Marchex, Inc. Class B Aktie

Hello, everyone. Thank you for joining us, and welcome to Marchex First Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Francis Feeney, Chief Operating Officer. Francis, please go ahead.

Good afternoon, everyone, and welcome to Marchex's Business Update and First Quarter 2026 Conference Call. Joining us today are Russ Horowitz, our Chairman of the Board; Troy Hartless, our President; and Brian Nagle, 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 or 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. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The earnings press release is available in the Investor Relations section of our website.

I will now turn the call over to Russ.

Thank you, Frank. I'm going to start with a few current thoughts and then hand the call over to Troy, Brian and then Frank again. The main item I'd like to share is that we believe the company is crossing a positive inflection point, both strategically and operationally. The first half of 2026 is marking an important step in showing how our execution is beginning to translate into improved business performance with the indicators we care about moving in the right direction.

We've come a long way in evolving our product and technology capabilities, and we are beginning to increase penetration of our customer footprint, which is starting to create real sales momentum. With this progress and deeper strategic understanding, which is against the backdrop of the very real and massive AI revolution, we've gained proprietary insight into what we believe may be a much bigger market opportunity, one where we are now evolving beyond mainly providing strategic analytics to vertical market-leading companies to one where we accelerate delivering more comprehensive solutions that open up new revenue opportunities by addressing higher value impact needs across the entire customer acquisition and optimization journey.

If you zoom out and consider what our customers most fundamentally rely on, it's knowing how to leverage AI-driven strategic solutions to more efficiently drive growth-oriented customer acquisition and optimization. We believe that we are seeing initial signs of validation that there is significant opportunity for us to rapidly expand into highly measurable AI-powered bundled solutions, which provide the strategic insights our customers need, the automated actions those insights inform and the outcomes those actions achieve.

We believe that there are significant untapped opportunities within our existing customer base and within each of our current verticals. We believe selling bundled solutions across this entire customer value chain can accelerate our business and make us more valuable within our vertical markets as AI opens up new product possibilities that can help businesses grow meaningfully, while driving efficiencies.

At Marchex, we view ourselves as a meaningful AI beneficiary based on how rapidly we are now able to leverage AI to develop and deploy new products into our customer base that can deliver high customer value, as well as significant new company revenue opportunities. We see significant new business potential in introducing Agentic workflows for customers who are integrated on our platform. Additionally, AI is making our business more agile and efficient to operate. The combination of these factors, including our vast amount of first-party data and vertical expertise are key elements in our improving outlook for meaningful business acceleration as we move through the year.

With that, I'll hand the call to Troy to briefly discuss the first quarter.

Thank you, Russ. With our previously announced proposed acquisition of Archenia, Marchex and Archenia have been collaborating to jointly develop and sell initial products that reflect the combined capabilities of the 2 companies. Product examples of this collaboration, which leverages Marchex's data and AI signals and Archenia's AI tool sets and user interface are AI verified outcomes, which drive increased revenue on a pay-per event basis and conversational AI agents, which increase customer bookings and appointment rate.

In the first quarter, our focus included continuing to define the initial key products that most leverage our strategic insights into AI-based action and outcome solutions that we could present to our installed customer base. And so far, we have seen very encouraging initial adoption. While we operate in a rapidly evolving and dynamic industry with uncertainty, these sales efforts and customer interactions so far continue to reinforce our belief that we are now in a strong position with our ability to leverage new AI capabilities across the customer acquisition and optimization journey with highly impactful insight, action and outcome-based solutions.

In terms of customers for background, Marchex's top 100 customers represent about 90% of our revenue. And this customer set has been an initial focus of presenting the products which leverage the combined capabilities of the companies. To date, we have made presentations to nearly 1/3 of these customers and approximately half of them have already purchased one or more of these products on a recurring or paid pilot basis. Of those remaining, we believe the majority are likely to also purchase one or more of these products on a recurring or paid pilot basis.

Additionally, as the potential transaction closing approaches, we are focused on accelerating our efforts to present these products to the majority of our top customers. Marchex believes our ability to sell these and other combined solutions, which reflect the bundling of insights, actions and outcomes to our installed customer base will be a meaningful sales catalyst in 2026 and beyond. As a reminder, we have a core focus on select large vertical markets where the combination of our expanding AI capabilities built on years of operating with first-party data across these verticals give us the ability to deliver unique solutions for world-class market-leading companies. To that end, we deliver industry-specific AI solutions for automotive, auto services, home services, health care and advertising and media, as well as other industries and sub-verticals.

With that, I will turn the call over to Brian to provide an overview of the first quarter 2026 financial results.

Thank you, Troy. Revenue for the first quarter of 2026 was $10.6 million compared to $10.8 million for the fourth quarter of 2025. We saw favorable impact of new sales and existing customer upsells benefit the company in the first quarter. We also saw offsets to that growth due to the previously completed migration activities from our legacy platforms onto our new Marchex Engage platform, which impacted revenue run rates entering 2026. For operating expenditures, we saw efficiencies throughout the business as we benefited from the continued realignment of the organization and the completion of certain technology platform initiatives during 2025, which have lowered our overall recurring cost structure.

We anticipate that our gross profit margins can continue to improve over time as we are carrying an overall lower cost structure going forward, which could enable meaningful future operating and financial leverage for the business as new products and features sell through. On the balance sheet, cash decreased to $9 million from $9.9 million at the end of the fourth quarter of 2025. The decrease in cash was primarily due to annual payroll and severance payments associated with our organizational realignment and efficiency initiatives.

Moving to guidance. Based on our evolved strategic approach with delivering bundled solutions across insights, actions and outcomes, as well as other positive factors for the second quarter of 2026, Marchex currently anticipates that revenue will see sequential increases from the first quarter and that adjusted EBITDA is now anticipated to increase to a range of $1.6 million to $1.8 million, up from prior guidance of more than $1 million. Additionally, in terms of initial guidance for the third quarter of 2026, we currently anticipate that revenue will sequentially increase and potentially accelerate over second quarter 2026 levels. And that on a stand-alone basis, adjusted EBITDA can potentially be in the $2 million range or more. To the extent, the Archenia transaction has been approved and closed by the third quarter of 2026, Marchex believes that the combined company can potentially see adjusted EBITDA in the $2.5 million range or more for the third quarter or an annualized run rate of $10 million or more.

