- First Quarter Call-Driven Revenue of
$36.0 million, up 3% Year-Over-Year, and 13% Year-Over-Year
excluding YP2
- Launched new premium features
Transcription and Keyword Spotting to further build out Marchex
Call DNA
- New Integrations with Salesforce and
Doubleclick
Marchex, Inc. (NASDAQ:MCHX), a leading mobile advertising
analytics company, today announced its financial results for the
first quarter ended March 31, 2016.
"The initiatives we kicked off last year to lead in mobile
analytics and measuring online-to-offline commerce began to pay off
in Q1," said Pete Christothoulou, CEO. “We are expanding our
category coverage, innovating faster than ever and, most
importantly, increasing client engagement and satisfaction.”
Q1 2016 Financial
Highlights
- GAAP revenue was $36.0
million for the first quarter of 2016, compared to $35.9
million for the first quarter of 2015.
- GAAP net loss from continuing
operations was $3.7 million for the first quarter of 2016, compared
to $330,000 for the first quarter of 2015.
- GAAP net loss from continuing
operations attributable to common stockholders per diluted share
was $0.09 for the first quarter of 2016, compared to $0.01 for the
first quarter of 2015.
Q1
2016 Q1 2015 GAAP Revenue
$36.0 million $35.9 million
Call-Driven Revenue
including YP $36.0 million $35.0
million
Non-GAAP Results1:
Enterprise Revenue2
$27.4 million $24.3 million
Call-Driven Adjusted OIBA ($1.7)
million $2.6 million
Call-Driven Adjusted EBITDA
($0.8) million $3.5 million
Cash Balance
$107 million $84 million
- Adjusted non-GAAP earnings (loss) per
share1 from continuing operations for the first quarter of 2016 was
($0.03), compared to $0.04 for the first quarter of 2015.
- During the first quarter of 2016, YP
contributed $8.5 million in Call-Driven Revenue, compared to $10.8
million in the first quarter 2015.
_________________________
1Reconciliations 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
2Enterprise Revenue, also referred to as “Call-Driven Revenue
excluding YP”, represents Call-Driven revenue excluding revenue
generated from our contracts with YP.
Strategic Priorities
Update
The following highlights our recent progress:
Grow New and Existing Enterprise Client Relationships
- Added customers across each core
vertical in the first quarter and now have more than 100 enterprise
customers across the Auto, Communications, Financial Services, Home
Services and Travel categories.
- Expanded international presence in the
United Kingdom by hiring a Managing Director to lead sales efforts.
The company now supports customers in 6 international markets and
can support 10 markets overall.
Accelerate Product Innovation
- Launched major enhancements to Call
DNA, the first automated solution for enterprise marketers to
analyze the customer experience on a phone call. The new
capabilities allow marketers to fine-tune ad campaigns towards
high-converting media channels and uncover actionable insights that
improve sales conversion rates. Combined with Marchex Call
Analytics, this will drive major improvements in paid search and
digital advertising performance.
- Appointed Ziad Ismail as Chief Product
Officer. Ismail previously served as the Senior Vice President of
Product and Engineering at Marchex.
Expand Global Strategic Partnerships
- Integration with Salesforce that allows
clients to seamlessly analyze and access Marchex and Salesforce
data together. Marchex’s integration uniquely allows clients to
amplify their marketing automation effectiveness by integrating
call analytics data directly into existing Salesforce workflows.
Enterprise marketers can use these to power quick decision-making
for continual campaign optimization because they can immediately
see all click-to-call activity and data directly in their standard
Salesforce field reports and dashboards.
- Integration with DoubleClick Search
that delivers better return on advertising spend for search
marketers that rely upon inbound phone calls to drive revenue. The
integration delivers 100% keyword attribution for calls placed
directly from paid search ads for an unlimited number of keywords
and any campaign structure.
Business Outlook
The following forward-looking statements reflect Marchex's
expectations as of May 5, 2016.
Total Call-Driven
financial guidance for the Second Quarter ending June 30,
2016
Call-Driven Revenue Including YP $35
million or more Call-Driven Adjusted OIBA1 a loss of ($0.5)
million to a loss of ($2.0) million Call-Driven Adjusted EBITDA1
$0.5 million to a loss of ($1.0) million
Total Enterprise
financial guidance for the year ending December 31,
2016
Enterprise Revenue1,2
$117 million or more
Conference Call and Webcast
Information
Management will hold a conference call, starting at 5:00 p.m. ET
on Thursday, May 5, 2016 to discuss its first quarter ended March
31, 2016 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 is a mobile advertising analytics company that connects
online behavior to real-world, offline actions. By linking critical
touchpoints in the customer journey, Marchex’s products enable a
360-degree view of marketing effectiveness. Brands and agencies
utilize Marchex’s products to transform business performance.
Please visit 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 which are described 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 May 5, 2016 and Marchex
undertakes no duty to update the information provided herein.
