0001224133
false
0001224133
2023-11-08
2023-11-08
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (
Date of earliest event reported):
November 8, 2023
Marchex, Inc.
(Exact name of Registrant as Specified in its Charter)
Delaware 000-50658 35-2194038
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1200 5th Ave 98101
.,
Suite 1300
,
Seattle
,
Washington
(Address of principal executive offices) (Zip Code)
Registrants Telephone Number, Including Area Code: (
206
)
331-3300
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Name of each exchange on which registered
Symbol(s)
Class B Common Stock, par value $0.01 per share MCHX The Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as
defined in as defined in Rule 405 of the Securities Act of 1933 ((s)230.405 of
this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
((s)240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complying with any new
or revised financial accounting standards provided pursuant to Section 13(a)
of the Exchange Act.
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Item 2.02
Results of Operations and Financial Condition.
On November 8, 2023, Marchex, Inc. (
Marchex
) is issuing a press release and holding a conference call regarding its
financial results for the third quarter ended September 30, 2023 (the
Press Release
). The full text of the Press Release is furnished as Exhibit 99.1 to this
Current Report on Form 8-K.
The information in this Item 2.02 (including Exhibit 99.1) is being furnished
and shall not be deemed filed for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the
Exchange Act
), or otherwise subject to the liabilities of that section. Such information
shall not be incorporated by reference into any registration statement or
other document pursuant to the Securities Act of 1933 or the Exchange Act,
except as shall be expressly set forth by specific reference in such filing.
Marchex is referencing non-GAAP financial information in both the Press
Release and on the conference call. A reconciliation of these non-GAAP
financial measures to the comparable GAAP financial measures is contained in
the attached Press Release. Disclosures regarding definitions of these
financial measures used by Marchex and why Marchexs management believes these
financial measures provide useful information to investors is also included in
the Press Release.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Description
No.
99.1 Press Release of Marchex, dated November 8, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Marchex
has duly caused this Current Report to be signed on its behalf by the
undersigned hereunto duly authorized.
MARCHEX, INC.
Date: November 8, 2023 By: /s/ HOLLY A. AGLIO
Name: Holly A. Aglio
Title: Chief Financial Officer
(Principal Financial Officer)
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Exhibit 99.1
Marchex Announces Third Quarter 2023 Results
SEATTLE November 8, 2023
Marchex, Inc
. (NASDAQ: MCHX),
the award-winning AI-powered conversation intelligence company that helps
businesses turn strategic insights into the actions that drive their most
valued sales outcomes
, today announced its financial results for the third quarter ended September
30, 2023.
Q3 2023 Financial Highlights
"
GAAP revenue was $12.8 million for the third quarter of 2023 compared to $13.2
million for the third quarter of 2022.
"
Net loss was $1.5 million for the third quarter of 2023 or $0.04 per diluted
share compared to a net loss of $1.6 million or $0.04 per diluted share for
the third quarter of 2022.
Q3 2022 Q3 2023
GAAP Revenue $13.2 million $12.8 million
Non-GAAP Results:
Adjusted EBITDA: Breakeven $370,000*
*
Adjusted EBITDA includes approximately $300,000 of reorganization costs.
Excluding these amounts would result in Adjusted EBITDA totaling $670,000
dollars.
"
Adjusted non-GAAP loss per share for the third quarter of 2023 was $0.01
compared to $0.01 for the third quarter of 2022.
Recent Progress Summary:
"
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 Healthcare.
"
Conversation Volumes.
Overall conversation volumes in the third quarter of 2023 showed modest
improvement when compared to the second quarter of 2023. On a year-over-year
basis volumes were down slightly, due in part to some customers being impacted
by underlying churn and pressure from other overall macroeconomic factors.
"
Company Hires CFO
. The company announced that Holly Aglio has joined the company as Chief
Financial Officer. Aglio is a seasoned financial leader, having served in
multiple influential financial management roles during her career, and will
lead Marchexs finance and accounting organizations.
"
Accelerate Product Innovation.
/
"
Marchex Launches Generative AI-powered Call Summary and Sentiment Suite
Capabilities.
The company announced the first of its Generative AI-powered technology
capabilities in its rapidly expanding award-winning conversational
intelligence platform. Powered by generative AI, these new features analyze
and generate summaries of consumer-to-business calls, enabling businesses to
immediately identify customers who have had exceptionally good experiences, as
well as dissatisfied ones. This valuable data empowers companies to capitalize
on positive interactions by advancing sales processes or encouraging positive
online behaviors, as well as take action to rectify concerns from dissatisfied
customers.
