Marchex — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue increased to $16.0 million (reported as $15.974 million in tables) for the three months ended September 30, 2026, up from $15.2 million in the third quarter of 2025.
• GAAP Net Income was $1.3 million ($0.03 per diluted share), compared to a net loss of $1.3 million ($0.03 per diluted share) in the prior year period.
• Adjusted EBITDA increased to $2.4 million (reported as $2.374 million in tables), compared to $0.5 million in the prior year period, with Adjusted EBITDA margin expanding to approximately 15% from 3%.
• Adjusted EBITDA before reorganization and acquisition-related costs was $2.6 million (16% margin).
• Adjusted non-GAAP income per share was $0.04, compared to an adjusted non-GAAP loss of $0.01 per share in the prior year period.
• Total operating expenses decreased to $14.5 million from $16.3 million in the prior year period.
• Cash and cash equivalents were $8.7 million as of September 30, 2026, down from $10.3 million as of December 31, 2025.
• Deferred revenue and deposits decreased to $0.4 million from $0.6 million in the prior year period.
• Total liabilities increased to $26.6 million from $13.9 million in the prior year period, driven by related party obligations ($4.9 million current, $6.7 million non-current) and contingent earn-outs ($2.5 million current, $2.0 million non-current).

Guidance and Future Outlook:

• Fourth Quarter 2026 revenue is anticipated to be $15.0 million or more.
• Fourth Quarter 2026 Adjusted EBITDA, net of reorganization and acquisition costs, is anticipated to be between $2.3 million and $2.5 million.
• Management notes that Q4 seasonality typically leads to lower sequential revenue and Adjusted EBITDA due to lower conversational volumes, though the company believes opportunities exist to offset this based on the current sales pipeline.
• Initial 2027 financial outlook is expected to be provided in early March 2027.
• The company intends to selectively invest in sales and product development in 2027 to capitalize on combined capabilities while maintaining disciplined expense management.

Business Segments and Product Lines:

• Following the July 2026 acquisition of Archenia, Marchex is integrating conversational intelligence with AI-powered customer qualification and automated engagement technologies.
• An existing advertising and media customer deployed the AI Voice Agent solution commercially after a successful paid pilot; the relationship generates approximately $400,000 in annualized revenue and is expected to generate more than $200,000 in incremental annualized revenue in 2027.
• A major automotive OEM approved Marchex's "Engage for Service" solution for distribution through its dealer portal, enabling dealers to access OEM co-op funding; the solution was previously piloted with 75 dealerships.
• The company serves verticals including automotive, insurance, home services, healthcare, and advertising/media.

Market and Competitive Landscape:

• Management believes the combination of Marchex's conversational intelligence and Archenia's technologies creates a differentiated platform to capture a greater share of customer spending and expand the market opportunity.
• The company highlights the ability to cross-sell AI-powered solutions to existing enterprise customers and unlock new markets through expanded distribution channels.

Risks and Challenges:

• Forward-looking statements involve substantial risks, including product demand, order cancellations and delays, competition, changes in business strategy, and general economic conditions.
• Actual results may differ materially from plans due to these factors.
• The company notes that Q4 seasonality typically results in lower sequential revenue and Adjusted EBITDA.

Management Commentary and Tone:

• Russell Horowitz, Chairman, stated that results reflect a "new phase of growth" with positive GAAP net income and significant EBITDA improvement.
• Management expressed confidence in "early commercial traction" following the Archenia combination, citing expanded customer relationships and new AI solution deployments.
• Travis Fairchild was appointed President effective November 9, 2026, following his tenure as CEO of Archenia; he previously served in senior roles at Marchex for 18 years.
• Troy Hartless continues as Chief Revenue Officer.
• Management emphasized a focus on scaling the business while maintaining financial discipline and deepening customer relationships.

Other Key Points:

• Marchex acquired Archenia in July 2026.
• The company reported $0.2 million in reorganization and acquisition-related costs included in the Adjusted EBITDA calculation.
• Stock-based compensation totaled $0.6 million for the quarter ended September 30, 2026, down from $1.0 million in the prior year period.
• The company will provide its initial 2027 financial outlook when reporting Fourth Quarter 2026 results.