Strong Demand for Call Advertising Products Drives 22% year-over-year Revenue Growth

Leads to an Increase in Annual Guidance

Marchex, Inc. (NASDAQ:MCHX), a mobile advertising technology company, today announced its financial results for the third quarter ended September 30, 2013.

“As mobile adoption continues to expand, phone calls are rapidly emerging as one of the most valued actions in the purchasing path,” said Russell Horowitz, Chairman and CEO of Marchex. “We see growing momentum in our business as a result, and will continue to invest our time, energy and resources in building call analytics capabilities that drive the highest levels of client performance and transparency.”

Q3 2013 Financial Highlights1

  • GAAP revenue was $40.6 million for the third quarter of 2013, compared to $33.7 million for the third quarter of 2012. Non-GAAP revenue, which excludes domain sales recorded in GAAP revenue, was $39.7 million for the third quarter of 2013.
  • GAAP net income from continuing operations was $598,000 for the third quarter of 2013, compared to a GAAP net loss from continuing operations of $490,000 for the third quarter of 2012.
  • GAAP net income from continuing operations attributable to common stockholders per diluted share was $0.02 for the third quarter of 2013. This compares to GAAP net loss from continuing operations attributable to common stockholders per diluted share of $0.02 for the third quarter of 2012.
        Q3 2013   Q3 2012 GAAP Revenue   $40.6 million   $33.7 million Non-GAAP Results below exclude Domain Sales and Discontinued Operations: Non-GAAP Revenue 2, 3   $39.7 million   $33.7 million Call-Driven and Other Revenue   $35.7 million   $29.3 million Archeo Revenue 2, 3   $4.0 million   $4.4 million Adjusted OIBA3   $2.5 million   $3.9 million Adjusted EBITDA3   $3.4 million   $4.8 million  

1 In July 2013, certain pay-per-click assets were sold. As a result, the financial results of these pay-per-click assets are presented as net loss from discontinued operations, net of tax in our condensed consolidated statements of operations in accordance with GAAP, and are excluded from all other results unless otherwise noted.

2 Excludes domain sales recognized in GAAP revenue. In September 2013 upon the launch of its domain marketplace, the company commenced recognizing domain sales as revenue.

3 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.

  • Adjusted non-GAAP EPS3 from continuing operations for the third quarter of 2013 was $0.04, compared to $0.06 for the third quarter of 2012.
  • Adjusted OIBA3 excluding domain sales2 was $2.5 million for the third quarter of 2013, compared to $3.9 million for the third quarter in 2012.
  • Adjusted EBITDA3 excluding domain sales2 was $3.4 million for the third quarter of 2013, compared to $4.8 million for the third quarter in 2012.

Marchex Q3 and Recent Call-Driven Business Highlights:

  • Revenue. Call-driven and other related revenue was $35.7 million for the third quarter of 2013 – a 22 percent increase compared to $29.2 million for the third quarter of 2012.
  • Products. We recently announced two technologies to transform mobile and call advertising measurement. Call DNA and Dynamic Tracking are designed to increase efficiency and significantly lower customer acquisition costs for advertisers by providing insights into which calls convert into sales. These unique, patent-pending technologies provide a new and deeper level of customer conversion data generated by ad campaigns.

Call DNA provides:

  • A simple, easy-to-understand visualization of what is happening on phone calls, and ultimately what outcomes were achieved, using automated call scoring technology.
  • A detailed break-down of how best to optimize advertising campaigns to improve sales and overall business performance.

Dynamic Tracking provides:

  • Details on what, exactly, triggered a phone call from a mobile consumer to an advertiser. This includes specific keywords, ad impressions and web-based sessions.
  • Easy campaign optimization to drive more calls from new customers.
  • People. During the quarter, Marchex announced that Clark Kokich, advertising technology expert and digital marketing thought leader, joined the company as its Chief Strategy Officer. Mr. Kokich, with more than 14 years of experience in the digital advertising space, most recently served as Chairman of Razorfish, one of the largest digital marketing agencies in the world, where he also held the roles of CEO and President. He also oversaw strategic direction at Razorfish and entrenched himself with clients, shaping digital innovation from the ground up. Razorfish was the largest operating division within aQuantive, an advertising technology and services giant, and Kokich helped grow the company from pre-IPO status in 1999 to more than $600 million in annualized sales, before it was acquired by Microsoft in 2007.
  • Customers and Partners. Marchex announced a partnership with Marin Software, a leading revenue acquisition management platform provider. Marin Software is now using Marchex Call Analytics to give agencies and advertisers powerful new insights into their ad campaigns and drive higher returns on ad spend. We also announced an integration with DoubleClick Search, a cross-engine search management platform. DoubleClick advertisers can now access our Call Analytics data to understand over-the-phone conversions that come from search-based ads.
  • In November, Marchex added its Twitter account @marchex.com (Twitter.com/Marchex) and its company blog at blog.marchex.com as designated channels to disclose material information.

Archeo Q3 Business Highlights:

  • Revenue. Archeo non-GAAP revenue was $4.0 million for the third quarter of 2013, which excludes domain sales recognized in GAAP revenue.
  • Domains sales. During the third quarter of 2013, Archeo sold a total of 81 domains that yielded $1.9 million.
  • During the quarter, Archeo announced the launch of the Domains Marketplace, which provides a gateway to the premium portfolio of more than 200,000 domain names.
  • In July 2013, certain pay-per-click assets were sold for proceeds totaling up to $2.6 million as part of a transaction to focus Archeo’s business on creating a premium domain marketplace. The financial results of these sold assets are presented as discontinued operations in our condensed consolidated statement of operations in accordance with GAAP.

Business Outlook

The following forward-looking statements reflect Marchex's expectations as of November 5, 2013 and exclude domain sales and discontinued operations:

 

Financial guidance for the fiscal year ending December 31, 2013

 

Non-GAAP Revenue1 excluding domain sales

  More than $148.5 million Call Driven Revenue   More than $134 million

Adjusted OIBA from continuing operations

  $9-$10 million

Adjusted EBITDA from continuing operations2

  $13-$14 million

Call Driven Adjusted EBITDA3

  More than $9 million  

1 Excludes historical and any prospective domain sales.

2 Includes estimated addbacks of $4.0 million related to additional depreciation and amortization.

3This non-GAAP Call-Driven measure assigns all Marchex indirect overhead costs to the Call-Driven results. 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.

2013 GAAP income (loss) from continuing operations is expected to be ($0.8) million or better, assuming stock-based compensation between $9-$10 million and amortization of intangible assets from acquisitions between $3-$3.5 million. This estimate excludes any prospective domain sales or gain or loss on sales and disposals of intangible assets.

