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Marchex Inc.$3.02($.05)(1.63%)

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 Marchex Announces Fourth Quarter and Full Year 2015 Results
   Thursday, February 18, 2016 4:15:04 PM ET

--Fourth Quarter Call-Driven Revenue of $34.3 million, up 13% Year-Over-Year, and 31% Year-Over-Year excluding YP

--Sold remaining non-strategic Archeo assets to focus on Mobile Advertising Analytics leadership

Marchex, Inc. (MCHX ), a leading mobile advertising analytics company, today announced its financial results for the fourth quarter and full year ended December 31, 2015.

"In 2015, we focused our entire company toward one opportunity: to provide global brands extraordinary insights into the mobile consumer journey by uniting the physical and digital worlds," said Pete Christothoulou, CEO. "We exited the year as the most innovative analytics company, trusted by the world’s largest brands, to measure and connect digital media to offline sales. I’m excited about the team we are building and what we plan to accomplish in 2016."



Q4 2015 Financial Highlights(1)

-- GAAP revenue was $34.9 million for the fourth quarter of 2015, compared to $31.2 million for the fourth quarter of 2014.

-- GAAP net income from continuing operations was $1.2 million for the fourth quarter of 2015. This compares to GAAP net loss from continuing operations of $146,000 for the fourth quarter of 2014.

-- GAAP net income from continuing operations attributable to common stockholders per diluted share was $0.03 for the fourth quarter of 2015. This compares to GAAP net loss from continuing operations of $0.00 for the fourth quarter of 2014.

                         Q4 2015                Q4 2014
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     GAAP Revenue                           $34.9 million          $31.2 million
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     Call-Driven and related Revenue        $34.3 million          $30.3 million
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     Non-GAAP Results:                   
                     -------------------------------- -------------------- ---------------------------------------------------------------
                     Call-Driven Adjusted OIBA(2)           $1.6 million           $2.5 million
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     Call-Driven Adjusted EBITDA(2)         $2.5 million           $3.4 million
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     Adjusted OIBA(2)                       $2.0 million           $2.4 million
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     Adjusted EBITDA(2)                     $2.9 million           $3.3 million
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                                          
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     Archeo Revenue                         $0.6 million           $0.9 million
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     Gain on Sale of Archeo Assets(1)       $1.5 million                 -
                     -------------------------------- -------------------- -------------------- -------------------- --------------------
                     Cash Balance                           $109 million            $80 million
                     -------------------------------- -------------------- -------------------- -------------------- --------------------

-- Adjusted non-GAAP EPS(2) from continuing operations for the fourth quarter of 2015 was $0.03, compared to $0.04 for the fourth quarter of 2014.

Q4 2015 Other Financial Highlights

-- During the fourth quarter of 2015, YP contributed $9.0 million in Call-Driven Revenues, compared to $11.1 million in the fourth quarter 2014.

-- During the fourth quarter of 2015, Marchex purchased 143,000 shares of its outstanding Class B common stock for a total price of $600,000. This brings Marchex’s total shares repurchased under its November 2014 share repurchase program to 1.6 million shares or 4% of its outstanding Class B common stock.

Full Year 2015 Financial Highlights(1)

-- GAAP revenue was $143.0 million for 2015, compared to $173.6 million for 2014.

-- GAAP net loss from continuing operations was $597,000 for 2015, compared to $22.8 million for 2014, which included the effect of a non-cash charge to income tax expense of $22.3 million for a valuation allowance on our deferred tax assets.

-- GAAP net loss from continuing operations attributable to common stockholders per diluted share was $0.01 for 2015, compared to $0.57 for 2014.

                         2015                   2014
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                     GAAP Revenue                         $143.0 million         $173.6 million
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                     Call-Driven and related Revenue      $139.9 million         $168.1 million
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                     Non-GAAP Results:                      
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                     Call-Driven Adjusted OIBA(2)          $7.8 million           $11.1 million
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                     Call-Driven Adjusted EBITDA(2)        $11.5 million          $14.7 million
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                     Adjusted OIBA(2)                      $8.2 million           $12.0 million
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                     Adjusted EBITDA(2)                    $11.9 million          $15.6 million
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                                         
                     ------------------------------- -------------------- -------------------- -------------------- --------------------
                     Archeo Revenue                        $3.1 million           $5.5 million
                     ------------------------------- -------------------- -------------------- -------------------- --------------------

-- Adjusted non-GAAP EPS(2) from continuing operations for 2015 was $0.13, compared to $0.19 for 2014.

-- During 2015, YP contributed $40.2 million in Call-Driven Revenues, compared to $41.8 million in 2014.

(1)In December 2015, the Company sold its remaining Archeo assets. The financial results of this disposition are included in continuing operations in our consolidated statements of operations. The Company had previously sold certain Archeo domain name and related assets in April 2015 and certain pay-per-click assets in July 2013. The financial results of these prior dispositions are presented as discontinued operations net of tax in our consolidated statements of operations in accordance with GAAP, and are excluded from all other results unless otherwise noted.

(2)Reconciliations of non-GAAP measures are included in the financial tables attached to this press release and we encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures.

2015 Business Highlights

Marchex removed several of the divergent priorities in the business, including selling non-core assets. It moved aggressively to build new partnerships with leading global brands and agencies, strengthened its team and launched groundbreaking products that solve many of the mobile advertising problems clients are facing. The following highlights selected points of progress throughout the year:

Strategic Focus and Growth

-- Focused on building the most powerful set of analytics tools for enterprise marketers to deeply understand the online-to-offline path to purchase.

