Marchex reported third‑quarter 2025 revenue of $11.5 million, a 4% decline from the $12.0 million reported in the same quarter last year. Adjusted earnings per share were $0.00, beating the consensus estimate of $0.01. Excluding a $0.5 million reorganization charge, the company’s adjusted EBITDA rose to $1.1 million, an 83% increase from the $0.6 million reported in Q2 2025 and the first time the company has reported positive adjusted EBITDA in two consecutive quarters.
The revenue miss was largely driven by migration‑related dilution as the company completes the transition of more than 1,000 customers from its legacy platform to the new Marchex Engage platform. While the migration created short‑term revenue pressure, management highlighted that sales bookings reached the highest level of the year, indicating strong demand for the company’s AI‑powered conversational intelligence solutions.
The jump in adjusted EBITDA reflects disciplined cost management and improved operating leverage. Removing the one‑time reorganization expense reveals that the core business generated $1.1 million in earnings, up 83% from the prior quarter. The company’s cost of revenue fell 5% year‑over‑year, and the cost of revenue as a percentage of revenue improved from 38% to 37%, supporting the margin expansion.
Management guided for a sequential decline in Q4 2025 revenue and adjusted EBITDA due to seasonality and ongoing migration, but projected 2026 revenue growth of approximately 10% and an adjusted EBITDA margin of 10% or more. For the combined entity post‑Archenia acquisition, the company expects an annualized revenue run rate of about $60 million with 15–20% growth in 2026 and adjusted EBITDA margins of 10% or higher.
The agreement to acquire Archenia, a performance‑based customer qualification and acquisition company, is expected to broaden Marchex’s AI‑driven customer acquisition capabilities and expand its market reach. Archenia’s last nine‑month revenue exceeded $14 million and it reported positive adjusted EBITDA, positioning the combined company to accelerate its AI portfolio and pursue new revenue streams.
"Revenue for the third quarter of 2025 was $11.5 million, which is down from $11.7 million for the second quarter of 2025," CFO Brian Nagel said. "We saw the favorable impact of new sales and existing customer upsells benefit the period, but offsets from migration activities are expected to normalize as the transition completes."
"Marchex believes its potential acquisition of Archenia, if successfully consummated, would create a vertically focused, AI‑driven customer acquisition and outcome‑optimization platform," Executive Chairman Russell C. Horowitz said. "The deal aligns with our strategy to become a leading SaaS‑based conversational intelligence provider."
Investors reacted cautiously to the revenue miss, with the market’s focus shifting to the company’s AI strategy and the strategic value of the Archenia acquisition. The earnings beat on adjusted EPS and the positive adjusted EBITDA signal operational improvements, while the guidance for 2026 and the combined entity’s projected growth underscore management’s confidence in the company’s long‑term trajectory.
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