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, Adjusted non-GAAP earnings (loss) per share and Call-Driven
and Archeo and Other Adjusted OIBA and EBITDA. Additionally,
Marchex also provides Enterprise Revenue, which represents
Call-Driven revenue excluding revenue generated from our contracts
with Yellowpages.com LLC (“YP”).
OIBA represents income (loss) from
operations plus 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 disposition related costs, as this item is 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 and
disposition related costs. Adjusted
EBITDA represents income before interest, income taxes,
depreciation, amortization, stock compensation expense, and
disposition related costs. Marchex believes that Adjusted EBITDA is
another alternative measure of liquidity to GAAP net cash provided
by 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.
Call-Driven Adjusted OIBA and
EBITDA include the above descriptions of Adjusted OIBA and
EBITDA for the Call-Driven segment. The Call-Driven Adjusted OIBA
and EBITDA assign all Marchex general corporate overhead costs to
the Call-Driven results. Archeo and Other
Adjusted OIBA and EBITDA includes the above descriptions of
Adjusted OIBA and EBITDA for the Archeo segment in 2015, and in
2016, Other operating results primarily includes transition
activities provided to buyer of Archeo assets which are not
material. Enterprise Revenue
represents Call-Driven revenue excluding revenue generated through
our contracts with YP. 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) disposition
related costs, (3) interest and other income (expense), (4)
discontinued operations, net of tax, and (5) dividends paid to
participating securities. 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 data) (unaudited) Three months
ended March 31, 2015
2016 Revenue $ 35,916 $ 35,985 Expenses:
Service costs (1) 19,366 21,982 Sales and marketing (1) 3,458 5,522
Product development (1) 7,693 7,472 General and administrative (1)
5,699 4,662 Disposition related costs - 4
Total operating expenses 36,216 39,642
Loss from operations (300 ) (3,657 ) Interest expense and
other, net (25 ) (7 ) Loss from continuing operations
before provision for income taxes (325 ) (3,664 ) Income tax
expense 5 13 Net loss from
continuing operations (330 ) (3,677 ) Discontinued operations, net
of tax 4,913 - Net income (loss)
4,583 (3,677 ) Dividends paid to participating securities
(19 ) - Net income (loss) applicable to common
stockholders $ 4,564 $ (3,677 ) Basic and
diluted net income (loss) per Class A and Class B share applicable
to common stockholders: Continuing operations $ (0.01 ) $ (0.09 )
Discontinued operations, net of tax $ 0.12 $ - Basic
and diluted net income (loss) per Class A and Class B share
applicable to common stockholders $ 0.11 $ (0.09 ) Dividends paid
per share $ 0.02 $ - Shares used to calculate basic net income
(loss) per share applicable to common stockholders Class A 5,233
5,233 Class B 35,766 35,977 Shares used to calculate diluted net
income (loss) per share applicable to common stockholders Class A
5,233 5,233 Class B 40,999 41,210 (1 ) Includes stock-based
compensation allocated as follows: Service costs $ 220 $ 198 Sales
and marketing 245 439 Product development 579 532 General and
administrative 1,747 797 Total $ 2,791
$ 1,966
MARCHEX, INC. AND
SUBSIDIARIES Condensed Consolidated Balance Sheets
(in thousands) (unaudited) December
31, March 31, Assets 2015
2016 Current assets: Cash and cash
equivalents $ 109,155 $ 106,603 Accounts receivable, net 24,621
26,497 Prepaid expenses and other current assets 1,784 2,515
Refundable taxes 127 117 Total
current assets 135,687 135,732 Property and equipment, net
5,778 5,133 Intangibles and other assets, net 222 216 Goodwill
63,305 63,305 Total Assets $
204,992 $ 204,386
Liabilities and
Stockholders' Equity Current liabilities: Accounts
payable $ 9,460 $ 10,692 Accrued expenses and other current
liabilities 6,712 6,875 Deferred revenue 692
319 Total current liabilities 16,864 17,886
Other non-current liabilities 662 543
Total Liabilities 17,526 18,429 Class A common
stock 55 55 Class B common stock 368 368 Treasury stock (238 ) (0 )
Additional paid-in capital 350,799 352,729 Accumulated deficit
(163,518 ) (167,195 ) Total Stockholders'
Equity 187,466 185,957 Total
Liabilities and Stockholders' Equity $ 204,992 $
204,386
MARCHEX, INC. AND SUBSIDIARIES
(in thousands) (unaudited)
Reconciliation of GAAP Income (loss) from Operations to
Operating Income Before Amortization (OIBA) and Adjusted
Operating Income Before Amortization (Adjusted OIBA)
Three Months Ended March 31, 2015
2016 Loss from operations $ (300
) $ (3,657 ) Stock-based compensation 2,791
1,966 Operating income before amortization
(OIBA) 2,491 (1,691 ) Disposition related costs -
4
Adjusted operating income before
amortization (Adjusted OIBA) - Consolidated $
2,491 $ (1,687 ) Less: Archeo and Other
Adjusted OIBA1 (141 ) 16
Call-Driven Adjusted OIBA1 $ 2,632 $ (1,703 )
Reconciliation from Net Cash provided by (used in) Operating
Activities to Adjusted EBITDA Three Months Ended
March 31, 2015
2016 Net cash provided by (used in) operating
activities $ 6,200 $ (2,267 ) Changes in asset and liabilities
2,054 1,432 Income tax expense 5 13 Disposition related costs - 4
Interest expense and other, net 25 7 Income on discontinued
operations, net of tax (4,931 ) -
Adjusted EBITDA - Consolidated $ 3,353
$ (811 ) Less: Archeo and Other Adjusted
EBITDA1 (141 ) 16 Call-Driven
Adjusted EBITDA1 $ 3,494 $ (827 ) Net cash
used in investing activities $ (877 ) $ (475 ) Net
cash provided by (used in) financing activities $ (1,697 ) $
190
(1)
The financial results have been derived from the condensed
consolidated financial statements. The Call-Driven financial
results include certain direct operating expenses and general
corporate overhead expenses. In 2015, the Archeo financial results
include direct operating expenses. In 2016, Other operating results
related primarily to transition activities provided to the buyer of
the Archeo assets and were not material. In April 2015,
Marchex divested certain Archeo domain name and related assets. The
operating results of the divested assets are included in
discontinued operations, net of tax, in the condensed consolidated
financial statements. In December 2015, Marchex sold the remaining
Archeo assets and its operating results are included in continuing
operations for 2015. Unless otherwise
indicated, information presented in these financial tables relates
only to Marchex's continuing operations.
