Marchex Announces Second Quarter 2021 Results
Q2 2021 Financial Highlights
-
GAAP revenue was
$14.0 million for the second quarter of 2021, compared to$12.7 million for the second quarter of 2020. -
Net loss from continuing operations was
$0.3 million for the second quarter of 2021 or$0.01 per diluted share, compared to a net loss of$5.7 million or$0.09 per diluted share for the second quarter of 2020.
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Q2 2020 |
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Q2 2021 |
GAAP Revenue |
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Non-GAAP Results: |
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|
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Adjusted EBITDA from continuing operations |
|
( |
|
( |
-
Adjusted non-GAAP income (loss) per share from continuing operations for the second quarter of 2021 was (
$0.02 ) compared to ($0.07 ) for the second quarter of 2020.
Second Quarter and Recent Highlights
Following the company’s divestiture of its call marketplace business in the fourth quarter of 2020,
Strategic Priorities and Growth Initiatives
Marchex’s focus on accelerating growth in 2021 is anticipated to be driven by:
-
New customer traction and existing customer expansion. In the second quarter of 2021,
Marchex saw continued momentum by adding new customers across multiple product lines in auto, home services, health care and other verticals.
-
Expansion of market opportunities:
-
In
May 2021 , the company launched Marchex Engage for Automotive. With this focused product,Marchex now offers thousands of auto dealers advanced dealer-specific conversation intelligence and sales engagement capabilities, opening a new important channel for growth. -
Marchex continues to broaden its text solution capabilities to include an expanding array of multi-channel customer use cases as interest and urgency in adoption of text solutions continues to grow.
-
In
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Technology Platform Integrations:
-
Marchex is on target to complete the integration of its technology platforms into a common architecture in order to bring the power of more than 1 billion conversational data points into a single platform. This platform will serve as the foundation for future innovation and will enable the company to simplify its product integrations and future upsell opportunities, as well as open new market opportunities. This initiative is currently on track and has realized to date a significant portion of the more than$2 million in annualized cost savings anticipated to be delivered on a run rate basis by the end of 2021.
-
Accelerate Product Innovation
New Products: In
Third Party Awards:
Marchex Recognized as “Best AI-Solution for Sales” by AI Breakthrough Awards. In
Marchex Recognized as “Market Leader” in Conversational Intelligence by
“In the second quarter,
Business Outlook
The following forward-looking statements reflect
“During the second quarter of 2021 we continued to see positive developments in the key drivers of our business, including increases in existing customer conversation volumes as well as sales pipeline development. We see that progress extending into the third quarter and, to the extent there is a continued unwinding of the business impact from the pandemic, we believe we are well positioned to grow on a year-over-year and sequential basis driven by new product adoption and customer renewals. We also continue to believe we are well positioned to deliver progressive, sequential growth in profitability in 2021 and believe there is a potential path to reach break-even or better on an Adjusted EBITDA basis during 2021,” said
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.
Discontinued Operations:
In
Non-GAAP Financial Information:
To supplement
Adjusted EBITDA from continuing operations represents net income (loss) from continuing operations 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), (7) impairment of goodwill and intangibles assets from acquisitions, and (8) foreign government assistance subsidies.
Adjusted OIBA from continuing operations represents Adjusted EBITDA from continuing operations adjusted for depreciation and amortization. This measure, among other things, is another metric by which