 

Financial guidance for the Fourth Quarter ending December 31, 2013

  Non-GAAP Revenue1 excluding domain sales   More than $36.5 million Call Driven Revenue   More than $33.5 million Adjusted OIBA from continuing operations   $2.1-$3.1 million Adjusted EBITDA from continuing operations2   $3.1-$4.1 million  

1 Excludes any prospective domain sales.

2 Includes estimated addbacks of $1.0 million related to additional depreciation and amortization.

Fourth quarter GAAP income (loss) from continuing operations is expected to be ($1.6) million or better, assuming stock-based compensation between $2-$3 million and amortization of intangible assets from acquisitions between $0.4-$0.7 million. This estimate excludes any prospective domain sales or gain or loss on sales and disposals of intangible assets.

Conference Call and Webcast Information

Management will hold a conference call, starting at 5:00 p.m. ET on Tuesday, November 5, 2013 to discuss its third quarter ended September 30, 2013 financial results, and other company updates. Access to the live webcast of the conference call will be available online from the Investors section of the 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 technology company. The company provides a suite of products and services for businesses that depend on consumer phone calls to drive sales. Marchex’s mobile advertising platform delivers new customer phone calls to businesses, while its technology analyzes the data in these calls to help maximize ad campaign results. Marchex disrupts traditional advertising models by giving businesses full transparency into their ad campaign performance and charging them based on new customer acquisition.

Please visit www.marchex.com, blog.marchex.com 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, 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 November 5, 2013 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, Revenue excluding and including Domain Sales, Adjusted OIBA and EBITDA excluding and including Domain Sales, Revenue with Discontinued Operations excluding and including Domain Sales, and Adjusted OIBA and EBITDA with Discontinued Operations excluding and including Domain Sales. Marchex also provides Call-Driven and Archeo Adjusted OIBA and EBITDA, and Adjusted non-GAAP EPS.

OIBA represents income (loss) from operations plus (1) stock-based compensation expense and (2) amortization of intangible assets from acquisitions. 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 any gain/loss on sales and disposals of intangible assets for each asset and acquisition and separation related costs as these items are not indicative of Marchex’s recurring core operating results and any domain sales contribution. 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 or gain/loss such as stock-based compensation, amortization of intangible assets from acquisitions, acquisition and separation related costs, domain sales contribution and gain/loss on sales and disposals of intangible assets. Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation, amortization, stock compensation expense, acquisition and separation related cost, domain sales contribution and gain/loss on sales and disposals of intangible assets. 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.

Revenue excluding Domain Sales represents GAAP revenue excluding domain sales sold through Marchex’s Domain Marketplace which are recognized in GAAP revenue. Revenue with Domain Sales represents GAAP revenue plus sales proceeds from the sale of intangible assets. Adjusted OIBA and EBITDA with Domain Sales includes the above descriptions of Adjusted OIBA and EBITDA plus any domain sales contribution and gain/loss on sales and disposals of intangible assets. Revenue with Discontinued Operations excluding Domain Sales represents GAAP Revenue plus discontinued operations and excludes domain sales sold through Marchex’s Domain Marketplace and recognized in GAAP revenue. Revenue with Discontinued Operations including Domain Sales represents GAAP Revenue plus discontinued operations and includes sales proceeds from the sale of intangible assets. For GAAP purposes, operating results of discontinued operations are shown as discontinued operations in the condensed consolidated statements of operations. Adjusted OIBA and EBITDA with Discontinued Operations excluding Domain Sales includes the above descriptions of Adjusted OIBA and EBITDA plus the operating results of discontinued operations and excludes domain sales contribution. Adjusted OIBA and EBITDA with Discontinued Operations including Domain sales includes the above descriptions of Adjusted OIBA and EBITDA plus the operating results of discontinued operations and includes domain sales contribution and gain/loss on sales and disposals of intangible assets. Call-Driven Adjusted OIBA and EBITDA includes the above descriptions of Adjusted OIBA and EBITDA for the Call-Driven segment. Archeo non-GAAP Measures include the measures above for the Archeo segment. Financial analysts and investors may use the non-GAAP historical Revenue with Domain Sales, Adjusted OIBA and EBITDA with Domain Sales and similarly those including Discontinued Operations to help with comparative financial evaluation to make informed investment decisions. The Call-Driven Adjusted OIBA and EBITDA assigns all Marchex indirect overhead costs to the Call-Driven results.

Adjusted non-GAAP EPS 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) amortization of intangible assets from acquisitions, (3) domain sales contribution and gain/loss on sales and disposals of intangible assets and domain sales contribution, (4) acquisition and separation related costs, (5) interest and other income (expense), (6) discontinued operations and gain on sale of discontinued operations, net of tax and (7) dividends paid to participating securities, and also excludes the effect of the tax valuation allowance. Financial analysts and investors may use Adjusted non-GAAP EPS 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 September 30,   2012       2013   Revenue $ 33,691   $ 112,870 Expenses: Service costs (1),(2) 19,744 68,025 Sales and marketing (1),(2) 2,542 8,350 Product development (1),(2) 5,510 20,586 General and administrative (1),(2) 5,678 15,003 Amortization of intangible assets from acquisitions 1,055 2,500 Acquisition and separation related costs   296       940   Total operating expenses 34,825 115,404 Gain on sales and disposals of intangible assets, net   713       3,739   Income from operations (421 ) 1,205 Interest expense and other, net   (118 )     (48 ) Income (loss) from continuing operations before provision for income taxes (539 ) 1,157 Income tax expense (benefit)   (49 )     797   Net income (loss) from continuing operations (490 ) 360 Discontinued operations: Loss from discontinued operations, net of tax (53 ) (77 ) Gain on sale from discontinued operations, net of tax   -       929   Discontinued operations, net of tax (53 ) 852 Net income (loss) (543 ) 1,212 Dividends paid to participating securities   (123 )     -   Net income (loss) applicable to common stockholders $ (666 )   $ 1,212   Basic and diluted net income (loss) per share: Net income (loss) from continuing operations $ (0.02 ) $ 0.01 Discontinued operations, net of tax   (0.00 )     0.02   Net income (loss) applicable to common stockholders $ (0.02 ) $ 0.03 Dividends paid per share $ 0.04 $ - Shares used to calculate basic net income (loss) per share applicable to common stockholders Class A 9,570 9,168 Class B 24,536 26,280 Shares used to calculate diluted net income (loss) per share applicable to common stockholders Class A 9,570 9,168 Class B 34,106 36,371 (1) Includes stock-based compensation allocated as follows: Service costs $ 554 $ 455 Sales and marketing 153 211 Product development 203 361 General and administrative   2,792       1,138   Total $ 3,702     $ 2,365   (2) Certain reclassifications have been made to prior period to conform to current period presentation.     MARCHEX, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited)   Nine Months Ended September 30,   2012       2013   Revenue $ 100,358 $ 112,870 Expenses: Service costs (1),(2) 56,821 68,025 Sales and marketing (1),(2) 10,494 8,350 Product development (1),(2) 17,237 20,586 General and administrative (1),(2) 17,281 15,003 Amortization of intangible assets from acquisitions 3,674 2,500 Acquisition and separation related costs   164       940   Total operating expenses 105,671 115,404 Gain on sales and disposals of intangible assets, net   5,434       3,739   Income from operations 121 1,205 Interest expense and other, net   (430 )     (48 ) Income (loss) from continuing operations before provision for income taxes (309 ) 1,157 Income tax expense   458       797   Net income (loss) from continuing operations (767 ) 360 Discontinued operations: Loss from discontinued operations, net of tax (95 ) (77 ) Gain on sale from discontinued operations, net of tax   -       929   Discontinued operations, net of tax (95 ) 852 Net income (loss) (862 ) 1,212 Dividends paid to participating securities   (262 )     -   Net income (loss) applicable to common stockholders $ (1,124 )   $ 1,212   Basic and diluted net income (loss) per share: Net income (loss) from continuing operations $ (0.03 ) $ 0.01 Discontinued operations, net of tax   (0.00 )     0.02   Net income (loss) applicable to common stockholders $ (0.03 ) $ 0.03 Dividends paid per share $ 0.08 $ - Shares used to calculate basic net income (loss) per share applicable to common stockholders Class A 9,576 9,168 Class B 24,303 26,280 Shares used to calculate diluted net income (loss) per share applicable to common stockholders Class A 9,576 9,168 Class B 33,879 36,371

