MARCHEX INC Q4 FY2024 earnings call

• Completed OneStack in Q4 2024, unifying data stacks into a single cloud-based architecture for better performance, scalability, and efficiency.
• Refined go-to-market strategy, strengthened customer relationships, and expanded reach in key vertical markets.
• In 2025, will complete technology advances like unified UI and single sign-on (SSO) to enhance customer experience and enable cross-sell/upsell.
• Launch new vertical-specific AI solutions, including complementing Engage for Service, and roll out partnership with Microsoft and other channel partners.
• Repositioned team at start of 2025 for growth, gaining efficiencies and reallocating resources to sales and marketing.

For the fourth quarter of 2024, revenue was $11.9 million, down from $12.4 million in the same quarter last year. Operating expenses excluding certain items were $12.9 million in Q4 2024 vs $12.6 million in Q4 2023. Cost of revenues was $4.4 million. Adjusted EBITDA was a loss of $386,000 in Q4 2024 vs $112,000 profit in Q4 2023. GAAP net loss was $1.9 million or negative $0.04 per diluted share in Q4 2024 vs $1.1 million loss or negative $0.02 per diluted share in Q4 2023. Cash on hand at end of Q4 2024 was approximately $12.8 million.

• Q1 2025 revenue anticipated to be in range of Q4 2024 levels, with adjusted EBITDA in range of Q4 2024 levels considering higher Q1 expenses and OneStack charges.
• FY 2025 revenue expected to grow year-over-year with sequential acceleration, gross margins higher than 2024 with improvement during the year, and adjusted EBITDA positive for the full year.
• Anticipate sequential growth throughout 2025 driven by customer demand, product expansions, and efficiency gains from technology investments.

• Exposure to Auto OEMs and potential impact of tariffs; currently, no specific disruptive tariffs noted in planning cycles, but unknowns exist and need to adapt to normalized behaviors.

Q: When talking about outlooks for sequential revenue improvement throughout 2025, can you talk about what gives confidence and how it's different from past tones?

A: Confidence comes from technological progress like unified platform, ability to capture more conversation volumes with predictive analytics, rapid leveraging of first-party data into new AI signals, and new initiatives like unified UI and SSO. Moving into service business units and multiple functions with enhanced data views for better decision-making.

Q: Considering exposure to Auto OEMs, can you talk about how tariffs might impact market presence?

A: Currently, no specific disruptive tariffs noted in planning cycles, with dialogue tied to customers' strategic road maps and no known disruptions related to tariffs at this point