-- Accelerated Call-Driven Revenue growth excluding YP to 31% in Q4 2015 compared to Q4 2014.

-- Increased 2015 revenue growth by 50% on average across three core verticals - Auto, Communications, and Home Services.

-- Sold all non-core Archeo assets. In April 2015, sold the bulk of Archeo’s domain portfolio for cash proceeds of $28.1 million plus additional earn-out payments subject to certain sales targets; and in December 2015, sold the remaining Archeo assets for a gain on sale of $1.5 million.

International Expansion

-- Announced Analytics product expansion to 10 markets throughout Europe, Canada, Australia and New Zealand to support enterprise client demand, including CDK Global and Yell.

Global Partnership Additions

-- Signed strategic partnerships with two of the world’s largest global advertising agencies including with Light Reaction, a mobile-first performance advertising business that is part of Xaxis, the programmatic media division of GroupM, to launch click-to-call mobile performance products.

Product Innovation

Marchex accelerated its analytics product momentum in 2015 announcing the following innovations:

-- Display Analytics beta, an industry-first Analytics product that for the first time enables enterprise marketers to measure when any inbound phone call to a call center or store is influenced by exposure to a display advertisement on a desktop or mobile device, even when a phone call occurs weeks or months after exposure to an ad. The reports are delivered real-time and track cross-device conversions, providing marketers with actionable intelligence to shift towards display tactics that produce positive returns.

-- Search Analytics, an industry-first Analytics product that enables brands and agencies to track and measure which keywords drive sales from click-to-call ads. Features of Search Analytics include: 100% keyword attribution from all phone calls driven from mobile search; real-time conversion data using Real-Time Call DNA technology to identify those calls that are most likely to convert into sales; and automated setup and synchronization with leading bid-management platforms, such as DoubleClick, Kenshoo and Marin, which allows search marketers to measure and improve campaigns accurately in real time.

-- Proprietary enhancements to our patented Real-Time Call DNA, including the ability to automatically redact credit card numbers from recorded phone calls in real-time. Using voice stream pattern recognition and machine learning algorithms, the technology redacts consumer credit card information while the call recording is being processed within Marchex’s secure datacenter.

-- Proprietary enhancements to its infrastructure, including Clean Call 3.0, a breakthrough in automatically detecting and stopping robocallers without the need for consumer verification through an interactive voice response (IVR) prompt. Call spam that uses fake Caller IDs is on the rise and analysis by Marchex estimates that robocalling may cost businesses more than $1 billion each year in telephone charges and lost productivity.

Leadership Additions

-- Announced executive appointments including Gary Nafus as Chief Revenue Officer and Customer Engagement Specialist Matthew Muilenburg as Senior Vice President to accelerate mobile advertising analytics leadership.

2016 Business Outlook

The following forward-looking statements reflect Marchex’s expectations as of February 18, 2016. In 2016, the company’s strategic priorities include:

-- Grow new and existing enterprise client relationships,

-- Accelerate product innovation, and

-- Expand global strategic partnerships.

The following financial guidance includes expectation of an incremental annual investment in sales and marketing, and related costs of more than $6 million for 2016 designed to capitalize on the company’s product, international and agency growth initiatives. The company expects the incremental investments to disproportionately impact the first half.

                                 Total Call-Driven financial guidance for
                                  the First Quarter ending March 31, 2016
--------------------------------------------------------------------------------------------------------
 
-----------------------------------------------------------------------------------------------------------
Call-Driven Revenue Including YP                    $35 million or more
-------------------------------- -------------------- ----------------------------------------------------
Call-Driven Adjusted OIBA(3)       a loss of ($0.5) million to a loss of ($2.5) million
-------------------------------- -------------------- ----------------------------------------------------
Call-Driven Adjusted EBITDA(3)           $0.5 million to a loss of ($1.5) million
-------------------------------- -------------------- ----------------------------------------------------
                                  
                   Call-Driven financial guidance excluding
                   YP for the year ending December 31, 2016
---------------------------------------------------------------------------
Call-Driven Revenue Excluding YP(3)   $117 million or more
----------------------------------- -------------------- --------------------
                                     

(3)Reconciliations of non-GAAP measures are included in the financial tables attached to this press release and we encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures.

Conference Call and Webcast Information

Management will hold a conference call, starting at 5:00 p.m. ET on Thursday, February 18, 2016 to discuss its fourth quarter and full year ended December 31, 2015 financial results, and other company updates. Access to the live webcast of the conference call will be available online from the Investors section of Marchex’s website at www.marchex.com. An archived version of the webcast will also be available at the same location, beginning two hours after completion of the call.

About Marchex

Marchex is a mobile advertising analytics company that connects online behavior to real-world, offline actions. By linking critical touchpoints in the customer journey, Marchex’s products enable a 360-degree view of marketing effectiveness. Brands and agencies utilize Marchex’s products to transform business performance.

Please visit www.marchex.com, www.marchex.com/blog or @marchex on Twitter (Twitter.com/Marchex), where Marchex discloses material information from time to time about the Company, its financial information, and its business.

