使用警語:中文譯文來源為 Google 翻譯,僅供參考,實際內容請以英文原文為主
Operator
Good evening.
My name is Vitania, and I will be your conference operator today.
At this time, I would like to welcome everyone to the Marchex first quarter earnings conference call.
All lines have been placed on mute to prevent any background noise.
After the speakers' remarks, there will be a question-and-answer session.
(Operator Instructions).
Thank you.
And I would now like to turn the call over to today's host, Mr.
Ethan Caldwell, General Counsel and Chief Administrative Officer.
Ethan Caldwell - General Counsel, Chief Administrative Officer
Thank you.
Good afternoon, everyone, and welcome to Marchex's business update and first quarter 2011 conference call.
Joining us today are Russell Horowitz, Chairman and Chief Executive Officer; John Keister, Executive Vice Chairman; Peter Christothoulou, Chief Operating Officer; Michael Arends, Chief Financial Officer; and Matthew Berk, Executive Vice President of Product Engineering.
During the course of this conference call, we will make forward-looking statements that involve substantial risks and uncertainties.
All statements other than statements of historical fact included on this call regarding our strategy, future operations, future financial position, future revenues and other financial guidance, acquisitions, projected costs, prospects, plans and objectives of management are forward-looking statements.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make.
There are a number of important factors that could cause Marchex's actual results to differ materially from those indicated by such forward-looking statements, as are described in the Risk Factors section of our most recent periodic report and registration statement filed with the Securities and Exchange Commission.
All of the information provided on this call is as of today's date, and we undertake no duty to update the information provided herein.
During the course of this conference call, we will also reference certain non-GAAP measures of financial performance and liquidity, including OIBA, adjusted OIBA, adjusted EBITDA, and adjusted non-GAAP EPS.
A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in today's earnings press release, which is available on the Investor Relations section of our website, and definitions of these measures as used by us and the reasons why we believe these measures provide useful information are also contained in today's earnings press release.
At this time, I would like to turn the call over to Russell Horowitz.
Russell Horowitz - Chairman, CEO
Thank you, Ethan, and welcome, everyone.
On today's call I'll discuss our progress, Mike will review our financial results, and then we'll open it up to Q&A.
For the last several years, we've consistently highlighted that our focus is on helping advertisers reach and acquire customers through the phone.
While we recognize that the call advertising industry is in its early stages of growth, based on the progress we see in our business, we're optimistic about the size of the overall opportunity.
Therefore, we're committed to continuing to define and shape the call advertising industry and growing our leadership position.
In order to execute on this goal, we need to continue to add diverse digital channel sources with strong call volumes, grow both national local advertiser relationships, deliver best-in-class products to support these advertisers, and ultimately drive performance.
To frame our opportunity and position, there are five key takeaways.
First, we believe that performance-based call advertising is the next layer of digital advertising.
We believe this for three reasons.
The first reason is that digital advertising inventory suited to phone calls, such as mobile, is exploding in tandem with mobile publishers' needs to efficiently monetize that inventory.
Second, significant advertiser demand for phone calls already exists in offline media such as Yellow Pages, local print, and radio, so we don't need to educate the market on the value of calls.
And third, connecting directly to a customer over the phone under a performance model delivers superior value to advertisers compared to other digital media, including search.
From our point of view, given these and other reasons, we believe that call advertising is the logical evolution of, and more efficient than, click advertising, in the same way that click advertising was the logical evolution of display.
In simple terms, to carry greater growth dynamics, increased advertiser transparency, and better performance.
Next, we believe the opportunity is global.
The macro trends of call advertising apply globally, and we have been making progress outside the United States, including beginning to launch hundreds of thousands of businesses in Canada with our call advertising products.
We expect to be operating in Europe this year as well.
Third, on the demand side, we're already operating at meaningful scale with both large and small advertisers.
Our success in building demand for phone calls is driven by the fact that we deliver compelling value to both national and local advertisers who want calls.