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In the third quarter and today, Marchex is making significant progress with a
number of initiatives that will help ensure long-term leadership in the
conversational intelligence market, said Edwin Miller, CEO. We are moving to
optimize our technology capabilities to accelerate our ability to innovate and
harness the power of our significant conversational data to deliver new
AI-driven products and features for customers and prospects. These initiatives
will be the foundation of our long-term growth and profitability. We are
highly focused on our most tangible opportunities, which we believe have the
potential to grow into a nine-figure business in the future. At the same time,
our focus has enabled us to achieve profitability on an adjusted EBITDA basis
earlier than expected this year. This also sets the stage for more operating
leverage as we grow revenue. I am proud of the team and the significant effort
we are making to take advantage of our robust market opportunity.
Business Outlook
The following forward-looking statements reflect Marchex's expectations as of
November 8, 2023.
For the fourth quarter ending December 31, 2023:
"
Revenue is anticipated to be at or near third quarter 2023 levels.
"
The company anticipates the auto vertical to deliver double-digit growth on an
annualized run rate year-over-year basis by the end of the fourth quarter.
"
Adjusted EBITDA is anticipated to be above break-even.
For the fiscal year 2024:
"
The company anticipates revenue growth on a year-over-year basis along with
sequential progress.
"
Adjusted EBITDA is anticipated to be above break-even throughout the year.
Despite what is traditionally a seasonally slower quarter for many customers,
in the fourth quarter we anticipate the business will continue to make
progress, grow year-over-year and remain profitable on an adjusted EBITDA
basis as we exit 2023. We look forward to seeing what our current efforts can
achieve as we move into next year and deliver on key initiatives including our
robust product roadmap and vertical sales opportunities, said Miller.
Management will hold a conference call, starting at 5:00 p.m. ET on Wednesday,
November 8, 2023, to discuss its third quarter September 30, 2023, financial
results and other company updates. Access to the live webcast of the
conference call will be available online from the Investors section of
Marchexs 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
Marchexs/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/multi
channel voice and text capabilities enable sales and marketing teams to
deliver the buying/experiences/that todays customers expect./Marchex/is the
trusted conversation intelligence partner for market-leading companies/in/critic
al/industries,/including many of the worlds/most innovative and successful
brands.
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 November 8, 2023, 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 EBITDA, Adjusted OIBA, and Adjusted non-GAAP income (loss)
per share.
Adjusted EBITDA
represents net income (loss) before (1) interest, (2) income taxes, (3)
amortization of intangible assets from acquisitions, (4) depreciation and
amortization, (5) stock-based compensation expense, (6) acquisition and
disposition-related costs (benefit), and (7) foreign government assistance
subsidies. Marchex believes that Adjusted EBITDA is an alternative measure
used by our management to understand and evaluate our core operating
performance and trends, and that provides meaningful supplemental information
regarding performance and evaluating performance and liquidity to measure its
ability to fund operations and its financing obligations.
Adjusted OIBA
represents Adjusted EBITDA adjusted for depreciation and amortization. This
measure, among other things, is another metric 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 as detailed above. Financial analysts and investors may use Adjusted
EBITDA and Adjusted OIBA 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 Marchexs 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) 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 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.
Marchexs 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.
