Marchex Inc. (NASDAQ:MCHX) Reports Mixed Q2 2025 Results with Revenue Miss and Adjusted EBITDA Growth

Marchex Reports Mixed Q2 2025 Results as Revenue Misses, Adjusted EBITDA Improves

Marchex Inc. (NASDAQ:MCHX) reported its second-quarter 2025 financial results, delivering a mixed performance relative to analyst expectations. The company, which specializes in AI-driven conversational analytics, posted GAAP revenue of $11.7 million, down 3.4% year-over-year and below the consensus estimate of $12.6 million. However, adjusted earnings per share (EPS) came in at $0.02, surpassing the estimated loss of $0.01 per share.

Key Financial Highlights vs. Estimates

• Revenue: $11.7M (actual) vs. $12.6M (estimate) – a 7.3% miss
• Adjusted EPS: $0.02 (actual) vs. -$0.01 (estimate) – beating expectations
• Net Income: $0.1M vs. a net loss of $0.8M in Q2 2024
• Adjusted EBITDA: $0.6M, up from $0.3M in the prior-year quarter

The revenue decline was attributed to customer migration impacts related to the company’s new Engage platform, which CEO Edwin Miller described as a short-term headwind. Despite the revenue miss, cost efficiencies and operational improvements helped Marchex swing to profitability on an adjusted basis.

Market Reaction

Following the earnings release, Marchex shares dipped ~2.9% in after-hours trading, reflecting investor concerns over the revenue shortfall. However, the stock has shown relative stability over the past month, with a slight gain of ~1%. The market’s reaction suggests that while the revenue miss is a concern, the improved profitability and forward-looking commentary may be mitigating deeper losses.

Business Updates and Strategic Initiatives

Marchex highlighted several key developments in Q2:

• Expanded Partnership with FordDirect: A multi-year deal extending Marchex’s conversational AI solutions to over 3,000 Ford dealerships.
• Healthcare AI Solutions Launch: New AI-powered sentiment analysis tools tailored for healthcare providers.
• Product Awards: The Engage for Auto Sales & Service platform won the 2025 AI Agent Product of the Year Award.
• Gross Margin Expansion: The company expects continued margin improvement due to SaaS revenue growth and cloud efficiency gains.

Outlook vs. Analyst Estimates

Management anticipates sequential growth in Q3, with:

• Revenue and Adjusted EBITDA expected to increase from Q2 levels.
• Adjusted EBITDA could rise by more than 50% in Q3.

However, Q4 is expected to see a sequential decline due to customer migration delays and macroeconomic factors. Analysts currently estimate Q3 revenue at $13.2M and EPS at -$0.01, suggesting that Marchex’s internal projections may align with or slightly exceed expectations.

For the full year, analysts project revenue of $50.9M and an EPS loss of $0.06, indicating that the company’s performance will hinge on successful platform migrations and new customer acquisitions in the latter half of 2025.

Conclusion

Marchex’s Q2 results reflect a company in transition, balancing short-term revenue pressures with long-term operational improvements. While the top-line miss is a concern, profitability trends and strategic partnerships provide a foundation for future growth. Investors will be watching for signs of accelerated revenue recovery in Q3 and beyond.

For more detailed earnings estimates and historical performance, visit Marchex’s earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.