10q10k10q10k.net

What changed in MARCHEX INC's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of MARCHEX INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+128 added−122 removedSource: 10-K (2026-03-26) vs 10-K (2025-03-14)

Top changes in MARCHEX INC's 2025 10-K

128 paragraphs added · 122 removed · 105 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

31 edited+5 added−7 removed42 unchanged
Biggest changeInnovating on conversational intelligence technology and solutions. We desire to normalize all conversational channels and leverage generative AI for understanding with scale and speed. The ability to interpret most any conversation through any potential channel and provide action to insight in real time adds value to our clients for revenue acceleration.
Biggest changeThe ability to interpret most any conversation through any potential channel and provide action to insight in real time adds value to our clients for revenue acceleration. We plan to continue to expand and invest in our conversational intelligence technology and expand our AI, data science and machine learning capabilities.
Our proprietary data and conversational insights help brands personalize customer interactions to accelerate sales and capture more opportunities to grow their business. We serve large enterprises with a distributed footprint that interact with their customers across multiple communication paths. We operate primarily in U.S. domestic markets with a desire to move into other markets over time.
Our proprietary data and conversational insights help enable brands to personalize customer interactions in order to accelerate sales and capture more opportunities to grow their business. We serve large enterprises with a distributed footprint that interact with their customers across multiple communication paths. We operate primarily in U.S. domestic markets with a desire to move into other markets over time.
We continuously review ways to improve major aspects of our technology support and maintenance, including improving, upgrading, and implementing business continuity plans, data retention initiatives, and backup and recovery processes. 8 Table of Contents Intellectual Property and Proprietary Rights We maintain a number of patents in the U.S. and other jurisdictions relating to various aspects of our technology.
We continuously review ways to improve major aspects of our technology support and maintenance, including improving, upgrading, and implementing business continuity plans, data retention initiatives, and backup and recovery processes. Intellectual Property and Proprietary Rights We maintain a number of patents in the U.S. and other jurisdictions relating to various aspects of our technology.
Web site Our web site, www.marchex.com, provides access, without charge, to our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such materials are electronically filed with the Securities and Exchange Commission ("SEC").
Website Our website, www.marchex.com , provides access, without charge, to our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such materials are electronically filed with the Securities and Exchange Commission ("SEC").
Marchex launched new features such as AI-generated Call Summaries and Sentiment Suite that are available via Marchex Platform Services. These new features analyze and generate summaries of consumer-to-business calls, enabling businesses to immediately identify customers who have had exceptionally good and dissatisfied experiences.
Marchex launched new features such as AI-generated Call Summaries and Sentiment Suite that are available via Marchex Platform Services. These new features analyze and generate summaries of consumer-to-business calls, enabling businesses to immediately identify customers who have had 4 Table of Contents exceptionally good and dissatisfied experiences.
Our leveraging of generative AI is an active approach and allows the understanding of interactions without a human needing to converse, type, or interpret. Our conversational intelligence product offerings are: • Marketing Edge . Marketing Edge leverages conversational intelligence with generative AI to form a comprehensive marketing attribution and conversation data solution.
Our leveraging of generative AI is an active approach and allows the understanding of interactions without a human needing to converse, type, or interpret. Our conversational intelligence product offerings primarily include: • Marketing Edge . Marketing Edge leverages conversational intelligence with generative AI to form a comprehensive marketing attribution and conversation data solution.
These products are the first in a series of AI enhancements in Marchex's product pipeline designed to equip organizations with applications to proactively identify sales and growth opportunities, and address issues that may lead to negative experiences and reviews from dissatisfied customers.
These products are the first in a series of AI enhancements in Marchex's product pipeline designed to equip organizations with applications to proactively identify sales and growth opportunities, and address issues that may lead to negative experiences and reviews from dissatisfied customers. • AI for Industry Solution.
Unlike basic text messaging, it provides a comprehensive and flexible two-way messaging solution that uses AI-powered automation to augment field-facing and customer-facing staff, driving dramatic and measurable increases in critical actions, customer engagement and conversions. The offering encompasses a unique workflow system that connects conversations to the client journey. 4 Table of Contents • Marchex Platform Services .
Unlike basic text messaging, it provides a comprehensive and flexible two-way messaging solution that uses AI-powered automation to augment field-facing and customer-facing staff, driving dramatic and measurable increases in critical actions, customer engagement and conversions. The offering encompasses a unique workflow system that connects conversations to the client journey. • Marchex Platform Services .
These efforts to protect our intellectual property rights may not be effective in preventing misappropriation of our technology or may not prevent the development and design by others of products or technologies similar to or competitive with those we develop. Employees As of December 31, 2024, we employed a total of 163 full-time employees.
These efforts to protect our intellectual property rights may not be effective in preventing misappropriation of our technology or may not prevent the development and design by others of products or technologies similar to or competitive with those we develop. Employees As of December 31, 2025, we employed a total of 139 full-time employees.
Accordingly, investors should monitor the above account and the blog, in addition to following our investor relations website, press releases, SEC filings, and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Annual Report on Form 10-K. 9 Table of Contents
Accordingly, investors should monitor the above accounts and blog, in addition to following our investor relations website, press releases, SEC filings, and public conference calls, and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Form 10-K. 9 Table of Contents
We compete with conversation analytics providers such as Twilio, EZ Texting, CallSource, CallRail, and Invoca. As we advance our data analytics technologies, the competitive landscape will increase and become broader. 6 Table of Contents Seasonality . Historically, our industry has experienced seasonality and we believe that it will continue to do so.
We compete with conversation analytics providers such as Twilio, EZ Texting, CallSource, CallRail, and Invoca. As we advance our data analytics technologies, the competitive landscape will increase and become broader. Seasonality . Historically, our industry has experienced seasonality and we believe that it will continue to do so.
We also use the following social media channels as a means of disclosing information about us, our services, and other matters, and for complying with our disclosure obligations under Regulation Fair Disclosure ("FD"): • Marchex X (formally known as Twitter) Account (https://twitter.com/marchex) • Marchex Company Blog (https://www.marchex.com/blog/) • Marchex LinkedIn Account (https://linkedin.com/company/marchex) The information we post through these social media channels may be deemed material.
We also use the following social media channels as a means of disclosing information about us, our services, and other matters, and for complying with our disclosure obligations under Regulation Fair Disclosure: • Marchex X Account Account ( www.x.com/marchex ) • Marchex Company Blog ( www.marchex.com/blog/ ) • Marchex LinkedIn Account ( www.linkedin.com/company/marchex ) The information we post through these social media channels may be deemed material.
Working closely with our business clients, we have innovated in conversational intelligence technology, creating specific solutions to address common needs and wants among both large enterprises and small businesses. 7 Table of Contents Transparent pricing model.
Working closely with our business clients, we have innovated in conversational intelligence technology, creating specific solutions to address common needs and wants among both large enterprises and small businesses. Transparent pricing model.
Mobile phone growth has changed the way customers and businesses interact. The majority of the world’s population now utilizes mobile phones and mobile phone usage is expected to continue to grow as the primary consumer communication device for the foreseeable future. According a study published by ConsumerAffairs, 97% of the population in the United States has a mobile phone.
The majority of the world’s population now utilizes mobile phones and mobile phone usage is expected to continue to grow as the primary consumer communication device for the foreseeable future. According a study published by ConsumerAffairs, 97% of the population in the United States has a mobile phone.
As a result, we can provide a measurable return on investment for our customers. Scalable technology platform and business model. We have developed our technology platform to address large customers, while also being able to support a large number of small local businesses. Our platform can support hundreds of millions of calls and thousands of unique customer accounts.
As a result, we can provide a measurable return on investment for our customers. Scalable technology platform and business model. We have developed our technology platform to address large customers, while also being able to support a large number of small local businesses.
To view these filings, please go to our web site and click on “Investor Relations” and then click on “SEC Filings.” Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings, and public conference calls and webcasts.
To view these filings, please go to our website and under the "Company" tab click on “Investor Relations” and then click on “Financial Information.” Investors and others should note that we announce material financial information to our investors using our investor relations website, press releases, SEC filings, public conference calls, and webcasts.