For example, in many cases, we're driving advertiser conversion rates of 20% to 30%, which means approximately one out of every four callers we send to an advertiser converts into a sale.
And as a result, many of our advertisers have increased their budgets by more than 10 times within their first 12 months of working with us.
Results like this are driven in large part by our technology innovations, which include call mining, call optimization, and filtering techniques.
Fourth, on the supply side, our network is large and growing.
It consists of the leading mobile carriers, mobile application developers, and VoIP providers.
Specifically, we have built a call advertising network that has an annualized reach of more than 500 million phone calls across all digital media, including mobile and VoIP.
And lastly, we're still very early and will continue investing for leadership.
And we're projecting strong revenue growth and long-term operating leverage.
Our focus is on the long term.
We'll continue investing in educating and growing the market and developing our products to support our advertisers and digital channel partners.
This effort will take time, as it took several years for the industry to embrace click advertising, but we believe it's the right thing to do.
In the meantime, we believe Marchex can deliver strong organic annual growth rates with revenue and EBITDA margins scaling beyond 20% over the long term.
With that, I'll highlight recent progress with our products and customers.
In terms of our products, our product vision is to build the most effective and broadest-reaching call advertising network that connects millions of businesses to hundreds of millions of customers via the phone at the right time in the purchasing process.
With that, we'll bring even greater transparency, efficiency, and value to our advertisers and digital media channel partners while also driving the largest scale of call volume.
With the acquisition of Jingle Networks, we have added mobile voice search, performance advertising, and technology solutions, and these complement our pay-per-call products.
Additionally, we continue to focus on improving our optimization technologies with the goal of increasing customer conversions for advertisers.
Next, looking at progress with our customers, as our recent progress demonstrates, there's tremendous and growing demand for phone calls across our three primary customer channels -- large national advertisers, reseller partners who serve small business advertisers across all categories, and reseller partners who specialize and go deep in providing marketing services for specific verticals.
In the first quarter, we added more than 10,000 new advertisers, raising Marchex's total number of advertiser relationships to more than 105,000.
This year we expect to grow our advertiser base by hundreds of thousands to nearly 0.5 million advertisers through exclusive relationships with partners like YPG Canada and others we'll add through the course of the year.
Concurrent with the momentum on the demand side of the call advertising equation, we're also adding diverse new sources of call supply from digital media, including mobile carriers, mobile network operators, mobile application and directory providers.
For example, Jingle Networks is expanding Marchex's reach with mobile voice search, some of the largest mobile carriers and leading mobile network providers in North America, including Sprint, Tracfone, US Cellular, AT&T, Verizon, and others.
As we integrate Marchex's advertiser base into the Jingle Networks sources of supply over the balance of 2011, we believe we can increase the scale of those relationships as well as add new sources.
In summary, our goal is to build the industry's most effective and broadest-reaching call advertising network for growth in advertiser relationships while also expanding access to high-quality call distribution.
With that, I'll hand the call over to Mike.
Michael Arends - CFO
Thanks, Russ.
During the first quarter, our continued progress with our call advertising products and customers drove 21% year-over-year growth as well as another consecutive quarter of sequential growth.
Total revenue for the first quarter was $29.1 million.
Growth was predominantly driven by continued execution across our product and business development initiatives.
We continue to grow the number of advertisers utilizing our call advertising products and believe the additional scale will bring increased efficiencies over the long term.
Revenue from publishing was $5.3 million, which was consistent with expectations.
Excluding stock-based compensation, acquisition costs, and amortization of intangible assets, total operating costs were $25.9 million for the first quarter of 2011.
Sales and marketing, excluding stock-based compensation, was $2.5 million.
During the quarter, sales and marketing expense levels were modestly down, in line with our expectations.
In the near term, we expect our marketing expense to increase modestly.
Longer term, we expect to increase marketing expenses to support the continued evolution of our products and growth of our customer base.