MARCHEX,
INC. AND SUBSIDIARIES Reconciliation of GAAP earnings (loss)
per share to Adjusted Non-GAAP earnings (loss) per share (in
thousands, except per share data) (unaudited)
Three Months Ended March 31,
2015 2016 Adjusted Non-GAAP
earnings (loss) per share from continuing operations $ 0.04
$ (0.03 ) Net loss from continuing operations applicable to
common stockholders - diluted (GAAP loss per share) $ (0.01 ) $
(0.09 ) Shares used to calculate diluted net income (loss) from
continuing operations per share applicable to common stockholders
40,999 41,210 Net income (loss) applicable to common
stockholders $ 4,564 $ (3,677 ) Stock-based compensation 2,791
1,966 Disposition related costs - 4 Interest expense and other, net
25 7 Dividends paid to participating securities 19 - Discontinued
operations, net of tax (4,913 ) - Estimated impact of income taxes
(873 ) 348
Adjusted Non-GAAP net income
(loss) from continuing operations $ 1,613
$ (1,352 ) Adjusted Non-GAAP
earnings (loss) per share from continuing operations $
0.04 $ (0.03 )
Shares used to calculate diluted net income (loss) from continuing
operations per share applicable to common stockholders (GAAP)
40,999 41,210 Weighted average stock options and common shares
subject to purchase or cancellation (if applicable) 311
- Diluted shares used to calculate Adjusted
Non-GAAP earnings (loss) per share 1 41,310
41,210 (1 ) For the purpose of computing the
number of diluted shares for Adjusted Non-GAAP earnings (loss) per
share, Marchex uses the accounting guidance that would be
applicable for computing the number of diluted shares for GAAP
earnings (loss) per share. Certain reclassifications
have been made to prior periods to conform to current presentation.
MARCHEX, INC. AND SUBSIDIARIES
Financial Summary Information (in thousands)
(unaudited) NON-GAAP MEASURES
CONSOLIDATED1 Q115
Q116 GAAP Revenue $ 35,915 $
35,985 Adjusted OIBA $ 2,491 $
(1,687 ) Adjusted EBITDA $ 3,353
$ (811 )
CALL-DRIVEN Q115 Q116 GAAP
Revenue $ 35,028 $ 35,964
Adjusted OIBA $ 2,632 $ (1,703
) Adjusted EBITDA $ 3,494 $
(827 ) ENTERPRISE
REVENUE2 Q115 Q116 Call-Driven
GAAP Revenue $ 35,028 $ 35,964
Less: YP Revenue $ 10,757 $
8,519 Enterprise Revenue $
24,271 $ 27,445 (1 ) In
April 2015, Marchex divested certain Archeo domain name and related
assets. The operating results of the divested assets are included
in discontinued operations, net of tax, in the condensed
consolidated financial statements. In December 2015, Marchex sold
the remaining Archeo assets and its operating results are included
in continuing operations for 2015. In the first quarter of 2016,
there were Other operating activities that related primarily to
transition activities provided to the buyer of the Archeo assets
and were not material. Unless otherwise indicated, information
presented in these financial tables relates only to Marchex's
continuing operations. (2 ) Enterprise Revenue, also
referred to as “Call-Driven Revenue excluding YP”, represents
Call-Driven revenue excluding revenue generated from our contracts
with YP.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160505006533/en/
Marchex Investor RelationsTrevor Caldwell,
206-331-3600ir(at)marchex.comorMEDIA INQUIRIESMarchex
Corporate Communications206-331-3434pr(at)marchex.com
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