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Thryv Grows SaaS Revenue 25% in Fourth Quarter 2023, Exceeds Full Year SaaS Guidance

Q4 SaaS Adjusted EBITDA exceeds mid-point of guidance by over $2.75 million

NDR increases 400 bps sequentially to 96%

Company generates strong FY operating cash flow of $148.2 million

Thryv Holdings, Inc. (NASDAQ:THRY) (“Thryv” or the “Company”), the provider of Thryv®, the leading small business software platform, reported SaaS revenue growth of 25% year-over-year in the fourth quarter of 2023.

“We are proud to announce robust fourth-quarter and full-year results, marking another successful year for Thryv,” said Joe Walsh, Thryv Chairman, and CEO. “We surpassed guidance on SaaS revenue growth and SaaS Adjusted EBITDA, underscoring our commitment to delivering profitable SaaS growth. Looking ahead to 2024, we plan to accelerate SaaS revenue growth and drive margin expansion by empowering our legacy digital clients to seamlessly transition to the Thryv SaaS platform, enabling them to access an advanced multi-center platform that addresses their everyday needs.”

Also today, Thryv has issued a press release outlining increasing adoption of the SaaS platform by legacy clients.

“For the fourth quarter, Thryv achieved record SaaS revenue growth of 25% year-over-year,” stated Paul Rouse, Chief Financial Officer. “Simultaneously, we delivered record SaaS Adjusted Gross profit margin of 70% and surpassed our SaaS Adjusted EBITDA guidance.” Rouse continued, “We generated strong free cash flow in 2023 which enabled us to pay down $120 million towards our term loan, exceeding expectations and further solidifying our financial position. As we move forward, our primary focus is to accelerate profitable growth in the SaaS business while maintaining a strong and healthy balance sheet.”

Fourth Quarter 2023 Highlights:

  • Total SaaS1 revenue was $74.0 million, a 25% increase year-over-year
  • Total Marketing Services2 revenue was $162.2 million, a 26% decrease year-over-year
  • Consolidated total revenue was $236.2 million, a decrease of 15% year-over-year
  • Consolidated net loss was $257.5 million, or $(7.39) per diluted share, which includes a non-cash charge of $268.8 million, or $7.71 per diluted share, related to goodwill impairment; compared to net loss of $50.4 million, or $(1.47) per diluted share, for the fourth quarter of 2022
  • Consolidated Adjusted EBITDA was $52.3 million, representing an Adjusted EBITDA margin of 22%
  • Total SaaS Adjusted EBITDA was $6.5 million, representing an Adjusted EBITDA margin of 8.8%
  • Total Marketing Services Adjusted EBITDA was $45.8 million, representing an Adjusted EBITDA margin of 28.2%
  • Consolidated Gross Profit was $159.7 million
  • Consolidated Adjusted Gross Profit3 was $165.4 million
  • SaaS Gross Profit was $50.0 million
  • SaaS Adjusted Gross Profit was $51.6 million, representing an Adjusted Gross Profit Margin of 70%
  • Operating cash flow was $44.6 million compared to $44.4 million for the fourth quarter of 2022
  • Free cash flow was $34.1 million compared to $34.5 million for the fourth quarter of 2022

Full-Year 2023 Financial Highlights:

  • Total SaaS1 revenue was $263.7 million, a 21.9% increase year-over-year
  • Total Marketing Services2 revenue was $653.2 million, a 33.8% decrease year-over-year
  • Consolidated total revenue was $917.0 million, a decrease of 24% year-over-year
  • Consolidated net loss was $259.3 million, or $(7.47) per diluted share, which includes a non-cash charge of $268.8 million related to goodwill impairment; compared to net income of $54.3 million, or $1.49 per diluted share, for last year
  • Consolidated Adjusted EBITDA was $187.5 million, representing an Adjusted EBITDA margin of 20.4%
  • Total SaaS Adjusted EBITDA was $12.0 million, representing an Adjusted EBITDA margin of 4.6%
  • Total Marketing Services Adjusted EBITDA was $175.5 million, representing an Adjusted EBITDA margin of 26.9%
  • Consolidated Gross Profit was $578.2 million
  • Consolidated Adjusted Gross Profit3 was $605.8 million
  • SaaS Gross Profit was $169.2 million
  • SaaS Adjusted Gross Profit was $175.6 million, representing an Adjusted Gross Profit Margin of 66.6%
  • Operating cash flow was $148.2 million compared to $148.6 million for the prior year
  • Free cash flow was $114.8 million compared to $119.3 million for the prior year