Adjusted non-GAAP income (loss) per share from continuing operations represents Adjusted non-GAAP income (loss) from continuing operations 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) impairment of goodwill and intangibles assets from acquisitions. (5) interest income and other, net, (6) net income from discontinued operations, net of tax, and (7) estimated impact of income taxes. Financial analysts and investors may use Adjusted non-GAAP income (loss) per share to analyze
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Three Months Ended |
|
|
Six Months Ended |
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||||||||||
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
||||
Revenue |
|
$ |
12,716 |
|
|
$ |
14,006 |
|
|
$ |
24,724 |
|
|
$ |
26,986 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs (1) |
|
|
4,967 |
|
|
|
5,460 |
|
|
|
9,796 |
|
|
|
10,882 |
|
Sales and marketing (1) |
|
|
4,828 |
|
|
|
2,702 |
|
|
|
8,998 |
|
|
|
6,339 |
|
Product development (1) |
|
|
5,307 |
|
|
|
4,789 |
|
|
|
10,664 |
|
|
|
10,111 |
|
General and administrative (1) |
|
|
2,845 |
|
|
|
2,465 |
|
|
|
6,298 |
|
|
|
5,085 |
|
Amortization of intangible assets from acquisitions |
|
|
1,206 |
|
|
|
1,378 |
|
|
|
2,969 |
|
|
|
2,559 |
|
Acquisition and disposition-related costs (benefit) |
|
|
(361 |
) |
|
|
76 |
|
|
|
(996 |
) |
|
|
121 |
|
Total operating expenses |
|
|
18,792 |
|
|
|
16,870 |
|
|
|
37,729 |
|
|
|
35,097 |
|
Impairment of goodwill |
|
|
— |
|
|
|
— |
|
|
|
(14,688 |
) |
|
|
— |
|
Impairment of intangible assets from acquisitions |
|
|
— |
|
|
|
— |
|
|
|
(4,959 |
) |
|
|
— |
|
Loss from operations |
|
|
(6,076 |
) |
|
|
(2,864 |
) |
|
|
(32,652 |
) |
|
|
(8,111 |
) |
Interest income (expense) and other, net |
|
|
32 |
|
|
|
2,486 |
|
|
|
142 |
|
|
|
2,474 |
|
Loss before provision for income taxes |
|
|
(6,044 |
) |
|
|
(378 |
) |
|
|
(32,510 |
) |
|
|
(5,637 |
) |
Income tax expense (benefit) |
|
|
(381 |
) |
|
|
(45 |
) |
|
|
(1,324 |
) |
|
|
31 |
|
Net loss from continuing operations |
|
|
(5,663 |
) |
|
|
(333 |
) |
|
|
(31,186 |
) |
|
|
(5,668 |
) |
Income from discontinued operations, net of tax |
|
|
1,155 |
|
|
|
— |
|
|
|
1,803 |
|
|
|
— |
|
Net loss applicable to common stockholders |
|
$ |
(4,508 |
) |
|
$ |
(333 |
) |
|
$ |
(29,383 |
) |
|
$ |
(5,668 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per Class A and Class B share applicable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.12 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.13 |
) |
Discontinued operations, net of tax |
|
|
0.03 |
|
|
|
— |
|
|
$ |
0.04 |
|
|
$ |
— |
|
Basic and diluted net loss per Class A and Class B share applicable to common stockholders |
|
$ |
(0.09 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.13 |
) |
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 |
|
|
42,385 |
|
|
|
39,171 |
|
|
|
42,382 |
|
|
|
39,167 |
|
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 |
|
|
47,046 |
|
|
|
43,832 |
|
|
|
47,043 |
|
|
|
43,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation allocated as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service costs |
|
$ |
6 |
|
|
$ |
3 |
|
|
$ |
22 |
|
|
$ |
11 |
|
Sales and marketing |
|
|
250 |
|
|
|
221 |
|
|
|
511 |
|
|
|
450 |
|
Product development |
|
|
90 |
|
|
|
88 |
|
|
|
171 |
|
|
|
185 |
|
General and administrative |
|
|
499 |
|
|
|
343 |
|
|
|
1,103 |
|
|
|
753 |
|
Total |
|
$ |
845 |
|
|
$ |
655 |
|
|
$ |
1,807 |
|
|
$ |
1,399 |
|
|
||||||||
|
|
|
|
|
|
|
||
|
|
2020 |
|
|
2021 |
|
||
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
33,851 |
|
|
$ |
27,813 |
|
Accounts receivable, net |
|
|
6,331 |
|
|
|
8,738 |
|
Prepaid expenses and other current assets |
|
|
2,160 |
|
|
|
2,662 |
|
Total current assets |
|
|
42,342 |
|
|
|
39,213 |
|
Property and equipment, net |
|
|
2,747 |
|
|
|
2,488 |
|
Right-of-use lease asset |
|
|
3,744 |
|
|
|
2,986 |
|
Other assets, net |
|
|
1,345 |
|
|
|
1,306 |
|
|
|
|
17,558 |
|
|
|
17,558 |
|
Intangible assets from acquisitions, net |
|
|
9,196 |
|
|
|
6,636 |
|
Total assets |
|
$ |
76,932 |
|
|
$ |
70,187 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,424 |
|
|
$ |
2,307 |
|
Accrued benefits and payroll |