Adjusted operating income before amortization for the first quarter was $3.2 million.
Adjusted EBITDA was $4.2 million.
GAAP net income applicable to common stockholders was $513,000 for the first quarter of 2011, or $0.01 per diluted share.
This compares to GAAP net loss applicable to common stockholders of $111,000 for the same period of 2010, or $0.00 per diluted share.
Adjusted non-GAAP income per share, an estimate some Wall Street investors utilize as a supplemental measure of our operating progress, was $0.06 per share.
During the first quarter, we generated $2.5 million in operating cash flow and had approximately $40 million cash on hand as of March 31, 2011.
Additionally, we sold a small number of non-strategic domains that yielded $1.9 million in incremental cash flow.
As highlighted previously, we expect non-strategic domain sales to be uneven quarter to quarter.
We do continue to see strong demand.
During the quarter, we acquired 29,000 of our common shares for a total price of $252,000, bringing our total shares acquired under our repurchase program to 10 million, or 28% of our common shares outstanding.
We will continue to be opportunistic with respect to share repurchases while also maintaining a meaningful cash position for financial flexibility.
Now turning to our outlook for 2011, which includes our guidance for the second quarter.
First, turning to our revenue guidance for the remainder of 2011, during the first quarter, we continued to add to our advertiser base.
In the current quarter, we are starting to activate all of YPG Canada's 370,000 advertisers into Skype via the Marchex call advertising network.
Given the volume of advertisers we are adding over the rest of 2011 through this relationship and several others, and the fact we will add these advertisers in rolling tests that may fluctuate month to month, we believe providing the number of advertisers from quarter to quarter will become less meaningful.
As such, we are going to move away from this on a quarterly basis but may provide it from time to time.
By the end of the year, we believe we will have approximately 500,000 advertisers using our products.
We are seeing significant momentum with our call advertising products for large and small businesses, and we expect that momentum to drive growth throughout the year.
As a result, today we are increasing our guidance for the year.
We now expect revenue of between $137 million and $141 million, which includes, first, growth tied to the ongoing momentum we are seeing with our call advertising products; and second, contribution of more than $16.2 million for the remainder of 2011 net of intercompany eliminations from our acquisition of Jingle Networks.
As we integrate the sales forces and bring the additional highly relevant Jingle Networks call supply into the Marchex call advertising network, we believe Marchex's call-driven revenue will increase to more than 75% of overall revenue on an annualized basis by the end of 2011, setting the stage for continued strong growth in 2012 and beyond.
For the second quarter, we expect revenue of between $35 million and $36 million, driven by continued growth in our call advertising products, while factoring in relatively consistent revenue in publishing as well.
Next, looking at adjusted OIBA and EBITDA margins.
For 2011, we expect more than $15 million in adjusted operating income before amortization for the year, implying more than $19.5 million in adjusted EBITDA.
Included in these figures, we expect Jungle Networks to contribute $1.2 million to adjusted operating income before amortization for the remainder of the year.
We also expect Jingle's incremental contribution margin will be consistent with our overall call-driven revenue incremental contribution of between 20% and 35%.
For the second quarter, we expect adjusted operating income before amortization of more than $3.3 million and EBITDA of more than $4.5 million.
We are carefully managing our investment in initiatives such that as we grow, a portion of the incremental contribution will be allocated to support our growth initiatives, including investments in our products, customers, and other aspects of our business, and a portion we will flow through to contribute to expanding profit margins.
With that, I'd like to hand the call back to you, Russ.
Russell Horowitz - Chairman, CEO
Thanks, Mike.
I'd like to end the call with a few of the takeaways I highlighted earlier.
First, we believe that performance-based call advertising is the next important wave in digital advertising.
Second, we believe the opportunity is global.
Third, we're already operating at scale with hundreds of thousands of national and local advertisers using our products.
