Marchex, Inc. Q2 FY2025 earnings call

• Continued progress in 2025 with technical and product developments, including signing new partnerships with Fortune 500 companies and launching the Marchex Engage platform as part of the OneStack initiative. - Marchex offers a conversation intelligence platform on a Software-as-a-Service model, focusing on select large vertical markets with industry-specific AI solutions for sectors like automotive, auto services, home services, healthcare, and advertising and media. - The Marchex Engage platform has a new user interface, integrates AI models, and enables click-to-purchase capability, with a focus on delivering AI-derived actionable intelligence to drive revenue and business performance.

The second quarter of 2025 saw revenue of $11.7 million, which is an increase from the first quarter's $11.4 million. There is no specific breakdown by product segments provided in terms of revenue contribution percentages, but the overall revenue figure and the change from the prior quarter are noted.

• Anticipates sequential increase in revenue and adjusted EBITDA in the third quarter of 2025, with adjusted EBITDA potentially increasing by more than 50% from second quarter levels. - Sees sequential decrease in revenue and adjusted EBITDA in the fourth quarter of 2025 compared to the third quarter due to migration impacts, seasonality, and macroeconomic factors, which are expected to delay the achievement of annual revenue and adjusted EBITDA run rate goals for 2025. - Ongoing migration of over 1,000 customers to the new Engage platform has short-term revenue impacts, including effects on new sale launches and product utilization.

• Macroeconomic environment brings increased uncertainty with customers and prospects. - New federal tariffs on imports have an adverse impact on industries such as automotive and auto services, making prediction of 2025 performance and timing more difficult.

Q: Did bookings improve sequentially in the second quarter?

A: Yes, our sales or ACV was sequentially higher.

Q: Any comments on the pipeline?

A: On the product lines, the Engage platform (formerly OneStack) is live with a new UI. Upcoming products include Benchmarking, Marchex GPT, Agent Assist, and vertical signals in the healthcare industry. These collectively help expand the pipeline and drive growth.

Q: How is the demand for your service use case versus sales?

A: With Engage for sales and service launched, we are seeing increasing average revenue per sale associated with it and additional uptake through channel efforts with auto dealers, including expansion with Ford to create more opportunity.