ITEM 1. BUSINESS Overview References herein to “we” “us” or “our” refer to Marchex, Inc. (“Marchex” or the “Company”) and its wholly-owned subsidiaries unless the context specifically states or implies otherwise. Marchex harnesses the power of artificial intelligence (“AI”) and conversational intelligence to provide actionable insights aligned with prescriptive vertical market data analytics, driving operational excellence and revenue acceleration.
ITEM 1. BUSINESS Overview References herein to “we” “us” or “our” refer to Marchex, Inc. (“Marchex” or the “Company”) and its wholly-owned subsidiaries unless the context specifically states or implies otherwise. Marchex harnesses the power of artificial intelligence (“AI”) and conversation intelligence to provide actionable insights derived from prescriptive vertical market data analytics.
We plan to continue to expand and invest in our conversational intelligence technology and expand our AI, data science and machine learning capabilities. Marchex’s large base of conversational data assets give it a unique advantage to continue to innovate with data science and AI to help our customers sell more and deliver a better customer experience across communication channels.
Marchex’s large base of conversational data assets give it a unique advantage to continue to innovate with data science and AI to help our customers sell more and deliver a better customer experience across communication channels.
The solution integrates call data into the business’s customer relationship management ("CRM") to capture all customer interactions in one place, providing valuable insights for optimization and real-time alerts when a sales conversation ends negatively, creating opportunities for training, accountability, and empowering revenue growth.
The solution integrates call data into the business’s customer relationship management ("CRM") to capture all customer interactions in one place, providing valuable insights for optimization and real-time alerts when a sales conversation ends negatively, creating opportunities for training, accountability, and empowering revenue growth. Overall, Marchex sales engagement technology is recognized as an industry leader. • Call Summary and Sentiment Suite.
We have never had a work stoppage and none of our employees are represented by a labor union. We consider our employee relationships to be positive.
We have never had a work stoppage and none of our employees are represented by a labor union.
We have developed applications that incorporate AI functionality for enterprises that depend on phone calls, texts, and other communication channels to help convert prospects into customers, enabling marketing optimization and insights into customer experiences during the sales and support processes and helping maximize returns.
We have assembled a set of applications that incorporate AI functionality for enterprises that depend on phone calls, texts, and other communication channels to help convert prospects into customers, enabling compelling customer experiences during the sales process and helping maximize returns.
They leverage the power of generative AI to help transform how businesses can capture and utilize critical insights from customer interactions and combine structured and unstructured data to provide a holistic view of customer emotions during conversations.
They leverage the power of generative AI to help transform how businesses can capture and utilize critical insights from customer interactions and combine structured and unstructured data to provide a holistic view of customer emotions during conversations. • Spotlight . Spotlight is an innovative AI conversation analytics product specifically designed for multi-location businesses.
With this information, managers can make informed decisions to improve call handling and improve outcomes, leading to increased revenue and brand loyalty. Spotlight was named “Product of the Year” in the 2023 BIG Awards for Business. • Engage . Engage is a comprehensive solution that provides locations with applications to enhance their overall performance.
With this information, managers can make informed decisions to improve call handling and improve outcomes, leading to increased revenue and brand loyalty. • Engage . Engage is a comprehensive solution that provides locations with applications to enhance their overall performance.
We regularly analyze our patent and trademark portfolios and prepare additional patent applications on current and anticipated features of our technology and trademark applications for new product and service names, or abandon patents, trademarks or applications that are no longer relevant or valuable to our operations.
We regularly analyze our patent and trademark portfolios and prepare additional patent applications on current and anticipated features of our technology and trademark applications for new product and service names, or abandon patents, trademarks or applications that are no longer relevant or valuable to our operations. 8 Table of Contents Our ability to compete across our businesses partly depends on the superiority, uniqueness, and value of the technology that we develop.
Our experience has shown that during the spring and summer months, call volumes in certain verticals such as home services are generally higher than during other times of the year. Further, during the latter part of the fourth quarter of the calendar year we generally experience lower call volumes. Our Strategy and Competitive Strengths OneStack.
Our experience has shown that during the spring and summer months, call volumes in certain verticals such as home services are generally higher than during other times of the year.
We seek to empower performance improvements for our customers by giving them actionable, real-time insights into the conversations they are having with their customers across phone, text, and other communication channels.
We desire to be a leader in vertical market conversational intelligence leveraging generative AI and data analytics. We seek to empower performance improvements for our customers by giving them actionable, real-time insights into the conversations they are having with their customers across phone, text, and other communication channels.
Our ability to compete across our businesses partly depends on the superiority, uniqueness, and value of the technology that we develop. To protect our proprietary rights, we rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality agreements with our employees and third parties, and protective contractual provisions.
To protect our proprietary rights, we rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality agreements with our employees and third parties, and protective contractual provisions.
For many of Marchex’s customers calls are often tracked and routed through interactive voice response (“IVR”) phone systems and integrated with CRM applications and back-office systems to measure transactions and ROI. Successful marketing analytics for calls and texts requires expertise from multiple disciplines, including digital advertising, communications infrastructure, voice and speech recognition expertise, and marketing software.
For many of Marchex’s customers calls are often tracked and routed through interactive voice response (“IVR”) phone systems and integrated with CRM applications and back-office systems to measure transactions and ROI.
Marchex provides conversational intelligence AI-powered solutions for market-leading companies in leading business-to-business-to-consumer ("B2B2C") vertical markets, including several of the world’s most innovative and successful brands. Our mission is to create intelligence around all types of business conversations. We desire to be a leader in vertical market conversational intelligence leveraging generative AI and data analytics.
Marchex enables organizations across business functions to optimize customer acquisitions and experiences, transforming conversations into meaningful business outcomes. Marchex provides AI-powered conversation intelligence solutions for market-leading companies in leading business-to-business-to-consumer ("B2B2C") vertical markets, including many of the world’s most innovative and successful brands. Our mission is to create intelligence around all types of business conversations.
The solution enhances conversion performance by using high-quality metrics to understand the performance of conversion events through the sales funnel. 5 Table of Contents Key Trends Driving our Industry and Business Understanding calls and/or texts is highly complex.
Additionally, it offers improved attribution, allowing businesses to segment target audiences and improve automated bidding using attributes such as product/service, lead outcome, lead value, and topics. The solution enhances conversion performance by using high-quality metrics to understand the performance of conversion events through the sales funnel. Key Trends Driving our Industry and Business Understanding calls and/or texts is highly complex.
Sales, Marketing & Business Development Our go to market approach is leveraging the alignment around OneStack. Our sales team focuses on adding new customers to our business and growing existing customer relationships, while our business development and partnership activities focus on adding new customers, reseller partnerships and servicing existing partnerships.
Our platform can support hundreds of millions of calls and thousands of unique customer accounts. 7 Table of Contents Sales, Marketing & Business Development Our sales team focuses on adding new customers to our business and growing existing customer relationships, while our business development and partnership activities focus on adding new customers, reseller partnerships and servicing existing partnerships.
Removed
Marchex enables executive, sales, and marketing teams to optimize customer journey experiences across communications channels. Through our prescriptive analytics solutions, we enable the alignment of enterprise strategy, empowering businesses to increase revenue through informed decision-making and strategic execution.
Added
Successful marketing analytics for calls and texts requires expertise from multiple disciplines, including digital advertising, communications infrastructure, voice and speech recognition expertise, and marketing software. 5 Table of Contents AI developments continue to expand the analysis capabilities of consumer conversations.
Removed
The platform received the "AI Excellence Award" in the Generative AI category as part of the 2024 Business Intelligence Group ("BIG") AI Intelligence Awards program. • Spotlight . Spotlight is an innovative AI conversation analytics product specifically designed for multi-location businesses.
Added
Conversation intelligence platforms increasingly use more advanced AI models, particularly natural language processing and machine learning, to turn spoken or written conversations, such as customer support calls and chats, into structured, actionable data.
Removed
Overall, Marchex sales engagement technology is recognized as an industry leader, winning the 2023 Conversation DNA - Automation Category from AI Excellence Awards. Engage was also named "Best AI-Based Solution for Sales” by AI Breakthrough in 2023. • Call Summary and Sentiment Suite.
Added
Several AI-driven developments are powering these trends, such as improved speech recognition and language models, generative AI for insight extraction, scalable pattern detection, and other real-time intelligence capabilities. These trends allow organizations to improve sales performance and customer experience, reduce manual review time and human bias, and make data-driven decisions based on customer interactions.