Fourth, our call advertising network is large and growing and consists of the leading mobile carriers, mobile application developers, and VoIP providers.
And fifth, we're still very early and will continue investing for leadership, and we're projecting strong revenue growth and long-term operating leverage.
2011 is off to a very good start.
We've got the right game plan, and we've got the right team.
So at this point, it really comes down to our ongoing focus on educating the market and on executing.
I want to thank our employees for their continued dedication and hard work.
And with that, operator, we can open it up for Q&A.
Operator
(Operator Instructions.) Ross Sandler.
Ross Sandler - Analyst
I've been hopping around a bit tonight, so I apologize if you covered some of this already.
First question -- I've got three.
First question is on some stuff going on just broadly in the industry.
Google's now paying rebates to some resellers, so would Marchex or AT&T be eligible for these rebates?
If so, how could that change/improve the business model of the margin?
A second question is, can you guys share any metrics about how the volumes are increasing on the Skype side on the pay-per-call network?
And then Skype's been mulling a bunch of ownership options.
So can you just give us details on if there were a change in ownership, how that might impact you, if at all?
And then lastly, any metrics or updates on the Canadian Yellow Pages partnership?
How are things progressing there?
Russell Horowitz - Chairman, CEO
Sure.
I think I've got all these.
If I don't get them all right, just follow up with me, please.
The Google providing incentives to folks isn't new.
They've been doing it a long time.
In our framework with the relationship with AT&T is we provide them two things.
We provide them a platform to go out and sell performance advertising specifically centered on driving phone calls, and we drive them phone calls on a pay-per-call basis as part of that through our call advertising network, which is the largest in the industry.
And so those are the two metrics that we get paid for, which is providing that platform and providing those calls as part of the value proposition for the end customers.
As it relates to arrangements between AT&T and Google specifically, clearly, we're not in a position to comment on that.
And our model is driven specifically by those two components and is not focused on Google rebates.
On the second question in terms of what's going on with Skype, it's going well for us.
We continue to see two primary catalysts for growth.
One is continuing to put more advertisers into it, and the second is Skype just continues to grow in terms of volumes from consumers.
On the advertiser side, obviously this quarter, with YPG going in with 370,000 advertisers, that's a big catalyst.
We continue to put local businesses as well as national advertisers in the US in, and that's been a catalyst for growth.
As we continue to add advertisers domestically, we see growth.
And, as we said in the conference call and will continue to communicate, we see opportunities like the YPG deal in other global markets as well, and we think we have a good chance to see some of those contribute in 2011 as well.
The third question, I think, came off in terms of how YPG is going so far.
And for us, Phase 1 was get all these advertisers live and working, and that's gone extremely well.
So Step 1 has gone well.
Step 2 will be, continue to optimize all those advertisers.
And Step 3 is, at the end of the day, YPG wants calls for their customers.
Skype's a good step.
We have other places in our call advertising network we can extend those, and so we think there's a chance to grow both within Skype and as part of the broader call advertising network.
In terms of some of the speculation around Skype and any potential new ownership, clearly, we can't comment.
For us, it's business as usual, and we're going to continue to operate that way.
Ross Sandler - Analyst
Thanks, guys.
Operator
Gene Munster.
Gene, your line is open.
Eric Martinuzzi.
Eric Martinuzzi - Analyst
Congratulations on the good execution.
It's good to see you guys getting your arms around the business.
Obviously, you're able to hit your guidance now, so it says things have stabilized.
The YPG -- I thought I understood how the pay-per-phone call worked, at least domestically.
It was advertisers opt in and the phone rings.
Can you explain how YPG Canada with Skype is different?
It sounds like all 370,000 customers are going to be getting phone calls.
Russell Horowitz - Chairman, CEO
I appreciate the question, Eric.
Yes, I think this is our eighth quarter in a row where we've met or exceeded the expectations, and we think we've got a good rhythm in terms of the momentum of the business and how that translates into growth and leverage.
