UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-35895

THRYV HOLDINGS, INC.

(Exact name of registrant as specified in its charter)


Delaware						13-2740040
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

2200 West Airfield Drive, P.O. Box 619810, D/FW Airport, TX						75261
(Address of principal executive offices)						(Zip Code)


(972)			453-7000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	THRY	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.


Large accelerated filer	☐☒	Accelerated filer	☒☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).

Yes ☐ No x

As of ~~October 31, 2023,~~April 30, 2024, there were ~~35,165,017~~35,830,802 shares of the registrant's common stock outstanding.

THRYV HOLDINGS, INC.

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~ for the Three ~~and~~ ~~Nine~~Months Ended ~~September~~ ~~30,~~March 31, 2024 and 2023 ~~and 2022~~ (unaudited)	3
	Consolidated Balance Sheets as of ~~September~~ ~~30, 2023~~March 31, 2024 (unaudited) and December 31, ~~2022~~2023	4
	Consolidated Statements of Changes in Stockholders' Equity for the Three ~~and~~ ~~Nin~~e Months Ended ~~September~~ ~~30,~~March 31, 2024 and 2023 ~~and 2022~~ (unaudited)	5
	Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September~~ ~~30,~~March 31, 2024 and 2023 ~~and 2022~~ (unaudited)	76
	Notes to Consolidated Financial Statements (unaudited)	87
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	4136
Item 4.	Controls and Procedures	4236

PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	4237
Item 1A.	Risk Factors	4237
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4237
Item 3.	Defaults Upon Senior Securities	4337
Item 4.	Mine Safety Disclosures	4337
Item 5.	Other Information	4337
Item 6.	Exhibits	4438
	Signatures	4539

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements that reflect our current views with respect to future events and financial performance. Such statements are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995 and include, without limitation, statements concerning the conditions of our industry and our operations, performance, and financial condition, including, in particular, statements relating to our business, growth strategies, product development efforts, and future expenses. Forward-looking statements include all statements that do not relate solely to historical or current facts and generally can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “could,” “estimates,” “expects,” “likely,” “may,” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance, such as those contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Accordingly, we caution you against relying on forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national, or global political, economic, business, competitive, market, and regulatory conditions and the following:

•significant competition for our Marketing Services solutions and SaaS offerings, including from companies that use components of our SaaS offerings provided by third parties;

•our ability to maintain profitability;

•our ability to manage our growth effectively;

•our ability to transition our Marketing Services clients to our Thryv platform, sell our platform into new markets or further penetrate existing markets;

•our ability to maintain our strategic relationships with third-party service providers;

•internet search engines and portals potentially terminating or materially altering their agreements with us;

•our ability to keep pace with rapid technological changes and evolving industry standards;

•our small to medium-sized businesses (“SMBs”) clients potentially opting not to renew their agreements with us or renewing at lower spend;

•potential system interruptions or failures, including cyber-security breaches, identity theft, data loss, unauthorized access to data or other disruptions that could compromise our information;

•our potential failure to identify suitable acquisition candidates and consummate such acquisitions;

•our ability to successfully integrate acquired businesses into our operations or recognize the benefits of acquisitions, including the failure of an acquired business to achieve its plans and objectives;

•the potential loss of one or more key employees or our inability to attract and to retain highly skilled employees;

•our ability to maintain the compatibility of our Thryv platform with third-party applications;

•our ability to successfully expand our operations and current offerings into new markets, including internationally, or further penetrate existing markets;

•our potential failure to provide new or enhanced functionality and features;

•our potential failure to comply with applicable privacy, security and data laws, regulations and standards;

•potential changes in regulations governing privacy concerns and laws or other domestic or foreign data protection regulations;

•our potential failure to meet service level commitments under our client contracts;

•our potential failure to offer high-quality or technical support services;

•our Thryv platform and add-ons potentially failing to perform properly;

•our use of artificial intelligence in our business, and challenges with properly managing its use, could result in reputational harm, competitive harm, and legal liability;

•the potential impact of future labor negotiations;

•our ability to protect our intellectual property rights, proprietary technology, information, processes, and know-how;

•rising inflation and our ability to control costs, including operating expenses;

•general macro-economic conditions, including a recession or an economic slowdown in the U.S. or internationally; and

•volatility and weakness in bank and capital ~~markets; and~~

•~~costs, obligations and liabilities incurred as a result of and in connection with being a public company.~~markets.

For additional information regarding known material factors that could cause the Company’s actual results to differ from its projected results, see Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2022~~2023 (“~~2022~~2023 Form 10-K”), as ~~well as our subsequent Quarterly Reports~~supplemented by the disclosure in Part II, Item 1.A. Risk Factors in this quarterly report on Form 10-Q. Readers are cautioned not to place undue reliance on forward-looking statements contained in this report, which speak only as of the date of this report. Except as required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements publicly after the date they are made, whether as a result of new information, future events, or otherwise.

In this Quarterly Report on Form 10-Q, the terms “our Company,” “we,” “us,” “our,” “Company” and “Thryv” refer to Thryv Holdings, Inc. and its subsidiaries, unless the context indicates otherwise.

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income ~~(Loss)~~

(unaudited)


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		Three Months Ended
		Three Months Ended
		Three Months Ended
		March 31,
		March 31,
		March 31,
(in thousands, except share and per share data)
(in thousands, except share and per share data)
(in thousands, except share and per share data)	(in thousands, except share and per share data)	2023		2022		2023		2022
Revenue	Revenue	$	183,822	$	280,650	$	680,798	$	923,020
Revenue
Revenue
Cost of services	Cost of services	80,178		105,011		262,261		321,543
Cost of services
Cost of services
Gross profit
Gross profit
Gross profit	Gross profit	103,644		175,639		418,537		601,477

Operating expenses:	Operating expenses:

Operating expenses:

Operating expenses:
Sales and marketing
Sales and marketing
Sales and marketing	Sales and marketing	74,755		89,891		226,781		275,659
General and administrative	General and administrative	48,267		54,670		149,642		159,514
Impairment charges		—		—		—		222
General and administrative
General and administrative

Total operating expenses	Total operating expenses	123,022		144,561		376,423		435,395

Operating (loss) income		(19,378)		31,078		42,114		166,082
Total operating expenses