SaaS Metrics

  • Total SaaS clients increased 27% year-over-year to 66 thousand for the fourth quarter of 2023
  • Seasoned Net Dollar Retention4 was 96% for the fourth quarter of 2023, an increase of 400 bps sequentially
  • SaaS monthly active users5 was 40 thousand active users for the fourth quarter of 2023
  • SaaS monthly Average Revenue per Unit (“ARPU”)6 decreased to $370 for the fourth quarter of 2023, compared to $387 in the fourth quarter of 2022
  • ThryvPay total payment volume was $60 million, an increase of 54% year-over-year

_____________________

1 Total SaaS revenue in the U.S. and International segments was $70.7 million and $3.3 million for the three months ended December 31, 2023 and $253.6 million and $10.1 million for the year ended December 31, 2023, respectively.

2 Total Marketing Services revenue in the U.S. and International segments was $132.7 million and $29.5 million for the three months ended December 31, 2023 and $510.5 million and $142.7 million for the year ended December 31, 2023, respectively.

3 Defined as Gross profit adjusted to exclude the impact of depreciation and amortization expense and stock-based compensation expense.

4 Seasoned Net Dollar Retention is defined as net dollar retention excluding clients acquired over the previous 12 months.

5 Defined as a client with one or more users who log into our SaaS solutions at least once during the calendar month.

6 Defined as total client billings for a particular month divided by the number of clients that have one or more revenue-generating solutions in that same month.

7 These statements are forward-looking and actual results may materially differ. Refer to the “Forward-Looking Statements” section below for information on the factors that could cause our actual results to materially differ from these forward-looking statements.

Outlook

Based on information available as of February 22, 2024, Thryv is issuing guidance7 for the first quarter of 2024 and full year 2024 as indicated below:

 

 

 

1st Quarter

 

Full Year

(in millions)

 

 

2024

 

2024

SaaS Revenue

 

 

$73 - $74

 

$325 - $328

SaaS Adjusted EBITDA

 

 

$6 - $7

 

$26 - $29

 

1st Quarter

 

2nd Quarter

 

3rd Quarter

 

4th Quarter

 

Full Year

(in millions)

2024

 

2024

 

2024

 

2024

 

2024

Marketing Services Revenue

$152 - $155

 

$146 - $149

 

$99 - $101

 

$98 - $100

 

$495 - $505

Marketing Services Adjusted EBITDA

 

 

 

 

 

 

 

 

$132 - $135

Earnings Conference Call Information

Thryv will host a conference call on Thursday, February 22, 2024 at 8:30 a.m. (Eastern Time) to discuss the Company's fourth quarter 2023 results.

For analysts to register for this conference call, please use this link. After registering, a confirmation email will be sent, including dial-in details and a unique code for entry. We recommend registering a day in advance or at a minimum thirty minutes prior to the start of the call. To listen to the webcast, please use this link or visit Thryv's Investor Relations website at investor.thryv.com. A live webcast will also be available on the Investor Relations section of the Company's website at investor.thryv.com.

If you are unable to participate in the conference call, a replay will be available. To access the replay, please dial (800) 770-2030 or (647) 362-9199 and enter “44819.”

 

 

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive (Loss) Income

 

 

Three Months Ended

 

Years Ended

 

December 31,

 

December 31,

(in thousands, except share and per share data)

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

$

236,163

 

 

$

279,368

 

 

$

916,961

 

 

$

1,202,388

 

Cost of services

 

76,453

 

 

 

100,463

 

 

 

338,714

 

 

 

422,006

 

Gross profit

 

159,710

 

 

 

178,905

 

 

 

578,247

 

 

 

780,382

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

73,757

 

 

 

86,773

 

 

 

300,538

 

 

 

362,432

 

General and administrative

 

59,238

 

 

 

56,892

 

 

 

208,880

 

 

 

216,406

 

Impairment charges

 

268,846

 

 

 

102,000

 

 

 

268,846

 

 

 

102,222

 

Total operating expenses

 

401,841

 

 

 

245,665

 

 

 

778,264

 

 

 

681,060

 

 

 

 

 

 

 

 

 

Operating (loss) income

 

(242,131

)

 

 

(66,760

)

 

 

(200,017

)

 

 

99,322

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense

 

(13,817

)

 

 