In terms of how YPG in Canada specifically works with Skype, we work with advertisers at different profiles.
Some we work with directly, and about half of our business is direct, where we sell to national advertisers and their agencies.
And then the second is where we utilize resellers.
Obviously, in the case of folks like AT&T and YPG and a few others, they're already utilizing our core platforms.
So incrementally adding them into our call advertising network is a function of integrating into ourselves.
So with YPG and Skype, Skype is -- we have a very diversified call advertising network, which includes Skype.
So YPG being integrated into the call advertising network allows us to effectively tailor that distribution to Skype and then, over time, broaden it to other providers as well.
I hope that answers your question, and happy to clarify it more if you'd like.
Eric Martinuzzi - Analyst
Actually, it does not.
What I'm wondering, who is paying for this?
When that phone rings, is that part of a package for YPG customers that everybody pays for?
Or is there an incremental -- and what I'm basically asking is, how do you guys get paid?
Russell Horowitz - Chairman, CEO
Oh, sure.
We get paid per call.
We get paid on every single call that gets made by a Skype user to a YPG business.
Eric Martinuzzi - Analyst
Okay.
Okay.
Russell Horowitz - Chairman, CEO
It is all performance advertising revenue.
It's variable to performance.
We drive calls, we get paid.
Eric Martinuzzi - Analyst
Got you.
All right.
And then competitive landscape -- I'm just curious.
Obviously, you guys, the big win a year ago with the AT&T interactive.
Now we're stringing together a couple of different Skype deals and a deeper relationship with YPG Canada.
Are these deals competitively bid?
Is it you guys versus a list of characters?
Talk to me about the competitive landscape with pay-per-phone call.
Russell Horowitz - Chairman, CEO
The good news is here, there's two things.
One, we obviously have a whole lot of national companies that understand the value of phone calls.
They've spent a lot of money historically on offline media trying to generate them, obviously, with a lack of visibility into what the performance was like.
We now do all the hefty lifting for them with some pretty complex technologies.
But at the end of the day, the value proposition is simple.
We can drive them qualified phone calls under a performance-based advertising model.
Take that over, now, into the partner space like the AT&Ts and YPGs and others.
Clearly, they take a broad view on the landscape of potential providers.
And the good news for us is that when you look at who has the products, the credibility, as well as the media to make the formula work, we are in a pretty unique place.
And so if you gain great scale, inevitably you gain efficiencies.
And if you're a thoughtful company, you find ways to share those with your partners.
I think we've done a good job with that.
I think we've been able to really build our credibility with these partners and, frankly, translate that into some pretty unique deals when you look at world-class companies formulating exclusive relationships with Marchex on fundamental and strategic initiatives to their businesses.
And so I think that, as you look at it and the places we've made progress, I would even extend that further to Jingle.
Where they looked at a market opportunity around the emergence of mobile, they recognized that with the massive growth of smart phones, that mobile voice search would grow, and whether it's a one-to-one correlation, there would be a very tight correlation between those two things.
And so they went to those mobile providers with both automation and monetization to lower their costs and create new growth revenue streams.
And so today, they really don't have any competition in that market.
And when you add that with what Marchex has built in terms of already having the largest call advertising network, we think we've got a unique footprint with a whole bunch of unique partners who are all well positioned to win their own markets.
And by virtue of it, we can all collectively benefit.
Eric Martinuzzi - Analyst
Okay.
And then lastly, a housekeeping question here.
You guys finished the March quarter with roughly $40 million in cash.
Since then, you've had the Jingles transaction, and I don't know if you've been active repurchasing shares.
But can you give us a pro forma cash balance, maybe as of April 30?
Michael Arends - CFO
$23 million post acquisition of Jingle, and there was $16.7 million cash that went out as part of that deal, so the $40 million less the $16.7 million.
Eric Martinuzzi - Analyst
Thank you.