We currently anticipate that we can continue to see quarterly revenue increases during 2026 and that over the course of the year, we can potentially see revenue growth on a run rate basis in the 10% range from 2025 year-end levels. We also currently anticipate that in the course of 2026, the combination of anticipated increasing revenue growth, combined with lower overall operating expenses can potentially lead to adjusted EBITDA margins of 10% or more.

With that, I will hand the call to Frank.

Thank you, Brian. I would like to take a moment to provide an update on the Archenia transaction. On May 8, 2026, Marchex entered into a stock purchase agreement, the SPA, to acquire 100% of the stock of Archenia Inc., the transaction from the Archenia stockholders, the sellers. A special committee of Marchex's Board of Directors consisting solely of independent directors, the special committee has approved Marchex entering into the SPA because certain of the sellers are related parties. In considering the SPA, the special committee retained Craig-Hallum Capital Group LLC as financial adviser, which provided a fairness opinion with respect to the purchase price.

DLA Piper LLP U.S. served as independent legal counsel to the special committee. Subject to receiving approval of the transaction by a majority of Marchex's disinterested stockholders and satisfaction of other closing conditions, the company expects the transaction to close in July 2026. For your reference, Archenia is a performance-based customer qualification and acquisition company, which transforms consumer intent into AI verified outcome-based results. Leveraging advanced AI signals, natural language analytics and automated decisioning, Archenia detects consumer intent and advertiser value in real time, optimizing customer acquisition campaigns dynamically across channels.

With machine learning models that continuously refine qualification accuracy and ROI, Archenia enables its customers to pay for verified AI validated outcomes such as appointments, sales and high-intent conversations. We believe that our potential combination with Archenia, if successfully consummated, we create a vertically focused AI-driven customer acquisition and outcome optimization platform, integrating deep insights, automated actions and verifiable outcomes.

Additionally, we believe that the expanded AI-driven product offerings across insights, actions and outcomes could create more ways to win new business and the bundling solutions could create greater customer value, stickiness and risk mitigation. We believe that the potential combined company could have the opportunity to achieve greater revenue scale and growth, higher margins, expanded market reach and enhanced strategic flexibility, which could include: first, a potentially expandable addressable market with opportunity to cross-sell and bundle. We believe the combined ability to sell insights, actions and outcomes would meaningfully expand our addressable market into new large vertical markets. Additionally, we believe we would have the ability to relatively quickly offer or bundle Archenia's outcome-based solutions to many of Marchex insights-based enterprise customers.

Second, greater potential revenue, scale and growth. Marchex believes that revenue run rates for the potential combined company are approximately $15 million quarterly or approximately $60 million annualized, which could grow in the 15% to 20% range in the course of 2026. Third, we see the potential for adjusted EBITDA expansion. We believe that our adjusted EBITDA margins are anticipated to trend up to 10% or more in 2026 and that Archenia could contribute additional positive adjusted EBITDA beyond these levels.

And finally, Rule of 30 to 40 trajectory. For reference, the Rule of 30 to 40 metric represents the combination of annual revenue growth rates plus adjusted EBITDA margins. If we're able to achieve the anticipated revenue run rate growth in the 15% to 20% range and combine this with improving adjusted EBITDA margins in double digits, the combined company could be positioned to potentially achieve these Rule of 30 to 40 metrics over time, which we believe helps highlight the unique opportunity of the combined company if consummated.

I will now hand the call back to Russ for closing remarks.

Thank you, Frank. I'd like to close out today's call by thanking all of our investors, partners and other stakeholders for your ongoing support. I would also like to deeply thank our employees for their expertise, sense of urgency and continued commitment while we execute on what we believe is an increasingly dynamic opportunity.

And with that, I'll hand the call back to the operator.

Your first question comes from the line of Mike Latimore with Northland Capital Markets.

So the EBITDA guidance for the second quarter, is that largely driven by OpEx refinements? And if so, what kind of reduction in OpEx should we see?

Yes. It's driven by a combination of our expected sales acceleration in the sequential growth in the second quarter. And then there's also contribution from some of the operations efficiency. So if you're looking at Q1 revenue levels, I think you could see kind of a reduction in the 5% plus range on the OpEx side. And on the other parts of it, we see the sell-through on products and upsells and expansion of the new revenue opportunities being drivers as well.

Okay. And then it sounds like you're already selling some bundles with Archenia and I think kind of the mass is like 15% of the base that already bought them. I guess, can you talk a little bit about the size of the upsell there, how much revenue per sale? And if you're already selling some bundles, like I assume there's more bundles to come, like what percent of the total bundle potential are we selling right now?

Yes. If you hit on the metrics as it relates to, call it, the initial customer outreach, yes, it's been very validating. When you look at some of the elements that I think we're most encouraged by, it's that the adoption of some of these new products are seeing opportunities to potentially double revenue on a per customer basis. And the fact that we're seeing guesses pretty quickly and indications on the ones we met with is what gives us, I think, kind of an encouraging lens in combination with the efficiency and just the acceleration of the whole business, both with product development, customer support and expansion. So the intent is to sell bundles to everybody. We know that's going to allow them to maximize the value of our capabilities. And we're leveraging our vertical expertise and their data to illuminate where they have big opportunities to drive increased customer acquisition, as well as drive more customer bookings and appointments with the qualified leads they already have coming into their ecosystem.

The bundled solution, we think, meaningfully expands per customer revenue opportunity and also is going to drive a lot of increased stickiness as well. So all the pulse metrics that we think translate to a more dynamic company that can support the kind of growth we foresee and expanding EBITDA margins that we're starting to message. Good questions.

Your next question comes from the line of Ross Koller with Koller Capital.

A few questions here. Russ, you mentioned that you've met with or pitched about 1/3 of your top 100 customers. How do you go about targeting the other 2/3?

