Workflow
Marchex(MCHX) - 2023 Q2 - Earnings Call Transcript
MCHXMarchex(MCHX)2023-08-06 04:52
Filings

Financial Data and Key Metrics Changes - For Q2 2023, revenue was 12.5million,downfrom12.5 million, down from 13.5 million in the same quarter last year, indicating a year-over-year decline [17] - GAAP net loss was 2.7millionforQ22023,or2.7 million for Q2 2023, or 0.06 per diluted share, compared to a loss of 1.5million,or1.5 million, or 0.03 per diluted share for Q2 2022 [19] - Adjusted EBITDA loss was approximately 1million,withanadjustednon−GAAPlossof1 million, with an adjusted non-GAAP loss of 0.03 per share for Q2 2023, compared to a loss of 0.01pershareinQ22022[19]BusinessLineDataandKeyMetricsChanges−Continuedpressureonconversationvolumesinsmallbusinesslistingsandsolutionproviders,whichhaspersistedsincelate2022[17]−Growthobservedinverticalssuchasautomotiveandautoservices,withautodealership−facingproductsgainingmomentumduetoexpandingOEMrelationships[17][20]−ServicecostsforQ22023were0.01 per share in Q2 2022 [19] Business Line Data and Key Metrics Changes - Continued pressure on conversation volumes in small business listings and solution providers, which has persisted since late 2022 [17] - Growth observed in verticals such as automotive and auto services, with auto dealership-facing products gaining momentum due to expanding OEM relationships [17][20] - Service costs for Q2 2023 were 5.5 million, which increased year-over-year due to higher data and labor costs associated with customer migrations [18] Market Data and Key Metrics Changes - The automotive vertical is expected to achieve double-digit revenue growth on a year-over-year basis by the end of 2023, driven by new customer adoption and existing customer ramping [20][25] - The company anticipates modest revenue growth in Q3 2023 compared to Q2 2023, offsetting headwinds in certain verticals with growth from new customer relationships [46] Company Strategy and Development Direction - The company aims to enhance customer experiences through conversational intelligence, leveraging strong relationships with enterprise companies in various verticals [13] - Focus on continuous innovation and investment in R&D to stay ahead in the conversational intelligence market [14] - Plans to achieve profitability earlier than previously anticipated while preserving the balance sheet for long-term needs [15] Management's Comments on Operating Environment and Future Outlook - Management believes the company is in a strong market position with significant opportunities for growth, particularly in the automotive sector [10][47] - The company has received recognition for its AI solutions, indicating a strong competitive edge in the market [12][38] - Management is optimistic about expanding relationships with Fortune 500 customers and launching new products in the coming months [48] Other Important Information - The company received a customer success award from Apili, highlighting the effectiveness of its solutions [12] - The management emphasizes the importance of data-driven insights and the ability to understand customer needs through advanced analytics [40] Q&A Session Summary Question: What are the volume trends across services? - Management noted that small business solution providers have been down year-over-year, continuing a trend from late 2022, but there is momentum in the automotive sector [50][51] Question: Can you provide a concrete example of conversational intelligence use cases? - A specific example involves 500 dealerships using the platform to quickly deliver education and performance insights based on customer interactions [54] Question: How does Generative AI fit into the company's strategy? - Generative AI is expected to accelerate understanding of customer sentiment and intent, leveraging existing data and math models to enhance service delivery [57][59]