Forward-Looking Statements:

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenues, other financial guidance, acquisitions, dispositions, projected costs, prospects, plans and objectives of management are forward-looking statements. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. There are a number of important factors that could cause Marchex’s actual results to differ materially from those indicated by such forward-looking statements which are described in the "Risk Factors" section of our most recent periodic report and registration statement filed with the SEC. All of the information provided in this release is as of February 18, 2016 and Marchex undertakes no duty to update the information provided herein.

Non-GAAP Financial Information:

To supplement Marchex’s consolidated financial statements presented in accordance with GAAP and to provide clarity internally and externally, Marchex uses certain non-GAAP measures of financial performance and liquidity, including OIBA, Adjusted OIBA, Adjusted EBITDA, Adjusted non-GAAP EPS and Call-Driven and Archeo Adjusted OIBA and EBITDA. Additionally, Marchex also provides Call-Driven and Archeo Revenue excluding revenue generated from our contracts with Yellowpages.com LLC ("YP").

OIBA represents income (loss) from operations plus (1) stock-based compensation expense and (2) amortization of intangible assets from acquisitions. This measure, among other things, is one of the primary metrics by which Marchex evaluates the performance of its business. Additionally, Marchex’s management uses Adjusted OIBA, which excludes acquisition and disposition related costs, and gain on sale of Archeo assets, as these items are not indicative of Marchex’s recurring core operating results. Adjusted OIBA is the basis on which Marchex’s internal budgets are based and by which Marchex’s management is currently evaluated. Marchex believes these measures are useful to investors because they represent Marchex’s consolidated operating results, taking into account depreciation and other intangible amortization, which Marchex believes is an ongoing cost of doing business, but excluding the effects of certain other expenses such as stock-based compensation, amortization of intangible assets from acquisitions, acquisition and disposition related costs, and gain on sale of Archeo assets. Adjusted EBITDA represents income before interest, income taxes, depreciation, amortization, stock compensation expense, acquisition and disposition related costs, and gain on sale of Archeo assets. Marchex believes that Adjusted EBITDA is another alternative measure of liquidity to GAAP net cash provided by operating activities that provides meaningful supplemental information regarding liquidity and is used by Marchex’s management to measure its ability to fund operations and its financing obligations.

Call-Driven Adjusted OIBA and EBITDA include the above descriptions of Adjusted OIBA and EBITDA for the Call-Driven segment. The Call-Driven Adjusted OIBA and EBITDA assign all Marchex general corporate overhead costs to the Call-Driven results. Archeo Adjusted OIBA and EBITDA include the above descriptions of Adjusted OIBA and EBITDA for the Archeo segment. Call-Driven and Archeo Revenue excluding YP excludes revenue generated through our contracts with YP. Financial analysts and investors may use Adjusted OIBA and EBITDA and Revenue excluding YP to help with comparative financial evaluation to make informed investment decisions. Adjusted non-GAAP EPS represents Adjusted non-GAAP net income applicable to common stockholders divided by GAAP diluted shares outstanding. Adjusted non-GAAP net income applicable to common stockholders generally captures those items on the statement of operations that have been, or ultimately will be, settled in cash exclusive of certain items that are not indicative of Marchex’s recurring core operating results and represents net income applicable to common stockholders plus the net of tax effects of: (1) stock-based compensation expense, (2) amortization of intangible assets from acquisitions, (3) acquisition and disposition related costs, (4) interest and other income (expense), (5) discontinued operations, net of tax, (6) dividends paid to participating securities, and (7) gain on sale of Archeo assets. Financial analysts and investors may use Adjusted non-GAAP EPS to analyze Marchex’s financial performance since these groups have historically used EPS related measures, along with other measures, to estimate the value of a company, to make informed investment decisions, and to evaluate a company’s operating performance compared to that of other companies in its industry.

Marchex’s management believes that investors should have access to, and Marchex is obligated to provide, the same set of tools that management uses in analyzing the company’s results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, and should not be considered in isolation, as a substitute for, or superior to, GAAP results. Marchex’s non-GAAP financial measures may be defined differently from time to time and may be defined differently than similar titled terms used by other companies, and accordingly, care should be exercised in understanding how Marchex defines its non-GAAP financial measures in this release. Marchex endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measure with equal or greater prominence, GAAP financial statements, and detailed descriptions of the reconciling items and adjustments, including quantifying such items, to derive the non-GAAP measure.

 
                                                                                                                                                                      MARCHEX, INC. AND SUBSIDIARIES
                                                                                                                                                              Condensed Consolidated Statements of Operations
                                                                                                                                                                   (in thousands, except per share data)
                                                                                                                                                                                (unaudited)
                                                                                                                                                                                                                                            
                                                                                                                                                        Three months ended                                                                                                                           Twelve Months Ended
                                                                                                                                                           December 31,                                                                                                                                 December 31,
                                                                                                         2014         2015                             2014          2015   
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Revenue                                                                                                                  $ 31,227                                                              $ 34,900                                                              $ 173,601                                                              $ 143,013
                                                                                                                                                                                                                                                                                                                          
