It’s a busy day for publicly traded domain related companies as Marchex, Inc. (NASDAQ:MCHX) also reported its results for the quarter ended March 31, 2011 today after the market closed.
Its the third company in our Domain Stock Index to report today and like QuinStreet and Demand Media, Wall Street liked Marchex’s report and the stock traded up over 6% in after hours trading.
Here are the highlights:
First Quarter 2011 Consolidated Financial Results:
- Revenue was $29.1 million for the first quarter of 2011, compared to $24.0 million for the same period of 2010.
- GAAP net income applicable to common stockholders was $513,000 for the first quarter of 2011 or $0.01 per diluted share. This compares to GAAP net loss applicable to common stockholders of $111,000 or $0.00 per diluted share for the same period of 2010. The first quarter 2011 results included non-cash stock-based compensation expense of $3.5 million, compared to non-cash stock-based compensation expense of $2.4 million for the same period in 2010.
- Adjusted operating income before amortization was $3.2 million for the first quarter of 2011, compared to $2.0 million for the same period of 2010. A reconciliation of non-GAAP adjusted operating income before amortization to GAAP operating income is included in the financial tables attached to this release.
- Adjusted EBITDA was $4.2 million in the first quarter of 2011, compared to $3.4 million for the same period of 2010. A reconciliation of adjusted EBITDA to GAAP net cash provided by operating activities is included in the financial tables attached to this release.
“We believe Call Advertising represents one of the primary growth opportunities in digital advertising,” said Russell C. Horowitz, Marchex Chairman and CEO. “We believe that continuing to invest in this opportunity — specifically in our customers, products and people — will drive our long-term success in defining this market.”
1. In the first quarter, Marchex added more than 10,000 new advertisers utilizing its call advertising products and ended the quarter with more than 105,000 advertisers. Marchex entered into a new agreement with Yellow Pages Group Canada to drive calls through Skype to all of their approximately 370,000 business customers.
2. On April 7, Marchex acquired Jingle Networks, one of the leading providers of mobile voice search performance advertising and technology solutions in North America. With the addition of Jingle Networks, the Marchex Call Advertising Network now has an annualized reach of more than 500 million phone calls across digital media, including mobile. The Marchex Call Advertising Network now includes exclusive and preferred relationships with more than one hundred channel sources including: four of the top five U.S. mobile carriers, the leading global VOIP provider (Skype), mobile network operators, mobile application and directory providers.
3. Publishing: For the first quarter of 2011, revenue from Publishing, which is Marchex’s proprietary local and category websites that fulfill advertiser campaigns, was $5.3 million.
4. During the first quarter of 2011, Marchex sold a small number of non-strategic domains that yielded $1.9 million.
5. Marchex also purchased 29,000 shares of its outstanding Class B common stock for a total price of $252,000, bringing its total shares repurchased under its stock repurchase program to 10.0 million shares, or 28% of its outstanding common stock.
The following reflects Marchex financial guidance for fiscal year ending December 31, 2011:
|Revenue estimate:||$137 million to $141 million|
Adjusted Operating Income Before Amortization estimate:
|More than $15 million|
|Adjusted EBITDA:||Estimated add-backs of approximately $4.5 million in additional depreciation and amortization to adjusted operating income before amortization, implying an adjusted EBITDA of more than $19.5 million.|
|Long Term Adjusted EBITDA Margin Target:||20% or more|
GAAP income (loss) from operations is expected to be ($8.6) million or better, assuming stock-based compensation between $14 million and $15.5 million and amortization of intangible assets from acquisitions between $7 million and $9 million. This estimate excludes any prospective gain or loss on sales and disposals of intangible assets.
The following reflects Marchex financial guidance for the second quarter of 2011:
|Revenue estimate:||$35 million – $36 million|
|Revenue detail:||Marchex anticipates revenue from proprietary traffic sources for the second quarter of 2011 to be relatively consistent with the first quarter. Marchex expects revenue volatility from time to time from proprietary traffic sources due to the nature of large advertiser spending.|
|Adjusted Operating Income Before Amortization:||More than $3.3 million|
|Adjusted EBITDA:||Estimated add-backs of approximately $1.2 million in additional depreciation and amortization to adjusted operating income before amortization, implying an adjusted EBITDA of more than $4.5 million.|
GAAP income (loss) from operations is expected to be ($4.3) million or better, assuming stock-based compensation between $3.7 million and $4.0 million and amortization of intangible assets from acquisitions between $2 million and $3 million. This estimate excludes any gain or loss on sales and disposals of intangible assets.
“Our growth continues to be defined by the momentum in our Call Advertising products. As we invest to bring greater scale for our call advertising products, we believe we will see an increase in incremental contribution from these growth initiatives flow through to expanding margins through the end of 2011 and beyond. We believe our building momentum is setting a strong foundation for long-term growth and financial leverage,” said Michael Arends, Marchex Chief Financial Officer.