Removed
The products were collectively chosen as the "Best Text Generative AI Solution" at the 2024 annual AI Breakthrough Awards program. The Sentiment Suite product also won the "New Product of the Year" as part of the 2024 BIG Awards for Business. • AI for Industry Solution.
Added
We believe it's critical for businesses to understand the capabilities of AI-powered understanding of human conversations to transform them from unstructured data into a strategic business asset to make informed decisions from for consumer engagement and satisfaction. Mobile phone growth has changed the way customers and businesses interact.
Removed
Additionally, it offers improved attribution, allowing businesses to segment target audiences and improve automated bidding using attributes such as product/service, lead outcome, lead value, and topics.
Added
Further, during the latter part of the fourth quarter of the calendar year we generally experience lower call volumes. 6 Table of Contents Our Strategy and Competitive Strengths Innovating on conversational intelligence technology and solutions. We desire to normalize all conversational channels and leverage generative AI for understanding with scale and speed.
Removed
We anticipate achieving operating and cost efficiencies by migrating all primary software stacks, clouds and data centers into one environment, or OneStack, which we believe will further enhance our strategic competitiveness and help drive acceleration of our AI product initiatives and future innovation.
Removed
OneStack enables our technologies, products and clients to be more easily managed in a unified operating environment and provides a streamlined go to market approach, allowing our vertical market clients to consume all our signals, data analytics and applied AI and also provides speed and scale for client onboarding while streamlining support and account management.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

38 edited+9 added−1 removed154 unchanged
Biggest changeIn addition, SOX Section 404 requires that we assess and in certain instances for our auditors to attest to the effectiveness of our controls over financial reporting. Our current and future compliance with the annual internal control report requirement will depend on the effectiveness of our financial reporting and data systems and controls across our operating subsidiaries.
Biggest changeOur current and future compliance with the annual internal control report requirements will depend on the effectiveness of our financial reporting and data systems and controls across our operating subsidiaries. We expect these systems and controls to become increasingly complex to the extent that we integrate acquisitions and our business grows.
In addition, the stock market in general, and the NASDAQ, the market for technology companies in particular, have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the listed companies.
In addition, for the stock market in general and the NASDAQ, the market for technology companies in particular, have experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the listed companies.
This difference in the voting rights of our Class A common stock and Class B common stock could adversely affect the price of our Class B common stock to the extent that investors or any potential future purchaser of our shares of Class B common stock give greater value to the superior voting rights of our Class A common stock. 22 Table of Contents Further, as long as our founder has a controlling interest, he will continue to be able to elect all or a majority of our board of directors and generally be able to determine the outcome of all corporate actions requiring stockholder approval.
This difference in the voting rights of our Class A and Class B common stock could adversely affect the price of our Class B common stock to the extent that investors or any potential future purchaser of our shares of Class B common stock give greater value to the superior voting rights of our Class A common stock. 22 Table of Contents Further, as long as our founder has a controlling interest, he will continue to be able to elect all or a majority of our board of directors and generally be able to determine the outcome of all corporate actions requiring stockholder approval.
The application of the DGCL could have the effect of delaying or preventing a change of control of our company. ITEM 1B. UNRESOLVED STAFF COMMENTS. Not applicable.
The application of DGCL could have the effect of delaying or preventing a change of control of our company. ITEM 1B. UNRESOLVED STAFF COMMENTS. Not applicable.
Any new laws or regulations concerning these, or other areas of our business could restrict our growth or increase our cost of doing business. • There is risk that a regulatory agency will require us to conform to rules that are unsuitable for IP communications technologies or rules that cannot be complied with due to the nature and efficiencies of IP routing, or are unnecessary or unreasonable in light of the manner in which we offer voice-related services such as call recording services to our customers. • Federal and state telemarketing laws including the TCPA which limits the use of autodialing systems, artificial or prerecorded voice messages, SMS text messages and fax machines, the Telemarketing Sales Rule, the Telemarketing Consumer Fraud and Abuse Prevention Act and the rules and regulations promulgated thereunder.
Any new laws or regulations concerning these, or other areas of our business could restrict our growth or increase our cost of doing business. • There is risk that a regulatory agency will require us to conform to rules that are unsuitable for IP communications technologies or rules that cannot be complied with due to the nature and efficiencies of IP routing, or are unnecessary or unreasonable in light of the manner in which we offer voice-related services such as call recording services to our customers. • Federal and state telemarketing laws including the TCPA which limits the use of autodialing systems, artificial or prerecorded voice messages, text messages and fax machines, the Telemarketing Sales Rule, the Telemarketing Consumer Fraud and Abuse Prevention Act and the rules and regulations promulgated thereunder.
If we do not comply with our providers’ evolving requirements pertaining to these regulations or if future regulatory measures relative to the STIR/SHAKEN caller ID authentication framework result in unforeseen interoperability issues for our information services that we are unable to address in a timely and efficient manner, our business, financial condition, and results of operations could be negatively impacted and/or we could face liability. 18 Table of Contents • Laws affecting telephone call recording and associated consent requirements.
If we do not comply with our providers’ evolving requirements pertaining to these regulations or if future regulatory measures relative to the STIR/SHAKEN caller ID authentication framework result in unforeseen interoperability issues for our information services that we are unable to address in a timely and efficient manner, our business, financial condition, and results of operations could be negatively impacted and/or we could face liability. 18 Table of Contents • Laws affecting telephone call recording and consent requirements.
Acquisitions are accompanied by a number of risks that could harm our business, operating results and financial condition: we could experience a substantial strain on our resources, including time and money, and we may not be successful; our management’s attention could be diverted from our ongoing business concerns; we may seek to enter new markets where we have no or limited experience or where competitors may have stronger market positions; integrating new companies may take longer than expected; while integrating new companies, we may lose key executives or other employees of these companies; we may issue shares of our Class B common stock as consideration for acquisitions which may result in ownership dilution to our stockholders; acquisitions of certain companies may result in us pursuing a diversified operating or holding company structure to allow us to focus on running diverse businesses independently, but in such event we may not realize the anticipated strategic benefits; we could fail to successfully integrate our financial and management controls, technology, reporting systems and procedures, or adequately expand, train and manage our workforce; we could experience customer dissatisfaction or performance problems with an acquired company or technology; we could become subject to unknown or underestimated liabilities of an acquired entity or incur unexpected expenses or losses from such acquisitions, including litigation; we could incur possible impairment charges related to goodwill or other intangible assets resulting from acquisitions or other unanticipated events or circumstances, any of which could harm our business; and we may be exposed to investigations and/or audits by federal, state or other taxing authorities.
Acquisitions are accompanied by a number of risks that could harm our business, operating results and financial condition: we could experience a substantial strain on our resources, including time and money, and we may not be successful; our management’s attention could be diverted from our ongoing business concerns; we may seek to enter new markets where we have no or limited experience or where competitors may have stronger market positions; integrating new companies may take longer than expected; while integrating new companies, we may lose key executives or other employees of these companies; we may issue shares of our Class B common stock as consideration for acquisitions which may result in ownership dilution to our stockholders; acquisitions of certain companies may result in us pursuing a diversified operating or holding company structure to allow us to focus on running diverse businesses independently, but in such event we may not realize the anticipated strategic benefits; we could fail to successfully integrate our financial and management controls, technology, reporting systems and procedures, or adequately expand, train and manage our workforce; we could experience customer dissatisfaction or performance problems with an acquired company or technology; we could become subject to unknown or underestimated liabilities of an acquired entity or incur unexpected expenses or losses from such acquisitions, including litigation; we could incur possible impairment charges related to goodwill or other intangible assets 13 Table of Contents resulting from acquisitions or other unanticipated events or circumstances, any of which could harm our business; and we may be exposed to investigations and/or audits by federal, state or other taxing authorities.
Finally, the majority of the aforementioned privacy laws and regulations do not apply to information historically regulated by certain industry-specific legislation and regulations such as the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and/or the Gramm-Leach-Bliley Act, each of which include separate sets of security standards for the processing of covered data and provide for significant civil and/or criminal penalties for violations.
Finally, the majority of the aforementioned privacy laws and regulations do not apply to information historically regulated by certain industry-specific legislation and regulations such as the Health Insurance Portability and Accountability Act of 1996 and/or the Gramm-Leach-Bliley Act, each of which include separate sets of security standards for the processing of covered data and provide for significant civil and/or criminal penalties for violations.