(1)

Includes stock-based compensation allocated as follows: Service costs $ 1,545 $ 818 Sales and marketing 2,008 474 Product development 860 1,127 General and administrative   7,982       4,456   Total $ 12,395     $ 6,875  

(2)

Certain reclassifications have been made to prior period to conform to current period presentation.     MARCHEX, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (in thousands) (unaudited)         December 31, September 30, Assets   2012       2013   Current assets: Cash and cash equivalents $ 15,930 $ 25,151 Accounts receivable, net 25,988 30,817 Prepaid expenses and other current assets 2,667 3,149 Refundable taxes 264 72 Deferred tax assets   830       1,108   Total current assets 45,679 60,297   Property and equipment, net 6,005 5,967 Deferred tax assets 27,677 26,494 Intangibles and other assets, net 611 569 Goodwill 65,815 65,679 Intangible assets from acquisitions, net   3,360       860   Total Assets $ 149,147     $ 159,866     Liabilities and Stockholders' Equity   Current liabilities: Accounts payable $ 12,378 $ 15,440 Accrued expenses and other current liabilities 9,609 8,838 Deferred revenue   2,009       1,506   Total current liabilities 23,996 25,784   Other non-current liabilities   2,216       2,186   Total Liabilities 26,212 27,970     Class A common stock 98 80 Class B common stock 284 301 Treasury stock (13 ) - Additional paid-in capital 295,532 303,269 Accumulated deficit   (172,966 )     (171,754 ) Total Stockholders' Equity   122,935       131,896   Total Liabilities and Stockholders' Equity $ 149,147     $ 159,866       MARCHEX, INC. AND SUBSIDIARIES Reconciliation of GAAP Income (Loss) from Operations to Operating Income Before Amortization (OIBA) and Adjusted Operating Income Before Amortization (Adjusted OIBA) (in thousands) (unaudited)         Three Months Ended September 30,   2012       2013   Income (loss) from operations $ (421 ) $ 1,006 Stock-based compensation 3,702 2,365 Amortization of intangible assets from acquisitions   1,055       709   Operating income before amortization (OIBA) 4,336 4,080 Acquisition and separation related costs 296 286 Domain sales contribution - (839 ) Gain on sales and disposals of intangible assets, net   (713 )     (1,047 ) Adjusted operating income before amortization (Adjusted OIBA) $ 3,919     $ 2,480       Nine Months Ended September 30,   2012       2013     Income from operations $ 121 $ 1,205 Stock-based compensation 12,395 6,875 Amortization of intangible assets from acquisitions   3,674       2,500   Operating income before amortization (OIBA) 16,190 10,580 Acquisition and separation related costs 164 940 Domain sales contribution - (839 ) Gain on sales and disposals of intangible assets, net   (5,434 )     (3,739 ) Adjusted operating income before amortization (Adjusted OIBA) $ 10,920     $ 6,942       Reconciliation from Net Cash provided by Operating Activities to Adjusted EBITDA (in thousands) (unaudited)         Three Months Ended September 30,   2012       2013     Net cash provided by operating activities $ 3,656 $ 4,332 Changes in asset and liabilities 811 (1,374 ) Income tax expense (benefit) (49 ) 389 Separation related costs 296 286 Interest expense and other, net 28 15 Less: Domain sales contribution - (839 ) Loss from discontinued operations, net of tax 53 46 Tax effect on gain on sale of discontinued operations - 563 Excess tax benefits related to stock compensation   42       13   Adjusted EBITDA $ 4,837     $ 3,431   Net cash provided by (used in) investing activities $ (103 )   $ 1,235   Net cash provided by (used in) financing activities $ (1,592 )   $ 842       Nine Months Ended September 30,   2012       2013     Net cash provided by operating activities $ 15,590 $ 7,487   Changes in asset and liabilities (2,884 ) 482 Income tax expense 458 797 Acquisition and separation related costs 296 940 Interest expense and other, net 68 44 Less: Domain sales contribution - (839 ) Loss from discontinued operations, net of tax 95 77 Tax effect on gain on sale of discontinued operations - 563 Excess tax benefits related to stock compensation   162       209   Adjusted EBITDA $ 13,785     $ 9,760   Net cash provided by investing activities $ 3,123     $ 2,197   Net cash used in financing activities $ (20,622 )   $ (463 )     MARCHEX, INC. AND SUBSIDIARIES Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS (in thousands, except per share data) (unaudited)       Three Months Ended September 30,   2012       2013   Adjusted Non-GAAP EPS from continuing operations $ 0.06     $ 0.04     Net income (loss) from continuing operations applicable to common stockholders - diluted (GAAP EPS) $ (0.02 ) $ 0.02 Shares used to calculate diluted net income (loss) per share applicable to common stockholders 34,106 37,277   Net income (loss) applicable to common stockholders $ (666 ) $ 1,481 Stock-based compensation 3,702 2,365 Acquisition and separation related costs 296 286 Amortization of intangible assets from acquisitions 1,055 709 Gain on sales and disposals of intangible assets, net (713 ) (1,047 ) Domain sales contribution - (839 ) Interest expense and other, net 118 19 Dividends paid to participating securities 123 - Discontinued operations, net of tax 53 (883 ) Estimated impact of income taxes   (1,399 )     (488 ) Adjusted Non-GAAP net income from continuing operations $ 2,569     $ 1,603         Adjusted Non-GAAP EPS from continuing operations $ 0.06     $ 0.04     Shares used to calculate diluted net income (loss) per share applicable to common stockholders 34,106 37,277 Weighted average stock options and common shares subject to purchase or cancellation (if applicable) 1,361 - Weighted average common shares related to deferred acquisition payments   4,907       -   Diluted shares used to calculate Adjusted Non-GAAP EPS (1)   40,374       37,277     (1) For the purpose of computing the number of diluted shares for Adjusted Non-GAAP EPS, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP EPS.     MARCHEX, INC. AND SUBSIDIARIES Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS (in thousands, except per share data) (unaudited)     Nine Months Ended September 30,   2012       2013         Adjusted Non-GAAP EPS $ 0.18     $ 0.12     Net income (loss) from continuing operations per share applicable to common stockholders - diluted (GAAP EPS) $ (0.03 ) $ 0.01 Shares used to calculate diluted net income (loss) per share applicable to common stockholders 33,879 36,371   Net income (loss) applicable to common stockholders $ (1,124 ) $ 1,212 Stock-based compensation 12,395 6,875 Acquisition and separation related costs 164 940 Amortization of intangible assets from acquisitions 3,674 2,500 Gain on sales and disposals of intangible assets, net (5,434 ) (3,739 ) Domain sales contribution - (839 ) Interest expense and other, net 430 48 Dividends paid to participating securities 262 - Tax valuation allowance - 651 Discontinued operations, net of tax 95 (852 ) Estimated impact of income taxes   (3,373 )     (2,291 ) Adjusted Non-GAAP net income from continuing operations $ 7,089   $ 4,504         Adjusted Non-GAAP EPS from continuing operations $ 0.18     $ 0.12     Shares used to calculate diluted net income (loss) per share applicable to common stockholders 33,879 36,371 Weighted average stock options and common shares subject to purchase or cancellation (if applicable) 1,340 - Weighted average common shares related to deferred acquisition payments   4,907       -   Diluted shares used to calculate Adjusted Non-GAAP EPS (1)   40,126       36,371       (1 )