Expenses:
                         Service costs (1)                                                                                 17,033                                                                19,601                                                                111,259                                                                 78,767
                         Sales and marketing (1)                                                                            2,960                                                                 4,493                                                                 11,719                                                                 16,462
                         Product development (1)                                                                            6,962                                                                 7,450                                                                 29,561                                                                 31,058
                         General and administrative (1)                                                                     4,791                                                                 3,585                                                                 20,918                                                                 18,510
                         Amortization of intangible assets from acquisitions                                                    -                                                                     -                                                                    434                                                                      -
                         Acquisition and disposition related costs                                           -           20                              (68 )                            219  
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
                          Total operating expenses                                                                         31,746                                                                35,149                                                                173,823                                                                145,016
                         Gain on sale of Archeo assets                                                       -        1,496                                -         1,496  
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Income (loss) from operations                                                                                                (519 )                                                               1,247                                                                   (222 )                                                                 (507 )
Interest expense and other, net                                                                            (19 )                           (11 )                                               (62 )                            (63 )
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Income (loss) from continuing operations before provision for income                                                         (538 )                                                               1,236                                                                   (284 )                                                                 (570 )
taxes
Income tax expense (benefit)                                                                              (392 )                            16                           22,509            27  
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net Income (loss) from continuing operations                                                                                 (146 )                                                               1,220                                                                (22,793 )                                                                 (597 )
Discontinued operations:
                         Income from discontinued operations, net of tax                                                      716                                                                    38                                                                  3,425                                                                  5,123
                         Gain on sale from discontinued operations, net of tax                               -            -                              278        22,195  
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Discontinued operations, net of tax                                                                        716           38                            3,703        27,318  
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net income (loss)                                                                                                             570                                                                 1,258                                                                (19,090 )                                                               26,721
Dividends paid to participating securities                                                                 (28 )                                                -                             (127 )                                               (37 )
                                                                                                      -------------------- ------ --------------------                      -------------------- ------ --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
Net income (loss) applicable to common stockholders                                                                      $    542                        $  1,258                                           $ (19,217 )                                         $  26,684  
                                                                                                      ==================== ====== ==================== ==================== ==================== ====== ====================                      ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                          
Basic and diluted net income (loss) per Class A and Class B share
applicable to common stockholders:
                         Continuing operations                                                                           $  (0.00 )                                                            $   0.03                                                              $   (0.57 )                                                            $   (0.01 )
                         Discontinued operations, net of tax                                                             $   0.01                        $   0.00                                           $    0.09                        $    0.66  
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Basic and diluted net income (loss) per Class A and Class B share                                                        $   0.01                                                              $   0.03                                                              $   (0.48 )                                                            $    0.65
applicable to common stockholders
Dividends paid per share                                                                                                 $   0.02                                                              $      -                                                              $    0.08                                                              $    0.04
Shares used to calculate basic net income (loss) per share
applicable to common stockholders
                         Class A                                                                                            5,233                                                                 5,233                                                                  5,853                                                                  5,233
                         Class B                                                                                           35,969                                                                35,804                                                                 34,157                                                                 35,935
Shares used to calculate diluted net income (loss) per share
applicable to common stockholders
                         Class A                                                                                            5,233                                                                 5,233                                                                  5,853                                                                  5,233
                         Class B                                                                                           41,202                                                                41,599                                                                 40,010                                                                 41,168
                    (1 ) Includes stock-based compensation allocated as follows:
                         Service costs                                                                                   $    363                                                              $    143                                                              $   1,373                                                              $   1,189
                         Sales and marketing                                                                                  230                                                                   414                                                                    888                                                                  1,307
                         Product development                                                                                  578                                                                   567                                                                  2,595                                                                  2,410
                         General and administrative                                                      1,704        1,091                            7,032         5,118  
                                                                                                      -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                      -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
                         Total                                                                                           $  2,875                        $  2,215                                           $  11,888                        $  10,024  
                                                                                                      ==================== ====== ==================== ==================== ==================== ====== ====================                      ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                       
                                                                                                  MARCHEX, INC. AND SUBSIDIARIES
                                                                                               Condensed Consolidated Balance Sheets
                                                                                                          (in thousands)
                                                                                                            (unaudited)
                                                                                                  
                                                                                                                          December 31,                                                            December 31,
                                                            Assets                                         2014           2015    
                                                                                                       -------------------- -------- -------------------- -------------------- -------------------- -------- --------------------
Current assets:
                     Cash and cash equivalents                                                                            $   80,032                                                              $  109,155
                     Accounts receivable, net                                                                                 25,941                                                                  24,621
                     Prepaid expenses and other current assets                                                                 3,143                                                                   1,784
                     Refundable taxes                                                                         131            127  
                                                                                                       -------------------- -------- -------------------- -------------------- -------------------- -------- --------------------
                                             Total current assets                                                            109,247                                                                 135,687
                                                                                                                                                                                
                     Property and equipment, net                                                                               5,430                                                                   5,778
                     Intangibles and other assets, net                                                                           313                                                                     222
                     Goodwill                                                                              65,679         63,305  
                                                                                                       -------------------- -------- -------------------- -------------------- -------------------- -------- --------------------
                                              Total Assets                                                                $  180,669                        $  204,992  
                                                                                                       ==================== ======== ==================== ==================== ==================== ======== ====================
                                                                                                                                                                                
                                             Liabilities and Stockholders’ Equity
                                                                                                                                                                                
Current liabilities:
                     Accounts payable                                                                                     $   13,766                                                              $    9,460
                     Accrued expenses and other current liabilities                                                            7,515                                                                   6,712
                     Deferred revenue                                                                       2,117            692  
                                                                                                       -------------------- -------- -------------------- -------------------- -------------------- -------- --------------------
                                             Total current liabilities                                                        23,398                                                                  16,864
                                                                                                                                                                                