Operator
Robert Coolbrith.
Robert Coolbrith - Analyst
First of all, just a quick question on Skype.
If you could maybe provide a little color on the type of lift an advertiser is provided with, just in terms of volume from Skype, before versus after lighting up their number as a free call.
And then I have a couple of other questions.
Thank you.
Russell Horowitz - Chairman, CEO
Sure.
We can't share that proprietary data.
What we can tell you is that on an aggregate basis, it's a healthy lift.
You do see variability, depending on categories and locations.
But all in all, we think that you see a healthy lift, and it's a very good user value when you look at the incremental calls.
Robert Coolbrith - Analyst
Great.
And then I also just wanted to maybe dig in a little bit on the total number of phone calls that you're talking about in the press release.
You know, 500 million through the combination of Jingle and Marchex.
Personally, I don't know if you're willing to do this, but how does that break out in terms of the number of calls that Jingle has brought to the table, roughly?
Russell Horowitz - Chairman, CEO
Yes, we're not breaking it out.
What I'll tell you is before the Jingle acquisition, Marchex had, by our knowledge, the largest call advertising network in the industry.
Jingle, obviously, created some very unique relationships in the mobile space, and we're thrilled to have them be part of our network.
And the scale of 0.5 billion calls and growing, we think, positions us really well in terms of the value proposition for advertisers, too.
Robert Coolbrith - Analyst
Great.
And so can you maybe -- this ties into the 40% 2011 growth that really began off Jingle as well.
Can you give a sense of, are they scaled up with the carrier partners at this point, or were some of them signed in 2011, or some of them still have to scale up materially?
And how much larger do you think the addressable set of mobile voice search or sponsored directory assistance calls could get over time?
Russell Horowitz - Chairman, CEO
This is a very important trend, and it's amongst a number of things we look at.
But I think understanding this really comes down to understanding Marchex, if you look at forward indicators.
Mobile voice search, a few years ago, it was about 270 million mobile voice searches a year.
And it's forecast to grow in the next two years to more than 2.1 billion.
So when you look at where Jingle was in terms of integrations with partners, on a net basis, we think it's very early when you look at both opportunities and penetration.
On the other side of it, you've got mass consumer adoption and utilization of mobile voice search based on smart phone growth.
So for us, to answer your question, we think Jingle is early in harnessing the growth opportunities.
And collectively, when you look at Marchex's partnerships, we're early, but that growth here correlates.
Using the growth in mobile voice search, we think that's our opportunity when you look at the steepness of that curve.
Robert Coolbrith - Analyst
Great.
And just one other question with respect to Jingles.
Does their TAC correspond reasonably well to your TAC in the call network?
That's my last question, and I'll -- okay.
Russell Horowitz - Chairman, CEO
We've communicated that incremental contribution margins from Marchex are in that 20% to 35% range of each incremental revenue dollar.
And for Jingle, based on where they are and having gotten past the fixed cost structure of their business, they have the same profile, about 20% to 35% on incremental dollars.
Robert Coolbrith - Analyst
Great.
Thanks a lot.
Congratulations.
Operator
Gene Munster.
Gene Munster - Analyst
Congratulations.
If you could go through just a little more on Europe.
I thought you mentioned that you're doing more in Europe.
What exactly does that mean?
Did you sign partnerships, and how should we think about that opp?
Russell Horowitz - Chairman, CEO
I'll be very brief here.
Obviously, it will be easier once we've announced a few things.
But the opportunity's global.
We know that Skype gives us Step 1 on the supply side in a number of these markets.
We since have developed other complementary supply sources along with Skype.
And clearly, when you look at our footprint in terms of relationships with resellers, we think there's opportunities to replicate relationships like YPG.
Gene Munster - Analyst
So expect more announcements in the next couple of quarters?
Is that a good way to think about it?
Russell Horowitz - Chairman, CEO
It is.
Gene Munster - Analyst
Okay.