Any of the foregoing factors could result in a material adverse effect on our business, financial condition, and results of operations. If some of our customers experience financial distress or suffer disruptions in their business, their weakened financial position could negatively affect our own financial position and results.
Any of the foregoing factors could result in a material adverse effect on our business, financial condition, and results of operations. If some of our customers experience financial distress or suffer disruptions in their business, their weakened financial position could negatively affect our financial position and results.
In recent years, the TCPA has become a fertile source for both individual and class action lawsuits and regulatory actions. Specifically, the TCPA restricts telemarketing and the transmission of automatic SMS text messages without proper consent.
In recent years, the TCPA has become a fertile source for both individual and class action lawsuits and regulatory actions. Specifically, the TCPA restricts telemarketing and the transmission of automatic text messages without proper consent.
The scope of the consent requirements under these laws may expand over time based on evolving case law in this area. • The Communications Assistance for Law Enforcement Act may require that we undertake material modifications to our platforms and processes to permit wiretapping and other access for law enforcement personnel. • Under various Orders of the FCC, we may be required to make material retroactive and prospective contributions to funds intended to support Universal Service, Telecommunications Relay Service, Local Number Portability, the North American Numbering Plan and the budget of the FCC. • Laws in most states of the United States of America may require registration or licensing of one or more of our subsidiaries, and may impose additional taxes, fees or telecommunications surcharges on the provision of our services which we may not be able to pass through to customers. • Our international operations may expose us to telecommunications regulations and data and privacy regulations in the countries where we are operating, and these regulations could negatively affect the viability of our business in those regions.
The scope of the consent requirements under these laws may expand over time based on evolving case law in this area. • The Communications Assistance for Law Enforcement Act may require that we undertake material modifications to our platforms and processes to permit wiretapping and other access for law enforcement personnel. • Under various Orders of the FCC, we may be required to make material retroactive and prospective contributions to funds intended to support Universal Service, Telecommunications Relay Service, Local Number Portability, the North American Numbering Plan and the budget of the FCC. • Laws in most U.S. states may require registration or licensing of one or more of our subsidiaries, and may impose additional taxes, fees or telecommunications surcharges on the provision of our services which we may not be able to pass through to customers. • Our international operations may expose us to telecommunications regulations and data and privacy regulations in the countries where we are operating, and these regulations could negatively affect the viability of our business in those regions.
For example, California enacted the California Consumer Privacy Act, which was subsequently amended by the California Privacy Rights Act of 2020 (collectively, “CPRA”), which went into effect on January 1, 2023.
For example, California enacted the California Consumer Privacy Act, which was subsequently amended by the California Privacy Rights Act of 2020 (“CPRA”), which went into effect on January 1, 2023.
The CPRA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Multiple other states have enacted privacy-related legislation that provides for consumer rights similar to the CPRA. Further, it is anticipated that additional federal and state privacy-related legislation may be enacted.
The CPRA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Several other states have enacted privacy-related legislation that provides for consumer rights similar to the CPRA. Further, it is anticipated that additional federal and state privacy-related legislation may be enacted.
To the extent that we increase our market share of conversational analytics offerings for customers in the healthcare and/or financial services industries, our risk of possible costs and liabilities related to compliance with these additional laws increases as well. 19 Table of Contents Foreign countries may enact laws that could negatively impact our business and/or may prosecute us for violating existing laws.
To the extent that we increase our market share of conversational analytics offerings for customers in the healthcare and/or financial services industries, our risk of possible costs and liabilities related to compliance with these additional laws increases as well. Foreign countries may enact laws that could negatively impact our business and/or may prosecute us for violating existing laws.
We maintain a registration in FCC’s Robocall Mitigation Database as a Non-Gateway Intermediate Provider.
We maintain a registration in the FCC’s Robocall Mitigation Database as a Non-Gateway Intermediate Provider.
If we fail to address these issues in a timely manner, we may lose the confidence of our customers and reseller partners, our revenue may decline, and our business could suffer. 14 Table of Contents Cybersecurity risks could adversely affect our business and disrupt our operations. The threats to network and data security are increasingly diverse and sophisticated.
If we fail to address these issues in a timely manner, we may lose the confidence of our customers and reseller partners, our revenue may decline, and our business could suffer. Cybersecurity risks could adversely affect our business and disrupt our operations. The threats to network and data security are increasingly diverse and sophisticated.
The following existing and possible future federal and state laws could impact the growth and profitability of our business: • The Communications Act of 1934, as amended by the Telecommunications Act of 1996 (the “Act”), and the regulations promulgated by the FCC under Title II of the Act, may impose federal licensing, reporting and other regulatory obligations on the Company.
The following existing and possible future federal and state laws could impact the growth and profitability of our business: • The Communications Act of 1934, as amended by the Telecommunications Act of 1996 (“TA”), and the regulations promulgated by the FCC under Title II of the TA, may impose federal licensing, reporting and other regulatory obligations on the Company.
The holders of our Class A common stock and Class B common stock have identical rights except that the holders of our Class B common stock are entitled to one vote per share, while holders of our Class A common stock are entitled to twenty-five votes per share on all matters to be voted on by stockholders.
The holders of our Class A and Class B common stock have identical rights except that the holders of our Class B common stock are entitled to one vote per share, while holders of our Class A common stock are entitled to 25 votes per share on all matters to be voted on by stockholders.
The actual or perceived improper sending of text messages or voice calls may subject us to potential risks, including liabilities or claims relating to consumer protection laws and regulatory enforcement, including fines. For example, the Telephone Consumer Protection Act ("TCPA") of 1991 restricts telemarketing and the sending of automatic short message service ("SMS") text messages without explicit customer consent.
The actual or perceived improper sending of text messages or voice calls may subject us to potential risks, including liabilities or claims relating to consumer protection laws and regulatory enforcement, including fines. For example, the Telephone Consumer Protection Act of 1991 ("TCPA") restricts telemarketing and the sending of automatic text messages without explicit customer consent.
If we are unable to develop or acquire new products, services, functionalities, or technologies to adapt to these changes or otherwise fail to maintain a technological edge, our business will suffer. 12 Table of Contents The conversational analytics and solutions market may develop more slowly than expected, which could harm our business.
If we are unable to develop or acquire new products, services, functionalities, or technologies to adapt to these changes or otherwise fail to maintain a technological edge, our business will suffer. The conversational analytics and solutions market may develop more slowly than expected, which could harm our business.
We received approximately 33% of our revenue from our five largest customers for the year ended December 31, 2024, and the loss of one or more of these customers could adversely impact our results of operations and financial condition. Our five largest customers accounted for approximately 33% of our total revenues for the year ended December 31, 2024.
We received approximately 36% of our revenue from our five largest customers for the year ended December 31, 2025, and the loss of one or more of these customers could adversely impact our results of operations and financial condition. Our five largest customers accounted for approximately 36% of our total revenues for the year ended December 31, 2025.
FINANCIAL RISKS We have largely incurred net losses since our inception, and we may incur net losses in the foreseeable future. We had an accumulated deficit of $326.2 million as of December 31, 2024.
FINANCIAL RISKS We have largely incurred net losses since our inception, and we may incur net losses in the foreseeable future. We had an accumulated deficit of $331.4 million as of December 31, 2025.
Our founder controls the outcome of stockholder voting, and there may be an adverse effect on the price of our Class B common stock due to the disparate voting rights of our Class A common stock and our Class B common stock. As of December 31, 2024, Russell C.
Our founder controls the outcome of stockholder voting, and there may be an adverse effect on the price of our Class B common stock due to the disparate voting rights of our Class A and Class B common stock.
Our systems and operations are vulnerable to damage or interruption from: fire; floods; network failure; hardware failure; software failure; power loss; telecommunications failures; break-ins; terrorism, war or sabotage; computer viruses; denial of service attacks; penetration of our network by unauthorized computer users and “hackers” and other similar events; natural disasters, including, but not limited to, hurricanes, tornadoes, and earthquakes; and other unanticipated problems.