Total operating expenses

Operating income

Operating income

Operating income
Other income (expense):
Other income (expense):
Other income (expense):	Other income (expense):
Interest expense	Interest expense	(15,131)		(13,720)		(47,911)		(40,584)
Interest expense, related party		—		(850)		—		(3,505)
Other components of net periodic pension (cost) benefit		(1,902)		(3,928)		(3,888)		5,295
Other income (expense)		(876)		6,941		(1,242)		15,567
(Loss) income before income tax benefit (expense)		(37,287)		19,521		(10,927)		142,855
Income tax benefit (expense)		10,241		(6,241)		9,173		(38,062)
Net (loss) income		$	(27,046)	$	13,280	$	(1,754)	$	104,793
Interest expense
Interest expense
Other components of net periodic pension cost
Other components of net periodic pension cost
Other components of net periodic pension cost
Other expense
Other expense
Other expense
Income before income tax expense
Income before income tax expense
Income before income tax expense
Income tax expense
Income tax expense
Income tax expense
Net income
Net income
Net income
Other comprehensive income (loss):
Other comprehensive income (loss):
Other comprehensive income (loss):	Other comprehensive income (loss):
Foreign currency translation adjustment, net of tax	Foreign currency translation adjustment, net of tax	(1,842)		(7,920)		(4,332)		(12,611)
Comprehensive (loss) income		$	(28,888)	$	5,360	$	(6,086)	$	92,182
Foreign currency translation adjustment, net of tax
Foreign currency translation adjustment, net of tax
Comprehensive income
Comprehensive income
Comprehensive income

Net (loss) income per common share:
Net income per common share:

Net income per common share:

Net income per common share:
Basic
Basic
Basic	Basic	$	(0.78)	$	0.39	$	(0.05)	$	3.06
Diluted	Diluted	$	(0.78)	$	0.37	$	(0.05)	$	2.86
Diluted
Diluted

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

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

Weighted-average shares used in computing basic and diluted net income per common share:
Basic
Basic
Basic	Basic	34,848,899		34,269,274		34,619,794		34,289,333
Diluted	Diluted	34,848,899		35,811,473		34,619,794		36,698,395
Diluted
Diluted

The accompanying notes are an integral part of the consolidated financial statements.

Thryv Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets


(in thousands, except share data)	(in thousands, except share data)	September 30, 2023		December 31, 2022		(in thousands, except share data)	March 31, 2024	December 31, 2023
Assets	Assets	(unaudited)
Current assets	Current assets
Current assets
Current assets
Cash and cash equivalents	Cash and cash equivalents	$	14,676	$	16,031
Accounts receivable, net of allowance of $13,764 in 2023 and $14,766 in 2022		198,828		284,698
Contract assets, net of allowance of $23 in 2023 and $33 in 2022		1,471		2,583
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable, net of allowance of $17,829 in 2024 and $14,926 in 2023
Contract assets, net of allowance of $39 in 2024 and $35 in 2023
Taxes receivable	Taxes receivable	19,087		11,553
Prepaid expenses	Prepaid expenses	22,801		25,092
Indemnification asset		—		26,495

Deferred costs
Deferred costs
Deferred costs	Deferred costs	15,085		9,544
Other current assets	Other current assets	2,624		2,320
Total current assets	Total current assets	274,572		378,316
Fixed assets and capitalized software, net	Fixed assets and capitalized software, net	37,951		42,334
Goodwill	Goodwill	567,773		566,004
Intangible assets, net	Intangible assets, net	24,268		34,715
Deferred tax assets	Deferred tax assets	114,406		113,859
Other assets	Other assets	21,412		42,649
Total assets	Total assets	$	1,040,382	$	1,177,877

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity
Liabilities and Stockholders' Equity
Liabilities and Stockholders' Equity
Current liabilities	Current liabilities
Current liabilities
Current liabilities
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	8,138	$	18,972
Accrued liabilities	Accrued liabilities	97,720		126,810
Current portion of unrecognized tax benefits	Current portion of unrecognized tax benefits	23,415		31,919
Contract liabilities	Contract liabilities	27,119		41,854
Current portion of long-term debt	Current portion of long-term debt	70,000		70,000
Other current liabilities	Other current liabilities	9,522		10,937
Total current liabilities	Total current liabilities	235,914		300,492
Term Loan, net	Term Loan, net	253,874		345,256
ABL Facility	ABL Facility	57,393		54,554
Pension obligations, net	Pension obligations, net	76,076		72,590
Other liabilities	Other liabilities	20,029		22,718
Total long-term liabilities	Total long-term liabilities	407,372		495,118
Commitments and contingencies (see Note 13)	Commitments and contingencies (see Note 13)					Commitments and contingencies (see Note 13)
Stockholders' equity	Stockholders' equity
Common stock - $0.01 par value, 250,000,000 shares authorized; 62,521,026 shares issued and 35,164,339 shares outstanding at September 30, 2023; and 61,279,379 shares issued and 34,593,837 shares outstanding at December 31, 2022		625		613
Common stock - $0.01 par value, 250,000,000 shares authorized; 63,306,246 shares issued and 35,826,908 shares outstanding at March 31, 2024; and 62,660,783 shares issued and 35,302,746 shares outstanding at December 31, 2023
Common stock - $0.01 par value, 250,000,000 shares authorized; 63,306,246 shares issued and 35,826,908 shares outstanding at March 31, 2024; and 62,660,783 shares issued and 35,302,746 shares outstanding at December 31, 2023
Common stock - $0.01 par value, 250,000,000 shares authorized; 63,306,246 shares issued and 35,826,908 shares outstanding at March 31, 2024; and 62,660,783 shares issued and 35,302,746 shares outstanding at December 31, 2023
Additional paid-in capital	Additional paid-in capital	1,143,493		1,105,701
Treasury stock - 27,356,687 shares at September 30, 2023 and 26,685,542 shares at December 31, 2022		(485,768)		(468,879)
Treasury stock - 27,479,338 shares at March 31, 2024 and 27,358,037 shares at December 31, 2023
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(20,593)		(16,261)
Accumulated deficit	Accumulated deficit	(240,661)		(238,907)
Total stockholders' equity	Total stockholders' equity	397,096		382,267
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	1,040,382	$	1,177,877

The accompanying notes are an integral part of the consolidated financial statements.

