MARCHEX INC Revenue Disclosure
Note 2: Revenue Recognition
The majority of the Company’s customers are invoiced on a monthly basis following the month of the delivery of services and are required to make payments under standard credit terms. Net accounts receivable was $7.4 million, including unbilled accounts receivable of $1.5 million, at January 1, 2024. Net accounts receivable, including unbilled accounts receivable, consists of the following as of the periods below:
|
|
December 31, |
|
|||||
(In Thousands) |
|
2025 |
|
|
2024 |
|
||
Accounts receivable: |
|
|
|
|
|
|
||
Billed |
|
$ |
5,330 |
|
|
$ |
5,420 |
|
Unbilled |
|
|
1,395 |
|
|
|
1,736 |
|
Allowance for expected credit losses |
|
|
(55 |
) |
|
|
(84 |
) |
Accounts receivable, net |
|
$ |
6,670 |
|
|
$ |
7,072 |
|
Customer payments received in advance of revenue recognition or the Company's unconditional right to invoice are considered contract liabilities and are recorded as deferred revenue. The beginning and ending deferred revenue balances and activity during the period consists of the following:
(In Thousands) |
|
|
|
|
Balance at December 31, 2024 |
|
$ |
1,093 |
|
Current year deferral of revenue |
|
|
685 |
|
Revenue earned from beginning deferred revenue |
|
|
(1,180 |
) |
Balance at December 31, 2025 |
|
$ |
598 |
|
The Company’s incremental direct costs of obtaining a contract, which consist primarily of sales incentive compensation including commissions, are generally deferred and amortized to sales and marketing expense over the estimated life of the relevant customer relationship. The Company’s net contract acquisition costs shown below consist of $1.0 million and $0.8 million in Prepaid expenses and other current assets on the December 31, 2025 and December 31, 2024 Consolidated Balance Sheets, respectively, and $0.2 million and $0.4 million in Other assets, net on the December 31, 2025 and December 31, 2024 Consolidated Balance Sheets, respectively. The gross and net amounts consist of the following:
|
|
December 31, |
||
(In Thousands) |
|
2025 |
|
2024 |
Contract assets: |
|
|
|
|
Gross balance |
|
$4,698 |
|
$3,407 |
Accumulated amortization |
|
(3,482) |
|
(2,247) |
Contract assets, net |
|
$1,216 |
|
$1,160 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 26, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.