Our systems and operations are vulnerable to damage or interruption from: fire; floods; network failure; hardware failure; software failure; power loss; telecommunications failures; break-ins; terrorism, war or sabotage; computer viruses; denial of service attacks; penetration of our network by unauthorized computer users and “hackers” and other similar events; natural disasters, including, but not limited to, hurricanes, tornadoes, and earthquakes; and other unanticipated problems. 14 Table of Contents We may not have developed or implemented adequate protections or safeguards to overcome any of these events.
The advertising and sales market is rapidly evolving, and most businesses have historically not utilized nor allocated a portion of their marketing and/or sales budgets to conversational analytics and solutions. As a result, the future demand and market acceptance for conversational analytics and related services is uncertain.
The advertising and sales market is rapidly evolving, and most businesses have historically not utilized nor allocated a portion of their marketing and/or sales budgets to conversational analytics and solutions.
Historically, we have seen this trend generally reversing in the first quarter of the calendar year with increased call volumes and often new budgets at the beginning of the year for many of our customers with fiscal years ending December 31.
Historically, we have seen this trend generally reversing in the first quarter of the calendar year with increased call volumes and often new budgets at the beginning of the year for many of our customers with fiscal years ending December 31. However, there can be no assurances such seasonal trends will consistently repeat each year.
Horowitz, our founder, beneficially owned 100% of the outstanding shares of our Class A common stock, which shares represented 75% of the voting power of all outstanding shares of our capital stock.
As of December 31, 2025, Russell Horowitz, our founder, beneficially owned 100% of the outstanding shares of our Class A common stock, which shares represent about 75% of the voting power of all outstanding shares of our capital stock.
In addition, we may experience greater disruption to our remaining business than expected, and the impact of the divestiture on our revenue may be larger than projected. 13 Table of Contents OPERATIONAL RISKS We depend on being able to secure enough phone numbers and associated telecommunication services to support our customers and other users of our services and any obstacles that we face which prevent us from meeting this demand could adversely affect our business.
OPERATIONAL RISKS We depend on being able to secure enough phone numbers and associated telecommunication services to support our customers and other users of our services and any obstacles that we face which prevent us from meeting this demand could adversely affect our business.
Any costs incurred in addressing foreign laws could negatively affect the viability of our business. Our exposure to this risk will increase to the extent we expand our operations internationally.
Any costs incurred in addressing foreign laws could negatively affect the viability of our business.
We are generally obliged, to the extent permitted by law, to indemnify our current and former directors and officers who are named as defendants in these types of lawsuits. Defending against litigation may require significant attention and resources of management. Regardless of the outcome, such litigation could result in significant legal expenses.
From time to time, we are subject to claims and litigation, which could seriously harm our business and require us to incur significant costs. We are generally obliged, to the extent permitted by law, to indemnify our current and former directors and officers who are named as defendants in these types of lawsuits.
We cannot be certain that these measures will ensure that we design, implement, and maintain adequate controls over our financial processes and reporting in the future. Any failure to implement required new or improved controls, or difficulties encountered in their implementation or operation, could harm our operating results, or cause us to fail to meet our financial reporting obligations.
Any failure to implement required new or improved controls, or difficulties encountered in their 11 Table of Contents implementation or operation, could harm our operating results, or cause us to fail to meet our financial reporting obligations.
In addition, the potential regulation of new and emerging technologies, such as AI, which we are increasingly building into many of our new offerings, may result in increased compliance costs and risks. Any additional costs and penalties associated with increased compliance and risk mitigation could make certain offerings less profitable or increase the difficulty of bringing certain offerings to market.
Our exposure to this risk will increase to the extent we expand our operations internationally. 19 Table of Contents In addition, the potential regulation of new and emerging technologies, such as AI, which we are increasingly building into many of our new offerings, may result in increased compliance costs and risks.
However, there can be no assurances such seasonal trends will consistently repeat each year. 11 Table of Contents If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud, which could harm our brand and operating results.
If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud, which could harm our brand and operating results. Effective internal controls are necessary for us to provide reliable and accurate financial reports and effectively prevent fraud.
We may not have developed or implemented adequate protections or safeguards to overcome any of these events. We also may not have anticipated or addressed many of the potential events that could threaten or undermine our technology network.
We also may not have anticipated or addressed many of the potential events that could threaten or undermine our technology network. Any of these occurrences could cause material interruptions or delays in our business, result in the loss of data or render us unable to provide services to our customers.
We expect these systems and controls to become increasingly complex to the extent that we integrate acquisitions and our business grows. To effectively manage this growth, we will need to continue to improve our operational, financial and management controls and our reporting systems and procedures.
To effectively manage this growth, we will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures. We cannot be certain that these measures will ensure that we design, implement, and maintain adequate controls over our financial processes and reporting in the future.
Effective internal controls are necessary for us to provide reliable and accurate financial reports and effectively prevent fraud. We have devoted significant resources and time to comply with the internal control over financial reporting requirements of the Sarbanes-Oxley ("SOX") Act of 2002.
We have devoted significant resources and time to comply with the internal controls over financial reporting requirements of the Sarbanes-Oxley ("SOX") Act of 2002. In addition, SOX Section 404 requires that we assess and in certain instances for our auditors to attest to the effectiveness of our controls over financial reporting.
Any of these occurrences could cause material interruptions or delays in our business, result in the loss of data or render us unable to provide services to our customers. In addition, if a person is able to circumvent our security measures, they could destroy or misappropriate valuable information, including sensitive customer information, or disrupt our operations.
In addition, if a person is able to circumvent our security measures, they could destroy or misappropriate valuable information, including sensitive customer information, or disrupt our operations. We have deployed firewall technology intended to thwart hacker attacks.
We may face risks related to litigation that could result in significant legal expenses and settlement or damage awards. From time to time, we are subject to claims and litigation, which could seriously harm our business and require us to incur significant costs.
Any additional costs and penalties associated with increased compliance and risk mitigation could make certain offerings less profitable or increase the difficulty of bringing certain offerings to market. We may face risks related to litigation that could result in significant legal expenses and settlement or damage awards.
Removed
We have deployed firewall technology intended to thwart hacker attacks.
Added
As a result, the future demand and market acceptance for conversational analytics and related services is uncertain. 12 Table of Contents The AI technology and features we develop and/or incorporate into our solutions include new and evolving technologies that may present both legal and business risks.
Added
While we are increasingly incorporating artificial intelligence (“AI”), including machine learning and large language model–based capabilities, into our products, services and internal operations, the use of AI presents risks and challenges that could adversely affect our business.
Added
AI technologies are complex, rapidly evolving and may produce outputs that are inaccurate, misleading, biased, incomplete or otherwise flawed, including as a result of errors in underlying algorithms, training data, or inputs. Our customers or other users may rely on such outputs to their detriment, which could expose us to legal claims, regulatory scrutiny, reputational harm or competitive disadvantage.
Added
In addition, the legal and regulatory framework governing AI is evolving and remains uncertain, including with respect to intellectual property ownership, data privacy, automated decision‑making and liability allocation.
Added
Our use of AI, or our integration of third‑party AI technologies into our offerings, may subject us to claims of intellectual property infringement or misappropriation, data protection violations or other legal obligations, including where we have limited contractual recourse against third‑party AI providers.
Added
Further, AI technologies may require the processing of personal or sensitive data, increasing our compliance obligations and risk exposure. We also permit and increasingly rely on the use of AI tools by our workforce in certain development, analytical and operational contexts.
Added
The use of such tools, whether authorized or unauthorized, may create risks related to the protection of confidential information, cybersecurity, data leakage, or the misuse of proprietary or third‑party intellectual property. If we are unable to manage these risks effectively, our business, reputation, financial condition and results of operations could be adversely affected.
Added
In addition, we may experience greater disruption to our remaining business than expected, and the impact of the divestiture on our revenue may be larger than projected.
Added
Defending against litigation may require significant attention and resources of management. Regardless of the outcome, such litigation could result in significant legal expenses.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed0 unchanged
Biggest changeITEM 2. PROPERTIES. Our headquarters are located in Seattle, Washington and consist of approximately 12,000 square feet of leased office space. We lease additional office space in Wichita, Kansas. See Item 1 of this Annual Report on Form 10-K under the caption “Information Technology and Systems.” We believe that our existing facilities are adequate for our near-term business needs.