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders' Equity

(unaudited)

Three Months Ended September 30, 2023
Common Stock Treasury Stock
(in thousands, except share amounts) Shares Amount Additional Paid-in Capital Shares Amount Accumulated Other Comprehensive Loss Accumulated
(Deficit) Total Stockholders'
Equity
Balance as of June 30, 2023 61,832,315 $ 618 $ 1,121,804 (27,355,029) $ (485,730) $ (18,751) $ (213,615) $ 404,326
Exercise of stock options, vesting of RSUs and PSUs 42,695 1 476 (1,658) (38) — — 439
Exercise of stock warrants 646,016 6 15,751 — — — — 15,757
Stock compensation expense — — 5,462 — — — — 5,462
Foreign currency translation adjustment, net of tax — — — — — (1,842) — (1,842)
Net (loss) — — — — — — (27,046) (27,046)
Balance as of September 30, 2023 62,521,026 $ 625 $ 1,143,493 (27,356,687) $ (485,768) $ (20,593) $ (240,661) $ 397,096
Three Months Ended September 30, 2022
Common Stock Treasury Stock
(in thousands, except share amounts) Shares Amount Additional Paid-in Capital Shares Amount Accumulated Other Comprehensive Loss Accumulated
(Deficit) Total Stockholders'
Equity
Balance as of June 30, 2022 61,121,058 $ 611 $ 1,094,362 (26,685,542) $ (468,879) $ (12,738) $ (201,742) $ 411,614
Exercise of stock options 37,051 1 485 — — — — 486
Exercise of stock warrants 2,622 — 64 — — — — 64
Stock compensation expense — — 4,402 — — — — 4,402
Foreign currency translation adjustment, net of tax — — — — — (7,920) — (7,920)
Net income — — — — — — 13,280 13,280
Balance as of September 30, 2022 61,160,731 $ 612 $ 1,099,313 (26,685,542) $ (468,879) $ (20,658) $ (188,462) $ 421,926


Three Months Ended March 31, 2024
	Common Stock					Treasury Stock
(in thousands, except share amounts)	Shares	Amount		Additional Paid-in Capital		Shares	Amount		Accumulated Other Comprehensive Loss		Accumulated (Deficit)		Total Stockholders' Equity
Balance as of December 31, 2023	62,660,783	$	627	$	1,151,259	(27,358,037)	$	(485,793)	$	(15,191)	$	(498,202)	$	152,700
Issuance of shares related to stock-based compensation	645,463	6		3,206		(121,301)	(2,294)		—		—		918
Stock-based compensation expense	—	—		5,289		—	—		—		—		5,289

Foreign currency translation adjustment, net of tax	—	—		—		—	—		(265)		—		(265)
Net income	—	—		—		—	—		—		8,424		8,424
Balance as of March 31, 2024	63,306,246	$	633	$	1,159,754	(27,479,338)	$	(488,087)	$	(15,456)	$	(489,778)	$	167,066


Three Months Ended March 31, 2023
	Common Stock					Treasury Stock
(in thousands, except share amounts)	Shares	Amount		Additional Paid-in Capital		Shares	Amount		Accumulated Other Comprehensive Loss		Accumulated (Deficit)		Total Stockholders' Equity
Balance as of December 31, 2022	61,279,379	$	613	$	1,105,701	(26,685,542)	$	(468,879)	$	(16,261)	$	(238,907)	$	382,267
Issuance of shares related to stock-based compensation	278,432	3		1,326		(54,290)	(1,062)		—		—		267
Stock-based compensation expense	—	—		5,393		—	—		—		—		5,393
Foreign currency translation adjustment, net of tax	—	—		—		—	—		(2,188)		—		(2,188)
Net income	—	—		—		—	—		—		9,314		9,314
Balance as of March 31, 2023	61,557,811	$	616	$	1,112,420	(26,739,832)	$	(469,941)	$	(18,449)	$	(229,593)	$	395,053

The accompanying notes are an integral part of the consolidated financial statements.

~~Thryv Holdings, Inc. and Subsidiaries~~

~~Consolidated Statements of Changes in Stockholders' Equity~~

~~(unaudited)~~

Nine Months Ended September 30, 2023
Common Stock Treasury Stock
(in thousands, except share amounts) Shares Amount Additional Paid-in Capital Shares Amount Accumulated Other Comprehensive Loss Accumulated
(Deficit) Total Stockholders'
Equity
Balance as of December 31, 2022 61,279,379 $ 613 $ 1,105,701 (26,685,542) $ (468,879) $ (16,261) $ (238,907) $ 382,267
Exercise of stock options, vesting of RSUs and PSUs 589,792 6 5,247 (57,191) (1,129) — — 4,124
Exercise of stock warrants 651,855 6 15,892 — — — — 15,898
Stock compensation expense — — 16,653 — — — — 16,653
Settlement of indemnification asset — — — (613,954) (15,760) — — (15,760)
Foreign currency translation adjustment, net of tax — — — — — (4,332) — (4,332)
Net (loss) — — — — — — (1,754) (1,754)
Balance as of September 30, 2023 62,521,026 $ 625 $ 1,143,493 (27,356,687) $ (485,768) $ (20,593) $ (240,661) $ 397,096
Nine Months Ended September 30, 2022
Common Stock Treasury Stock
(in thousands, except share amounts) Shares Amount Additional Paid-in Capital Shares Amount Accumulated Other Comprehensive Loss Accumulated
(Deficit) Total Stockholders'
Equity
Balance as of December 31, 2021 60,830,853 $ 608 $ 1,084,288 (26,685,542) $ (468,879) $ (8,047) $ (293,255) $ 314,715
Exercise of stock options 327,256 4 4,821 — — — — 4,825
Exercise of stock warrants 2,622 — 64 — — — — 64
Stock compensation expense — — 10,140 — — — — 10,140
Foreign currency translation adjustment, net of tax — — — — — (12,611) — (12,611)
Net income — — — — — — 104,793 104,793
Balance as of September 30, 2022 61,160,731 $ 612 $ 1,099,313 (26,685,542) $ (468,879) $ (20,658) $ (188,462) $ 421,926

~~The accompanying notes are an integral part of the consolidated financial statements.~~

