Marchex (MCHX) 31 Oct 242024 Q3 Earnings call transcript

Hello, everyone. Thank you for attending today's Marchex Q3 2024 Earnings Call. My name is Sierra, and I will be your moderator for today. [Operator Instructions] I would now like to pass the conference over to our host, Trevor Caldwell, Senior Vice President of Investor Relations and Strategic Initiatives. Please go ahead.

Sierra. you, Thank and Quarter everyone, Marchex's Update Business Good Conference welcome Call. Third XXXX and afternoon, to

Joining are our Chief us Holly Financial and today Officer. Edwin Miller, CEO; our Aglio,

to like Before those started, statements, contemplated materially statements. and including financial forward-looking today to actual remind our forward-looking you to by operational take will we these include that I'd from this and get references results remarks our differ opportunity performance, may

in today's events. and quarterly differ of forth call to Risks as SEC. today, assumptions that these materially our that in this these for could report statements based make we obligation the and update statements press to results earnings and most uncertainties cause with Any annual we and forward-looking on no subsequent are on release set recent filed undertake

the During The will we Reconciliation earnings GAAP to non-GAAP both in release measures and press press our is Relations of GAAP today's this call, included in section is of Investor non-GAAP website. release. financial measures. present available

At call over to to turn the this Edwin. like time, I'd

strategic progress us making Good to Thank joining you update for the ongoing We on Marchex appreciate and your you the thank Trevor. afternoon, interest our opportunity everyone, towards in you vision. today. and we're

highlights During and forward and look today's beyond. of into through call, we'll give walk the XXXX quarter the an initial

do reason we leader achieve operational a also to analytics. We'll why to mission-critical taking we The company, provide insights updates to on in deliver prescriptive market the businesses of we're Marchex as do the excellence. position to steps purpose is our what

greater most drive customer help we our and more products, build importantly, customers experiences, AI-driven our generate better Through revenue. loyalty

customers. across multiple We are now functions with this our doing

more hear direct of data consistently signals drive and with we for and power the more customers first-party capabilities. I provide. will one-on-one want expand revenue AI-driven intel what we growth, our ad future we our ourselves of are can to that customers, products our more they future The As help my conversational creating utilizing to position sessions vast

an This for Marchex. is time exciting

the at We our place first-party an to are to accelerate into high-value vertical moving the increasing actions direct customers we all data that business. proactive. information being By help are sets, company as our transform transforming for of from market power reactive we impact pieces in put a XXX building harnesses raw Fortune pace companies. We

ahead growth opportunities. Looking are on beyond, and to XXXX focused we

We will that are expand market key momentum. pursuing initiatives and presence our accelerate several

product First, our innovation. I to would like talk about

AI earlier which XXXX. keep prescriptive of We are to brought the forefront market developing are launching new we to enhancements AI-driven and this at that we includes This and us year the QX features [indiscernible], of in recently analytics. new announced we solutions, vertical-specific

increase on These products elements that deliver medical, tailored sales solutions and spend, descriptive understand services are improve in preliminary their to customer ad change behavior dental insights enable and The and businesses growth. automotive for and services, OEMs prescriptive home return verticals. driving the dealers automotive

of There is insights. come. fuel billion than conversations to X more more direct minutes With first-party to

to prescriptive insights. expanding data provide of We are able an menu

unique problems the Our opportunities into vertical and deep data rich on our provides with Marchex for markets omnichannel insights clients.

are when a is engaging our key driver cross-functional customers of a This manner. in

channel Second, sales our marketing capabilities expand our will presence, XXXX, as into evolve grow and messaging look we move team, we our and to partnerships.

We to verticals deeper are new go-to-market and expanding open our existing diving new and our into strategy opportunities.

experience grow growth and Simplifying targets. to our integration. achieve is the and our productivity. customer will evolved our strengthen single access our revenue We understand sign solutions team enhance Last the to on need to

will quarter channel our AI our sales on sales and through growth. tools well We to be will to API this that investing positioned to can initiatives to and overall pivot committed believe launch and with the are Marchex business go-to-market with we and larger the substantially a for accelerate we anticipate platform SaaS signals and form throughout existing customers We Marchex innovation XXXX, business team, new leverage expanded growth. with more new

centralized In will initiatives take previous a our it, the the third a customer-facing quarter, of technical OneStack cloud. into purpose we I the on advantage continued to to create in platform play data make OneStack, crucial on role meaningful is This scalable and ability more mentioned assets. bring which to foundation. progress to calls our our our behind a

are This product key that in to unify and ] anticipate cost innovation. already and the pipelines [ will that revenue to growth our in initiatives progress resources to free allow up XXXX will beyond. to OneStack of started products, has We us reinvest stacks data initiative driving completion accelerate the that help

cash will vertical market revenue expanded ease process, accelerant a movement an this improved It cost improvements customers a our onboarding remove for flow streamlined as platform. SaaS overall support catalyst growth time us business growth to in of will specifically and also support go-to-market allow with greater provide and be free gross margin This Also, account of management. over will a will our that strategy. and the and

pipeline future. work modernize relationships. and we expanding in technical faster on foundation, new infrastructure building Our capitalize is can for believe this the building momentum our the we win are opportunities this build I'm to year we and about expand plus about $XXX move With on million excited the our a place, to business. smarter invest

some position and year. next Marchex of believe go-to-market our to these growth launch transition we scale to As company initiatives, a we in a is relationships strong

to I Holly. that, the will hand With call

Edwin. you, Thank

$XX.X in conversation $XX.X volumes the revenue far customer the was in and quarter, up so to for was part in the quarter million. year. For from quarter new of this million XXXX, launch improved from slightly up last third million part revenue same Quarter second versus $XX.X the due quarter Third the XXXX some and year Revenue second of wins of from

the small home business our traction impact resellers, like Fortune saw by we seeing base. features a last continued sequential the a mitigated though volume Similar trends slightly on improved small certain reseller business customer and are basis, be vertical. that year-over-year customer the new auto of sell-through in launch on may XXX and basis. and of seems auto, We from quarter, In our to into future, services anticipate services segments products we headwinds our

with third timing to Turning for the operating of our of a costs costs costs the of $X.X due which quarter, million total of related of to a for operating third items, was as Service and were consistent somewhat million levels, including amortization trended higher-than-anticipated quarter quarter the of to to execution revenue results acquisition expense percentage QX the for costs excluding certain infrastructure stock-based disposition-related initiatives. quarter. were compensation, million costs, assets intangible third $XX.X the expenses for third compared and XXXX. Service XXXX $XX.X

XXXX Sales we the go-to-market and the increased our This was investments in third approximately up our $X.X marketing were costs from quarter million of slightly third team. for as quarter.

development with we goals, in Product complete of infrastructure to we suite. million our third AI growth in leveraging were product expand As innovation phases continue for our initiatives. our to and along invest increasing balancing we quarter the be investment $X.X initiatives, profitability costs will as

for for quarter Moving in growth. profitability XXXX, largely strategic to adjusted with with of measures. $XXX,XXX XXXX, approximately third approximately investments of was EBITDA consistent for even our that us third future $XXX,XXX quarter the of Adjusted key areas position is which EBITDA the

quarter of for XXXX quarter $X.XX diluted or of share third $XXX,XXX XXXX. Adjusted a loss per per was $X.XX the for the to a share $X.X third third loss of $X.XX of or of per quarter This non-GAAP share loss quarter for to the third for diluted net loss the million per of GAAP XXXX. XXXX, compares share. $X.XX was compared

Additionally, we ended $XX.X the in hand. third quarter on cash with approximately million

of XXXX. Now turning to quarter fourth our the outlook for

discuss the fourth expected First, to revenue. range $XX quarter XXXX let's We seasonality revenue will million be anticipate of due call volumes. of in

volumes many volumes of declined our represents lower quarter the sales reminder, a during customers call for fourth As holidays. typically the as

the fourth and EBITDA, range foundational adjusted anticipate we a of due be the loss the For timing expenses to completion in initiative. $XXX,XXX of to to the adjusted EBITDA of our quarter, overlap OneStack related in

slightly is to higher quarter and For mentioned, due XXXX, than gross of than trended margin which, consistent as somewhat QX anticipated was items. fourth timing expense to QX anticipated be lower margin, certain with gross previously

Turning of the higher is outlook fourth of higher preliminary the than the XXXX. to quarter to Revenue quarter sequentially XXXX. than for our and be of first for XXXX quarter first XXXX anticipated

revenue XXXX. the We during XXXX anticipate growth XXXX, to will be for XXXX, anticipate accelerating rates opportunity will a XXXX. in with with be year relative gross XXXX improvement than the We during growth margins opportunity sequential for higher for

QX adjusted over XXXX. that will anticipate QX also We be EBITDA improved XXXX

of continue to we year, our pipeline next grow into initially opportunities. look we As

revenue margin in growth new along the continue and as anticipate are through We we these in quarter something drive the from additional AI could next in flow to XXXX. we investments releasing products some leverage gross the go-to-market of contribute This of is anticipate savings recent cost OneStack innovation initiatives. and our efforts new our the to we as with also throughout believe infrastructure and that we initiatives our product wins the onboarding anticipated of XXXX year. see We favorably traction our phase of first to transition customer efforts, our expanding throughout our

I'll that, With Edwin. the hand call back to

the you prescriptive ahead. Holly. value confident team to front for I'll the the partners, a the well our Marchex At customers, In to delivering to committed on time, this in we the Thank demonstrates quarter about remain about all the and questions. any and market-leading our you, closing, our take difference. talented are Marchex. excited building function our in strategy analytic operator Thank call back members that the this is way. excited shareholders. is and employees progress each and in that make It us of We road we are company and opportunities pass

from [Operator Darren Instructions] Our first Partners. ROTH comes with Aftahi Capital question

products complete? of Or across it that? sort that When and clarify could some line it of some do is the does -- ongoing resulting in see impact time be of are When help product of the specific think XXXX to happening the with of on those you XQ First, sales. increased verticals would through of you sort that thing in sort rollouts an start?