(16,318

)

 

 

(61,728

)

 

 

(56,902

)

Interest expense, related party

 

 

 

 

 

 

 

 

 

 

(3,505

)

Other components of net periodic pension benefit

 

6,607

 

 

 

39,317

 

 

 

2,719

 

 

 

44,612

 

Other (expense) income

 

(276

)

 

 

(119

)

 

 

(1,518

)

 

 

15,448

 

(Loss) income before income tax (expense) benefit

 

(249,617

)

 

 

(43,880

)

 

 

(260,544

)

 

 

98,975

 

Income tax (expense) benefit

 

(7,924

)

 

 

(6,565

)

 

 

1,249

 

 

 

(44,627

)

Net (loss) income

$

(257,541

)

 

$

(50,445

)

 

$

(259,295

)

 

$

54,348

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Foreign currency translation adjustment, net of tax

 

5,402

 

 

 

4,397

 

 

 

1,070

 

 

 

(8,214

)

Comprehensive (loss) income

$

(252,139

)

 

$

(46,048

)

 

$

(258,225

)

 

$

46,134

 

 

 

 

 

 

 

 

 

Net (loss) income per common share:

 

 

 

 

 

 

 

Basic

$

(7.39

)

 

$

(1.47

)

 

$

(7.47

)

 

$

1.58

 

Diluted

$

(7.39

)

 

$

(1.47

)

 

$

(7.47

)

 

$

1.49

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing basic and diluted net (loss) income per common share:

 

 

 

 

 

 

 

Basic

 

34,858,157

 

 

 

34,270,520

 

 

 

34,723,491

 

 

 

34,336,493

 

Diluted

 

34,858,157

 

 

 

34,270,520

 

 

 

34,723,491

 

 

 

36,506,095

 

 

Thryv Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

 

(in thousands, except share data)

December 31, 2023

 

December 31, 2022

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

18,216

 

 

$

16,031

 

Accounts receivable, net of allowance of $14,926 in 2023 and $14,766 in 2022

 

205,503

 

 

 

284,698

 

Contract assets, net of allowance of $35 in 2023 and $33 in 2022

 

2,909

 

 

 

2,583

 

Taxes receivable

 

3,085

 

 

 

11,553

 

Prepaid expenses

 

17,771

 

 

 

25,092

 

Indemnification asset

 

 

 

 

26,495

 

Deferred costs

 

16,722

 

 

 

9,544

 

Other current assets

 

2,662

 

 

 

2,320

 

Total current assets

 

266,868

 

 

 

378,316

 

Fixed assets and capitalized software, net

 

38,599

 

 

 

42,334

 

Goodwill

 

302,400

 

 

 

566,004

 

Intangible assets, net

 

18,788

 

 

 

34,715

 

Deferred tax assets

 

128,051

 

 

 

113,859

 

Other assets

 

28,464

 

 

 

42,649

 

Total assets

$

783,170

 

 

$

1,177,877

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

10,348

 

 

$

18,972

 

Accrued liabilities

 

105,903

 

 

 

126,810

 

Current portion of unrecognized tax benefits

 

23,979

 

 

 

31,919

 

Contract liabilities

 

44,558

 

 

 

41,854

 

Current portion of long-term debt

 

70,000

 

 

 

70,000

 

Other current liabilities

 

8,402

 

 

 

10,937

 

Total current liabilities

 

263,190

 

 

 

300,492

 

Term Loan, net

 

230,052

 

 

 

345,256

 

ABL Facility

 

48,845

 

 

 

54,554

 

Pension obligations, net

 

69,388

 

 

 

72,590

 

Other liabilities

 

18,995

 

 

 

22,718

 

Total long-term liabilities

 

367,280

 

 

 

495,118

 

Commitments and contingencies

 

 

 

Stockholders' equity

 

 

 

Common stock - $0.01 par value, 250,000,000 shares authorized; 62,660,783 shares issued and 35,302,746 shares outstanding at December 31, 2023; and 61,279,379 shares issued and 34,593,837 shares outstanding at December 31, 2022

 

627

 

 

 

613

 

Additional paid-in capital

 

1,151,259

 

 

 

1,105,701

 

Treasury stock - 27,358,037 shares at December 31, 2023 and 26,685,542 shares at December 31, 2022

 

(485,793

)

 

 

(468,879

)

Accumulated other comprehensive loss

 

(15,191

)

 

 

(16,261

)