|
|
5,975 |
|
|
|
4,741 |
|
Other accrued expenses and current liabilities |
|
|
4,210 |
|
|
|
3,715 |
|
Deferred revenue and deposits |
|
|
1,393 |
|
|
|
1,454 |
|
Lease liability current |
|
|
1,827 |
|
|
|
1,785 |
|
Loan obligations, current |
|
|
5,123 |
|
|
|
5,149 |
|
Total current liabilities |
|
|
20,952 |
|
|
|
19,151 |
|
Deferred tax liabilities |
|
|
156 |
|
|
|
179 |
|
Lease liability non-current |
|
|
3,136 |
|
|
|
2,336 |
|
Total liabilities |
|
|
24,244 |
|
|
|
21,666 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Class A common stock |
|
|
49 |
|
|
|
49 |
|
Class B common stock |
|
|
365 |
|
|
|
367 |
|
Additional paid-in capital |
|
|
350,960 |
|
|
|
352,456 |
|
Accumulated deficit |
|
|
(298,686 |
) |
|
|
(304,351 |
) |
Total stockholders’ equity |
|
|
52,688 |
|
|
|
48,521 |
|
Total liabilities and stockholders’ equity |
|
$ |
76,932 |
|
|
$ |
70,187 |
|
|
||||||||||||||||
(in thousands) |
||||||||||||||||
(unaudited) |
||||||||||||||||
Reconciliation of GAAP Net Loss from Continuing Operations to Adjusted EBITDA from Continuing
|
||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
||||
Net loss from continuing operations |
|
$ |
(5,663 |
) |
|
$ |
(333 |
) |
|
$ |
(31,186 |
) |
|
$ |
(5,668 |
) |
Interest income (expense) and other, net |
|
|
32 |
|
|
|
2,486 |
|
|
|
142 |
|
|
|
2,474 |
|
Income tax expense (benefit) |
|
|
(381 |
) |
|
|
(45 |
) |
|
|
(1,324 |
) |
|
|
31 |
|
Acquisition of intangible assets from acquisitions |
|
|
1,206 |
|
|
|
1,378 |
|
|
|
2,969 |
|
|
|
2,559 |
|
Depreciation and amortization |
|
|
478 |
|
|
|
376 |
|
|
|
985 |
|
|
|
803 |
|
Stock-based compensation |
|
|
845 |
|
|
|
655 |
|
|
|
1,807 |
|
|
|
1,399 |
|
Acquisition and disposition-related costs (benefit) |
|
|
(361 |
) |
|
|
76 |
|
|
|
(996 |
) |
|
|
121 |
|
Impairment of goodwill |
|
|
— |
|
|
|
— |
|
|
|
14,688 |
|
|
|
— |
|
Impairment of intangible assets from acquisitions |
|
|
— |
|
|
|
— |
|
|
|
4,959 |
|
|
|
— |
|
Foreign government paycheck assistance and rent subsidies1 |
|
|
(252 |
) |
|
|
(148 |
) |
|
|
(252 |
) |
|
|
(299 |
) |
Adjusted EBITDA from continuing operations |
|
$ |
(4,160 |
) |
|
$ |
(527 |
) |
|
$ |
(8,492 |
) |
|
$ |
(3,528 |
) |
Depreciation and amortization |
|
|
478 |
|
|
|
376 |
|
|
|
985 |
|
|
|
803 |
|
Adjusted OIBA from continuing operations |
|
$ |
(4,638 |
) |
|
$ |
(903 |
) |
|
$ |
(9,477 |
) |
|
$ |
(4,331 |
) |
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 from Continuing Operations per Share |
|||||||||||||||||
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|||||||||||
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|||||
Net loss applicable to common stockholders, diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.13 |
) |
|
Stock-based compensation |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
|
0.03 |
|
|
Acquisition and disposition-related costs (benefit) |
|
|
(0.01 |
) |
|
|
- |
|
|
|
(0.02 |
) |
|
|
- |
|
|
Amortization of intangible assets from acquisitions |
|
|
0.03 |
|
|
|
0.03 |
|
|
|
0.06 |
|
|
|
0.06 |
|
|
Impairment of goodwill |
|
|
- |
|
|
|
- |
|
|
|
0.31 |
|
|
|
- |
|
|
Impairment of intangible assets from acquisitions |
|
|
- |
|
|
|
- |
|
|
|
0.11 |
|
|
|
- |
|
|
Interest income and other, net |
|
|
- |
|
|
|
(0.05 |
) |
|
|
- |
|
|
|
(0.06 |
) |
|
Income from discontinued operations, net of tax |
|
|
(0.03 |
) |
|
|
- |
|
|
|
(0.04 |
) |
|
|
- |
|
|
Foreign government paycheck assistance and rent subsidies |
|
|
(0.01 |
) |
|
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
|
Estimated impact of income taxes |
|
|
0.02 |
|
|
|
- |
|
|
|
0.03 |
|
|
|
- |
|
|
Adjusted non-GAAP loss from continuing operations per share |
|
$ |
(0.07 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to calculate diluted net loss per share applicable to common stockholders (GAAP) and Adjusted Non-GAAP loss from continuing operations per share |
|
|
47,046 |
|
|
|
43,832 |
|
|
|
47,043 |
|
|
|
43,828 |
|
1 |
For the purpose of computing the number of diluted shares for Adjusted Non-GAAP income (loss) from continuing operations per share, |
View source version on businesswire.com: https://www.businesswire.com/news/home/20210805005945/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: