MARCHEX INC Q3 FY2024 earnings call

• Edwin Miller introduced the progress toward the strategic vision, including leveraging AI-driven products to deliver mission-critical insights, moving toward OneStack for a centralized cloud platform to free up resources for revenue growth initiatives. - The company is focused on product innovation with new AI-driven features and enhancements, including vertical-specific solutions launched in Q4 2024. - Plans to expand the sales team, evolve marketing presence, and grow channel partnerships for future growth. - OneStack initiative is progressing, which will help accelerate product innovation, streamline go-to-market process, and improve account management.

In the third quarter of 2024, revenue was $12.6 million versus $12.8 million for the same quarter last year, and up from second quarter 2024 revenue of $12.1 million. Adjusted EBITDA was approximately $300,000 for the third quarter of 2024, largely consistent with adjusted EBITDA of approximately $400,000 for the third quarter of 2023. GAAP net loss was $800,000 for the third quarter of 2024, or $0.02 per diluted share. Adjusted non-GAAP loss was $0.01 per share for the third quarter of 2024. We ended the third quarter with approximately $12.1 million in cash on hand.

• Fourth quarter 2024 revenue is anticipated to be in the range of $12 million due to seasonality. Adjusted EBITDA in the fourth quarter is anticipated to be a loss in the range of $400,000. Fourth quarter gross margin is anticipated to be slightly lower than Q3 2024. - 2025 first quarter revenue is anticipated to be higher than the first quarter of 2024 and sequentially higher than the fourth quarter of 2024. 2025 is anticipated to be a growth year in revenue relative to 2024 with higher gross margins than 2024, and Q1 2025 adjusted EBITDA is anticipated to be improved over Q4 2024.

Q: Darren Aftahi asked about the timeline for product rollouts in 4Q across specific verticals and details on AI capabilities.

A: Edwin Miller said some products were already piloted, they'll continue innovating and productizing AI-driven capabilities, and moving to OneStack will free up capacity for go-to-market motion. On AI, they have a MIND plus team working on it with a sequence of progress that could create a virtuous cycle.

Q: Mike Latimore asked about new customer wins, OneStack completion timeline, sales and marketing investment, and channel partners.

A: Edwin Miller said they have wins in enterprise and commercial groups, OneStack is in progress with no legacy co-locations, they'll invest savings from OneStack for sales and marketing, and channel partners could include major CRM companies and those in dealerships with POS or DMS