Accumulated deficit

 

(498,202

)

 

 

(238,907

)

Total stockholders' equity

 

152,700

 

 

 

382,267

 

Total liabilities and stockholders' equity

$

783,170

 

 

$

1,177,877

 

 

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

 

 

Years Ended December 31,

(in thousands)

 

2023

 

 

 

2022

 

Cash Flows from Operating Activities

 

 

 

Net (loss) income

$

(259,295

)

 

$

54,348

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

63,251

 

 

 

88,392

 

Amortization of deferred commissions

 

14,954

 

 

 

12,110

 

Amortization of debt issuance costs

 

5,422

 

 

 

5,749

 

Deferred income taxes

 

(12,904

)

 

 

(15,119

)

Provision for credit losses and service credits

 

24,516

 

 

 

25,971

 

Stock-based compensation expense

 

22,201

 

 

 

14,628

 

Other components of net periodic pension (benefit)

 

(2,719

)

 

 

(44,612

)

Impairment charges

 

268,846

 

 

 

102,222

 

Non-cash loss (gain) from the remeasurement of the indemnification asset

 

10,734

 

 

 

(2,148

)

Bargain purchase gain

 

 

 

 

(10,883

)

Other

 

603

 

 

 

(2,309

)

Changes in working capital items, excluding acquisitions:

 

 

 

Accounts receivable

 

54,325

 

 

 

(5,242

)

Contract assets

 

(326

)

 

 

2,764

 

Prepaid expenses and other assets

 

7,117

 

 

 

(9,592

)

Accounts payable and accrued liabilities

 

(37,749

)

 

 

(41,105

)

Other liabilities

 

(10,750

)

 

 

(26,601

)

Net cash provided by operating activities

 

148,226

 

 

 

148,573

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

Additions to fixed assets and capitalized software

 

(33,394

)

 

 

(29,233

)

Acquisition of a business, net of cash acquired

 

(8,897

)

 

 

(22,793

)

Other

 

(225

)

 

 

 

Net cash used in investing activities

 

(42,516

)

 

 

(52,026

)

 

 

 

 

Cash Flows from Financing Activities

 

 

 

Payments of Term Loan

 

(120,000

)

 

 

(104,165

)

Payments of Term Loan, related party

 

 

 

 

(8,347

)

Proceeds from ABL Facility

 

919,975

 

 

 

976,296

 

Payments of ABL Facility

 

(925,684

)

 

 

(961,670

)

Proceeds from exercises of stock warrants

 

15,898

 

 

 

64

 

Other

 

6,318

 

 

 

6,725

 

Net cash used in financing activities

 

(103,493

)

 

 

(91,097

)

 

 

 

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

133

 

 

 

(827

)

Increase in cash, cash equivalents and restricted cash

 

2,350

 

 

 

4,623

 

Cash, cash equivalents and restricted cash, beginning of period

 

18,180

 

 

 

13,557

 

Cash, cash equivalents and restricted cash, end of period

$

20,530

 

 

$

18,180

 

 

 

 

 

Supplemental Information

 

 

 

Cash paid for interest

$

57,027

 

 

$

57,084

 

Cash paid for income taxes, net

$

9,313

 

 

$

58,259

 

 

 

 

 

Non-cash investing and financing activities

 

 

 

Repurchase of Treasury stock as a result of the settlement of the indemnification asset

$

15,760

 

 

$

 

The following tables summarize the operating results of the Company's reportable segments:

 

Three Months Ended December 31,

 

Change

(in thousands)

 

2023

 

 

 

2022

 

 

Amount

 

%

Revenue

 

 

 

 

 

 

 

Thryv U.S.

 

 

 

 

 

 

 

Marketing Services

$

132,665

 

 

$

187,755

 

 

$

(55,090

)

 

(29.3

)%

SaaS

 

70,652

 

 

 

57,938

 

 

 

12,714

 

 

21.9

%

Thryv International

 

 

 

 

 

 

 

Marketing Services

 

29,528

 

 

 

32,295

 

 

 

(2,767

)

 

(8.6

)%

SaaS

 

3,318

 

 

 

1,380

 

 

 

1,938

 

 

140.4

%

Consolidated Revenue

$

236,163

 

 

$

279,368

 

 

$

(43,205

)

 

(15.5

)%

 

 

 

 

 

 

 

 

Segment Gross Profit

 

 

 

 

 

 

 

Thryv U.S.