Biggest changeITEM 2. PROPERTIES. Our headquarters are located in Seattle, WA and consist of approximately 12,000 square feet of leased office space. See Item 1 of this Annual Report on Form 10-K under the caption “Information Technology and Systems.” We believe that our existing facilities are adequate for our near-term business needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed3 unchanged
Biggest changeDuring the fiscal year 2024, we did not have any share repurchases under this program and 1,319,128 Class B common shares remain available for purchase under the plan.
Biggest changeThe timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions. During the fiscal year 2025, we did not have any share repurchases under this program or any superseded program and 3,000,000 of Class B common shares remain available for purchase under the plan.
Issuer Purchases of Equity Securities In November 2014, the Company established a 2014 share repurchase program, which supersedes and replaces any prior repurchase programs, and authorized the Company to repurchase up to 3,000,000 shares in the aggregate of the Company’s Class B common stock.
Issuer Purchases of Equity Securities In May 2025, the Company established the 2025 Repurchase Program, which supersedes and replaces any prior repurchase programs, and authorized the Company to repurchase up to 3,000,000 shares in the aggregate of the Company’s Class B common stock.
The following table sets forth, for the periods indicated, the high and low market prices for Marchex’s Class B common stock as reported on the NASDAQ: High Low Year Ended December 31, 2024 First Quarter $ 1.49 $ 1.11 Second Quarter 1.75 1.20 Third Quarter 2.16 1.36 Fourth Quarter 2.40 1.60 Year Ended December 31, 2023 First Quarter $ 2.16 $ 1.72 Second Quarter 2.17 1.69 Third Quarter 2.11 1.31 Fourth Quarter 2.11 1.25 Holders As of March 7, 2025, there was 1 shareholder of record of our Class A common stock and 34 shareholders of record of our Class B common stock, respectively.
The following table sets forth, for the periods indicated, the high and low market prices for Marchex’s Class B common stock as reported on the NASDAQ: High Low Year Ended December 31, 2025 First Quarter $ 2.15 $ 1.63 Second Quarter 2.31 1.26 Third Quarter 2.27 1.37 Fourth Quarter 2.04 1.32 Year Ended December 31, 2024 First Quarter $ 1.49 $ 1.11 Second Quarter 1.75 1.20 Third Quarter 2.16 1.36 Fourth Quarter 2.40 1.60 Holders As of March 19, 2026, there was 1 shareholder of record of our Class A common stock and 32 shareholders of record of our Class B common stock, respectively.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

32 edited+9 added−9 removed28 unchanged
Biggest changeThe effect on deferred tax assets and liabilities of a change in tax law is recognized in results of operations in the period that includes the enactment date. 27 Table of Contents Results of Operations The following table presents revenue and certain operating results as a percentage of revenue: Year Ended December 31, % of revenue Year Ended December 31, % of revenue (In Thousands, Except Percentages) 2024 2023 Revenue $ 48,122 100 % $ 49,910 100 % Expenses: Cost of revenue 17,172 36 % 20,582 41 % Sales and marketing 12,136 25 % 11,412 23 % Product development 12,414 26 % 15,355 31 % General and administrative 10,245 21 % 10,205 20 % Amortization of intangible assets from acquisitions 602 1 % 1,987 4 % Acquisition and disposition related costs — 0 % 12 0 % Total operating expenses 52,569 109 % 59,553 119 % Loss from operations $ (4,447 ) -9 % $ (9,643 ) -19 % Stock-based compensation expense was included in the following operating expense categories as follows: Year Ended December 31, (In Thousands) 2024 2023 Cost of revenue $ 24 $ 2 Sales and marketing 308 663 Product development 54 114 General and administrative 1,321 1,614 Total stock-based compensation $ 1,707 $ 2,393 See Note 6: Stockholders' Equity of the Notes to Consolidated Financial Statements, as well as our Critical Accounting Policies for additional information about stock-based compensation.
Biggest changeThe effect on deferred tax assets and liabilities of a change in tax law is recognized in results of operations in the period that includes the enactment date. 27 Table of Contents Results of Operations The following table presents revenue and certain operating results as a percentage of revenue: Year Ended December 31, % of revenue Year Ended December 31, % of revenue (In Thousands, Except Percentages) 2025 2024 Revenue $ 45,420 100 % $ 48,122 100 % Expenses: Cost of revenue 16,626 37 % 17,172 36 % Cost of revenue - amortization of capitalized software development costs 89 0 % — 0 % Total cost of revenue 16,715 37 % 17,172 36 % Sales and marketing 12,528 28 % 12,136 25 % Product development 9,747 21 % 12,414 26 % General and administrative 10,804 24 % 10,245 21 % Acquisition settlement 1,350 3 % — 0 % Amortization of intangible assets from acquisitions — 0 % 602 1 % Total operating expenses 51,144 113 % 52,569 109 % Loss from operations $ (5,724 ) -13 % $ (4,447 ) -9 % Stock-based compensation expense was included in the following operating expense categories as follows: Year Ended December 31, (In Thousands) 2025 2024 Cost of revenue $ 12 $ 24 Sales and marketing 433 308 Product development 259 54 General and administrative 1,683 1,321 Total stock-based compensation $ 2,387 $ 1,707 See Note 6: Stockholders' Equity of the Notes to the Consolidated Financial Statements, as well as our Critical Accounting Policies for additional information about stock-based compensation.
Based on our operating plans we believe that our resources will be sufficient to fund our operations, including any investments in strategic initiatives, for at least twelve months, however macroeconomic factors could influence our operating plans and resources significantly. Additional equity and debt financing may be needed to support our acquisition strategy, our long-term obligations, and our Company’s needs.
Based on our operating plans we believe that our resources will be sufficient to fund our operations, including any investments in strategic initiatives, for at least twelve months, however macroeconomic factors could influence our operating plans and resources significantly. Additional equity and debt financing may be needed to support our acquisition strategy, long-term obligations, and other Company’s needs.
Stock-based compensation expense is included in the same lines as compensation paid to the same employees in the Consolidated Statements of Operations. Amortization of Intangibles from Acquisitions Amortization of intangible assets excluding goodwill relates to intangible assets identified in connection with our acquisitions. The intangible assets have been identified as customer relationships; acquired technology; non-competition agreements; trade names.
Stock-based compensation expense is included in the same lines as compensation paid to the same employees in the Consolidated Statements of Operations. Amortization of Intangibles from Acquisitions Amortization of intangible assets excluding goodwill relates to intangible assets identified in connection with our acquisitions. The intangible assets have been identified as customer relationships; acquired technology; non-competition agreements; and trade names.
Although the fair value of stock-based awards is determined in accordance with ASC 718, the assumptions used in calculating fair value of stock-based awards and the use of the Black-Scholes option pricing model is highly subjective, and other reasonable assumptions could provide differing results.
Although the fair value of stock-based awards is determined in accordance with ASC 718, the assumptions used in calculating fair value of stock-based awards and the use of the Black-Scholes option pricing model is subjective, and other reasonable assumptions could provide differing results.
Critical Accounting Policies Our Consolidated Financial Statements have been prepared in accordance with U.S. GAAP. Our critical accounting policies are those that we believe have the most significant impact to reported amounts of assets, liabilities, revenue and expenses and the related disclosures of contingent assets and liabilities and that require the most difficult, subjective, or complex judgments.
Critical Accounting Policies Our Consolidated Financial Statements have been prepared in conformity with U.S. GAAP. Our critical accounting policies are those that we believe have the most significant impact to reported amounts of assets, liabilities, revenue and expenses, and the related disclosures of contingent assets and liabilities that require the most difficult, subjective, or complex judgments.
Collection on the related receivables may vary from reported information based upon third-party refinement of the estimated and reported amounts owed that occurs subsequent to period ends. 30 Table of Contents Stock-Based Compensation Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 718, Compensation – Stock Compensation, requires the measurement and recognition of compensation for all stock-based awards made to employees, non-employees and directors including stock options, restricted stock issuances, and restricted stock units be based on estimated fair values.
Collection on the related receivables may vary from reported information based upon third-party refinement of the estimated and reported amounts owed that occurs subsequent to period ends. 30 Table of Contents Stock-Based Compensation Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 718, Compensation – Stock Compensation, requires the measurement and recognition of compensation for all stock-based awards made to employees, non-employees and directors including stock options, restricted stock awards ("RSAs"), and restricted stock units ("RSUs") be based on estimated fair values.