The We One, for the question. at piloted fourth rolled clients rolled this a ones quarter Thanks already. couple already the in out. we've be will out year.

to So But and we'll continue productize we've our and any clients. innovate tested it. capabilities solutions for AI-driven

won't stop we that. doing So

the us to OneStack clients. X more motion in of into these two up X being data onboarding signals, and freeing ease things: by capacity are clients, our going again, OneStack go-to-market spend sell allow for invest with We pipe with time to will to our API,

in to then the customer demonstrate success market we we're have management capability click-to-buy talking we our and off in to going future, them, group, group, able leveraging but web being are being So about the channel, easily current clients. building them and having in not the the stop out account a already anticipate with

and development capabilities the much AI And Got what with is you -- that's maybe working what elaborate on Or if products? some your sort on? go it. pipeline could already? out and these investments of of the the of of in product part How sort that have you got sales you've to sort create that now of you you're and of

We've plus Todd [ a Troy We're Hart, mind CRO works path. which already got down Head ] for Product. reports Wilson, of It to and the team. our

day. down so And and every go I will back. we're path the we're building

I we create company. a plan. think potential for we're of cycle a believe, the is date delivery to X progress, big virtuous of X -- strategic date. And items. us we've good And for absolute big the got the going a is for back, June has an March sequence

the team. ] We I the are the good about XXXX the Inge to coming team. team. product ELP the and in further, marketing good about [ good months feel together feel product about feel with I I plan

So more to come.

Latimore with Capital next Northland Mike Our comes question Markets. today from

new wins use type you've elaborate you a You year. the of few customer, big mentioned this case. they customer had on Can how already that just are

thanks hope And Mike, good the question. for voice. hear I to Yes. your you're well.

group as we'll have the enterprise and I commercial a those those OEM. going depends approaches size group approach an and vary. the to we're of and deal into and in call group, on Sizes channel if well. the of size commercial what have We with market. the the rooftops a 'XX, different seeing it's It both again, wins of a And

And again, against I the it's all mentioned. verticals

big was team Inge the Hart done in So do we're Troy year, this cells. ] job and able in either of OneStack in having success. what And ease of moved March to form will I I'm really happy year and use, X a has sign-on, us are June [ to of great getting us say single progress. product to X been of for But et next dates cetera. scale,

velocity in see so And speed the and just motion. I

do when can then expect OneStack, of you clarify And kind complete? on you fully that just to be

with is in see and now are which We the efficiency. to scale cloud, fun

is legacy at signals, won't in API, see, each going here have AI month all, which We'll in minutes of productize clients. we the SaaS the term, data and team to beyond near And but get is of and breathe, to but of prescriptive about fun. We we're is will, X to data. innovating analytics to the good while which the we're efficient it. co-locations have excited the here a no being able all we on grabbing movement stop anticipation and our billions we're We're analytics. fun from We're seeing again, grabbing other buckets sitting our more platform

about good So I feel our progress.

to lease. that as relate March to relates And new OneStack going applications to the X date, you're June that X and does

place continue in scale the company. time. we're containers in across the we're I a and talent won't can't We've to the -- the board. again, The the great built. innovating. great stop we'll market at I'm to I But It a manage about say at enough progress the market. the relates got and about signals excited compliance, right vertical team create but right so on We're market. manage it, and making mostly applications

is So hard, has my which Chairman leaned with. in to fun work

we're So good spot. a in

have hard build sales need or already kind And kind additional make products of it'll these you this from on just marketing OneStack and just do out there. to progress the and you Or Great. push? of is before a then just pushing investment, you're now, really on new

made, show as I a little There have. so a fun. what got able acquisitions company, play a it at I say always in red platform we're sell wagon to you bringing up When and sell is to were together we great

so a sell think And faster we'll -- speed. at I

to from OneStack efficiency. will dollars scale and on the saving moving We invest we're with

in the could that real with go-to-market breakout with channel think partners major be staffing. us Troy and the for API I motion helping And the moment some while

Got it.

at just Okay. talk the I you're one, looking channel last of with. you engaging guess, partners about channel. Can on very of type kind

you I can company. major mean think CRM about any

think got in can a down POS DMS. anyone that's You dealership or about

data So that ability our ability to it's ecosystem share large and and with that our data a consume even data.

actually partners data that a one talk mentioned, and something But data ingest the lot We things our on from cross-functional that clients engagement. have So the I the didn't about past I in talked I've our call. about we of or called is NPS. compare that can which

We one began, multiple When up at functions have showing now. meetings function. I we were into sell

of to So on great leadership making it's team, we're progress. again, fun watch. the And the

[Operator are There no further have in no we currently questions. questions appear queue. Instructions] It

pass I'll any conference for remarks. back or the to closing So management further

continued in. and you, everyone, Thank for your in dialing support. appreciate for working We're Marchex We Okay. the shareholders. interest hard

Thank conversations. next to forward look you. So

Thank you That participation. will call. conference conclude all today's your for

You may now disconnect your lines.