Yes. It's another good question. As we got started pitching the new stuff, we decided to focus on specific customers in specific verticals like auto and home services, who we believe had common problems and we're bundling with the logical next step, given what we knew to be their pain points and the value impacts of our solutions against those pain points. Doing it this way was really first to try and have success with revenue expansion, but also to validate our approach, expose ourselves into the learnings we need to scale our sales efforts and then iterate. We feel like this approach has worked really well so far and what we've learned in terms of -- is informing us on how to start expanding to our other verticals and also to more of the top customers.

Obviously, our intent is to get to all of the top 100 customers as soon as practical and then go beyond where we see strategic product fit and meaningful revenue opportunities. So this is happening like right now as we speak. We're at that inflection point. The metrics we provided around initial uptake has kind of given us the line of sight on how we approach and scale those efforts to more of the top 100 and beyond. So what we've also learned in this process is doing nothing but continuing to support our belief that on a combined basis, the business has a $100 million revenue opportunity, and we're approaching all of our efforts in viewing this as a profitably focused sprint to that $100 million revenue run rate and beyond.

Awesome. And then the $10 million annualized adjusted EBITDA guidance for Q3 is impressive. As the business returns to substantial profitability, what are your thoughts on capital allocation?

Yes. Look, the first and most important thing is we think we're at a really positive inflection point. And obviously, the updated guidance today with the increased EBITDA reflects that. We're just getting started in this new up cycle, and we're working toward the Archenia transaction approval and formalization. But in looking at increasing cash generation, we'll assess the best and highest use of increasing cash as we go forward and we achieve these milestones. But it is worth noting we are a low CapEx business, and we have meaningful tax shields. And with the Archenia transaction, this will help us optimize our free cash flow generation as we go forward. And as I've noted before in our history, we've had times where we've done stock buybacks, sell tender offers, declared special dividends and more. And as a reminder, we do have an existing $3 million share buyback program authorized at this time.

In terms of primary focus, we understand it's a simple concept. But if we can just keep driving increasing organic growth with expanding profitability, then we'll have a lot of flexibility and latitude with the business and with our cash.

We have reached the end of the Q&A session. I will now turn the call back to the management team to conclude the call.

Once again, I just want to thank everybody for your ongoing support, participation in today's call. And we're just energized with where we are. Look forward to executing on what we think is an increasingly dynamic opportunity and updating you as we move forward. Thanks again.

Thank you for attending. You may now disconnect.

Good afternoon. Thank you for attending today's Q4 and Full Year 2025 Marchex Earnings Conference Call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions]. I would now like to pass the conference over to your host, Frank Feeney, Chief Operating Officer at Marchex.

Good afternoon, everyone, and welcome to Marchex's business update and fourth quarter and full year 2025 conference call. Joining us today are Russ Horowitz, our Chairman of the Board; Troy Hartless, our President, and Brian Nagle, 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 our most recent annual or 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. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. 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 Russ.

Thank you, Frank. I'm going to start off with a few thoughts and then hand the call over to Troy, Brian and then Frank again. The main item I'd like to reiterate is that we feel the company is at a very positive inflection point, both strategically and operationally. We've come a long way in expanding our customer footprint, evolving our product and technology capabilities and starting to create real sales momentum.

With this progress and deeper strategic understanding, which is against the backdrop of the very real and very massive AI revolution, we've gained proprietary insight into what we believe may be a much bigger market opportunity, one where we evolve beyond mainly providing strategic analytics to vertical market-leading companies, to one where we accelerate delivering more comprehensive solutions that address high-value impact needs across the entire customer acquisition and optimization journey.

At the end of the day, our customers fundamentally rely on our AI-driven strategic insights to more efficiently drive growth-oriented customer acquisition. We believe there is a significant opportunity for us to rapidly expand into highly measurable AI-powered bundled solutions, which provide the strategic insights our customers need, the automated actions those insights inform and the outcomes those actions achieve. We believe that there are significant untapped opportunities within our existing customer base and within each of our current verticals. We believe selling such bundled solutions across this entire customer value chain can accelerate our business and make us much more valuable within our vertical markets, as AI opens new product possibilities that can help businesses grow meaningfully while driving efficiencies.

At Marchex, we view ourselves as a meaningful AI beneficiary, based on how rapidly we are now able to leverage AI to develop and deploy new products into our customer base that can deliver high customer value as well as new company revenue opportunities. In fact, we're being relied on to help many customers navigate the rapidly evolving and complex world of introducing AI and evaluating agentic possibilities to impact customer acquisition and retention. We see significant new business potential in introducing agentic workflows for customers who are integrated on the new Engage platform. Additionally, AI is making our business more agile and efficient to operate. The combination of these factors, including our vast amount of first-party data and vertical expertise are key elements in our improving outlook for meaningful business acceleration as we move through the year.

With that, I'll hand the call to Troy to briefly discuss the fourth quarter.

Thank you, Russ. In the fourth quarter, we achieved our goal of the primary completion of our technology platform migration by the end of the year. While this involved our migrating approximately 1,000 customers to the new platform and some resulting revenue dilution and offsets, we believe that we are now in a strong position with our ability to leverage new AI capabilities and more rapidly deliver innovative solutions to our customers.

With this significant infrastructure project finally behind us, in 2026, we believe that we are well positioned to focus on accelerating our revenue growth and delivering margin expansion during 2026. Over the course of the past year, Marchex has significantly expanded our product platform capabilities for customers and prospects. Over this time, we have launched our new unified user interface across Marchex's product suite, new vertical AI capabilities and various other new products and features, and there is much more to come over the course of 2026 and beyond.

In addition, with the previously announced proposed acquisition of Archenia. Marchex and Archenia have created a collaboration framework, and we have been jointly developing and selling initial products that reflect the combined capabilities of the two companies. Product examples of this collaboration, which leverage Marchex's data and AI signals and Archenia's AI tool sets and user interface, include conversational AI agents, which increase customer bookings and appointment rate and AI-verified outcomes, which drive increased revenue on a pay-per-event basis. We are currently in trials with a handful of customers and expect to launch more next month and beyond.

While these combined selling efforts are early, we have had initial positive indications of adoption of the combined solutions for Marchex's existing customers in the Home Services and Auto Services verticals. We believe our ability to sell these and other combined solutions, which reflect the bundling of AI-driven insights, actions and outcomes to our installed customer base, will be a meaningful revenue growth catalyst in 2026 and beyond.

