Marchex Announces Second Quarter 2017 Results
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. |
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2 |
Enterprise Revenue represents total revenue less revenue generated from our contracts with YP. |
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Strategic Priorities Update
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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 inJune 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. InJuly 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 fromForrester 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
Business Outlook
The following forward-looking statements reflect
Financial Guidance for the Third Quarter ending September 30, 2017 |
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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
About
Please visit http://www.marchex.com, www.marchex.com/blog or @marchex on
Twitter (Twitter.com/
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
This press release may contain links to third party websites or
materials. These links are provided solely as a convenience to you.
Non-GAAP Financial Information:
To supplement
OIBA represents income (loss) from
operations excluding stock-based compensation expense. This measure,
among other things, is one of the primary metrics by which
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, 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 |
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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/
Source:
Marchex Investor Relations
Trevor Caldwell, 206-331-3600
ir(at)marchex.com
or
MEDIA
INQUIRIES
Marchex Corporate Communications
206-331-3434,
pr(at)marchex.com