Marchex, Inc. Q3 FY2025 earnings call

• The company is at a positive inflection point strategically and operationally, with progress in launching new products and accelerating sales bookings.
• There was improved sequential adjusted EBITDA in Q3, showing operating leverage.
• Focus on select large vertical markets with unique capabilities and first-party data.
• Announced agreement in principle to acquire Archenia, a performance-based customer qualification and acquisition company, which could expand addressable market, revenue scale, and margins.

Revenue for the third quarter of 2025 was $11.5 million, down from $11.7 million in the second quarter of 2025. Favorable impact from new sales and existing customer upsells was offset by revenue migration from legacy platforms to the new Marchex Engage platform. Operating expenditures showed efficiencies due to organizational realignment, and gross profit margins are expected to improve over time.

• Anticipates sequential lower revenue and adjusted EBITDA in Q4 2025 due to seasonality and platform migration.
• Believes sales levels can increase going forward, with revenue growth on a run rate basis in the 10% range in 2026.
• Expects adjusted EBITDA margins of 10% or more in 2026.

• Conditions to the Archenia acquisition include receiving audited financial statements of Archenia, getting a fairness opinion, and approval by a majority of disinterested stockholders.
• Transaction closing depends on meeting these conditions and stockholder approval.

Q: Discuss how you view the TAM for the combined solutions?

A: We think the opportunity and addressable market for the combined company, selling insights, actions, and outcomes, is multiples of the existing one, with insights tied to 9-figure customer acquisition budgets and a significantly larger TAM possible.

Q: Talk about the trade-off between growth and profitability as you scale up?

A: Focus on maximizing revenue growth while maintaining adjusted EBITDA margins in the 10% or more range, emphasizing customer penetration and scaling up while prioritizing growth rates.

Q: Discuss how you view the growth breaking down between new versus existing customers and the potential inside current installed base?

A: Believes the combined company can reach $100 million revenue rate sooner with existing installed base, leveraging expertise and first-party data in verticals, making it more relevant to additional customers.