For the purpose of computing the number of diluted shares for non-GAAP EPS, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP EPS.

    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)         3 months ended     9 months ended   3/31/2012       6/30/2012       9/30/2012       12/31/2012       3/31/2013       6/30/2013       9/30/2013     9/30/2012       9/30/2013                 Income (loss) from operations $ (616 ) $ 1,158 $ (421 ) $ (17,364 ) $ 297 $ (98 ) $ 1,006 $ 121 $ 1,205 Stock-based compensation 3,891 4,802 3,702 3,243 1,907 2,603 2,365 12,395 6,875 Amortization of intangible assets from acquisitions   1,537       1,082       1,055       1,055       1,055       736       709     3,674       2,500   Operating income before amortization (OIBA) 4,812 7,042 4,336

(13,066

) 3,259 3,241 4,080 16,190 10,580 Acquisition and separation related costs (132 ) - 296 589 345 309 286 164 940 Impairment of goodwill - - - 15,837 - - - - - Domain sales contribution - - - - - - (839 ) - (839 ) Gain on sales and disposals of intangible assets, net   (1,463 )     (3,258 )     (713 )     (862 )     (1,362 )     (1,330 )     (1,047 )   (5,434 )     (3,739 ) Adjusted operating income before amortization (Adjusted OIBA) $ 3,217     $ 3,784     $ 3,919     $

2,498

    $ 2,242     $ 2,220     $ 2,480   $ 10,920     $ 6,942     Reconciliation from Net Cash provided by Operating Activities to Adjusted EBITDA   3 months ended 9 months ended 3/31/2012       6/30/2012       9/30/2012       12/31/2012       3/31/2013       6/30/2013       9/30/2013     9/30/2012       9/30/2013     Net cash provided by operating activities $ 3,954 $ 7,980 $ 3,656 $ 4,311 $ 2,141 $ 1,014 $ 4,332 $ 15,590 $ 7,487 Changes in asset and liabilities 302 (3,997 ) 811 (17,696 )

462

1,394

(1,374 ) (2,884 ) 482 Income tax expense (benefit) (88 ) 595 (49 ) 16,109 165 243 389 458 797 Separation related costs - - 296 589 345 309 286 296 940 Less: Domain sales contribution - - - - - - (839 ) - (839 ) Discontinued operations, net of tax (10 ) 52 53 843 31 (0 ) 46 95 77 Tax effect of gain on sale of discontinued operations - - - - - - 563 - 563 Interest expense and other, net 18 22 28 19 17 12 15 68 44 Excess tax benefits related to stock compensation 97       23       42       146       7       189       13     162       209   Adjusted EBITDA $ 4,273     $ 4,675     $ 4,837     $ 4,321     $

3,168

    $

3,161

    $ 3,431   $ 13,785     $ 9,760   Net cash provided by (used in) investing activities $ 1,194     $ 2,032     $ (103 )   $ 197     $ 512     $ 449     $ 1,235   $ 3,123     $ 2,196   Net cash provided by (used in) financing activities $(1,296 )   $ (17,734 )   $ (1,592 )   $ (24,112 )   $ (1,483 )   $ 179     $ 842   $ (20,622 )   $ (463 )     MARCHEX, INC. AND SUBSIDIARIES   Quarterly Financial Summary Information (in thousands)                               NON-GAAP MEASURES               Amounts below exclude Domain Sales and Discontinued Operations                                       CONSOLIDATED   Q112   Q212   Q312   Q412   Q113   Q213   Q313   Non-GAAP Revenue $ 33,835 $ 32,832 $ 33,691 $ 32,436 $ 34,732 $ 37,578 $ 39,661   Adjusted OIBA $ 3,217 $ 3,784 $ 3,919 $ 2,498 $ 2,242 $ 2,220 $ 2,480   Adjusted EBITDA   $ 4,273   $ 4,675   $ 4,837   $ 4,321   $ 3,168   $ 3,161   $ 3,431                               CALL-DRIVEN   Q112   Q212   Q312   Q412   Q113   Q213   Q313   Revenue $ 26,651 $ 27,497 $ 29,269 $ 28,470 $ 31,108 $ 33,893 $ 35,668   Adjusted OIBA $ 171 $ 1,513 $ 2,199 $ 1,145 $ 1,357 $ 1,496 $ 1,690   Adjusted EBITDA   $ 980   $ 2,316   $ 3,063   $ 2,917   $ 2,245   $ 2,399   $ 2,598                               ARCHEO   Q112   Q212   Q312   Q412   Q113   Q213   Q313   Non-GAAP Revenue $ 7,184 $ 5,335 $ 4,422 $ 3,965 $ 3,624 $