These assets are fully amortized as of December 31, 2024. Provision for Income Taxes We utilize the asset and liability method of accounting for income taxes.
These assets were fully amortized as of December 31, 2024. Provision for Income Taxes We utilize the asset and liability method of accounting for income taxes.
Our proprietary data and conversational insights help enable brands to personalize customer interactions in order to accelerate sales and capture more opportunities to grow their business. We serve large enterprises with a distributed footprint that interact with their customers across multiple communication paths. We were incorporated in Delaware on January 17, 2003.
Our proprietary data and conversational insights help enable brands to personalize customer interactions in order to accelerate sales and capture more opportunities to grow their business. We serve large enterprises with a distributed footprint that interact with their customers across multiple communication paths. We were incorporated in Delaware on January 17, 2003. We have office space in Seattle, WA.
At both December 31, 2024 and 2023, based on all the available evidence, both positive and negative, we determined that it is more likely than not that our deferred tax assets will not be realized and accordingly recorded a full valuation allowance. Net Loss.
At both December 31, 2025 and 2024, based on all the available evidence, both positive and negative, we determined that it is more likely than not that our deferred tax assets will not be realized and accordingly recorded a full valuation allowance.
The cash used in operating activities was primarily the result of a net loss of $9.9 million, adjusted for non-cash items of $7.1 million, which primarily included depreciation and amortization and stock-based compensation, and the rest attributed to changes in working capital of $1.6 million.
The cash used in operating activities was primarily the result of a net loss of $4.9 million, adjusted for non-cash items of $4.5 million, which primarily included depreciation, amortization, and stock-based compensation, and the rest was attributed to changes in working capital of $0.7 million.
Product Development Product development costs consist primarily of expenses incurred in the research and development, and creation and enhancement, of our products and services. These costs primarily consist of payroll and related expenses for personnel; costs of computer hardware and software; costs incurred in developing features and functionality of the services we offer; and stock-based compensation of related personnel.
Product Development Product development costs consist primarily of expenses incurred in the research and development ("R&D") of our products and services. These costs primarily consist of payroll and related expenses for personnel; costs of computer hardware and software; costs incurred for features and functionality of the services we offer; and stock-based compensation of related personnel.
We have offices in Seattle, Washington and Wichita, Kansas. Components of the Results of our Operations Revenue We generate the majority of our revenues from our conversational intelligence product offerings. Our AI-powered conversational analytics technology platform provides data and insights into the conversations our clients are having with their customers across phone, text and other communication channels.
Components of the Results of our Operations Revenue We generate the majority of our revenues from our conversational intelligence product offerings. Our AI-powered conversational analytics technology platform provides data and insights into the conversations our clients are having with their customers across phone, text and other communication channels.
The change in working capital was driven primarily by a decrease in accrued expenses and other current liabilities as well as a decrease in accounts payable, partially offset by an increase in prepaid expenses and other assets and accounts receivable.
The change in working capital was driven primarily by a decrease in accrued expenses and other current liabilities as well as a decrease in accounts payable.
The policies below are critical to our business operations and the understanding of our results of operations. In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of our results.
In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of our results.
Cash used in operating activities was $1.1 million during the year ended December 31, 2024. The cash used in operating activities was primarily the result of a net loss of $4.9 million, adjusted for non-cash items of $4.5 million, which primarily included depreciation and amortization and stock-based compensation, and the rest attributed to changes in working capital of $0.7 million.
The cash used in operating activities was primarily the result of a net loss of $5.2 million, adjusted for non-cash items of $4.6 million, which primarily included depreciation, amortization, and stock-based compensation, and the rest was attributed to changes in working capital and the acquisition settlement of $2.1 million and $1.4 million, respectively.
Cash used in investing activities for the years ended December 31, 2024 and 2023, was $0.4 million and $1.3 million, respectively, and was primarily attributable to cash paid for purchases of property and equipment for our technology infrastructure platform as well as capitalized software development costs in both years. 29 Table of Contents Cash used in financing activities for the years ended December 31, 2024 and 2023, was $0.3 million and $0.2 million, respectively, and was primarily attributable to payments made related to equipment financing lease obligations for both years.
Cash used in investing activities for the year ended December 31, 2024 was $0.4 million and was primarily attributable to cash paid for purchases of property and equipment for our technology infrastructure platform. 29 Table of Contents Cash used in financing activities for the years ended December 31, 2025 and 2024, was $0.1 million and $0.3 million, respectively.
The effective tax rate differed from the expected tax rate of 21% in both years primarily due to a the valuation allowance and, to a lesser extent, state income taxes, foreign branch income and rate differential, non-deductible stock-based compensation related to incentive stock options recorded under the fair-value method, and other non-deductible amounts.
We incurred federal taxable losses in both 2025 and 2024. The effective tax rate differed from the expected tax rate of 21% in both years primarily due to the valuation allowance, non-deductible stock-based compensation related to restricted stock units and incentive stock options recorded under the fair-value method, and other non-deductible amounts.
The change in working capital was driven primarily by a decrease in accrued expenses and other current liabilities as well as a decrease in accounts payable, partially offset by an increase in accounts receivable and prepaid expenses and other assets. Cash used in operating activities was $4.4 million during the year ended December 31, 2023.
The change in working capital was driven primarily by a decrease in accrued expenses, other current, and other liabilities. Cash used in operating activities was $1.1 million during the year ended December 31, 2024.
Liquidity and Capital Resources As of December 31, 2024 and 2023, we had cash and cash equivalents of $12.8 million and $14.6 million, respectively. As of December 31, 2024, we had current and non-current contractual obligations of $11.4 million, of which $1.8 million is for payments due under our facilities and financed equipment leases.
Liquidity and Capital Resources As of December 31, 2025 and 2024, we had cash and cash equivalents of $9.9 million and $12.8 million, respectively. As of December 31, 2025, we had current and non-current contractual obligations of $7.3 million, of which $0.8 million is for payments due under our facility lease.
Please see page 1 on this Annual Report on Form 10-K “Forward-Looking Statements” and Item 1A of this Annual Report on Form 10-K under the caption “Risk Factors” for a discussion of the risks, uncertainties and assumptions associated with these statements.
Please see page 1 on this Form 10-K “Forward-Looking Statements” and Item 1A of this Form 10-K under the caption “Risk Factors” for a discussion of the risks, uncertainties and assumptions associated with these statements. Overview Marchex harnesses the power of AI and conversation intelligence to provide actionable insights derived from prescriptive vertical market data analytics.
For the periods presented, substantially all of our product development expenses are research and development. Product development costs are expensed as incurred or capitalized into property and equipment in accordance with U.S. generally accepted accounting principles ("GAAP").
For the periods presented, substantially all of our product development expenses are R&D and are expensed as incurred or capitalized into property and equipment in accordance with the U.S. generally accepted accounting principles ("GAAP") once requirements have been met. See Note 1: Description of Business and Summary of Significant Accounting Policies for more information on software development capitalization.
As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. See Note 6: Stockholders' Equity in the Notes to Consolidated Financial Statements for additional information.
As a result, if factors change and we use different assumptions, our stock-based compensation expense could be materially different in the future. See Note 6: Stockholders' Equity for additional information. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed in business combinations accounted for under the purchase method.
General and administrative expenses was consistent at $10.2 million for both the years ended December 31, 2024 and 2023. As a percentage of revenue, general and administrative expenses were 21% and 20% for the years ended December 31, 2024 and 2023, respectively. Amortization of Intangible Assets from Acquisitions .
General and administrative expenses increased $0.6 million, or 6%, to $10.8 million for the year ended December 31, 2025 from $10.2 million for the year ended December 31, 2024. As a percentage of revenue, general and administrative expenses were 24% and 21% for the years ended December 31, 2025 and 2024, respectively.
Income tax expense was $0.4 million and $0.1 million for the years ended December 31, 2024 and 2023, respectively, consisting primarily of deferred tax expense and U.S. state income taxes. We incurred federal taxable losses in both 2024 and 2023.
During 2024, the intangible assets acquired from acquisitions all reached the end of their useful lives and consequently there was no amortization expense in 2025. Income Tax. Income tax expense was $0.1 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively, consisting primarily of deferred tax expense and U.S. state income taxes.