 

 

 

 

 

 

 

Marketing Services

$

88,520

 

 

$

124,413

 

 

$

(35,893

)

 

(28.8

)%

SaaS

 

47,183

 

 

 

34,944

 

 

 

12,239

 

 

35.0

%

Thryv International

 

 

 

 

 

 

 

Marketing Services

 

21,232

 

 

 

18,802

 

 

 

2,430

 

 

12.9

%

SaaS

 

2,775

 

 

 

746

 

 

 

2,029

 

 

NM

 

Consolidated Segment Gross Profit

$

159,710

 

 

$

178,905

 

 

$

(19,195

)

 

(10.7

)%

 

 

 

 

 

 

 

 

Segment EBITDA

 

 

 

 

 

 

 

Thryv U.S.

 

 

 

 

 

 

 

Marketing Services

$

38,383

 

 

$

59,758

 

 

$

(21,375

)

 

(35.8

)%

SaaS

 

8,345

 

 

 

83

 

 

 

8,262

 

 

NM

 

Thryv International

 

 

 

 

 

 

 

Marketing Services

 

7,390

 

 

 

10,657

 

 

 

(3,267

)

 

(30.7

)%

SaaS

 

(1,842

)

 

 

(2,305

)

 

 

463

 

 

20.1

%

Consolidated Adjusted EBITDA

$

52,276

 

 

$

68,193

 

 

$

(15,917

)

 

(23.3

)%

 

Years Ended December 31,

 

Change

(in thousands)

 

2023 (1

)

 

 

2022 (2

)

 

Amount

 

%

Revenue

 

 

 

 

 

 

 

Thryv U.S.

 

 

 

 

 

 

 

Marketing Services

$

510,533

 

 

$

820,032

 

 

$

(309,499

)

 

(37.7

)%

SaaS

 

253,579

 

 

 

211,801

 

 

 

41,778

 

 

19.7

%

Thryv International

 

 

 

 

 

 

 

Marketing Services

 

142,711

 

 

 

166,010

 

 

 

(23,299

)

 

(14.0

)%

SaaS

 

10,138

 

 

 

4,545

 

 

 

5,593

 

 

123.1

%

Consolidated Revenue

$

916,961

 

 

$

1,202,388

 

 

$

(285,427

)

 

(23.7

)%

 

 

 

 

 

 

 

 

Segment Gross Profit

 

 

 

 

 

 

 

Thryv U.S.

 

 

 

 

 

 

 

Marketing Services

$

320,327

 

 

$

539,543

 

 

$

(219,216

)

 

(40.6

)%

SaaS

 

161,663

 

 

 

130,272

 

 

 

31,391

 

 

24.1

%

Thryv International

 

 

 

 

 

 

 

Marketing Services

 

88,730

 

 

 

108,496

 

 

 

(19,766

)

 

(18.2

)%

SaaS

 

7,527

 

 

 

2,071

 

 

 

5,456

 

 

NM

 

Consolidated Segment Gross Profit

$

578,247

 

 

$

780,382

 

 

$

(202,135

)

 

(25.9

)%

 

 

 

 

 

 

 

 

Segment EBITDA

 

 

 

 

 

 

 

Thryv U.S.

 

 

 

 

 

 

 

Marketing Services

$

123,249

 

 

$

271,629

 

 

$

(148,380

)

 

(54.6

)%

SaaS

 

18,576

 

 

 

(3,686

)

 

 

22,262

 

 

NM

 

Thryv International

 

 

 

 

 

 

 

Marketing Services

 

52,241

 

 

 

75,106

 

 

 

(22,865

)

 

(30.4

)%

SaaS

 

(6,551

)

 

 

(9,707

)

 

 

3,156

 

 

32.5

%

Consolidated Adjusted EBITDA

$

187,515

 

 

$

333,342

 

 

$

(145,827

)

 

(43.7

)%

(1)

Thryv International includes Yellow's results of operations subsequent to the Yellow acquisition.

(2)

Thryv U.S. includes Vivial's results of operations subsequent to the Vivial acquisition.

Non-GAAP Measures

Our results included in this press release include Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Gross Profit, which are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are presented for supplemental informational purposes only and are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the tables below for a reconciliation of Adjusted EBITDA to Net (loss) income and Adjusted Gross Profit to Gross profit. Both Net (loss) income and Gross profit are the most comparable GAAP financial measure to Adjusted EBITDA and Adjusted Gross Profit, respectively. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.