3,685

$

3,993

  Adjusted OIBA $ 3,046 $ 2,270 $ 1,720 $ 1,353 $ 885 $ 724 $ 790   Adjusted EBITDA   $ 3,293   $ 2,359   $ 1,774   $ 1,404   $ 923   $ 762   $ 833   Prior periods have been adjusted to confirm to current period presentation due to change in segment profitability measures.     MARCHEX, INC. AND SUBSIDIARIES Financial Summary by Segment (in thousands) (unaudited)                     Three months ended Nine months ended   3/31/2012     6/30/2012     9/30/2012     12/31/2012     3/31/2013     6/30/2013     9/30/2013   9/30/2012     9/30/2013 Marchex - consolidated   Revenue excluding Discontinued Operations4 - GAAP   $ 33,835   $ 32,832   $ 33,691   $ 32,436   $ 34,732   $ 37,578   $ 40,560   $ 100,358   $ 112,870 Revenue excluding Discontinued Operations and Domain Sales2   $ 33,835   $ 32,832   $ 33,691   $ 32,436   $ 34,732   $ 37,578   $ 39,661   $ 100,358   $ 111,971 Revenue with Domain Sales3 and excluding Discontinued Operations $ 35,309 $ 36,102 $ 34,404 $ 33,299 $ 36,094 $ 38,908 $ 41,607 $ 105,815 $ 116,609 Revenue including Discontinued Operations and excluding Domain Sales2 $ 35,481 $ 34,014 $ 34,821 $ 33,990 $ 36,213 $ 39,019 $ 39,923 $ 104,316 $ 115,155 Revenue with Domain Sales3 and including Discontinued Operations   $ 36,955   $ 37,284   $ 35,534   $ 34,853   $ 37,575   $ 40,349   $ 41,869   $ 109,773   $ 119,793 Adjusted OIBA excluding Discontinued Operations and Domain Sales2   $ 3,217   $ 3,784   $ 3,919   $ 2,498   $ 2,242   $ 2,220   $ 2,480   $ 10,920   $ 6,942 Adjusted OIBA with Domain Sales and excluding Discontinued Operations4 $ 4,681 $ 7,042 $ 4,631 $ 3,360 $ 3,603 $ 3,550 $ 4,366 $ 16,354 $ 11,519 Adjusted OIBA including Discontinued Operations and excluding Domain Sales2 $ 3,252 $ 3,728 $ 3,862 $ 2,589 $ 2,205 $ 2,231 $ 2,409 $ 10,842 $ 6,845 Adjusted OIBA with Domain Sales3 and including Discontinued Operations   $ 4,715   $ 6,986   $ 4,575   $ 3,451   $ 3,568   $ 3,561   $ 4,295   $ 16,276   $ 11,424 Adjusted EBITDA excluding Discontinued Operations and Domain Sales2   $ 4,273   $ 4,675   $ 4,837   $ 4,321   $ 3,168   $ 3,161   $ 3,431   $ 13,785   $ 9,760 Adjusted EBITDA with Domain Sales3 and excluding Discontinued Operations4 $ 5,737 $ 7,933 $ 5,550 $ 5,183 $ 4,530 $ 4,490 $ 5,317 $ 19,219 $ 14,337 Adjusted EBITDA including Discontinued Operations and excluding Domain Sales2 $ 4,309 $ 4,619 $ 4,781 $ 4,412 $ 3,133 $ 3,172 $ 3,359 $ 13,709 $ 9,664 Adjusted EBITDA with Domain Sales3 and including Discontinued Operations $ 5,773 $ 7,877 $ 5,493 $ 5,275 $ 4,495 $ 4,501 $ 5,245 $ 19,143 $ 14,241   Call-Driven and Other1 Revenue $ 26,651 $ 27,497 $ 29,269 $ 28,470 $ 31,108 $ 33,893 $ 35,668 $ 83,417 $ 100,669 Adjusted OIBA $ 171 $ 1,513 $ 2,199 $ 1,145 $ 1,357 $ 1,496 $ 1,690 $ 3,883 $ 4,543 Adjusted EBITDA   $ 980   $ 2,316   $ 3,063   $ 2,917   $ 2,245   $ 2,399   $ 2,598 $ 6,359   $ 7,242   Archeo1 Revenue excluding Discontinued Operations $ 7,184 $ 5,335 $ 4,422 $ 3,965 $ 3,624 $ 3,685 $ 4,893 $ 16,941 $ 12,202 Revenue excluding Discontinued Operations and Domain Sales2 $ 7,184 $ 5,335 $ 4,422 $ 3,965 $ 3,624 $ 3,685 $ 3,994 $ 16,941 $ 11,303 Revenue with Domain Sales excluding Discontinued Operations4 $ 8,658 $ 8,605 $ 5,135 $ 4,828 $ 4,986 $ 5,016 $ 5,940 $ 22,398 $ 15,942 Revenue including Discontinued Operations and excluding Domain Sales2 $ 8,830 $ 6,517 $ 5,552 $ 5,519 $ 5,106 $ 5,127 $ 4,256 $ 20,899 $ 14,489 Revenue with Domain Sales3 and including Discontinued Operations   $ 10,304   $ 9,787   $ 6,265   $ 6,382   $ 6,467   $ 6,457   $ 6,202 $ 26,356   $ 19,126 Adjusted OIBA excluding Discontinued Operations and Domain Sales2 $ 3,046 $ 2,270 $ 1,720 $ 1,353 $ 885 $ 724 $ 790 $ 7,036 $ 2,399 Adjusted OIBA with Domain Sales3 excluding Discontinued Operations4 $ 4,510 $ 5,528 $ 2,431 $ 2,215 $ 2,246 $ 2,054 $ 2,676 $ 12,469 $ 6,976 Adjusted OIBA including Discontinued Operations and excluding Domain Sales2 $ 3,081 $ 2,215 $ 1,662 $ 1,444 $ 849 $ 735 $ 719 $ 6,958 $ 2,303 Adjusted OIBA with Domain Sales3 and including Discontinued Operations   $ 4,544   $ 5,472   $ 2,375   $ 2,306   $ 2,211   $ 2,065   $ 2,605 $ 12,391   $ 6,881 Adjusted EBITDA excluding Discontinued Operations and Domain Sales2 $ 3,293 $ 2,359 $ 1,774 $ 1,404 $ 923 $ 762 $ 833 $ 7,426 $ 2,518 Adjusted EBITDA with Domain Sales excluding Discontinued Operations4 $ 4,757 $ 5,617 $ 2,487 $ 2,266 $ 2,285 $ 2,091 $ 2,719 $ 12,860 $ 7,095 Adjusted EBITDA including Discontinued Operations and excluding Domain Sales2 $ 3,329 $ 2,303 $ 1,718 $ 1,495 $ 888 $ 773 $ 761 $ 7,350 $ 2,422 Adjusted EBITDA with Domain Sales3 and including Discontinued Operations $ 4,793 $ 5,561 $ 2,430 $ 2,358 $ 2,250 $ 2,102 $ 2,647 $ 12,784 $ 6,999     1 The financial results for Call-Driven and Archeo are preliminary and have been derived from the unaudited consolidated financial statements of Marchex, Inc. for all periods presented. Corporate overhead expenses have been reallocated in prior periods to conform to current period presentation.   The unaudited Call-Driven financial results include certain direct operating expenses and general corporate overhead expenses in all periods presented. The unaudited Archeo financial results include direct operating expenses for all periods presented.   2 In September 2013, Marchex announced and launched its Domain Marketplace and through it, commenced buying and selling of domains. Domain sales occurring after this date are included in revenue and related cost in service cost. Prior to this date, domain sales were recognized in gain on sales and disposals of intangible assets in the unaudited consolidated financial statements.     3 Includes all domain sales recognized in gain on sales and disposals of intangible assets and in revenue and service costs. 4 Operating results of discontinued operations relate to certain pay-per-click assets sold in July 2013 and are included in discontinued operations, net of tax in the unaudited consolidated financial statements.       MARCHEX, INC. AND SUBSIDIARIES Archeo and Discontinued Operations (in thousands) (unaudited)                           Three months ended Nine months ended   3/31/2012     6/30/2012       9/30/2012     12/31/2012     3/31/2013       6/30/2013     9/30/2013   9/30/2012       9/30/2013   Archeo1 including Discontinued Operations4         Revenue excluding Domain Sales2 $ 8,830 $ 6,517 $ 5,552 $ 5,519 $ 5,106