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows


		Nine Months Ended September 30,
	Three Months Ended March 31,								Three Months Ended March 31,
(in thousands)	(in thousands)	2023		2022		(in thousands)	2024	2023
Cash Flows from Operating Activities	Cash Flows from Operating Activities	(unaudited)		(unaudited)		Cash Flows from Operating Activities	(unaudited)	(unaudited)
Net (loss) income		$	(1,754)	$	104,793
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization	Depreciation and amortization	46,940		65,954
Amortization of deferred commissions	Amortization of deferred commissions	10,304		8,396
Amortization of debt issuance costs	Amortization of debt issuance costs	4,080		4,327
Deferred income taxes	Deferred income taxes	808		(23,222)
Provision for credit losses and service credits	Provision for credit losses and service credits	15,594		18,325
Stock-based compensation expense	Stock-based compensation expense	16,653		10,140
Other components of net periodic pension cost (benefit)		3,888		(5,295)
Impairment charges		—		222
Other components of net periodic pension cost

Loss (gain) on foreign currency exchange rates	Loss (gain) on foreign currency exchange rates	164		(4,447)
Non-cash loss (gain) from the remeasurement of the indemnification asset		10,734		(1,472)
Bargain purchase gain		—		(10,245)
Loss (gain) on foreign currency exchange rates
Loss (gain) on foreign currency exchange rates

Other

Other

Other	Other	—		1,961
Changes in working capital items, excluding acquisitions:	Changes in working capital items, excluding acquisitions:
Accounts receivable
Accounts receivable
Accounts receivable	Accounts receivable	59,238		(8,930)
Contract assets	Contract assets	1,111		2,226
Prepaid expenses and other assets	Prepaid expenses and other assets	23,489		8,089
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	(63,469)		(36,956)
Other liabilities	Other liabilities	(24,132)		(29,645)
Net cash provided by operating activities	Net cash provided by operating activities	103,648		104,221

Cash Flows from Investing Activities	Cash Flows from Investing Activities
Cash Flows from Investing Activities
Cash Flows from Investing Activities
Additions to fixed assets and capitalized software
Additions to fixed assets and capitalized software
Additions to fixed assets and capitalized software	Additions to fixed assets and capitalized software	(22,920)		(19,345)

Acquisition of a business, net of cash acquired		(8,897)		(22,793)
Other		(215)		—
Net cash (used in) investing activities		(32,032)		(42,138)

Net cash used in investing activities

Net cash used in investing activities

Net cash used in investing activities

Cash Flows from Financing Activities	Cash Flows from Financing Activities
Cash Flows from Financing Activities
Cash Flows from Financing Activities
Payments of Term Loan	Payments of Term Loan	(95,000)		(73,164)
Payments of Term Loan, related party		—		(8,347)
Payments of Term Loan
Payments of Term Loan

Proceeds from ABL Facility
Proceeds from ABL Facility
Proceeds from ABL Facility	Proceeds from ABL Facility	697,234		746,689
Payments of ABL Facility	Payments of ABL Facility	(694,395)		(727,762)
Proceeds from exercise of stock warrants		15,899		64
Other	Other	4,124		4,824
Net cash (used in) financing activities		(72,138)		(57,696)
Net cash used in financing activities

Effect of exchange rate changes on cash, cash equivalents and restricted cash
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash	(707)		(1,610)
(Decrease) increase in cash, cash equivalents and restricted cash	(Decrease) increase in cash, cash equivalents and restricted cash	(1,229)		2,777
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	18,180		13,557
Cash, cash equivalents and restricted cash, end of period	Cash, cash equivalents and restricted cash, end of period	$	16,951	$	16,334

Supplemental Information	Supplemental Information
Supplemental Information
Supplemental Information
Cash paid for interest	Cash paid for interest	$	44,029	$	42,435
Cash paid for income taxes, net		$	7,605	$	53,673
Cash paid for interest
Cash paid for interest
Cash paid (received) for income taxes, net

Non-cash investing and financing activities
Repurchase of Treasury stock as a result of the settlement of the indemnification asset		$	15,760	$	—

The accompanying notes are an integral part of the consolidated financial statements.

Thryv Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

Note 1 Description of Business and Summary of Significant Accounting Policies

General

Thryv Holdings, Inc. (“Thryv” or the “Company”) provides small-to-medium sized businesses (“SMBs”) with print and digital marketing services and Software as a Service (“SaaS”) business management tools. The Company owns and operates Print Yellow Pages ("PYP" or “Print”) and digital marketing services (“Digital”), which includes Internet Yellow Pages ("IYP"), search engine marketing ("SEM"), and other digital media services, including online display advertising, and search engine optimization ("SEO") tools. In addition, through the Thryv® platform, the Company is a provider of SaaS ~~small~~ business management, ~~software~~communication, and marketing tools designed for SMBs.

On April 3, 2023, Thryv New Zealand Limited, the Company’s wholly-owned subsidiary, acquired Yellow Holdings Limited (“Yellow”), a New Zealand marketing services company. ~~Additionally, o~~

During the first quarter of 2024, the Company changed the internal reporting provided to the chief operating decision maker (n"CODM"). As a result, the Company reevaluated its segment reporting and determined that Thryv U.S. Marketing Services and Thryv International Marketing Services should be reflected as a single reportable segment, and that Thryv U.S. SaaS and Thryv International SaaS should be reflected as a single reportable segment. As such, beginning on January ~~21, 2022, Thryv, Inc.,~~1, 2024, the ~~Company’s wholly-owned subsidiary, acquired~~ ~~Vivial Media Holdings, Inc. (“Vivial”),~~ ~~a marketing~~results of our Marketing Services and ~~advertising company with operations in~~SaaS businesses will be presented as two reportable segments. Comparative prior periods have been recast to reflect the ~~United States~~.current presentation.

The Company reports its results based on ~~four~~two reportable segments (see Note 15, Segment Information):

•Thryv ~~U.S.~~ Marketing Services, which includes the Company's Print and Digital solutions ~~business in the United States;~~business; and

•Thryv ~~U.S.~~ SaaS, which includes the Company's SaaS flagship all-in-one small business management modular software ~~platform~~ ~~in the United States;~~

•~~Thryv International Marketing Services, which is comprised of the Company's Print and Digital solutions business outside of the United States; and~~

•~~Thryv International SaaS, which primarily includes the Company's~~ ~~flagship all-in-one small business management modular software platform~~ ~~outside of the United States.~~platform.