The following is a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, Net (loss) income:

 

Three Months Ended December 31,

 

Years Ended December 31,

(in thousands)

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Reconciliation of Adjusted EBITDA

 

 

 

 

 

 

 

Net (loss) income

$

(257,541

)

 

$

(50,445

)

 

$

(259,295

)

 

$

54,348

 

Impairment charges

 

268,846

 

 

 

102,000

 

 

 

268,846

 

 

 

102,222

 

Depreciation and amortization expense

 

16,311

 

 

 

22,438

 

 

 

63,251

 

 

 

88,392

 

Interest expense

 

13,817

 

 

 

16,318

 

 

 

61,728

 

 

 

60,407

 

Stock-based compensation expense (1)

 

5,548

 

 

 

4,488

 

 

 

22,201

 

 

 

14,628

 

Restructuring and integration expenses (2)

 

1,767

 

 

 

3,365

 

 

 

14,612

 

 

 

17,804

 

Non-cash (gain) loss from remeasurement of indemnification asset (3)

 

 

 

 

(676

)

 

 

10,734

 

 

 

(2,148

)

Transaction costs (4)

 

 

 

 

1,322

 

 

 

373

 

 

 

6,119

 

Income tax expense (benefit)

 

7,924

 

 

 

6,565

 

 

 

(1,249

)

 

 

44,627

 

Other components of net periodic pension benefit (5)

 

(6,607

)

 

 

(39,317

)

 

 

(2,719

)

 

 

(44,612

)

Other (6)

 

2,211

 

 

 

2,135

 

 

 

9,033

 

 

 

(8,445

)

Adjusted EBITDA

$

52,276

 

 

$

68,193

 

 

$

187,515

 

 

$

333,342

 

(1)

We record stock-based compensation expense related to the amortization of grant date fair value of the Company’s stock-based compensation awards.

(2)

For the years ended December 31, 2023 and 2022, expenses relate to periodic efforts to enhance efficiencies and reduce costs, and include severance benefits, and costs associated with abandoned facilities and system consolidation.

(3)

In connection with the YP acquisition, the seller indemnified us for future potential losses associated with certain federal and state tax positions taken in tax returns filed by the seller prior to the acquisition date.

(4)

Expenses related to the Yellow acquisition, Vivial acquisition and other transaction costs.

(5)

Other components of net periodic pension benefit is from our non-contributory defined benefit pension plans that are currently frozen and incur no additional service costs. The most significant component of Other components of net periodic pension benefit relates to periodic mark-to-market pension remeasurement.

(6)

During the year ended December 31, 2023, Other includes expenses related to the valuation of certain assets as a result of the acquisition of Thryv Australia and foreign exchange-related expense. During the year ended December 31, 2022, Other primarily represents the bargain purchase gain as a result of the Vivial acquisition, partially offset by foreign exchange-related expense.

The following tables set forth reconciliations of Adjusted Gross Profit and Adjusted Gross Margin, to their most directly comparable GAAP measures, Gross profit and Gross margin:

 

Three Months Ended December 31, 2023

 

Thryv U.S.

 

Thryv International

 

 

(in thousands)

Marketing Services

 

SaaS

 

Marketing Services

 

SaaS

 

Total

Reconciliation of Adjusted Gross Profit

 

 

 

 

 

 

 

 

 

Gross profit

$

88,520

 

 

$

47,183

 

 

$

21,232

 

 

$

2,775

 

 

$

159,710

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

2,665

 

 

 

1,425

 

 

 

1,356

 

 

 

150

 

 

 

5,596

 

Stock-based compensation expense

 

74

 

 

 

43

 

 

 

 

 

 

 

 

 

117

 

Adjusted Gross Profit

$

91,259

 

 

$

48,651

 

 

$

22,588

 

 

$

2,925

 

 

$

165,423

 

Gross Margin

 

66.7

%

 

 

66.8

%

 

 

71.9

%

 

 

83.6

%

 

 

67.6

%

Adjusted Gross Margin

 

68.8

%

 

 

68.9

%

 

 

76.5

%

 

 

88.2

%

 

 

70.0

%

 

Three Months Ended December 31, 2022

 

Thryv U.S.

