Marchex (NASDAQ: MCHX) reported Q3 EPS of ($0.03), $0.03 better than the analyst estimate of ($0.06). Revenue for the quarter came in at $26.5 million versus the consensus estimate of $23.89 million.

Q3 2020 Financial Highlights

• Revenue was $26.5 million for the third quarter of 2020, compared to $24.8 million for the third quarter of 2019.
• Core analytics and solutions revenue was $13.6 million for the third quarter of 2020, which included the benefit of recognizing $776,000 of revenues that were reserved at the end of the second quarter given they did not meet recognition criteria under our revenue recognition policies at such time. Excluding this amount, core analytics and solutions revenue for the third quarter of 2020 was $12.9 million, compared to $13.5 million for the third quarter of 2019.
• Net loss was $3.7 million for the third quarter of 2020 or $0.08 per diluted share. For the third quarter of 2019, net loss was $1.2 million or $0.03 per diluted share.

“The trend toward AI-powered conversational intelligence and sales engagement solutions is one that we believe can be transformational,” said Russell Horowitz, Executive Chairman and Co-CEO. “We are solving mission critical problems for businesses by giving them a real-time view of customer conversations across their most important communication channels, while also enabling them with solutions to engage customers and prospects in the moments that matter to deliver better experiences and achieve desired outcomes. In the third quarter, we took proactive steps to increasingly focus our business to capitalize on this expansive opportunity. We are leveraging industry leading conversational data to build a robust product pipeline with expanding AI capabilities that we believe will drive our future growth, while still maintaining a strong balance sheet.”

1 Information regarding the impact of the divestiture and discontinued operations is expected to be filed in the Company’s Form10-K for its fiscal year ended December 31, 2020. Preliminary estimated unaudited pro forma information giving effect to the divestiture prepared on a similar basis to the Unaudited Pro Forma Condensed Financial Information as presented in the Company’s Proxy Statement filed with the SEC on August 24, 2020 is included in the financial tables attached to this press release.

Business Outlook

“The year remains highly fluid and there is a degree of uncertainty in the near term, however, we are seeing encouraging engagement from customers with prospective planning, which we believe could positively impact the intermediate term,” said Mike Arends, Co-CEO & Chief Financial Officer. “Similar to recent quarters, for the fourth quarter we are not providing revenue or adjusted operating income or adjusted EBITDA guidance. It is worth noting that the fourth quarter is typically the lowest sales volume period for many of our customers, as call volumes seasonally decline during the holidays and as a result, we expect core analytics and solutions revenue will be sequentially lower in the quarter.”

“As we look at the intermediate term, we are encouraged by the conversations we are having with existing and potential new customers about next year. Assuming the current trajectory of these continue, and there is an unwinding of the business impact from the pandemic in 2021, we believe there is a path to achieving organic double-digit annual revenue growth on a run rate basis for core analytics and solutions. Additionally, as some of our new products sell through and contribute, we believe we can see a path in 2021 to break-even or better on an Adjusted EBITDA basis before the end of the year,” said Arends.

For earnings history and earnings-related data on Marchex (MCHX) click here.