Marchex, Inc.

Hello all and welcome to the March 1st quarter 2024 earnings call. My name is Lydia and I'll be your operator today. If you'd like to ask a question during the Q&A, you can do so by pressing star followed by one on your telephone keypad. I'll now hand you over to Trevor Caldwell, Senior Vice President of Investor Relations and Strategic Initiative to begin.

Great. Thank you, Lydia. Good afternoon, everyone. And welcome to Marchex's business update and first quarter 2024 conference call. Joining us today are Edwin Miller, our CEO, and Holly Aglio, our chief financial officer. Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements, including references to our financial and operational performance, and actual results may differ materially from those contemplated by these forward-looking statements. Risks and uncertainties that could cause these results to differ materially are set forth in today's earnings press release and in our most recent annual and quarterly report filed with the SEC. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements for subsequent events. During this call, we will present both GAAP and non-GAAP financial measures. Reconciliation of GAAP to non-GAAP measures is included in today's earnings press release, and the earnings press release is available in the investor relations section of our website. At this time, I want to turn the call over to Edwin.

Thank you, Trevor. And good afternoon, everyone, and thank you for joining us today. It's been a highly active start to the year for MarchX. From continuing engagement with our customers to our focus on innovation and key infrastructure initiatives, we're making substantial progress. With renewed momentum, we're laying a strong foundation for growth and future profitability. You will hear more about that from Holly in a minute. What I will share with you now is that on the revenue side, our near-term outlook is largely influenced by conversational volumes, while the intermediate and longer term is shaped by our customer engagement, go to market initiatives, innovation, and supporting infrastructure progress. While the start of the year did have some headwinds in traffic volumes, conversational volumes started to improve in the latter part of Q1, which we believe should help the overall outlook for 2024. In addition, we are seeing strong traction in our pipeline, and we're winning new business, which will help drive our growth sequentially and beyond. Moving next to our infrastructure initiatives, which are a foundational component of our future growth strategy. We have ambitious goals to achieve key milestones throughout the year that we believe will support our growth initiatives. These are the ones that will also help us increase both our gross margins and the long-term profitability of the business. A critical milestone with this has been our progress with One Stack. One Stack is a significant effort that will unite our products. This will also establish our sizable footprint of direct first-party vertical market data and a one cloud architecture. We are currently on target to complete our primary one-stack initiatives in the third quarter. Once completed, this will enable MarchX to concentrate our resources on accelerating innovation and focus on developing API integrations with vertical market partners. This will allow our customers to access and leverage all MarchX data and capabilities more easily. In conjunction with OneStack, we are also focusing on accelerating our unified user interface and single sign-on initiatives. We believe that these initiatives will be key drivers of our go-to-market plan to increase upsells by giving customers the ability to access all of our products in one interface and with one integration. OneStack is an ambitious project, and we are on track to meet our goals regarding it. There is still work to be done, but I am proud of the team and their deep commitment to accomplishing OneStack and our other key projects. Initiatives like OneStack are foundational elements to uniting our data and helping MarchX strategically evolve into a market-leading prescriptive analytics company. The recent launch of our AI Sentiment Suite following its successful trial period is just one example of the types of features we can deliver using generative AI to accelerate product development. Sentiment Suite, which utilizes generative AI to capture the emotional sentiment of consumers as they engage with businesses, is just one of the expanding group of applications we are offering Fortune 500 brands and other customers over the next year. I'd also like to highlight our momentum in building our sales pipeline. One recent example of progress is a recent win with one of the largest U.S. auto OEM channel partners. This is a multi-year agreement that expands our footprint into a vast ecosystem of OEM channel partners. The auto vertical is a massive opportunity for Marchex, and along with this recent customer addition, We anticipate more coming wins as we expand our auto and overall vertical leadership. In addition, we are growing ourselves pipeline and other verticals, such as home services and healthcare. In home services, we recently signed a new multi-year expansion with one of our largest home services customers. We are also expanding relationships with some of our largest existing home service customers who have robust interest in our current and new AI features that form prescriptive analytics for our clients. While there's still more to accomplish in building out our other vertical market teams, to the comparable depth that we have in the auto vertical, we are being deliberate and sensible in the steps that we're taking to invest in our business while being mindful of our profitability goals. That said, we expect to continue to build out our sales team and product portfolio to further penetrate each of our four core verticals this year. As mentioned on our last call, everything we are doing is focused on accelerating the business and enhancing MarchX's overall growth and profitability. As we move through our infrastructure milestones, we will expand our investment in these key go-to-market strategies. We are positioning our customers to easily adopt and operationalize our prescriptive analytics so we can continue to upsell at a faster rate. At the same time, we anticipate that our operating and technology efficiencies should meaningfully expand our gross margins and increase free cash flow over time. With that, I'll hand over the call to Holly to walk you through the financials.