 

Thryv International

 

 

(in thousands)

Marketing Services

 

SaaS

 

Marketing Services

 

SaaS

 

Total

Reconciliation of Adjusted Gross Profit

 

 

 

 

 

 

 

 

 

Gross profit

$

124,413

 

 

$

34,944

 

 

$

18,802

 

 

$

746

 

 

$

178,905

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

4,419

 

 

 

1,379

 

 

 

3,614

 

 

 

168

 

 

 

9,580

 

Stock-based compensation expense

 

81

 

 

 

26

 

 

 

 

 

 

 

 

 

107

 

Adjusted Gross Profit

$

128,913

 

 

$

36,349

 

 

$

22,416

 

 

$

914

 

 

$

188,592

 

Gross Margin

 

66.3

%

 

 

60.3

%

 

 

58.2

%

 

 

54.1

%

 

 

64.0

%

Adjusted Gross Margin

 

68.7

%

 

 

62.7

%

 

 

69.4

%

 

 

66.2

%

 

 

67.5

%

 

Year Ended December 31, 2023

 

Thryv U.S.

 

Thryv International

 

 

(in thousands)

Marketing Services

 

SaaS

 

Marketing Services

 

SaaS

 

Total

Reconciliation of Adjusted Gross Profit

 

 

 

 

 

 

 

 

 

Gross profit

$

320,327

 

 

$

161,663

 

 

$

88,730

 

 

$

7,527

 

 

$

578,247

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

10,766

 

 

 

5,429

 

 

 

10,045

 

 

 

749

 

 

 

26,989

 

Stock-based compensation expense

 

399

 

 

 

214

 

 

 

 

 

 

 

 

 

613

 

Adjusted Gross Profit

$

331,492

 

 

$

167,306

 

 

$

98,775

 

 

$

8,276

 

 

$

605,849

 

Gross Margin

 

62.7

%

 

 

63.8

%

 

 

62.2

%

 

 

74.2

%

 

 

63.1

%

Adjusted Gross Margin

 

64.9

%

 

 

66.0

%

 

 

69.2

%

 

 

81.6

%

 

 

66.1

%

 

Year Ended December 31, 2022

 

Thryv U.S.

 

Thryv International

 

 

(in thousands)

Marketing Services

 

SaaS

 

Marketing Services

 

SaaS

 

Total

Reconciliation of Adjusted Gross Profit

 

 

 

 

 

 

 

 

 

Gross profit

$

539,543

 

 

$

130,272

 

 

$

108,496

 

 

$

2,071

 

 

$

780,382

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

17,800

 

 

 

4,657

 

 

 

15,385

 

 

 

505

 

 

 

38,347

 

Stock-based compensation expense

 

332

 

 

 

89

 

 

 

 

 

 

 

 

 

421

 

Adjusted Gross Profit

$

557,675

 

 

$

135,018

 

 

$

123,881

 

 

$

2,576

 

 

$

819,150

 

Gross Margin

 

65.8

%

 

 

61.5

%

 

 

65.4

%

 

 

45.6

%

 

 

64.9

%

Adjusted Gross Margin

 

68.0

%

 

 

63.7

%

 

 

74.6

%

 

 

56.7

%

 

 

68.1

%

Supplemental Financial Information

The following supplemental financial information provides Revenue, Adjusted EBITDA and Adjusted EBITDA Margin by (i) Marketing Services businesses in the U.S., International and in Total and (ii) SaaS businesses in the U.S., International and in Total. Total SaaS Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. Total Marketing Services Adjusted EBITDA and Adjusted EBITDA margin are also non-GAAP financial measures. These non-GAAP financial measures are presented for supplemental informational purposes only and are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the tables below for a reconciliation of these non-GAAP financial measures to the corresponding segment financial measures presented in accordance with GAAP.

We believe that these non-GAAP financial measures provide useful information about our global SaaS and Marketing Services financial performance, enhance the overall understanding of our global SaaS and Marketing Services past financial performance and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods.

 

Three Months Ended December 31, 2023

(in thousands)

Marketing Services

 

SaaS

 

U.S.

 

International

 

Total

 

U.S.

 

International

 

Total

Revenue

$

132,665

 

 

$

29,528

 

 

$

162,193

 

 

$

70,652

 

 

$

3,318

 

 

$

73,970

 

Adjusted EBITDA

 

38,383

 

 

 

7,390

 

 

 

45,773

 

 

 

8,345

 

 

 

(1,842

)

 

 

6,503

 

Adjusted EBITDA Margin

 

28.9

%

 

 

25.0

%

 

 

28.2

%

 

 

11.8

%

 

 

(55.5

)%

 

 

8.8

%

 

Three Months Ended December 31, 2022

(in thousands)

Marketing Services

 

SaaS

 

U.S.