                     Other non-current liabilities                                                          1,118            662  
                                                                                                       -------------------- -------- -------------------- -------------------- -------------------- -------- --------------------
                                             Total Liabilities                                                                24,516                                                                  17,526
                                                                                                                                                                                
                                                                                                                                                                                
                     Class A common stock                                                                                         55                                                                      55
                     Class B common stock                                                                                        373                                                                     368
                     Treasury stock                                                                                           (2,503 )                                                                  (238 )
                     Additional paid-in capital                                                                              348,467                                                                 350,799
                     Accumulated deficit                                                                 (190,239 )                        (163,518 )
                                                                                                       -------------------- -------- -------------------- -------------------- -------------------- -------- --------------------
                                             Total Stockholders’ Equity                                   156,153        187,466  
                                                                                                       -------------------- -------- -------------------- -------------------- -------------------- -------- --------------------
                                                                                                                          $  180,669                                                              $  204,992
                                                                                                                                                                                                              
                                                                                                                                                                                                                            MARCHEX, INC. AND SUBSIDIARIES
                                                                                                                                                                                                                                    (in thousands)
                                                                                                                                                                                                                                     (unaudited)
                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                           Reconciliation of GAAP Income (loss) from Operations to Operating
                                                                                                                                                                                                                           Income Before Amortization (OIBA)
                                                                                                                                                                                                           and Adjusted Operating Income Before Amortization (Adjusted OIBA)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                            Three Months Ended                                                                                                                                                                                                               Twelve Months Ended
                                                                                                                                                               December 31,                                                                                                                                                                                                                     December 31,
                                                                                                             2014                            2015                                                                                                                 2014                            2015   
                                                                                                          -------------------- ------ --------------------                      -------------------- ------ --------------------                                                                                                          -------------------- ------- --------------------                      -------------------- ------ --------------------
Income (loss) from operations                                                                                                $   (519 )                                                            $  1,247                                                                                                                                                  $    (222 )                                                            $   (507 )
                               Stock-based compensation                                                                         2,875                                                                 2,215                                                                                                                                                     11,888                                                                10,024
                               Amortization of intangible assets from acquisitions                               -                               -                                                                                                                  434                               -  
                                                                                                          -------------------- ------ --------------------                      -------------------- ------ --------------------                                                                                                          -------------------- ------- --------------------                      -------------------- ------ --------------------
Operating income before amortization (OIBA)                                                                                     2,356                                                                 3,462                                                                                                                                                     12,100                                                                 9,517
                               Acquisition and disposition related costs                                                            -                                                                    20                                                                                                                                                        (68 )                                                                 219
                               Gain on sale of Archeo assets                                                     -                          (1,496 )                                                                                                                                     -                          (1,496 )
                                                                                                          -------------------- ------ --------------------                      -------------------- ------ --------------------                                                                                                          -------------------- ------- --------------------                      -------------------- ------ --------------------
Adjusted operating income before amortization (Adjusted OIBA)                                                                $  2,356                                           $  1,986                                                                                                                               $  12,032                                           $  8,240  
                                                                                                          ==================== ====== ====================                      ==================== ====== ====================                                                                                                          ==================== ======= ====================                      ==================== ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                           Reconciliation from Net Cash provided by Operating Activities to
                                                                                                                                                                                                                                    Adjusted EBITDA
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                            Three Months Ended                                                                                                                                                                                                               Twelve Months Ended
                                                                                                                                                               December 31,                                                                                                                                                                                                                     December 31,
                                                                                                             2014         2015                                                                                                                 2014         2015   
                                                                                                          -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Net cash provided by operating activities                                                                                    $  4,302                                                              $    753                                                                                                                                                  $  22,419                                                              $ 12,753
                               Changes in asset and liabilities                                                                    58                                                                 2,150                                                                                                                                                    (25,991 )                                                               3,963
                               Income tax expense (benefit)                                                                      (392 )                                                                  16                                                                                                                                                     22,509                                                                    27
                               Acquisition and disposition related costs                                                            -                                                                    20                                                                                                                                                          -                                                                   219
                               Interest expense and other, net                                                                     19                                                                    11                                                                                                                                                         62                                                                    63
                               Income on discontinued operations, net of tax                                                     (734 )                                                                 (38 )                                                                                                                                                   (3,555 )                                                              (5,140 )
                               Tax effect on gain on sale of discontinued operations                             -            -                                                                                                                  144            -  
                                                                                                          -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- ------ --------------------
Adjusted EBITDA                                                                                                              $  3,253                        $  2,912                                                                                                                               $  15,588                        $ 11,885  