As a reminder, we have a core focus on select very large vertical markets where the combination of our expanding AI capabilities, built on years of operating with first-party data across these verticals, give us the ability to deliver unique solutions for world-class market-leading companies. To that end, we deliver industry-specific AI solutions for automotive, auto services, home services, health care, advertising and media as well as other industries and sub-verticals.

With that, I will turn the call over to Brian to provide an overview of the fourth quarter financial results.

Thank you, Troy. Revenue for the fourth quarter of 2025 was $10.8 million, which is down from $11.5 million for the third quarter of 2025. We saw favorable impact of new sales and existing customer up-sells benefit the company in the quarter. We also saw some offsets to that growth due to migration activities from our legacy platforms onto our new Marchex Engage platform.

For operating expenditures, we saw efficiencies throughout the business as we benefited from the realignment of the organization and the completion of certain technology platform initiatives during 2025. We anticipate that our gross profit margins can continue to improve over time as we are carrying an overall lower cost structure going forward, which could enable meaningful future operating and financial leverage for the business as new products and features sell through.

On the balance sheet, cash decreased to $9.9 million from $10.3 million at the end of the third quarter of 2025. The decrease in cash was primarily due to the timing of customer payments at the end of the quarter.

Moving to guidance. Revenue in the first quarter of 2026 reflects the migration revenue dilution from the final platform switchover in December 2025, which impacted revenue run rates entering 2026. With this noted, in the first quarter of 2026, we currently anticipate that revenue will be in the range of fourth quarter 2025 levels and that adjusted EBITDA will be $500,000 or more. Based on the growth initiatives previously noted by Troy and other positive factors, we currently anticipate that for the second quarter of 2026, revenue will sequentially increase as compared to the first quarter of 2026, with adjusted EBITDA potentially increasing to more than $1 million.

In addition, with our ongoing product and feature launches on the new technology platform, we currently anticipate that we can see sequential quarterly revenue increases during 2026 and that over the course of the year, we can see revenue growth on a run rate basis in the 10% range from 2025 year-end levels. We also currently anticipate that in the course of 2026, the combination of anticipated increasing revenue growth, combined with lower overall operating expenses can lead to adjusted EBITDA margins of 10% or more.

With that, I will hand the call over to Frank.

Thank you, Brian. I would like to take a moment to provide an update on the Archenia transaction. In November 2025, Marchex announced that we had entered into an Agreement In Principle or AIP, to acquire 100% of the stock of Archenia from its stockholders. A special committee of Marchex's Board of Directors consisting solely of independent directors approved Marchex entering into the AIP because certain of the sellers are related parties. The AIP contemplates the parties entering into a definitive purchase agreement relating to the transaction.

Conditions to entering into the definitive agreement include receipt of audited financial statements of Archenia for such periods as required by SEC rules and receipt of a customary fairness opinion by a financial adviser selected by the special committee. Archenia has engaged RSM US LLP to audit the Archenia financial statements and the special committee has engaged Craig-Hallum Capital Group, LLC as its financial adviser. Conditions to closing the transaction shall include approval of the transaction by a majority of Marchex's disinterested stockholders. The closing date, in the event a definitive agreement is entered into and the transaction is approved by disinterested stockholders, is anticipated to occur in June 2026.

For your reference, Archenia is a performance-based customer qualification and acquisition company, which transforms consumer intent into AI-verified outcome-based results. Leveraging advanced AI signals, natural language analytics and automated decisioning, Archenia detects consumer intent and advertiser value in real time, optimizing customer acquisition campaigns dynamically across channels. With machine learning models that continuously refine qualification accuracy and ROI, Archenia enables its customers to pay for verified AI-validated outcomes such as appointments, sales and high-intent conversations.

We believe that our potential combination with Archenia, if successfully consummated, would create a vertically-focused AI-driven customer acquisition and outcome optimization platform, integrating deep insights, automated actions and verifiable outcomes. Additionally, we believe that the expanded AI-driven product offerings across insights, actions and outcomes, could create more ways to win new business with the bundling of solutions could create customer value, stickiness and risk mitigation. We believe that the potential combined company could have the opportunity to achieve greater revenue scale and growth, higher margins, expanded market reach and enhanced strategic flexibility, which could include, first, a potentially expanded addressable market with opportunity to cross-sell and bundle. We believe the combined ability to sell insights, actions and outcomes would meaningfully expand our addressable market into a new large vertical markets.

Additionally, we believe we could have the ability to relatively quickly offer or bundle Archenia's outcome-based solutions to many of Marchex's insights-based enterprise customers. Second, greater potential revenue, scale and growth. Marchex believes that revenue run rates for the potential combined company are approximately $15 million quarterly or approximately $60 million annualized, which could grow in the 15% to 20% range in the course of '26. Third, we see the potential for adjusted EBITDA expansion. We believe that our adjusted EBITDA margins are anticipated to trend up to 10% or more in 2026 and that Archenia could contribute additional positive adjusted EBITDA beyond these levels.

And finally, Rule of 30 to Rule of 40 trajectory. For reference, the Rule of 30 to 40 metric represents the combination of annual revenue growth rates plus adjusted EBITDA margins. If we're able to achieve the anticipated revenue run rate growth in the 15% to 20% range and combine this with improving adjusted EBITDA margins of double digits, the combined company could be positioned to potentially achieve these Rule of 30 to 40 metrics over time, which we believe helps highlight the unique opportunity of the combined company if consummated.

With that, I will hand the call back to Russ for closing remarks.

Thank you, Frank. I want to close out today's call by thanking all of our investors, partners and other stakeholders for your ongoing support. Additionally, I want to deeply thank our employees for their unique expertise, sense of urgency and continued commitment while we execute on what we believe is an increasingly dynamic opportunity.

And with that, I'll hand the call back to the operator for Q&A.

[Operator Instructions] The first question comes from Ross Koller with Koller Capital.

I have a few on the go-forward business. First, Russ, can you provide any color on how the selling efforts for the combined capabilities are going so far? What kind of feedback are you getting?