Basis of Presentation

The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, certain information and disclosures normally included in the complete financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. The consolidated financial statements include the financial statements of Thryv Holdings, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, the accompanying consolidated financial statements reflect all adjustments, consisting of only normal recurring items and accruals, necessary for the fair statement of the financial position, results of operations and cash flows of the Company for the periods presented. The consolidated financial statements as of and for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and 2023 ~~and 2022~~ have been prepared on the same basis as the audited annual financial statements. The consolidated balance sheet as of December 31, ~~2022~~2023 was derived from the audited annual financial statements. The consolidated results for interim periods are not necessarily indicative of results for the full year and should be read in conjunction with the Company’s audited financial statements and related footnotes for the year ended December 31, ~~2022.~~2023.

Use of Estimates

The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions about future events that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. The results of those estimates form the basis for making judgments about the carrying values of certain assets and liabilities.

Examples of reported amounts that rely on significant estimates include revenue recognition, allowance for credit losses, assets acquired and liabilities assumed in business combinations, capitalized costs to obtain a contract, certain amounts relating to the accounting for income taxes, including valuation allowance, indemnification asset, stock-based compensation expense, operating lease right-of-use assets and operating lease liabilities, accrued service credits, and pension obligations. Significant estimates are also used in determining the recoverability and fair value of fixed assets and capitalized software, operating lease right-of-use assets, goodwill and intangible assets.

Summary of Significant Accounting Policies

The Company describes its significant accounting policies in Note 1 to the financial statements in Part II, Item 8 of its Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023. There have been no changes to the Company's significant accounting policies during the three ~~and nine~~ months ended ~~September 30, 2023.~~March 31, 2024.

Restricted Cash

The following table presents a reconciliation of cash, cash equivalents and restricted cash reported within the Company's consolidated balance sheets to the amount shown in the Company's consolidated statements of cash flows for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:


(in thousands)	(in thousands)	September 30, 2023		September 30, 2022		December 31, 2022		(in thousands)	March 31, 2024	March 31, 2023
Cash and cash equivalents	Cash and cash equivalents	$	14,676	$	14,312	$	16,031
Restricted cash, included in Other current assets	Restricted cash, included in Other current assets	2,275		2,022		2,149
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	16,951	$	16,334	$	18,180

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). ASU 2023-07 requires additional disclosures, including more detailed information about segment expenses about a public entity’s reportable segments on an annual and interim basis. The new segment disclosures are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Management will review the extent of new disclosures necessary in the coming quarters, prior to implementation in the Company's 2024 Annual Report on Form 10-K. Other than additional disclosures, the Company does not expect the adoption of ASU 2023-07 to have a material impact on its consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 requires additional disclosures primarily related to the rate reconciliation and income taxes paid information. The new income tax disclosures are effective for fiscal years beginning after December 15, 2024. Management will review the extent of new disclosures necessary in the coming years, prior to implementation in the Company's 2025 Annual Report on Form 10-K. Other than additional disclosures, the Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements.

Note 2 Acquisitions

Yellow New Zealand Acquisition

On April 3, 2023 (the “Yellow Acquisition Date”), Thryv New Zealand Limited, the Company’s wholly-owned subsidiary, acquired Yellow, a New Zealand marketing services company for $8.9 million in cash (net of $1.7 million of cash acquired), subject to certain adjustments (the “Yellow Acquisition”). The Yellow Acquisition expanded the Company's market share with a broader geographical footprint and provided the Company with an increase in our clients. Yellow is a provider of marketing solutions serving SMBs in New Zealand. Control was obtained by means of acquiring all the voting interests. The assets acquired consisted primarily of $2.4 million in current assets and $5.6 million in fixed and intangible assets, consisting primarily of customer relationships, trade name, and technology assets, along with $5.1 million in goodwill. The Company also assumed liabilities of $4.7 million, consisting primarily of accrued, contract, and deferred liabilities.

The Company accounted for the Yellow Acquisition using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”). This requires that the assets acquired and liabilities assumed are measured at fair value. With the assistance of a third-party valuation firm, the Company determined, using Level 3 inputs (see Note 4, Fair Value Measurements), the fair value of certain assets and liabilities, including fixed assets and intangible assets by applying the income approach and the cost approach. Specific to intangible assets, client relationships were valued using a combination of the income and excess earnings approach, whereas trade names were valued using a relief of royalty method and assumptions related to Yellow's assets acquired and liabilities assumed. The fair values of existing technologies were computed using a relief of royalty approach, similar to the trade name valuation. ~~The preliminary purchase price allocation is expected to be finalized within 12 months after the Yellow Acquisition Date.~~

The following table summarizes the assets acquired and liabilities assumed at the Yellow Acquisition Date:


(in thousands)
Current assets	$	2,438
Fixed and intangible assets	5,565

Other assets	457
Current liabilities	(3,533)
Other liabilities	(1,159)
Goodwill	5,129
Fair value allocated to net assets acquired	$	8,897

The excess of the purchase price over the fair value of the identifiable net assets acquired and the liabilities assumed was allocated to goodwill. The recognized goodwill of $5.1 million was primarily related to the benefits expected from the acquisition and iswas allocated to the Thryv ~~International~~ Marketing Services segment. The goodwill recognized is not deductible for income tax purposes.

~~The Yellow Acquisition has contributed~~ ~~$9.1 million~~ ~~in revenue since the Yellow Acquisition Date.~~

~~Vivial Acquisition~~

~~On January 21, 2022 (the “Vivial Acquisition Date”), Thryv, Inc., the Company’s wholly-owned subsidiary, acquired Vivial, for $22.8 million in cash (net of $8.5 million of cash acquired) (the “Vivial Acquisition~~”). The assets acquired as part of these transactions consisted primarily of $27.7 million in current assets and $9.8 million in fixed and intangible assets, consisting primarily of customer relationships and technology assets, $14.5 million in deferred tax assets, along with a $10.9 million bargain purchase gain. The Vivial Acquisition resulted in a bargain purchase gain in part because the seller was motivated to divest its marketing services business that was in secular decline. The Company also assumed liabilities of $20.4 million, consisting primarily of accounts payable and accrued liabilities.