                                                                                                          ==================== ====== ==================== ==================== ==================== ====== ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Net cash provided by (used in) investing activities                                                                          $ (1,000 )                                         $    242                                                                                                                               $  (3,178 )                                         $ 21,822  
                                                                                                          ==================== ====== ==================== ==================== ==================== ====== ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Net cash provided by (used in) financing activities                                                                          $ (3,922 )                                         $   (776 )                                                                                                                                                $  29,879                        $ (5,452 )
                                                                                                          ==================== ====== ==================== ==================== ==================== ====== ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ====== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                              MARCHEX, INC. AND SUBSIDIARIES
                                                                                                                                                                                                                    Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS
                                                                                                                                                                                                                           (in thousands, except per share data)
                                                                                                                                                                                                                                     (unaudited)
                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                               Three Months Ended                                                                                                                                                                                                               Twelve Months Ended
                                                                                                                                                                  December 31,                                                                                                                                                                                                                     December 31,
                                                                                                                2014         2015                                                                                                                 2014          2015   
                                                                                                             -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Adjusted Non-GAAP EPS from continuing operations                                                                                $   0.04                        $   0.03                                                                                                                               $    0.19                        $    0.13  
                                                                                                             ==================== ====== ==================== ==================== ==================== ====== ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Net Income (loss) from continuing operations applicable to common                                                               $  (0.00 )                                                            $   0.03                                                                                                                                                  $   (0.57 )                                                            $   (0.01 )
stockholders - diluted (GAAP EPS)
Shares used to calculate diluted net income (loss) from continuing                                                                41,202                                                                41,599                                                                                                                                                     40,010                                                                 41,168
operations per share applicable to common stockholders
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Net income (loss) applicable to common stockholders                                                                             $    542                                                              $  1,258                                                                                                                                                  $ (19,217 )                                                            $  26,684
                   Stock-based compensation                                                                                        2,875                                                                 2,215                                                                                                                                                     11,888                                                                 10,024
                   Acquisition and disposition related costs                                                                           -                                                                    20                                                                                                                                                        (68 )                                                                  219
                   Gain on sale of Archeo assets                                                                                       -                                                                (1,496 )                                                                                                                                                        -                                                                 (1,496 )
                   Amortization of intangible assets from acquisitions                                                                 -                                                                     -                                                                                                                                                        434                                                                      -
                   Interest expense and other, net                                                                                    19                                                                    11                                                                                                                                                         62                                                                     63
                   Dividends paid to participating securities                                                                         28                                                                     -                                                                                                                                                        127                                                                     37
                   Tax valuation allowance                                                                                          (659 )                                                                   -                                                                                                                                                     21,686                                                                      -
                   Discontinued operations, net of tax                                                                              (716 )                                                                 (38 )                                                                                                                                                   (3,703 )                                                              (27,318 )
                   Estimated impact of income taxes                                                              (554 )                          (682 )                                                                                                                                (3,378 )                         (2,863 )
                                                                                                             -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Adjusted Non-GAAP net income from continuing operations                                                                         $  1,535                        $  1,288                                                                                                                               $   7,831                        $   5,350  
                                                                                                             ==================== ====== ==================== ==================== ==================== ====== ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Adjusted Non-GAAP EPS from continuing operations                                                                                $   0.04                        $   0.03                                                                                                                               $    0.19                        $    0.13  
                                                                                                             ==================== ====== ==================== ==================== ==================== ====== ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Shares used to calculate diluted net income (loss) from continuing
operations
    per share applicable to common stockholders (GAAP)                                                                            41,202                                                                41,599                                                                                                                                                     40,010                                                                 41,168
                   Weighted average stock options and common shares subject to purchase                           365            -                                                                                                                2,116           421  
                   or cancellation (if applicable)
                                                                                                             -------------------- ------ -------------------- -------------------- -------------------- ------ --------------------                                                                                                          -------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Diluted shares used to calculate Adjusted Non-GAAP EPS (1)                                                     41,567       41,599                                                                                                               42,126        41,589  
                                                                                                             ==================== ====== ==================== ==================== ==================== ====== ====================                                                                                                          ==================== ======= ==================== ==================== ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
              (1 ) For the purpose of computing the number of diluted shares for
                   Adjusted Non-GAAP EPS, Marchex uses the accounting guidance that
                   would be applicable for computing the number of diluted shares for
                   GAAP EPS.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
Certain reclassifications have been made to prior periods to conform
to current presentation.
                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                                                                     MARCHEX, INC. AND SUBSIDIARIES
                                                                                                                                                                                                                                     Financial Summary Information
                                                                                                                                                                                                                                     (in thousands)
                                                                                                                                                                                                                                     (unaudited)
                                                                                                                                                                                                                                                                                                                                                       