Yes. Look, so far, the joint sales calls have been very positive and very much strategically operational. We've so far prioritized creating and selling the products that bring together the best of the combined capabilities of both Marchex and Archenia and where the customer data clearly highlights how the customer problem, our unique solution to it and the value impact that we can deliver. And we've had just a short amount of time to get this started, we actually already have multiple orders in hand from the installed customer base for these new products.

We're now focused on launching and scaling these opportunities, and we think as we grow the list of customers adopting these products and then start stacking the wins together, we're going to see a very positive cumulative revenue effect. In today's release, we specifically referenced that we're out there selling conversational AI agents and AI-verified outcomes on a pay-per-event basis into the auto services and home services verticals. This is going to be continuing expanding with additional customers and also move into other verticals as well.

Awesome. Russ, can you talk about the opportunity set inside the installed base? I mean, what percentage of the base could be targeted to the new capabilities? And how large can the company grow just inside that base?

It's a really good question, and it's one we spend a lot of time assessing. If you think about our business overall, our top 50 customers represent about 80% of our revenue. And when we look at the new product capabilities, we believe that they are very relevant and very applicable to the vast majority of those top 50 as well as other customers beyond the top 50.

In the past, Marchex has stated our belief that we have a $100 million revenue opportunity overtime. On a combined basis, we believe that the $100 million revenue run rate is much more tangible and achievable much sooner even with just the existing customer base. The joint sales efforts so far are validating that these are the right initial revenue goals and the right prioritized approach. So with everything we've learned so far, we just view this all as a profitably focused sprint to $100 million in revenue run rate.

Awesome. And Russ, lastly, can you walk us through the IR strategy going forward and how you'll be reintroducing the story to investors? And how are you thinking about the current stock valuation?

Well, yes, I'll start with the second question first. Look, clearly, we don't -- we feel the current stock price doesn't reflect our value or even the incremental value we believe we're in the process of both creating and validating. But we understand it's up to us to deliver the financial results and provide the customer and product stories for people to understand our value impact and to start seeing us the way we're really now seeing ourselves, which is a dynamic and unique company. And specifically, we're an exciting emerging AI growth story. So we think we're at an inflection point.

We know the burden is on us to prove it with our results. But getting to the first part of your story, kind of with all this in mind, we just recently hired a new IR firm, PondelWilkinson, to help us get a lot more active in reaching out to new investors and helping us tell our story and make sure that we're really landing this, in a way we think is differential and unique. So we're going to be much more active, particularly with the Archenia transaction potentially closing shortly.

Beyond that, when we think about our stock, throughout our history, we've had times where we've done stock buybacks. We've done self-tender offers. We've declared regular and special dividends, and as a reminder, right now, we do have an existing $3 million share buyback program authorized. So we're going to continue to assess all of our options. But again, first and foremost, under any scenario, we know the best way to get our value recognized is to outperform and communicate well. So that's what we're focused on right now, particularly since our May reporting cycle is only 6-weeks away. And we're excited for May to come because we think we're in a position to hopefully reinforce with some of those stories and some of those points of progress and pointing to how the results can unfold through the course of the year. Appreciate those questions.

The next question comes from Mike Latimore with Northland Capital Markets.

This is Vijay Devar for Mike Latimore. A couple of questions. The first one, did bookings grow sequentially and year-on-year?

Yes. On the first one, bookings were similar to the prior quarter. And when you look at the seasonal impact, we view that as a favorable result. And when you look at the trajectory kind of beyond the quarter, but month-to-month, particularly as we're getting out there with new solutions, we see accelerations of bookings as we're ending Q1 and going into Q2 in a way that we think can potentially meaningfully move the math.

Okay. And how about call volumes following normal seasonal patterns?

Yes. Right now, call volumes have been relatively consistent in the past at times, we've spoken about those as being a bit of a drag that we need to overcome as part of our growth. But right now, not as much the case as it has been historically.

Right now, the primary variables are customer expansion, up-selling the new products and getting the benefits or stacking effect of what we're starting to see unfold based on the joint efforts to go sell the combined capabilities.

Beyond that, we are having success with some up-sells, and I do believe that we are in a position to win more new customers on the traditional products. But the real catalyst that we see is with these products that really unlock the strategic insights into action and outcome-based products, and we're getting a lot of validation with the early sales efforts, and we see the opportunity to significantly expand within the existing base, which is the quickest way, again, for us to really favorably move the math on our financial results.

There are currently no more questions remaining at this time. So I'll pass it back over to the team for closing remarks.

Look, I just want to thank everybody for participation in the call, the very thoughtful questions, and again, reiterate with our investors and stakeholders the appreciation for your ongoing support, and we look forward to seeing and hearing you again very shortly with our forthcoming May announcement as well. Thank you, everybody.

This concludes today's conference call. Thank you for your participation. You may now disconnect your lines.

Good afternoon. Thank you for attending today's Q3 2025 Marchex Earnings Conference Call. My name is Shayla, and I'll be your moderator for today. [Operator Instructions]

At this time, I'd like to pass the conference over to our host, Frank Feeney, the COO. Please proceed.

Thank you. Good afternoon, everyone, and welcome to Marchex' Business Update and Third Quarter 2025 Conference Call. Joining us today is Russ Horowitz, our Chairman of the Board; Troy Hartless, our President; and Brian Nagle, 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 or 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. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. The earnings press release is available in the Investor Relations section of our website.

At this time, I will turn the call over to Russ.

Thanks, Frank. I'm going to start with a few introductory remarks and then hand the call over to Troy, Brian and then Frank. The main item I'd like to share is that we feel the company is at a very positive inflection point, both strategically and operationally. There's always more to accomplish, but we've come a long way with expanding our customer and opportunity footprint, evolving our product capabilities and starting to create real sales momentum.

With this progress and deeper strategic understanding, which is against the backdrop of the very real and very massive AI revolution, we have gained proprietary insight into what we believe may be a much bigger market opportunity, one where we evolve beyond mainly providing strategic analytics to vertical market-leading companies to one where we accelerate delivering more comprehensive solutions that address higher value impact needs across the entire customer acquisition and optimization journey.