 

International

 

Total

 

U.S.

 

International

 

Total

Revenue

$

187,755

 

 

$

32,295

 

 

$

220,050

 

 

$

57,938

 

 

$

1,380

 

 

$

59,318

 

Adjusted EBITDA

 

59,758

 

 

 

10,657

 

 

 

70,415

 

 

 

83

 

 

 

(2,305

)

 

 

(2,222

)

Adjusted EBITDA Margin

 

31.8

%

 

 

33.0

%

 

 

32.0

%

 

 

0.1

%

 

 

(167.0

)%

 

 

(3.7

)%

 

Year Ended December 31, 2023

(in thousands)

Marketing Services

 

SaaS

 

U.S.

 

International

 

Total

 

U.S.

 

International

 

Total

Revenue

$

510,533

 

 

$

142,711

 

 

$

653,244

 

 

$

253,579

 

 

$

10,138

 

 

$

263,717

 

Adjusted EBITDA

 

123,249

 

 

 

52,241

 

 

 

175,490

 

 

 

18,576

 

 

 

(6,551

)

 

 

12,025

 

Adjusted EBITDA Margin

 

24.1

%

 

 

36.6

%

 

 

26.9

%

 

 

7.3

%

 

 

(64.6

)%

 

 

4.6

%

 

Year Ended December 31, 2022

(in thousands)

Marketing Services

 

SaaS

 

U.S.

 

International

 

Total

 

U.S.

 

International

 

Total

Revenue

$

820,032

 

 

$

166,010

 

 

$

986,042

 

 

$

211,801

 

 

$

4,545

 

 

$

216,346

 

Adjusted EBITDA

 

271,629

 

 

 

75,106

 

 

 

346,735

 

 

 

(3,686

)

 

 

(9,707

)

 

 

(13,393

)

Adjusted EBITDA Margin

 

33.1

%

 

 

45.2

%

 

 

35.2

%

 

 

(1.7

)%

 

 

(213.6

)%

 

 

(6.2

)%

Forward-Looking Statements

Certain statements contained herein are not historical facts, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. Statements that include the words “may”, “will”, “could”, “should”, “would”, “believe”, “anticipate”, “forecast”, “estimate”, “expect”, “preliminary”, “intend”, “plan”, “target”, “project”, “outlook”, “future”, “forward”, “guidance” and similar statements of a future or forward-looking nature identify forward-looking statements. These statements are not guarantees of future performance. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: the Company’s ability to maintain adequate liquidity to fund operations; the Company’s future operating and financial performance; the Company’s ability to consummate acquisitions, or, if consummated, to successfully integrate acquired businesses into the Company’s operations, the Company’s ability to recognize the benefits of acquisitions, or the failure of an acquired company to achieve its plans and objectives; limitations on our operating and strategic flexibility and the ability to operate our business, finance our capital needs or expand business strategies under the terms of our credit facilities; our ability to retain existing business and obtain and retain new business; general economic or business conditions affecting the markets we serve; declining use of print yellow page directories by consumers; our ability to collect trade receivables from clients to whom we extend credit; credit risk associated with our reliance on small and medium sized businesses as clients; our ability to attract and retain key managers; increased competition in our markets; our ability to obtain future financing due to changes in the lending markets or our financial position; our ability to maintain agreements with major Internet search and local media companies; reduced advertising spending and increased contract cancellations by our clients, which causes reduced revenue; and our ability to anticipate or respond effectively to changes in technology and consumer preferences as well as the risks and uncertainties set forth in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.

If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. For these reasons, we caution you against relying on forward-looking statements. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. These forward-looking statements speak only as of the date hereof and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Thryv Holdings, Inc.

Thryv Holdings, Inc. (NASDAQ:THRY) is a global software and marketing services company that empowers small- to medium-sized businesses (SMBs) to grow and modernize their operations so they can compete and win in today’s economy. Over 65,000 businesses use our award-winning SaaS platform, Thryv®, to manage their end-to-end operations, which has helped these organizations across the U.S. and overseas grow their bottom line. Of Thryv’s approximately 350,000 business customers, most also use its digital and print presence products, connecting these SMBs to local consumers via proprietary local search portals and local directories. For more information about Thryv Holdings, Inc., visit thryv.com.

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