$

5,127

$ 4,256

$

20,899

$ 14,489 Revenue with Domain Sales4   $ 10,304   $ 9,787     $ 6,265     $ 6,382   $ 6,467    

$

6,457

  $ 6,202  

$

26,356

    $ 19,126   Adjusted OIBA excluding Domain Sales3 $ 3,081 $ 2,215 $ 1,662 $ 1,444 $ 849

$

735

$

719

$

6,958

$ 2,303 Adjusted OIBA with Domain Sales4   $ 4,544   $ 5,472     $ 2,375     $ 2,306   $ 2,211    

$

2,065

  $ 2,605    

$

12,391

    $ 6,881   Adjusted EBITDA excluding Domain Sales3 $ 3,329 $ 2,303 $ 1,718 $ 1,495 $ 888

$

773

$ 761

$

7,350

$ 2,422 Adjusted EBITDA with Domain Sales4   $ 4,793   $ 5,561     $ 2,430     $ 2,358   $ 2,250    

$

2,102

  $ 2,647  

$

12,784

    $ 6,999     Discontinued Operations4 Revenue $ 1,646 $ 1,182 $ 1,130 $ 1,554 $ 1,482

$

1,441

$ 262

$

3,958

$ 3,184 Adjusted OIBA $ 35 $ (56 ) $ (57 ) $ 91 $ (36 )

$

10

$ (71 )

$

(78

) $ (97 ) Adjusted EBITDA $ 36 $ (56 ) $ (56 ) $ 92 $ (36 )

$

11

$ (71 )

$

(76

) $ (96 )   Archeo excluding Discontinued Operations Revenue excluding Domain Sales3 $ 7,184 $ 5,335 $ 4,422 $ 3,965 $ 3,624

$

3,685

$ 3,994

$

16,941

$ 11,303 Revenue with Domain Sales4   $ 8,658   $ 8,605     $ 5,135     $ 4,828   $ 4,986    

$

5,016

  $ 5,940  

$

22,398

    $ 15,942   Adjusted OIBA excluding Domain Sales3 $ 3,046 $ 2,270 $ 1,720 $ 1,353 $ 885

$

724

$ 790

$

7,036

$ 2,399 Adjusted OIBA with Domain Sales4   $ 4,510   $ 5,528     $ 2,431     $ 2,215   $ 2,246    

$

2,054

  $ 2,676  

$

12,469

    $ 6,976   Adjusted EBITDA excluding Domain Sales3 $ 3,293 $ 2,359 $ 1,774 $ 1,403 $ 923

$

762

$ 833

$

7,426

$ 2,518 Adjusted EBITDA with Domain Sales4   $ 4,757   $ 5,617     $ 2,487     $ 2,266   $ 2,285    

$

2,091

  $ 2,719  

 

 

$

12,860

    $ 7,095     1 The financial results of Archeo are preliminary and have been derived from the unaudited consolidated financial statements of Marchex, Inc. for all periods presented. The unaudited Archeo financial results include direct operating expenses for all periods presented.   2 In September 2013, Marchex announced and launched its Domain Marketplace and through it, commenced buying and selling of domains. Domain sales occurring after this date are included in revenue and related cost in service cost. Prior to this date, domain sales were recognized in gain on sales and disposals of intangible assets in the unaudited consolidated financial statements.     3 Includes all domain sales recognized in gain on sales and disposals of intangible assets and in revenue and service costs. 4 Operating results of discontinued operations relate to certain pay-per-click assets sold in July 2013 and are included in discontinued operations, net of tax in the unaudited consolidated financial statements.       MARCHEX, INC. AND SUBSIDIARIES   Corporate Overhead Cost Allocation by Segment (in thousands) (unaudited)              