At the end of the day, our customers fundamentally rely on our AI-driven strategic insights to more efficiently drive growth-oriented customer acquisition. We believe there is a significant opportunity for us to rapidly expand into highly measurable AI-powered bundled solutions, which provide the strategic insights our customers need, the automated actions those insights inform and the outcomes those actions achieve.

We believe that there are significant untapped opportunities with our customers and solutions within each of our current verticals. We believe selling such bundled solutions across the entire customer value chain can accelerate our business and make us much more valuable, sticky and scalable.

And with that, I'll hand the call to Troy to briefly discuss the third quarter.

Thank you, Russ. The third quarter represented continued progress with launching new products and accelerating sales bookings to our highest levels this year. While we did see some additional revenue migration dilution as we near completion of our technology platform migration at this year's end, we still saw meaningfully improved sequential adjusted EBITDA, showing the magnitude of our operating leverage.

Based on this overall progress with accelerating sales bookings, which we anticipate can continue and compound, we believe we are gaining visibility on increased sustainable sales growth moving into 2026. We have a core focus on select very large vertical markets where the combination of our unique capabilities, combined with first-party data, create unique solutions for world-class market-leading companies.

To that end, we deliver industry-specific AI solutions for automotive, auto services, home services, health care and advertising and media as well as other industries and subverticals. Overall, our AI-driven products revolve around the mission of understanding and capitalizing on customer conversations and leveraging first-party data for our customers' strategic and financial benefits.

Our AI-driven conversational intelligence platform integrates universal and industry AI models with extensive API integrations and industry-specific applications. The Engage platform is driven by agentic AI and enables any client to easily understand their insight to action path, allowing business leaders across multiple business functions to make complex decisions, leveraging prescriptive analytics across the full customer journey.

All of the new products and features we have launched or anticipate launching in the course of 2025 are key components of our go-forward growth strategy.

With that, I'll turn the call over to Brian to provide an overview of the third quarter financial results.

Thank you, Troy. Revenue for the third quarter of 2025 was $11.5 million, which is down from $11.7 million for the second quarter of 2025. We saw favorable impact of new sales and existing customer upsells benefit the company in the period. We also saw some offsets to that growth due to migration activities from our legacy platforms onto our new Marchex Engage platform.

For operating expenditures, we saw efficiencies throughout the business as we had a full quarter of benefit from the realignment of the organization that took place in the first half of 2025 following the completion of certain technology platform initiatives.

We anticipate that our gross profit margins can continue to improve over time as we are carrying an overall lower cost structure going forward, which could enable meaningful future operating and financial leverage for the business as new products and features sell through.

On the balance sheet, cash decreased to $10.3 million from $10.5 million at the end of the second quarter of 2025. The decrease in cash was primarily due to the timing of customer payments at the end of the quarter.

Moving to guidance. As previously communicated in the second quarter of 2025 earnings announcement, based on typical seasonality and the revenue migration dilution associated with migrating more than 1,000 customers onto the new technology platform, we currently anticipate that both revenue and adjusted EBITDA will be sequentially lower in the fourth quarter of 2025, as compared to the third quarter of 2025.

That being said, as Troy previously noted, in the third quarter of 2025, we saw meaningful increases in sales bookings. With this and the ongoing launch of our various new products, we believe we can continue to see sales levels increase going forward, which will, in turn, drive increased revenue growth. So with the sales expansion currently underway and the primary platform migration completion by year's end, we currently believe that in the course of 2026, we can see revenue growth on a run rate basis in the 10% range from year-end levels. We also believe that in the course of 2026, the combination of increasing revenue growth, combined with lower overall operating expenses can lead to adjusted EBITDA margins of 10% or more.

With that, I will hand the call to Frank.

Thank you, Brian. I would like to take a moment to walk through today's announced agreement in principle to acquire Archenia. While the details regarding the potential transaction are included in today's earnings press release as well as certain Archenia estimated financial metrics, at a high level, Marchex has entered into an agreement in principle to acquire Archenia for consideration, consisting of a $10 million convertible promissory note and an earn-out in the 2 years following closing of up to 4 million shares to the extent Archenia's revenue and adjusted EBITDA exceeds thresholds to be agreed to in the definitive agreement for the transaction.

A special committee of Marchex' Board of Directors consisting solely of independent directors has approved Marchex entering into the agreement in principle because certain of the sellers are related parties. The parties have agreed to promptly commence the negotiated definitive purchase agreement relating to the transaction.

Conditions to entering into the definitive agreement, including receipt of audited financial statements of Archenia for such periods as required by SEC rules, and receipt of a customary fairness opinion by a financial adviser selected by the special committee. Conditions to closing the transaction shall include approval of the transaction by a majority of Marchex' disinterested stockholders and the closing date in the event a definitive agreement is entered into and the transaction is approved by disinterested stockholders is anticipated to occur in the first half of 2026.

For your reference, Archenia is a performance-based, customer qualification and acquisition company, which transforms consumer intent into AI verified outcome-based results. Leveraging advanced AI signals, natural language analytics and automated decisioning, Archenia detects consumer intent and advertiser value in real time, optimizing customer acquisition campaigns dynamically across channels. With machine learning models that continuously refine qualification accuracy and ROI, Archenia enables its customers to pay for verified AI-validated outcomes such as appointments, sales and high-intent conversations.

We believe that Marchex' potential combination with Archenia, if successfully consummated, we create a vertically focused AI-driven customer acquisition and outcome optimization platform, integrating deep insights, automated actions, and verifiable outcomes. Additionally, we believe that the expanded AI-driven product offerings across insights, actions and outcomes could create more ways to win new business and the bundling of solutions could create greater customer value, stickiness and risk mitigation.

We believe that the potential combined company could have the opportunity to achieve greater revenue scale and growth higher margins, expanded market reach and enhanced strategic flexibility, which could include: first, a potentially expanded addressable market with opportunity to cross-sell and bundle. Marchex believes the combined ability to sell insights, actions and outcomes would meaningfully expand our addressable market into new large vertical markets. Additionally, we believe we would have the ability to relatively quickly offer or bundle Archenia's outcome-based solutions to many of Marchex' insights-based enterprise customers.