The Company accounted for the Vivial Acquisition using the acquisition method of accounting in accordance with ASC 805. This requires that the assets acquired and liabilities assumed are measured at fair value. With the assistance of a third-party valuation firm, the Company determined, using Level 3 inputs (see Note 4, ~~Fair Value Measurements~~), the fair value of certain assets and liabilities, including fixed assets and intangible assets by applying the income approach and the cost approach. Specific to intangible assets, client relationships were valued using a combination of the income and excess earnings approach, whereas trade names were valued using a relief of royalty method and assumptions related to Vivial’s assets acquired and liabilities assumed.

~~The following table summarizes the assets acquired and liabilities assumed at the Vivial Acquisition Date:~~


~~(in thousands)~~
~~Current assets~~	$	~~27,705~~
~~Fixed and intangible assets~~	~~9,759~~
~~Deferred tax assets~~	~~14,530~~
~~Other assets~~	~~2,103~~
~~Current liabilities~~	~~(18,775)~~
~~Other liabilities~~	~~(1,646)~~
~~Bargain purchase gain~~	~~(10,883)~~
~~Fair value allocated to net assets acquired, net of bargain purchase gain~~	$	~~22,793~~

The deferred tax asset primarily relates to excess carryover tax basis over book basis in intangibles as a result of the assessment of the fair value of the assets and liabilities assumed using the acquisition method of accounting.

109

Note 3 Revenue Recognition

The Company has determined that each of its Print and Digital marketing services and SaaS business management tools services is distinct and represents a separate performance obligation. The client can benefit from each service on its own or together with other resources that are readily available to the client. Services are separately identifiable from other promises in the contract. Control over the Company’s Print services transfers to the client upon delivery of the published directories containing their advertisements to the intended market(s). Therefore, revenue associated with Print services is recognized at a point in time upon delivery to the intended market(s). The Company bills clients for Print advertising services monthly over the relative contract term. The difference between the timing of recognition of Print advertising revenue and monthly billing generates the Company’s unbilled receivables balance. The unbilled receivables balance is reclassified as billed accounts receivable through the passage of time as the clients are invoiced each month. SaaS and Digital marketing services are recognized using the series guidance. Under the series guidance, the Company's obligation to provide services is the same for each day under the contract, and therefore represents a single performance obligation. Revenue associated with SaaS and Digital marketing services is recognized over time using an output method to measure the progress toward satisfying a performance obligation.

Disaggregation of Revenue

The Company presents disaggregated revenue based on the type of service within its segment footnote. See Note 15, Segment Information.

Contract Assets and Liabilities

The timing of revenue recognition may differ from the timing of billing to the Company’s clients. These timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) as disclosed on the Company's consolidated balance sheets. Contract assets represent the Company's right to consideration when revenue recognized exceeds the receivable from the client because the consideration allocated to fulfilled performance obligations exceeds the Company’s right to payment, and the right to payment is subject to more than the passage of time. Contract liabilities represent remaining performance obligations that consist of advance payments and revenue deferrals resulting from the allocation of the consideration to performance obligations. The Company recognizes revenue on all of its remaining performance obligations within the next twelve months. For the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, the Company recognized ~~Revenue~~revenue of ~~$1.6~~$28.5 million ~~and $40.6 million, respectively,~~that was recorded in Contract liabilities as of December 31, ~~2022~~2023. For the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, the Company recognized ~~Revenue~~revenue of ~~$12.9~~$29.7 million ~~and $38.8 million, respectively,~~ that was recorded in Contract liabilities as of December 31, ~~2021.~~2022.

Note 4 Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.

Level 3 — Unobservable inputs that reflect the Company's own assumptions incorporated into valuation techniques.

These valuations require significant judgment.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When there is more than one input at different levels within the hierarchy, the fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assessment of the significance of a particular input to the fair value measurement in its entirety requires substantial judgment and consideration of factors specific to the asset or liability. Level 3 inputs are inherently difficult to estimate. Changes to these inputs can have a significant impact on fair value measurements. Assets and liabilities measured at fair value using Level 3 inputs are based on one or more of the following valuation techniques: market approach, income approach or cost approach.

1110

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The Company’s non-financial assets such as goodwill, intangible assets, fixed assets, capitalized software and operating lease right-of-use assets are adjusted to fair value when the net book values of the assets exceed their respective fair values, resulting in an impairment charge. Such fair value measurements are predominantly based on Level 3 inputs.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Indemnification Asset

On June 30, 2017, the Company completed the acquisition of YP Holdings, Inc. (the “YP Acquisition”). As further discussed in Note 13, Contingent Liabilities, as part of the YP Acquisition agreement, the Company was indemnified for an uncertain tax position for up to the fair value of 1,804,715 shares held in escrow, subject to certain contract limitations (the “indemnification asset”).

On June 22, 2023, the Company entered into a settlement agreement with the sellers regarding the settlement of the indemnification asset. Pursuant to the settlement agreement, the Company and the sellers agreed (i) that the sellers would pay and indemnify the Company for $15.8 million of indemnified taxes (the “Indemnity Amount”) and (ii) that the Indemnity Amount would be deemed satisfied by the transfer of 613,954 outstanding shares of the Company’s common stock from the sellers back to the Company, which were returned to treasury and reduced the number of outstanding shares of the Company’s common stock. Furthermore, the sellers would be entitled to retain 1,190,761 currently outstanding shares of the Company’s common stock that previously secured the sellers' tax indemnity obligations under the YP Acquisition agreement.

As of ~~September 30,~~March 31, 2024 and December 31, 2023, the Company no longer recorded a Level 1 indemnification asset because it was settled on June 22, 2023. ~~As of December 31, 2022, the fair value of the Company's Level 1 indemnification asset was $26.5 million.~~ A ~~loss~~gain of $~~10.7~~0.8 million from the change in fair value of the Company’s Level 1 indemnification asset during the ~~nine~~three months ended ~~September 30,~~March 31, 2023 was recorded in General and administrative expense on the Company's consolidated statements of operations and comprehensive ~~income (loss).~~income. The $15.8 million Indemnity Amount, which iswas the fair value of the shares returned to treasury, was recorded in Treasury stock on the Company's consolidated balance sheets, along with the 613,954 shares that the Company received from the sellers, as of ~~September 30,~~March 31, 2024 and December 31, 2023.