Three months ended

Nine months ended   3/31/2012     6/30/2012       9/30/2012       12/31/2012       3/31/2013       6/30/2013       9/30/2013     9/30/2012     9/30/2013   Call Driven and Other1 Adjusted OIBA $ 171 $ 1,513 $ 2,199 $ 1,145 $ 1,356 $ 1,497

$

1,690

$ 3,883 $ 4,543 Adjusted EBITDA $ 980     $ 2,316     $ 3,063     $ 2,917     $ 2,245     $ 2,399    

$

2,598

  $ 6,359   $ 7,243     Effect of Reallocated Corporate Overhead Costs: Corporate Overhead Costs5 $ 675     $ 701     $ 574     $ 616     $ 855     $ 772    

$

658

  $ 1,950   $ 2,285   Adjusted OIBA before Reallocation of corporate overhead costs $ 846 $ 2,214 $ 2,774 $ 1,762 $ 2,212 $ 2,268

$

2,348

$ 5,834 $ 6,828 Adjusted EBITDA before Reallocation corporate overhead costs $ 1,656     $ 3,017     $ 3,637     $ 3,533     $ 3,100     $ 3,171    

$

3,256

  $ 8,309   $ 9,527     Archeo1 Adjusted OIBA excluding Discontinued Operations4 and Domain Sales2 $ 3,046 $ 2,270 $ 1,720 $ 1,353 $ 886 $ 724

$

790

$ 7,036 $ 2,399 Adjusted OIBA with Domain Sales4 excluding Discontinued Operations $ 4,510     $ 5,528     $ 2,431     $ 2,215     $ 2,246     $ 2,054    

$

2,676

  $ 12,469   $ 6,976   Adjusted OIBA including Discontinued Operations4 $ 3,081 $ 2,215 $ 1,662 $ 1,444 $ 849 $ 735

$

719

$ 6,958 $ 2,303 Adjusted OIBA with Domain Sales4 and including Discontinued Operations $ 4,544     $ 5,472     $ 2,375     $ 2,306     $ 2,211     $ 2,065    

$

2,605

  $ 12,391   $ 6,881   Adjusted EBITDA excluding Discontinued Operations4 and Domain Sales2 $ 3,293 $ 2,359 $ 1,774 $ 1,404 $ 923 $ 762

$

833

$ 7,426 $ 2,518 Adjusted EBITDA with Domain Sales4 excluding Discontinued Operations $ 4,757     $ 5,617     $ 2,487     $ 2,266     $ 2,285     $

2,091

   

$

2,719

  $ 12,860   $ 7,096   Adjusted EBITDA including Discontinued Operations4 $ 3,329 $ 2,303 $ 1,718 $ 1,495 $ 888 $ 773

$

761

$ 7,350 $ 2,422 Adjusted EBITDA with Domain Sales4 including Discontinued Operations $ 4,793     $ 5,561     $ 2,430     $ 2,358     $ 2,250     $ 2,102    

$

2,647

  $ 12,784   $ 6,999     Effect of Reallocated Corporate Overhead Costs: Corporate Overhead Costs5 $ (675 ) $ (701 ) $ (574 ) $ (616 ) $ (855 ) $ (772 )

$

(658

) $ (1,950 ) $ (2,285 ) Adjusted OIBA excluding Discontinued Operations4 and Domain Sales2 $ 2,372 $ 1,569 $ 1,145 $ 736 $ 30 $ (48 )

$

132

$ 5,086 $ 114 Adjusted OIBA with Domain Sales4 excluding Discontinued Operations $ 3,835     $ 4,827     $ 1,857     $ 1,599     $ 1,391     $ 1,282    

$

2,018

  $ 10,519   $ 4,691   Adjusted OIBA including Discontinued Operations4 $ 2,406 $ 1,514 $ 1,088 $ 828 $ (6 ) $ (37 )

$

61

$ 5,008 $ 18 Adjusted OIBA with Domain Sales4 and including Discontinued Operations $ 3,869     $ 4,771     $ 1,801     $ 1,690     $ 1,356     $ 1,293    

$

1,947

  $ 10,441   $ 4,596   Adjusted EBITDA excluding Discontinued Operations4 and Domain Sales2 $ 2,618 $ 1,658 $ 1,200 $ 788 $ 68 $ (10 )

$

175

$ 5,476 $ 233 Adjusted EBITDA with Domain Sales4 excluding Discontinued Operations $ 4,082     $ 4,916     $ 1,913     $ 1,650     $ 1,430     $ 1,319    

$

2,061

  $ 10,910   $ 4,811   Adjusted EBITDA including Discontinued Operations4 $ 2,654 $ 1,602 $ 1,144 $ 879 $ 33 $ 1

$

103

$ 5,400 $ 137 Adjusted EBITDA with Domain Sales4 including Discontinued Operations $ 4,118     $ 4,860     $ 1,856     $ 1,741     $ 1,395     $ 1,330    

$

1,989

  $ 10,834   $ 4,714       1 The financial results for Call-Driven and Archeo are preliminary and have been derived from the unaudited consolidated financial statements of Marchex, Inc. for all periods presented. Corporate overhead expenses have been reallocated in prior periods to conform to current period presentation. The unaudited Call-Driven financial results include certain direct operating expenses and general corporate overhead expenses in all periods presented. The unaudited Archeo financial results include direct operating expenses for all periods presented. 2 In September 2013, Marchex announced and launched its Domain Marketplace and through it, commenced buying and selling of domains.

Domain sales occurring after this date are included in revenue and related cost in service cost. Prior to this date, domain sales were recognized in gain on sales and disposals of intangible assets in the unaudited consolidated financial statements.

3 Includes all domain sales recognized in gain on sales and disposals of intangible assets and in revenue and service costs.     MARCHEX, INC. AND SUBSIDIARIES Reconciliation to Reported Financial and Non-GAAP Information (in thousands) (unaudited)                         Three months ended Nine months ended   3/31/2012     6/30/2012       9/30/2012       12/31/2012     3/31/2013       6/30/2013     9/30/2013     9/30/2012       9/30/2013   Revenue Consolidated excluding Discontinued Operations - GAAP $ 33,835 $ 32,832 $ 33,691 $ 32,436 $ 34,732 $ 37,578 $ 40,560 $ 100,358 $ 112,870 Less: Domain sales recognized in revenue3   -     -       -       -     -       -     899     -       899   Consolidated excluding Domain Sales1 $ 33,835 $ 32,832 $ 33,691 $ 32,436 $ 34,732 $ 37,578 $ 39,661 $ 100,358 $ 111,971 Add: Domain sales recognized in revenue5 - - - - - - 899 - 899 Add: Domain Sales1   1,474     3,270       713       863     1,362       1,330     1,047     5,457       3,739   Consolidated with Domain Sales1 35,309 36,102 34,404 33,299 36,094 38,908 41,607 105,815 116,609 Add: Discontinued Operations6   1,646     1,182       1,130       1,554     1,481       1,441     262     3,958       3,184   Consolidated with Domain Sales and Discontinued Operations1 $ 36,955 $ 37,284 $ 35,534 $ 34,853 $ 37,575 $ 40,349 $ 41,869 $ 109,773 $ 119,793 Less: Domain sales recognized in revenue3 - - - - - - 899 - 899 Less: Domain Sales1   1,474     3,270       713       863     1,362       1,330     1,047     5,457       3,739  