Second, greater potential revenue, scale and growth. Marchex believes that revenue run rates for the potential combined company are approximately $15 million quarterly or approximately $60 million annualized, which could grow in the 15% to 20% range in the course of 2026. Third, we see the potential for adjusted EBITDA expansion. Marchex believes that our adjusted EBITDA margins are anticipated to trend up to 10% or more in 2026, and that Archenia could contribute additional positive adjusted EBITDA beyond these levels.

And finally, Rule of 30 to Rule of 40 trajectory. For reference, the Rule of 30 to 40 metric represents the combination of annual revenue growth rates plus adjusted EBITDA margins. If we are able to achieve the anticipated revenue run rate growth in the 15% to 20% range and combine this with improving adjusted EBITDA margins in double digits, the combined company could be positioned to potentially achieve these Rule of 30 to 40 metrics over time, which we believe helps highlight the unique opportunity of the combined company if consummated.

With that, I will hand the call back to Russ for closing remarks.

Thank you, Frank. We've already covered a whole lot today. So I simply want to close out by thanking all of our investors, partners and other stakeholders for all of your ongoing support. Additionally, I want to deeply thank our employees for their unique expertise, sense of urgency and continued commitment while we execute on what we believe is an increasingly dynamic opportunity.

And with that, I will hand the call back to the operator.

[Operator Instructions] Our first question comes from Ross Koller with company Koller Capital.

Congrats on the proposed acquisition. I have a couple of questions on what the go-forward business looks like. Russ, first, can you discuss how you view the TAM for the combined solutions?

Good question. Yes, we think the opportunity and addressable market, when you look at the combined company's ability to sell insights, actions and outcomes is multiples of our existing one, we're predominantly selling insights only. Our insights, we believe, are tied to meaningful 9-figure customer acquisition budgets, and we get used strategically to inform those. And our ability to continue to deliver more capabilities across that insights, actions, outcomes value chain translates to a significantly larger TAM, one we believe could be multiples of what we're operating against today.

Okay. Great. And can you talk about how you're thinking about the trade-off between growth and profitability as you scale up the business?

Definitely. It's -- obviously, it's an internal focus when we think about arbitrating, validating that the investments we've made are translating into growth. We're pleased that on the back end of the migration, we're at an inflection point on a stand-alone basis where we believe we're seeing that happen now, and we can build on that. But net-net, as we look at the acquisition and our ability to accelerate growth potentially to the extent it gets consummated, we're just focused on maximizing the revenue growth and maintaining some baseline positive adjusted EBITDA margins in that 10% or more range. We believe emphasizing customer penetration and really scaling up while prioritizing our growth rates is going to be the best approach for us for now.

Perfect. And lastly, can you discuss how you view the growth breaking down between new versus existing customers? And also, how big a business can you build just inside your current installed base?

Yes. Look, I think the best way to frame it is you've heard us say historically that we believe we have a $100 million revenue opportunity over time. But on a combined basis, this deal closes, we really believe that $100 million in revenue is way more tangible and way more achievable much sooner even just with the existing or installed base. We look at the verticals we operate in, and we look at the market-leading companies that we work in, in those verticals, and we look at the opportunities even within the subverticals, and call it the virtuous cycle of the expertise that we're putting together, combined with the unique first-party data that we have that -- informs our expanding set of solutions.

And we think there's other customers we don't have that look like them, and we're going to be more relevant to with more capabilities that are easier to say yes to. But on kind of a stand-alone basis with existing installed base, yes, the combined company is well positioned in a more tangible way to get to $100 million rate much sooner.

At this time, there are no more questions registered in queue. I'd like to pass the conference back over to our hosting team for closing remarks.

Look, I appreciate everybody's interest in Marchex. Obviously, we're excited about where we are and what our possible opportunity can look like as we move forward. We've got a lot of congruency and clarity around what that looks like. And we just appreciate all your ongoing support and look forward to keeping you posted as we execute and hope we make that happen. Thank you, everyone.

That will conclude today's conference call. Thanks for your participation, and enjoy the rest of your day.

Good afternoon. Thank you for attending today's Second Quarter 2025 Marchex Earnings Conference Call. My name is Victoria, and I'll be your moderator today. [Operator Instructions] I would now like to pass the conference over to our host, Trevor Caldwell. Thank you. You may proceed.

Thank you, Victoria. Good afternoon, everyone, and welcome to Marchex's Business Update and Second Quarter 2025 Conference Call. Joining us today are Edwin Miller, our CEO; Russ Horowitz, our Chairman of the Board; and Brian Nagle, our SVP, Corporate Controller.

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. 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.

Hello, and thank you, Trevor. The second quarter saw continued progress toward making 2025 an inflection point for our company based on technical and product developments. We also saw acceleration in our transition to investing in the go-forward growth initiatives. From signing new partnerships with Fortune 500 companies that expand our market opportunity to launching our first channel partnerships, we are continuing to position our business to drive for future growth.

We launched our new innovative Marchex Engage platform, the result of our OneStack initiative, which offers a new user interface that is both easy to configure and use, all while streaming customer access -- streamlining customer access to new AI signals and solutions that will enable simple click-to-purchase capability. Higher level, Marchex offers our conversation intelligence platform on a Software-as-a-Service model, where customers pay for AI-derived actionable intelligence specific to their customer prospects and desired outcomes, including increased revenue and improved business performance.

We have a core focus on select very large vertical markets where the combination of our unique capabilities, combined with first-party data, create unique solutions for world-class marketing-leading companies. To that end, we deliver industry-specific AI solutions for automotive, auto services, home services, health care and advertising and media as well as other industries. Our AI-driven conversation intelligence platform integrates universal and industry AI models, delivering outcomes such as CSAT scores and lead value with extensive API integrations and industry-specific applications.

The Engage platform is driven by agentic AI and enables any client to easily understand their insights to action path, allowing business leaders across multiple functions to make complex decisions leveraging prescriptive analytics across the full customer journey. All of these new products and features are key components of our go-forward growth strategy. Overall, our AI-driven products revolve around the mission of understanding and capitalizing on customer conversations and leveraging first-party data for our customers' strategic and financial benefit.