For further information, contact:
Trevor Caldwell
Marchex Investor Relations
Telephone: 206.331.3600
Email:
ir@marchex.com
Or
MEDIA INQUIRIES
Marchex Corporate Communications
Telephone: 206.331.3434
Email: pr(at)marchex.com
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MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2022 2023 2022 2023
Revenue $ 13,197 $ 12,778 $ 39,878 $ 37,516
Expenses:
Service 4,992 5,057 14,791 15,899
costs (1)
Sales and 3,388 2,319 10,172 8,920
marketing (1)
Product 3,524 3,942 10,515 12,202
development (1)
General and 2,351 2,249 7,397 7,412
administrative (1)
Amortization of intangible 531 531 1,593 1,593
assets from acquisitions
Acquisition and 10 37 12
disposition-related costs
Total operating 14,796 14,098 44,505 46,038
expenses
Loss from (1,599 ) (1,320 ) (4,627 ) (8,522 )
operations
Interest income (expense) 37 (218 ) 33 (192 )
and other, net
Loss before provision (1,562 ) (1,538 ) (4,594 ) (8,714 )
for income taxes
Income tax expense (4 ) 9 77 53
(benefit)
Net (1,558 ) (1,547 ) (4,671 ) (8,767 )
loss
Net loss applicable to $ (1,558 ) $ (1,547 ) $ (4,671 ) $ (8,767 )
common stockholders
Basic and diluted net loss per Class A and Class $ (0.04 ) $ (0.04 ) $ (0.11 ) $ (0.21 )
B share applicable to common stockholders
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 38,861 38,103 38,735 37,927
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 43,522 42,764 43,396 42,588
(1) Includes stock-based
compensation allocated as follows:
Service $ 46 $ $ 125 $
costs
Sales and 205 89 596 580
marketing
Product 58 (39 ) 216 94
development
General and 316 357 1,097 1,233
administrative
Total $ 625 $ 407 $ 2,034 $ 1,907
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MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, September 30,
2022 2023
Assets
Current assets:
Cash and cash equivalents $ 20,474 $ 13,717
Accounts receivable, net 8,396 8,132
Prepaid expenses and other current assets 2,015 2,107
Total current assets 30,885 23,956
Property and equipment, net 4,050 3,313
Right-of-use lease asset 738 1,745
Other assets, net 973 1,112
Assets held for sale - 400
Goodwill 17,558 17,558
Intangible assets from acquisitions, net 2,590 997
Total assets $ 56,794 $ 49,081
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable $ 2,037 $ 1,177
Accrued benefits and payroll 3,566 2,990
Other accrued expenses and current liabilities 3,825 3,762
Deferred revenue and deposits 1,384 1,212
Right of use liability, current 1,252 452
Finance lease, current 221
Total current liabilities 12,064 9,814
Deferred tax liabilities 233 233
Finance lease, non-current - 424
Right of use liability non-current 385 1,336
Total liabilities 12,682 11,807
Stockholders equity:
Class A common stock 49 49
Class B common stock 385 387
Additional paid-in capital 354,999 356,926
Accumulated deficit (311,321 ) (320,088 )
Total stockholders equity 44,112 37,274
Total liabilities and stockholders equity $ 56,794 $ 49,081
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MARCHEX, INC. AND SUBSIDIARIES
(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
September 30, September 30,
2022 2023 2022 2023
Net loss applicable to $ (1,558 ) $ (1,547 ) $ (4,671 ) $ (8,767 )
common stockholders
Interest expense (37 ) 218 (33 ) 192
(income) and other, net
Income tax (4 ) 9 77 53
expense
Amortization of intangible 531 531 1,593 1,593
assets from acquisitions
Depreciation and 443 752 1,301 1,533
amortization
Stock-based 625 407 2,034 1,907
compensation
Acquisition and 10 37 12
disposition-related costs
Foreign government paycheck (10 )
assistance and rent subsidies
1
Adjusted $ 10 $ 370 $ 328 $ (3,477 )
EBITDA
Depreciation and 443 752 1,301 1,533
amortization
Adjusted $ (433 ) $ (382 ) $ (973 ) $ (5,010 )
OIBA
1
Includes pandemic related wage and rent relief subsidies, recognized as a
reduction of wages or rent during the period received.
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MARCHEX, INC. AND SUBSIDIARIES
(in thousands)
(unaudited)
Reconciliation of GAAP Net Loss per Share to Adjusted Non-GAAP Loss
1
Three Months Ended Nine Months Ended
September 30, September 30,
2022 2023 2022 2023
Net loss applicable to $ (0.04 ) $ (0.04 ) $ (0.11 ) $ (0.21 )
common stockholders, diluted
Stock-based 0.02 0.02 0.05 0.05
compensation
Acquisition and - - - -
disposition-related costs
Amortization of intangible 0.01 0.01 0.04 0.04
assets from acquisitions
Interest income (expense) - - - -
and other, net
Foreign government paycheck - - - -
assistance and rent subsidies
Adjusted non-GAAP $ (0.01 ) $ (0.01 ) $ (0.02 ) $ (0.12 )
loss per share
Shares used to calculate diluted net loss per share applicable to 43,522 42,764 43,396 42,588
common stockholders (GAAP) and Adjusted Non-GAAP loss per share
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.
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