Through our prescriptive analytics solutions, we enable the alignment of enterprise strategy, empowering businesses to increase revenue through informed decision-making and strategic execution. Marchex provides conversational intelligence AI-powered solutions for market-leading companies in leading B2B2C vertical markets, including several of the world’s most innovative and successful brands. Our mission is to create intelligence around all types of business conversations.
Marchex enables organizations across business functions to optimize customer acquisitions and experiences, transforming conversations into meaningful business outcomes. Marchex provides AI-powered conversation intelligence solutions for market-leading companies in leading B2B2C vertical markets, including many of the world’s most innovative and successful brands. Our mission is to create intelligence around all types of business conversations.
Revenue Revenue decreased $1.8 million, or 4%, to $48.1 million for the year ended December 31, 2024 from $49.9 million for the year ended December 31, 2023. This decrease was impacted primarily by lower conversational volumes in 2024 as compared to 2023, and certain non-recurring non-core analytics revenue in 2023.
Revenue Revenue decreased $2.7 million, or 6%, to $45.4 million for the year ended December 31, 2025 from $48.1 million for the year ended December 31, 2024. This decrease was impacted by lower call volumes in 2025 compared to 2024, customer corporate development activities, which consolidated customer contracts and customer migration revenue dilution resulting in decreased revenues.
Sales and Marketing Sales and marketing expenses consist primarily of payroll and related expenses for personnel engaged in marketing and sales functions; advertising and promotional expenditures including online and outside marketing activities; cost of systems used to sell to and serve customers; and stock-based compensation of related personnel.
These costs primarily consist of cloud computing and hosting costs, telecommunication costs, including the use of phone numbers relating to our services; bandwidth and software license fees; network operations; and payroll and related expenses of personnel, including stock based compensation. 26 Table of Contents Sales and Marketing Sales and marketing expenses consist primarily of payroll and related expenses for personnel engaged in marketing and sales functions; advertising and promotional expenditures including online and outside marketing activities; and stock-based compensation of related personnel.
As a percentage of revenue, sales and marketing expenses were 25% and 23% for the years ended December 31, 2024 and 2023, respectively. The change from the prior year was primarily attributable to $1.0 million in higher personnel costs, primarily due to investments made in the sales and marketing function to increase the sales workforce and prioritize go-to-market initiatives.
Sales and marketing expenses increased $0.4 million, or 3%, to $12.5 million for the year ended December 31, 2025 from $12.1 million for the year ended December 31, 2024. As a percentage of revenue, sales and marketing expenses were 28% and 25% for the years ended December 31, 2025 and 2024, respectively.
This was partially offset by lower stock-based compensation costs of $0.3 million. 28 Table of Contents Product Development. Product development expenses decreased $3.0 million, or 19%, to $12.4 million for the year ended December 31, 2024 from $15.4 million for the year ended December 31, 2023.
The change from prior year was primarily attributable to an increase in contract asset amortization charges of $0.6 million. 28 Table of Contents Product Development. Product development expenses decreased $2.7 million, or 22%, to $9.7 million for the year ended December 31, 2025 from $12.4 million for the year ended December 31, 2024.
As a percentage of revenue, product development expenses were 26% and 31% for the years ended December 31, 2024 and 2023, respectively. The change from the prior year was primarily attributable to $2.9 million in lower personnel and contractor costs, as we reorganized and realigned our research and development teams. General and Administrative.
As a percentage of revenue, product development expenses were 21% and 26% for the years ended December 31, 2025 and 2024, respectively.
Intangibles amortization expense was $0.6 million and $2.0 million for the years ended December 31, 2024 and 2023, respectively.
The amount represents the cost recorded in the period associated with the probable resolution of a historical acquisition related matter. Amortization of Intangible Assets from Acquisitions . Intangibles amortization expense was $0 and $0.6 million for the years ended December 31, 2025 and 2024, respectively.
As a percentage of revenue, cost of revenue was 36% and 41% for the years ended December 31, 2024 and 2023, respectively. The change from the prior year was primarily due to $1.8 million in lower conversational data processing and telecommunication costs due to a combination of lower conversational volumes, benefits from leveraging AI technology, and efficient vendor costs management.
Expenses Cost of Revenue. Cost of revenue decreased $0.5 million, or 3%, to $16.7 million for the year ended December 31, 2025 from $17.2 million for the year ended December 31, 2024. As a percentage of revenue, cost of revenue was 37% and 36% for the years ended December 31, 2025 and 2024, respectively.
Removed
Overview Marchex, Inc. harnesses the power of AI and conversational intelligence to provide actionable insights aligned with prescriptive vertical market data analytics, driving operational excellence and revenue acceleration. Marchex enables executive, sales, and marketing teams to optimize customer journey experiences across communications channels.
Added
The change from the prior year was primarily attributable to a decrease in costs from investment in cloud infrastructure and platform integration, and personnel and outside labor costs of $0.5 million, as we reorganized and realigned our personnel in 2025. Sales and Marketing.
Removed
These costs primarily consist of telecommunication costs, including the use of phone numbers relating to our services; bandwidth and software license fees; network operations; and payroll and related expenses of personnel, including stock based compensation. 26 Table of Contents The Company has historically reported these costs under the caption "service costs" on the Consolidated Statement of Operations, but determined that the change to "cost of revenue" on a go-forward basis, beginning on December 31, 2024, better aligns the Company's financial reporting to its industry and competitors for comparison.
Added
The change from the prior year was primarily attributable to $2.0 million in lower personnel and outside labor costs due to the reorganization and realignment of our personnel in 2025 and the capitalization of software development costs in 2025.
Removed
The lower volumes primarily came from several of our small business listing and solution providers that mostly sell marketing services to local businesses. Expenses Cost of Revenue. Cost of revenue decreased $3.4 million, or 17%, to $17.2 million for the year ended December 31, 2024 from $20.6 million for the year ended December 31, 2023.
Added
Additionally, there were approximately $0.5 million less in cloud infrastructure costs in 2025 due to the completion of the certain development activities in 2024 which resulted in those costs being incorporated in cost of revenue upon completion of the development activities. General and Administrative.
Removed
In addition, personnel costs were $1.7 million lower as we reorganized and realigned our technology teams. Sales and Marketing. Sales and marketing expenses increased $0.7 million, or 6%, to $12.1 million for the year ended December 31, 2024 from $11.4 million for the year ended December 31, 2023.
Added
The change from prior year was primarily attributable to an increase in personnel costs and share-based compensation costs, which largely consist of one-time reorganization charges and associated impacts to share-based compensation as we reorganized and realigned our personnel throughout 2025. Acquisition settlement . Acquisition settlement expense was $1.4 million and for the year ended December 31, 2025.
Removed
This expense was associated with amortization of intangible assets acquired from business acquisitions made in 2018 and 2019, and is further categorized as cost of revenue or sales and marketing expense in the Company's Consolidated Statements of Operations based on the nature of the underlying intangible asset.
Added
Cash used in operating activities was $1.4 million during the year ended December 31, 2025.
Removed
The year over year decrease was driven by certain assets reaching the end of their useful life in the fourth quarter of the prior year. Intangible asset amortization from these acquisitions was completed in 2024 as a result of the remainder of these assets reaching the end of their useful lives. Income Tax.
Added
Cash used in investing activities for the year ended December 31, 2025 was $1.3 million and was primarily attributable to cash paid for capitalized software development projects, partially offset by proceeds collected from the domain asset sale in the current year.
Removed
Net loss decreased $5.0 million, or 51%, to $4.9 million for the year ended December 31, 2024 from $9.9 million for the year ended December 31, 2023.
Added
Cash used in financing activities for the year ended December 31, 2025 was primarily attributable to payments made related to equipment financing lease obligations, partially offset by proceeds from exercises of stock options, and issuances and vesting of restricted stock.
Removed
The decrease in net loss was primarily attributable to the $7.0 million decrease in operating expenses, driven by the decrease in cost of revenue and product development expenses discussed above, that was partially offset by the $1.8 million decrease in revenue also discussed above.
Added
Cash used in financing activities for the year ended December 31, 2024 was primarily attributable to payments made related to equipment financing lease obligations.
Removed
Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed in business combinations accounted for under the purchase method.
Added
There have been no significant changes in our critical accounting policies and estimates during the year ended December 31, 2025.

Other MCHX 10-K year-over-year comparisons