Benefit Plan Assets

The fair value of benefit plan assets is measured and recorded on the Company's consolidated balance sheets using Level 2 inputs. See Note 9, Pensions.

Fair Value of Financial Instruments

The Company considers the carrying amounts of cash, trade receivables, and accounts payable to approximate fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment.

Additionally, the Company considers the carrying amounts of its ABL Facility (as defined in Note 8, Debt Obligations) and financing obligations to approximate their respective fair values due to their short-term nature and approximation of interest rates to market rates. These fair value measurements are considered Level 2. See Note 8, Debt Obligations.

The Term Loan (as defined in Note 8, Debt Obligations) is carried at amortized cost; however, the Company estimates the fair value of the Term Loan for disclosure purposes. The fair value of the Term Loan is determined based on quoted prices that are observable in the marketplace and are classified as Level 2 measurements. See Note 8, Debt Obligations.

The following table sets forth the carrying amount and fair value of the Term Loan:

September 30, 2023

December 31, 2022

March 31, 2024

December 31, 2023

(in thousands)

Carrying Amount

Fair Value

Carrying Amount

Fair Value

(in thousands)

Carrying Amount

Fair Value

Carrying Amount

Fair Value

Term Loan, net

323,874

324,684

415,256

410,065

1211

Note 5 Goodwill and Intangible Assets

Goodwill

The following ~~tables set~~table sets forth the changes in the carrying amount of the Company's goodwill for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and the year ended December 31, ~~2022~~2023.


(in thousands)												(in thousands)	Thryv Marketing Services	Thryv SaaS	Total
Balance as of December 31, 2022
Yellow Acquisition (1)
Impairments
Effects of foreign currency translation
Balance as of December 31, 2023

		Thryv U.S.				Thryv International
(in thousands)		Marketing Services		SaaS		Marketing Services		SaaS		Total
Balance as of December 31, 2021		$	390,573	$	218,884	$	62,429	$	—	$	671,886

Impairments		(102,000)		—		—		—		(102,000)
Effects of foreign currency translation	Effects of foreign currency translation	—		—		(3,882)		—		(3,882)
Balance as of December 31, 2022		$	288,573	$	218,884	$	58,547	$	—	$	566,004

Yellow Acquisition1		—		—		5,129		—		5,129
Effects of foreign currency translation	Effects of foreign currency translation	—		—		(3,360)		—		(3,360)
Balance as of September 30, 2023		$	288,573	$	218,884	$	60,316	$	—	$	567,773

Effects of foreign currency translation
Balance as of March 31, 2024

(1) Yellow was included in the Thryv ~~International~~ Marketing Services reporting unit.

In the first quarter of 2024, the Company changed its reporting structure from four to two reporting units. Accordingly, the Company assessed its goodwill for impairment under a four reporting unit structure prior to the assessment. Upon completion of this assessment, the Company determined that no impairment existed. Subsequent to this review and after allocating goodwill to the new reporting units based on relative fair value, the Company reassessed goodwill for impairment at the new reporting unit level (i.e., the Marketing Services and SaaS reporting units). Based upon each of these assessments, the Company determined no impairment existed for any of the Company's reporting units.

Intangible Assets

The following tables set forth the details of the Company's intangible assets as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023:


		As of September 30, 2023								As of March 31, 2024
(in thousands)	(in thousands)	Gross		Accumulated Amortization		Net		Weighted Average Remaining Amortization Period in Years	(in thousands)	Gross			Accumulated Amortization				Net					Weighted Average Remaining Amortization Period in Years
Client relationships	Client relationships	$	794,774	$	(779,260)	$	15,514	1.5	Client relationships	$	795,808	$	$	(787,496)	$		$	8,312		1.2			1.2
Trademarks and domain names	Trademarks and domain names	223,158		(218,567)		4,591		1.9	Trademarks and domain names	223,410		(221,024)		(221,024)		2,386			2,386		2.0			2.0
Patented technologies		19,600		(19,600)		—		0.0
Covenants not to compete	Covenants not to compete	10,352		(6,189)		4,163		1.0	Covenants not to compete	9,220		(8,292)		(8,292)		928			928		0.5			0.5
Total intangible assets	Total intangible assets	$	1,047,884	$	(1,023,616)	$	24,268	1.5	Total intangible assets	$	1,028,438	$	$	(1,016,812)	$		$	11,626		1.3			1.3


		As of December 31, 2022								As of December 31, 2023
(in thousands)	(in thousands)	Gross		Accumulated Amortization		Net		Weighted Average Remaining Amortization Period in Years	(in thousands)	Gross			Accumulated Amortization				Net					Weighted Average Remaining Amortization Period in Years
Client relationships	Client relationships	$	796,213	$	(771,475)	$	24,738	1.8	Client relationships	$	799,882	$	$	(787,736)	$		$	12,146		1.4			1.4
Trademarks and domain names	Trademarks and domain names	223,206		(215,639)		7,567		1.7	Trademarks and domain names	224,423		(220,886)		(220,886)		3,537			3,537		1.9			1.9
Patented technologies		19,600		(19,600)		—		0.0
Covenants not to compete	Covenants not to compete	5,240		(2,830)		2,410		2.0	Covenants not to compete	10,446		(7,341)		(7,341)		3,105			3,105		0.8			0.8
Total intangible assets	Total intangible assets	$	1,044,259	$	(1,009,544)	$	34,715	1.8	Total intangible assets	$	1,034,751	$	$	(1,015,963)	$		$	18,788		1.4			1.4

Amortization expense for intangible assets for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 was $~~6.4~~5.4 million ~~and~~ ~~$19.1 million, respectively.~~. Amortization expense for intangible assets for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 was ~~$14.1 million and $39.0 million, respectively.~~$6.2 million.