NON-GAAP MEASURES
                                                                                                                                                                                                                                       
-------------------------------- -------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------------------------------------------- ------------------------------------------------------- -------------------- -------------------- ------------------------------------
CONSOLIDATED(1)                                                       Q414                                                                         Q115                                                                         Q215                                                     Q315                                 Q415                                                        FY 2015
-------------------------------- -------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------                      -------------------- ------------------------------------
GAAP Revenue                                             $   31,227                                                                   $   35,915                                                                   $   35,346                                                                     $   36,852                           $   34,900                                                                     $   143,013
Adjusted OIBA                                            $                       2,356                                                                   $                       2,491                                                                   $                       1,319                                                                     $                       2,444                           $                       1,986                                                                     $                        8,240
Adjusted EBITDA                       $    3,253          $    3,353          $    2,272            $    3,348        $    2,912                               $    11,885
-------------------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- ------ -------------------- ------ -------------------- ------ --------------------                      -------------------- ------ -------------------- -------
                                                                                                                                                                                                                                                          
-------------------------------- -------------------- ----------------------------------------------------------------------     -------------------- ----------------------------------------------------------------------     -------------------- ----------------------------------------------------------------------     -------------------- --------------------------------   -------------------- --------------------------------   --------------------                      -------------------- ---------------------------------
CALL-DRIVEN AND RELATED                                               Q414                                                                         Q115                                                                         Q215                                                     Q315                                 Q415                                                        FY 2015
-------------------------------- -------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------------------------------------------- -------------------------------------------------------                      -------------------- ------------------------------------
GAAP Revenue                                             $                      30,325                                                                   $                      35,028                                                                   $                      34,458                                                                     $                      36,135                           $                      34,265                                                                     $                      139,886
Adjusted OIBA                                            $                       2,512                                                                   $                       2,632                                                                   $                       1,400                                                                     $                       2,177                           $                       1,600                                                                     $                        7,809
Adjusted EBITDA                       $    3,409          $    3,494          $    2,353            $    3,081        $    2,526                                                                     $    11,454
-------------------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- ------ -------------------- ------ -------------------- ------                                                                ------ -------------------- -------
                                                                                                                                                                                                                                                                                                
-------------------------------- -------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------------------------------------------- -----------------------------------                                                               ------------------------------------
ARCHEO                                                                Q414                                                                         Q115                                                                         Q215                                                     Q315                                 Q415                                                                                              FY 2015
-------------------------------- -------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------------------------------------------- -----------------------------------                                                               ------------------------------------
GAAP Revenue                                             $                         902                                                                   $                         887                                                $                         888                                                                     $                         717                           $                         635                                                                     $                        3,127
Adjusted OIBA                                            $                        (156 )                                              $                        (141 )                                              $                         (81 )                                                $                         267                           $                         386                                                                     $                          431
Adjusted EBITDA                       $     (156 )                           $     (141 )                           $      (81 )                             $      267        $      386                                                                     $       431
-------------------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- ------ -------------------- ------ -------------------- ------                                                                ------ -------------------- -------
                                                                                                                                                                                                                                                                                                
-------------------------------- -------------------- ----------------------------------------------------------------------     -------------------- ----------------------------------------------------------------------     -------------------- ----------------------------------------------------------------------     -------------------- --------------------------------   -------------------- --------------------------------                                                                  ---------------------------------
CALL-DRIVEN REVENUE EXCLUDING YP                                      Q414                                                                         Q115                                                                         Q215                                                     Q315                                 Q415                                                                                              FY 2015
-------------------------------- -------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------------------------------------------- -----------------------------------                                                               ------------------------------------
GAAP Revenue                                             $                      30,325                                                                   $                      35,028                                                                   $                      34,458                                                                     $                      36,135                           $                      34,265                                                                     $                      139,886
Revenue excluding YP                                     $                      19,262                                                                   $                      24,271                                                                   $                      24,096                                                                     $                      26,007                           $                      25,302                                                                     $                       99,676
YP Revenue                            $   11,063          $   10,757          $   10,362            $   10,128        $    8,963                                                                     $    40,210
-------------------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- ------ -------------------- ------ -------------------- ------                                                                ------ -------------------- -------
                                                                                                                                                                                                                                                                                                
-------------------------------- -------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------------------------------------------- -----------------------------------                                                               ------------------------------------
ARCHEO REVENUE EXCLUDING YP                                           Q414                                                                         Q115                                                                         Q215                                                     Q315                                 Q415                                                                                              FY 2015
-------------------------------- -------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------- ------------------------------------------------------- -----------------------------------                                                               ------------------------------------
GAAP Revenue                                             $                         902                                                                   $                         887                                                                   $                         888                                                                     $                         717                           $                         635                                                                     $                        3,127
Revenue excluding YP                                     $                         524                                                                   $                         525                                                                   $                         515                                                                     $                         418                           $                         343                                                                     $                        1,801
YP Revenue                            $      378          $      362          $      373            $      299        $      292                                                                     $     1,326
-------------------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ---- -------------------- ------ -------------------- -------------------- -------------------- ------ -------------------- ------ -------------------- ------ -------------------- ------                                                                ------ -------------------- -------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

(1) In April 2015, Marchex divested certain Archeo domain name and related assets. The operating results of the divested assets are included in discontinued operations, net of tax, in the unaudited consolidated financial statements. In December 2015, Marchex sold the remaining Archeo assets and its operating results are included in continuing operations. Unless otherwise indicated, information presented in these financial tables relates only to Marchex’s continuing operations. The financial results for the discontinued operations are preliminary, subject to updates, and have been derived from the unaudited consolidated financial statements of Marchex, Inc. for all periods presented.

Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods.

                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                          MARCHEX, INC. AND SUBSIDIARIES
                                                                                                                                                                                                                                     (in thousands)
                                                                                                                                                                                                                                     (unaudited)
                        
