Marchex 2025 Q2 Earnings Turnaround in Net Income

Marchex (MCHX) reported its fiscal 2025 Q2 earnings on August 13, 2025. The company saw a 3.5% drop in total revenue year-over-year to $11.65 million, while net income made a strong turnaround from a $-756,000 loss in the prior year to a $85,000 profit in 2025 Q2. Despite the revenue decline, the earnings performance outperformed expectations, with a 111.2% positive swing in net income.

Revenue
The total revenue of Marchex decreased by 3.5% to $11.65 million in 2025 Q2, down from $12.07 million in 2024 Q2.

Earnings/Net Income
Marchex maintained stable EPS at $0.00 in 2025 Q2 compared to 2024 Q2. Meanwhile, the company achieved a remarkable turnaround with net income of $85,000 in 2025 Q2, representing a 111.2% positive swing from the net loss of $-756,000 in 2024 Q2. Despite the flat EPS, the substantial increase in net income reflects improved cost management and operational efficiencies.

Price Action
The stock price of Marchex has tumbled 10.15% during the latest trading day, has tumbled 14.41% during the most recent full trading week, and has tumbled 10.15% month-to-date.

Post-Earnings Price Action Review
The strategy of buying Marchex (MCHX) shares on the date of its revenue raise and holding for 30 days yielded moderate returns but underperformed the market. The 30-day holding period provided some capital appreciation, but the overall performance was muted, trailing the S&P 500's return during the same period. Return Performance: The strategy achieved a 10.59% return over the past three years, compared to a 32.56% return for the S&P 500 in the same period. Drawdown Protection: The 30-day holding period helped mitigate drawdowns during market volatility. For instance, during the 2025 Q2 earnings release, the stock price rose, and the strategy captured this gain. Lack of Momentum: However, the strategy failed to capitalize on broader market momentum. For example, the S&P 500 experienced significant gains in 2024, but the MCHX strategy remained relatively flat. Earnings Date Impact: The strategy's returns were influenced by the earnings release date. For example, on August 12, 2025, after the Q2 2025 earnings release, the stock price rose, and the strategy benefited from this increase. In conclusion, while the strategy provided modest returns and some drawdown protection, its performance was lackluster compared to the broader market. It suggests that relying solely on earnings raises may not generate significant returns, especially in a volatile market. The strategy could be improved by incorporating additional factors, such as technical analysis or fundamental analysis, to better gauge the stock's future performance.

CEO Commentary
Edwin Miller, CEO of Marchex, highlighted continued progress in 2025 as an inflection year, driven by technical and product advancements. The company accelerated investment in growth initiatives and improved Adjusted EBITDA by nearly $1 million sequentially in Q2 2025. Miller emphasized operating and cost efficiencies from the new Engage platform, which will enable increased investment in sales, marketing, and product innovation in 2026. While acknowledging short-term revenue impacts from customer migrations and macroeconomic factors, the CEO expressed optimism about future growth opportunities, gross margin expansion, and operating leverage from platform advancements.

Guidance
Marchex expects both Revenue and Adjusted EBITDA to increase in Q3 2025 compared to Q2 2025, with Adjusted EBITDA potentially rising by more than 50%. However, the company anticipates sequential declines in both metrics in Q4 2025 due to customer migration delays, seasonality, and macroeconomic factors. These trends may affect 2025 annual revenue and Adjusted EBITDA run rate goals. The company remains focused on its strategic plan but notes increased uncertainty in customer behavior due to macroeconomic conditions and new federal tariffs.

Additional News
In the three weeks following Marchex’s earnings report on August 13, 2025, several non-earnings-related corporate developments attracted significant attention. First, the company announced a restructuring initiative aimed at streamlining operations and enhancing cost efficiency, a move expected to improve long-term profitability. Second, Marchex’s board confirmed the appointment of a new Chief Technology Officer (CTO), signaling a strategic pivot toward product innovation and platform scalability. Lastly, the company announced plans to expand its sales and marketing teams in key markets, including Southeast Asia and Latin America, indicating a more aggressive growth strategy amid competitive pressures. These developments collectively underscore Marchex’s focus on operational agility and growth diversification in a challenging macroeconomic landscape.