Consolidated with Discontinued Operations1 and excluding Domain Sales

$ 35,481 $ 34,014 $ 34,821 $ 33,990 $ 36,213 $ 39,019 $ 39,923 $ 104,316 $ 115,155 Less: Discontinued Operations 1,646 1,182 1,130 1,554 1,481 1,441 262 3,958 3,184 Archeo excluding

Domain Sales4

7,184 5,335 4,422

3,965

3,624 3,685 3,993 16,941 11,302 Other   181     175       174      

181

    171       162     131     530       464   Call-Driven4 $ 26,470   $ 27,322     $ 29,095     $ 28,290   $ 30,937     $ 33,731   $ 35,537   $ 82,887     $ 100,205     Adjusted operating income4 Consolidated excluding Discontinued Operations $ 3,217 $ 3,784 $ 3,919 $ 2,498 $ 2,242 $ 2,220 $ 2,480 $ 10,920 $ 6,942 Add: Gain on Domain Sales and Domain Sales Contribution7   1,463     3,258       713       862     1,362       1,330     1,886     5,434       4,578   Consolidated with Domain Sales 4,680 7,042 4,632 3,360 3,604 3,550 4,366 16,354 11,520 Add: Discontinued Operations6   35     (56 )     (57 )     91     (36 )     10     (71 )   (78 )     (97 ) Consolidated with Domain Sales and Discontinued Operations $ 4,715 $ 6,986 $ 4,575 $ 3,451 $ 3,568 $ 3,560 $ 4,295 $ 16,276 $ 11,423 Less: Gain on Domain Sales and Domain Sales Contribution7   1,463     3,258       713       862     1,362       1,330     1,886     5,434       4,578   Consolidated with Discontinued Operations $ 3,252 $ 3,728 $ 3,862 $ 2,589 $ 2,206 $ 2,230 $ 2,409 $ 10,841 $ 6,845 Less: Discontinued Operations 35 (56 ) (57 ) 91 (36 ) 10 (71 ) (78 ) (97 ) Archeo excluding

Domain Sales4

3,046 2,271 1,720 1,353

885

724 790 7,037

2,399

Other   71     116       104       105     106       86     75     291       267   Call-Driven4 $ 100   $ 1,397     $ 2,095     $ 1,040   $ 1,251     $ 1,410   $ 1,615   $ 3,592     $ 4,276     Adjusted EBITDA5 Consolidated excluding Discontinued Operations $ 4,273 $ 4,675 $ 4,837 $

4,321

$ 3,168 $ 3,161 $ 3,431 $ 13,785 $ 9,760 Add: Gain on Domain Sales and Domain Sales Contribution7   1,463     3,258       713       862     1,362       1,330     1,886     5,434       4,577   Consolidated with Domain Sales 5,736 7,933 5,550

5,183

4,530 4,491 5,317 19,219 14,338 Add: Discontinued Operations6   36     (56 )     (56 )     92     (36 )     11     (71 )   (76 )     (96 ) Consolidated with Domain Sales and Discontinued Operations $ 5,773 $ 7,877 $ 5,493 $ 5,275 $ 4,495 $ 4,501 $ 5,245 $ 19,143 $ 14,242 Less: Gain on Domain Sales and Domain Sales Contribution7   1,463     3,258       713      

863

    1,362       1,330     1,886     5,434       4,578   Consolidated with Discontinued Operations $ 4,309 $ 4,619 $ 4,781 $ 4,411 $ 3,132 $ 3,172 $ 3,360 $ 13,709 $ 9,664 Less: Discontinued Operations 36 (56 ) (56 ) 92 (36 ) 11 (71 ) (76 ) (96 ) Archeo excluding

Domain Sales

3,293 2,359 1,774

1,404

923 762 833 7,426 2,518 Other   71     116       104       105     106       86     75     291       267   Call-Driven4 $ 909   $ 2,200     $ 2,959     $ 2,812   $ 2,139     $ 2,313   $ 2,523   $ 6,068     $ 6,975     1 These are non-GAAP measures of financial results which are adjusted for sales proceeds from sales of intangible assets, domain sales recognized as revenue3 and/or revenue from Discontinued Operations6.   2 Sales proceeds from sales of intangible domain assets. 3 In September 2013, Marchex announced and launched its Domain Marketplace and through it, commenced buying and selling of domains.

Domain sales occurring after this date are included in revenue and related cost in service cost. Prior to this date, domain sales were recognized in gain on sales and disposals of intangible assets in the unaudited condensed consolidated financial statements.

  4

The financial results for Call-Driven and Archeo are preliminary and have been derived from the unaudited condensed consolidated financial statements of Marchex, Inc. for all periods presented. Corporate overhead expenses have been reallocated in prior periods to conform to current period presentation. The unaudited Call-Driven financial results include certain direct operating expenses and general corporate overhead expenses in all periods presented. The unaudited Archeo financial results include direct operating expenses for all periods presented.

      5 These are non-GAAP measures of operating results and liquidity. These non-GAAP measures are adjusted for net gains from sales of intangible assets, direct contribution of domain sales sold through Marchex's Domain Marketplace5 and/or include operating results of Discontinued Operations6.   6

Financial results of discontinued operations related to certain pay-per-click assets sold in July 2013 and are included in discontinued operations, net of tax in the unaudited condensed consolidated financial statements.

  7 Includes net gains from sales of intangible assets and direct contribution of domain sales sold through Marchex's Domain Marketplace5.

Marchex Investor RelationsTrevor Caldwell, 206-331-3600Email: ir(at)marchex.comorMEDIA INQUIRIESMarchex Public RelationsSonia Krishnan, 206-331-3434Email: skrishnan(at)marchex.com

Marchex (NASDAQ:MCHX)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Marchex Charts.
Marchex (NASDAQ:MCHX)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Marchex Charts.