And then just one follow-up to Jingle Networks, and I guess in over all these numbers.
But can you just remind me what the organic growth rate was of Jingle Networks in 2010?
Michael Arends - CFO
2010 to 2011, it is an organic growth rate of over 40%.
In terms of revenue, Gene, are you asking about the year over year?
Gene Munster - Analyst
Yes, what the year-over-year growth was and what the run rate was before you guys had acquired it.
Michael Arends - CFO
The run rate net of eliminations back in 2010 was just over $16 million.
And we're forecasting --
Gene Munster - Analyst
Okay.
Michael Arends - CFO
Yes, okay.
Over 40% in 2012 -- or 2011.
Gene Munster - Analyst
Okay, and then one final question.
I know you've talked a lot about YPG Canada.
Just to make sure I've got these numbers correct.
So tell me.
You've added advertisers very quickly.
How many do you think you could add by the end of the year?
Russell Horowitz - Chairman, CEO
Right now, we've added them, and that step has gone well.
And now it's about optimization and growing volume.
So we have incremental steps to play, and then it's expanding volume beyond Skype into other parts of the network.
Gene Munster - Analyst
Got it.
So the additions have been made.
Now it's Steps 2 and 3.
Russell Horowitz - Chairman, CEO
That's right.
Gene Munster - Analyst
Excellent.
Thanks.
Congrats.
Operator
Dan Salmon.
Dan Salmon - Analyst
With the call business ramping the way it is, could you just chat a little bit about the future of the publishing business and where that fits in your strategy heading into next year?
Russell Horowitz - Chairman, CEO
Sure.
When you look at our publishing business and the opportunities, right now what's emerging is that our directory sites -- sites that fall into that traditional directory framework in terms of consumer utility -- are already proving to be very relevant in driving call volume.
What we're also seeing now is opportunities to extend that when you look at, call it mobile directories, as well as mobile applications that we can provide to partners as well as part of their consumer experience.
So publishing is turning out to be a very good asset and a good group for us to push forward with our existing directory assets and leveraging those applications for third parties as well.
Dan Salmon - Analyst
So would it be fair to say, then, that with the shift in strategy and momentum behind call advertising, that of the couple hundred thousand domains that you own, that there's a larger percentage of them that would be considered non-core?
Obviously, there's those you mentioned, the directory sites, seem fairly important.
But I guess what I'm getting is would we expect any sort of acceleration or perhaps large sale of domains as the strategy shifts to calls?
Russell Horowitz - Chairman, CEO
The interesting thing is this.
We see -- obviously, our publishing platform is turning out to be very valuable in contributing to our call advertising strategy.
And that's been the case for two years plus.
But it's starting to be more accentuated, particularly as we penetrate the mobile space.
And so when you look at how you might bifurcate it, the reality is, I can't remember if I said, it, but I think that cash flow is strategic.
And the fact that these assets generate meaningful cash flow, which contributes to our investment, we think is a nice thing to have.
Clearly, with an outlook of more than 75% of our revenue being driven by our call-driven products, it's a formula that drives the success of Marchex.
But right now, we've got meaningful cash flow that comes from some of those websites that are not specifically geared towards calls, and we're getting a couple million bucks a quarter on the ones we sell, which again, it's like pebbles of sand on the beach.
And so we feel like we've got a unique asset that very few companies have in terms of driving discretionary cash flow and investment dollars, both for our business and to buy back our shares.
How that translates over time, we'll see.
But we like where we are.
Dan Salmon - Analyst
Okay, great.
Thank you.
Operator
(Operator Instructions.) There are no further questions.
I'll turn the call back over to you, Mr.
Caldwell.
Russell Horowitz - Chairman, CEO
This is Russell Horowitz.
I just want to thank everyone for participating and for some great questions, and we look forward to updating you on our progress again in three months.
Thank you.
Operator
This concludes today's conference call.
You may now disconnect.