                                                                                                                                                                                                                                     Reconciliation of GAAP Income (loss) from Operations to Operating
                                                                                                                                                                                                                                     Income before Amortization (OIBA)
                                                                                                                                                                                                                                     and Adjusted Operating Income Before Amortization (Adjusted OIBA)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                              Three Months Ended                                                                                                                                                                                                                           Twelve Months Ended
                                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                       ----------------------------------------------------------------------------------------------------
                                                                                                                       12/31/2014       3/31/2015                          6/30/2015       9/30/2015     12/31/2015                          12/31/2014     12/31/2015  
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- --------------------                      -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                     Income (loss) from operations                                                                                      $       (519 )                                                            $      (300 )                                                            $    (1,466 )                                                            $        12                                         $      1,247                                                              $       (222 )                                       $       (507 )
                     Stock-based compensation                                                                                                  2,875                                                                    2,791                                                                    2,667                                                                    2,351                                                2,215                                                                    11,888                                               10,024
                     Amortization of intangible assets from acquisitions                                                        -               -                                  -               -              -                                 434              -  
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- --------------------                      -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                     Operating income before amortization (OIBA)                                                                               2,356                                                                    2,491                                                                    1,201                                                                    2,363                                                3,462                                                                    12,100                                                9,517
                     Acquisition and disposition related costs                                                                                     -                                                                        -                                                                      118                                                                       81                                                   20                                                                       (68 )                                                219
                     Gain on sale of Archeo assets                                                                              -               -                                  -               -         (1,496 )                                                    -         (1,496 )
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- --------------------                      -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                     Adjusted OIBA - Consolidated                                                                                       $      2,356                                                              $     2,491                                                              $     1,319                                                              $     2,444                                         $      1,986                                                              $     12,032                                         $      8,240
                     Less: Archeo Adjusted OIBA(1)                                                                           (156 )                             (141 )                                                 (81 )                                                 267            386                                 933            431  
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- --------------------                      -------------------- --------- --------------------                      -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                     Call-Driven and related Adjusted OIBA(1)                                                                           $      2,512                        $     2,632                        $     1,400                        $     2,177                      $      1,600                                           $     11,099                      $      7,809  
                                                                                                                     ==================== ========== ==================== ==================== ==================== ========= ==================== ==================== ==================== ========= ==================== ==================== ==================== ========= ==================== ==================== ========== ====================                      ==================== ========== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                     Reconciliation from Net Cash provided by (used in) Operating
                                                                                                                                                                                                                                     Activities to Adjusted EBITDA
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                              Three Months Ended                                                                                                                                                                                                                           Twelve Months Ended
                                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                       ----------------------------------------------------------------------------------------------------
                                                                                                                       12/31/2014       3/31/2015       6/30/2015       9/30/2015     12/31/2015                          12/31/2014     12/31/2015  
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                     Net cash provided by (used in) operating activities                                                                $      4,302                                                              $     6,251                                                              $    (1,814 )                                                            $     7,563                                         $        753                                                              $     22,419                                         $     12,753
                                          Changes in assets and liabilities                                                                       58                                                                    2,228                                                                    3,883                                                                   (4,299 )                                              2,150                                                                   (25,991 )                                              3,963
                                          Income tax expense (benefit)                                                                          (392 )                                                                      5                                                                     (185 )                                                                    191                                                   16                                                                    22,509                                                   27
                                          Acquisition and disposition related costs                                                                -                                                                        -                                                                      118                                                                       81                                                   20                                                                         -                                                  219
                                          Income on discontinued operations, net of tax                                                         (734 )                                                                 (5,156 )                                                                     91                                                                      (37 )                                                (38 )                                                                  (3,555 )                                             (5,140 )
                                          Tax effect of gain on sale of discontinued operations                                                    -                                                                        -                                                                      163                                                                     (163 )                                                  -                                                                       144                                                    -
                                          Interest expense and other, net                                                      19              25              16              12             11                                  62             63  
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                     Adjusted EBITDA - Consolidated                                                                                     $      3,253                                                              $     3,353                                                              $     2,272                                                              $     3,348                                         $      2,912                                                              $     15,588                                         $     11,885
                     Less: Archeo Adjusted EBITDA(1)                                                                         (156 )                             (141 )                              (81 )                              267            386                                 933            431  
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                     Call-Drivenand related Adjusted EBITDA(1)                                                                          $      3,409                        $     3,494                        $     2,353                        $     3,081                      $      2,526                                           $     14,655                      $     11,454  
                                                                                                                     ==================== ========== ==================== ==================== ==================== ========= ==================== ==================== ==================== ========= ==================== ==================== ==================== ========= ==================== ==================== ========== ====================                      ==================== ========== ==================== ==================== ========== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                     Summary of Revenue by Segment
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                              Three Months Ended                                                                                                                                                                                                                           Twelve Months Ended
                                                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                       ----------------------------------------------------------------------------------------------------
                                                                                                                       12/31/2014       3/31/2015       6/30/2015       9/30/2015     12/31/2015                          12/31/2014     12/31/2015  
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                     Call-Driven(1)and related Revenue                                                                                  $     30,325                                                              $    35,028                                                              $    34,458                                                              $    36,135                                         $     34,265                                                              $    168,051                                         $    139,886
                     Archeo Revenue(1)                                                                                        902             887             888             717            635                               5,550          3,127  
                                                                                                                     -------------------- ---------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- -------------------- --------- -------------------- -------------------- ---------- --------------------                      -------------------- ---------- -------------------- -------------------- ---------- --------------------
                     Revenue - Consolidated                                                                                             $     31,227                        $    35,915                        $    35,346                        $    36,852                      $     34,900                                           $    173,601                      $    143,013  
                                                                                                                     ==================== ========== ==================== ==================== ==================== ========= ==================== ==================== ==================== ========= ==================== ==================== ==================== ========= ==================== ==================== ========== ====================                      ==================== ========== ==================== ==================== ========== ====================
                      

(1) The financial results for Call-Driven and Archeo have been derived from the unaudited condensed consolidated financial statements. The Call-Driven financial results include certain direct operating expenses and general corporate overhead expenses. The Archeo financial results include direct operating expenses.

Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160218006640r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160218006640/en/

SOURCE: Marchex, Inc.

Marchex Investor Relations 
Trevor Caldwell, 206-331-3600 
Email: ir(at)marchex.com 
or 
MEDIA INQUIRIES 
Marchex Corporate Communications 
206-331-3434 
Email: pr(at)marchex.com


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