current liabilities
|
|
|
14,867
|
|
|
|
11,904
|
|
Other non-current liabilities
|
|
|
134
|
|
|
|
540
|
|
Total liabilities
|
|
|
15,001
|
|
|
|
12,444
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Class A common stock
|
|
|
53
|
|
|
|
53
|
|
Class B common stock
|
|
|
380
|
|
|
|
385
|
|
Treasury stock
|
|
|
-
|
|
|
|
(2
|
)
|
Additional paid-in capital
|
|
|
360,422
|
|
|
|
362,810
|
|
Accumulated deficit
|
|
|
(247,584
|
)
|
|
|
(252,411
|
)
|
Total stockholders' equity
|
|
|
113,271
|
|
|
|
110,835
|
|
Total liabilities and stockholders' equity
|
|
$
|
128,272
|
|
|
$
|
123,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARCHEX, INC. AND SUBSIDIARIES
|
|
(in thousands)
|
|
(unaudited)
|
|
|
|
Reconciliation of GAAP Loss from Operations to Operating Loss
Before Amortization (OIBA)
|
|
and Adjusted Operating Loss Before Amortization (Adjusted OIBA)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
Loss from operations
|
|
$
|
(68,711
|
)
|
|
$
|
(1,307
|
)
|
|
$
|
(72,368
|
)
|
|
$
|
(4,822
|
)
|
Stock-based compensation
|
|
|
3,501
|
|
|
|
981
|
|
|
|
5,467
|
|
|
|
2,338
|
|
Operating loss before amortization (OIBA)
|
|
|
(65,210
|
)
|
|
|
(326
|
)
|
|
|
(66,901
|
)
|
|
|
(2,484
|
)
|
Acquisition and disposition related costs
|
|
|
304
|
|
|
|
-
|
|
|
|
308
|
|
|
|
-
|
|
Impairment of goodwill
|
|
|
63,305
|
|
|
|
-
|
|
|
|
63,305
|
|
|
|
-
|
|
Adjusted operating loss before amortization (Adjusted OIBA)1
|
|
$
|
(1,601
|
)
|
|
$
|
(326
|
)
|
|
$
|
(3,288
|
)
|
|
$
|
(2,484
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation from Net Cash used in Operating Activities to
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
Net cash provided by (used in) operating activities
|
|
$
|
(386
|
)
|
|
$
|
254
|
|
|
$
|
(2,653
|
)
|
|
$
|
(624
|
)
|
Changes in assets and liabilities
|
|
|
(785
|
)
|
|
|
174
|
|
|
|
647
|
|
|
|
(350
|
)
|
Income tax expense
|
|
|
12
|
|
|
|
13
|
|
|
|
25
|
|
|
|
25
|
|
Acquisition and disposition related costs
|
|
|
304
|
|
|
|
-
|
|
|
|
308
|
|
|
|
-
|
|
Interest (income) expense and other, net
|
|
|
68
|
|
|
|
(40
|
)
|
|
|
75
|
|
|
|
(57
|
)
|
Adjusted EBITDA1
|
|
$
|
(787
|
)
|
|
$
|
401
|
|
|
$
|
(1,598
|
)
|
|
$
|
(1,006
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
$
|
(119
|
)
|
|
$
|
(906
|
)
|
|
$
|
(594
|
)
|
|
$
|
(912
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
|
$
|
(321
|
)
|
|
$
|
9
|
|
|
$
|
(131
|
)
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
Includes reorganization costs of approximately $700,000 in Q1 2017.
|
|
|
|
|
|
|
Reconciliation from Revenue to Enterprise Revenue
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
Revenue
|
|
$
|
34,412
|
|
|
$
|
22,016
|
|
|
$
|
70,397
|
|
|
$
|
46,391
|
Less: YP Revenue
|
|
|
8,091
|
|
|
|
4,829
|
|
|
|
16,610
|
|
|
|
10,232
|
Less: Other
|
|
|
-
|
|
|
|
-
|
|
|
|
21
|
|
|
|
-
|
Enterprise Revenue2
|
|
$
|
26,321
|
|
|
$
|
17,187
|
|
|
$
|
53,766
|
|
|
$
|
36,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
Enterprise Revenue represents total revenue less revenue generated
from our contracts with YP and other Archeo related transition
activities.
|
|
|
|
|
|
|
|
MARCHEX, INC. AND SUBSIDIARIES
|
|
Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP
Loss per Share
|
|
(in thousands, except per share amounts)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
Adjusted Non-GAAP loss per share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share applicable to common stockholders - diluted
(GAAP loss per share)
|
|
$
|
(1.65
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(0.11
|
)
|
Shares used to calculate diluted net loss per share applicable to
common stockholders
|
|
|
41,732
|
|
|
|
42,754
|
|
|
|
41,471
|
|
|
|
42,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss applicable to common stockholders
|
|
$
|
(68,791
|
)
|
|
$
|
(1,280
|
)
|
|
$
|
(72,468
|
)
|
|
$
|
(4,790
|
)
|
Stock-based compensation
|
|
|
3,501
|
|
|
|
981
|
|
|
|
5,467
|
|
|
|
2,338
|
|
Acquisition and disposition related costs
|
|
|
304
|
|
|
|
-
|
|
|
|
308
|
|
|
|
-
|
|
Impairment of goodwill
|
|
|
63,305
|
|
|
|
-
|
|
|
|
63,305
|
|
|
|
-
|
|
Interest (income) expense and other, net
|
|
|
68
|
|
|
|
(40
|
)
|
|
|
75
|
|
|
|
(57
|
)
|
Estimated impact of income taxes
|
|
|
746
|
|
|
|
115
|
|
|
|
1,093
|
|
|
|
829
|
|
Adjusted Non-GAAP loss
|
|
$
|
(867
|
)
|
|
$
|
(224
|
)
|
|
$
|
(2,220
|
)
|
|
$
|
(1,680
|
)
|
Adjusted Non-GAAP loss per share
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to calculate diluted net loss per share applicable to
common stockholders (GAAP) and Adjusted Non-GAAP loss per share
|
|
|
41,732
|
|
|
|
42,754
|
|
|
|
41,471
|
|
|
|
42,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170802006297/en/
[ Back To TMCnet.com's Homepage ]
|