Whether it's a marketing VP trying to attribute revenue, a sales director managing a team of agents, or a digital strategist looking to unify online and off-line data, the Marchex Engage platform provides targeted solutions powered by our underlying AI insights to action engine. This unified and modular approach with one platform and multiple solutions means clients can begin with one use case, such as marketing attribution and incrementally expand to others such as service departments and customer engagement, all while utilizing the same platform.

This is the key advantage of our having a rich AI-powered platform. The data and the models can be leveraged in numerous ways and add differentiated value across multiple departments and organizational functions, driving our critical insights into the key actions that enable our customers to achieve measurable high-value impact outcomes.

With that, I'll turn the call over to Brian to provide an overview of the second quarter financial results.

Thank you, Edwin. Revenue for the second quarter of 2025 was $11.7 million, which is up from $11.4 million for the first quarter of 2025. We saw a favorable impact of new sales and some upsells benefit the company in the period. We did also see some offsets to that growth due to migration activities from our legacy platforms onto our new Marchex Engage platform. For operating expenditures, we saw efficiencies throughout the business as we had a full quarter of benefit from the realignment of the organization that took place in the first quarter of 2025 following the completion of certain primary OneStack initiatives.

We anticipate that our gross profit margins can continue to improve as we are carrying an overall lower cost structure going forward, which could enable meaningful future operating and financial leverage for the business as new products and features sell through. On the balance sheet, cash rose to $10.5 million from $10 million at the end of the first quarter of 2025. We anticipate the third quarter to see cash balances stable to favorable relative to the second quarter amounts. During the second quarter of 2025, the company reported positive net income of approximately $100,000.

Moving to guidance. We currently anticipate that both revenue and adjusted EBITDA will sequentially increase in the third quarter of 2025 as compared to the second quarter of 2025, with adjusted EBITDA potentially increasing by more than 50% over the second quarter levels. We also currently anticipate that both revenue and adjusted EBITDA will be sequentially lower in the fourth quarter of 2025 as compared to the third quarter of 2025 due to the revenue impact of certain customers not migrating, anticipated seasonality and current macroeconomic factors, which it is anticipated will delay the achievement of Marchex's annual revenue and adjusted EBITDA run rate goals previously set for 2025.

Throughout 2025, we have seen operating efficiency benefits begin to highlight the magnitude of our operating leverage, but we have also had to overcome migration, revenue dilution based on the timing and success of more than 1,000 customers to the new Engage platform. Though the migration has been mostly completed at this stage, this does have short-term impacts on revenue, including ancillary factors such as timing of new sale launches and product utilization. Also, as noted in our first quarter earnings release, the current macroeconomic environment continues to bring increased uncertainty with customers and prospects.

Furthermore, new federal tariffs on imports have begun to have an adverse impact on various industries and vertical markets in which the company operates, including automotive and auto services. These conditions make predicting actual 2025 performance and timing more difficult. The company will continue to execute on its 2025 strategic plan, which we believe will lead to more success with new sales to existing and new customers, but we acknowledge these conditions raise increased uncertainty regarding customer impacts. And as a result, actual financial results may be more variable in terms of revenue and adjusted EBITDA as reflected above.

With that, I will hand the call back to Edwin.

Thank you, Brian. The Marchex leadership team is highly focused on delivering value for our customers, employees and shareholders. My sincere appreciation is extended to all members of the Marchex team for their significant efforts this year. I'm energized by the progress we are making. And as we continue to execute on our key initiatives, we believe we are well positioned to successfully deliver on our key strategic and financial goals.

With that, I'll hand the call back to the operator.

[Operator Instructions] Our first question comes from the line of Mike Latimore with Copeland Capital Markets (sic) [ Northland Capital Markets ].

This is Vijay Devar for Mike Latimore from Northland Capital Markets. So a couple of questions on that. Did bookings improve sequentially in the second quarter?

Could you repeat that question? I'm sorry, we couldn't hear you.

Yes, the line was...

I was asking about -- okay, sorry, it's about bookings. Did bookings improve sequentially in the second quarter?

Yes. This is Russell. Thanks for the question. Yes, our sales or ACV was sequentially higher.

Okay. And any comments on the pipeline?

Yes. This is Russell again. On the product lines, we tried to lay that out in our press release communications regarding both the progress with the migration, what specifically has been launched year-to-date and what launches are impending. And so we talked about the Engage platform, formerly OneStack is live. The new UI is live, and these are foundational elements on which we're launching new products, which we think are key drivers of expanding ACV and sales and driving growth.

Upcoming, we have Benchmarking, Marchex GPT and Agent Assist, which we've highlighted as 3 that we think will really help us accelerate, all of which will launch between now and the end of the year. And we're eager to get those out and in front of as many customers as soon as possible as well. We also, going into last quarter, announced some of our vertical-specific signals, which were in the home services area category or vertical.

And today, we announced the very recent launch of vertical signals in the health care industry. So all of these collectively come together to allow us to sell forward-looking innovative products that we think are value impacting for a lot of our customers. So it's one of the reasons why we feel good about our opportunity to expand the pipeline and sell more, particularly as we go into '26.

Okay. And finally, how is the demand for your service use case versus sales?

I'm sorry, could you repeat that, please?

How is demand for your service use case versus sales?

Well, for service -- right, correct. So yes, with Engage for sales and service, which we launched coming out of last quarter, we're in market. We are seeing, call it, increasing average revenue per sale associated with that and additional uptake as part of our channel efforts with auto dealers.

Edwin, anything you want to add there?

No, that's a good answer.

We're excited about Ford and the expansion of the channel to be able to give us a bigger footprint of opportunity. And again, it's another foundational piece of what we think positions us well to get more penetration and more wallet share with our customers as we finish the migration, launch the new products and sell more going into '26 as we exit this year.

[Operator Instructions] There are no questions registered at this time. So I would now like to pass the conference back over to Trevor for closing remarks.

Thank you so much for -- to our shareholders for joining the call today. We look forward to having conversations with you in the future.

Thank you, everyone.

That concludes today's call. Thank you for your participation, and enjoy the rest of your day.