1312

Estimated aggregate future amortization expense by fiscal year for the Company's intangible assets is as follows:


(in thousands)	(in thousands)	Estimated Future Amortization Expense		(in thousands)	Estimated Future Amortization Expense
2023 (remaining)		$	6,294
2024		15,428
2024 (remaining)
2025	2025	1,977
2026	2026	397
2027	2027	132
Thereafter		40
2028
Total	Total	$	24,268

Note 6 Allowance for Credit Losses

The following table sets forth the Company's allowance for credit losses as of ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:


(in thousands)	(in thousands)	2023		2022		(in thousands)	March 31, 2024	March 31, 2023
Balance as of January 1	Balance as of January 1	$	14,799	$	17,475

Additions (1)	Additions (1)	10,397		10,669
Additions (1)
Additions (1)
Deductions (2)	Deductions (2)	(11,409)		(14,960)
Balance as of September 30 (3)		$	13,787	$	13,184
Balance as of March 31 (3)

(1) For the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ the Company recorded a provision for credit losses of $~~10.4~~6.0 million and ~~$10.7~~$3.8 million, respectively, which is included in General and administrative ~~expense. For~~expense in the ~~three months ended September 30, 2023~~Company's consolidated statements of operations and ~~2022, the Company recorded a provision for credit losses of~~ ~~$3.1 million~~ ~~and $2.8 million, respectively, which is included in General and administrative expense.~~comprehensive income.

(2) For the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022, represents~~the deductions represent amounts written off as uncollectible, net of recoveries.

(3) As of ~~September 30, 2023,~~March 31, 2024, $~~13.8~~17.8 million of the allowance is attributable to Accounts receivable and less than $0.1 million is attributable to Contract assets. As of ~~September 30, 2022, $13.1~~March 31, 2023, $13.2 million of the allowance is attributable to Accounts receivable and less than $0.1 million is attributable to Contract assets.

The Company’s exposure to expected credit losses depends on the financial condition of its clients and other macroeconomic factors. The Company maintains an allowance for credit losses based upon its estimate of potential credit losses. This allowance is based upon historical and current client collection trends, any identified client-specific collection issues, and current as well as expected future economic conditions and market trends.

Note 7 Accrued Liabilities

The following table sets forth additional financial information related to the Company's accrued liabilities as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022:~~2023:


(in thousands)	(in thousands)	September 30, 2023		December 31, 2022		(in thousands)	March 31, 2024	December 31, 2023
Accrued salaries and related expenses	Accrued salaries and related expenses	$	47,745	$	62,044
Accrued expenses	Accrued expenses	42,193		52,313
Accrued taxes	Accrued taxes	5,463		9,799
Accrued service credits	Accrued service credits	2,319		2,654

Accrued liabilities	Accrued liabilities	$	97,720	$	126,810
Accrued liabilities
Accrued liabilities

1413

Note 8 Debt Obligations

The following table sets forth the Company's outstanding debt obligations as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022:~~2023:

(in thousands) Maturity Interest Rate September 30, 2023 December 31, 2022
Term Loan(1)
March 1, 2026 SOFR + 8.5% $ 334,368 $ 429,368
ABL Facility (Seventh Amendment)(2)
March 1, 2026 Adjusted Daily Simple SOFR + 3.0% 57,393 54,554
Unamortized original issue discount and debt issuance costs (10,494) (14,112)
Total debt obligations $ 381,267 $ 469,810
Current portion of Term Loan (70,000) (70,000)
Total long-term debt obligations $ 311,267 $ 399,810

~~(1)~~ ~~Effective June 30, 2023, the Company's Term Loan amendment replaced the LIBOR benchmark with a Secured Overnight Financing Rate (“SOFR”) based benchmark.~~

~~(2)~~ ~~Effective June 1, 2023, the Company's ABL Facility amendment replaced the LIBOR benchmark with a SOFR based benchmark.~~


(in thousands)	Maturity	Interest Rate		March 31, 2024		December 31, 2023
Term Loan	March 1, 2026	SOFR +	8.5%	$	300,000	$	309,368
ABL Facility (Seventh Amendment)	March 1, 2026	Adjusted Daily Simple SOFR +	3.0%	55,737		48,845
Unamortized original issue discount and debt issuance costs				(8,169)		(9,316)
Total debt obligations				$	347,568	$	348,897
Current portion of Term Loan				(52,500)		(70,000)
Total long-term debt obligations				$	295,068	$	278,897

Term Loan

On March 1, 2021, the Company entered into a Term Loan credit agreement (the “Term Loan”). ~~The proceeds of the Term Loan were used to finance the acquisition of Sensis Holding Limited (the “Thryv Australia Acquisition”), refinance in full the Company's existing term loan facility (the “Senior Term Loan”), and pay fees and expenses related to the Thryv Australia Acquisition and related financing.~~

The Term Loan established a senior secured term loan facility (the “Term Loan Facility”) in an aggregate principal amount equal to $700.0 million, of which 38.4% was held by related parties who were equity holders of the Company as of March 1, 2021. As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023, no portion of the Term Loan was held by related ~~parties who were equity holders of the Company as of~~ ~~such date.~~parties.

The Term Loan Facility matures on March 1, 2026. Through the six months ended June 30, 2023, borrowings under the Term Loan Facility bore interest at a fluctuating rate per annum equal to, at the Company’s option, LIBOR or a base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for LIBOR loans) and (ii) 7.50% (for base rate loans). The Term Loan Facility requires mandatory amortization payments equal to $17.5 million per fiscal quarter.

On June 21, 2023, the Company entered into an agreement to amend the Term Loan Facility (the “Term Loan Amendment”). The Term Loan Amendment replaced the ~~LIBOR benchmark applicable to the loan~~LIBOR-based rate with a ~~SOFR based~~SOFR-based rate. Effective June 30, 2023, borrowings under the Term Loan Facility bear interest at a fluctuating rate per annum equal to, at the Company’s option, SOFR or a base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for SOFR loans) and (ii) 7.50% (for base rate loans). In connection with these amendments, the Company applied the modification accounting relief provided by the FASB in ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”.

~~In accordance with~~On May 1, 2024, the Company entered into a new Term Loan Credit Agreement (the “Term Loan Agreement”), the ~~Company recorded no interest expense with~~proceeds of which were used to refinance and pay off in full the Company’s previous term loan facility and to pay fees and expenses related ~~parties for~~to the ~~three and nine months ended September 30, 2023, compared to $0.9 million and $3.5 million~~refinancing. The Current portion of ~~interest expense with related parties for~~Term Loan reflects the ~~three and nine months ended September 30, 2022.~~current portion of the mandatory amortization payments under the new Term Loan Agreement. See Note 16, Subsequent Events.

The Company has recorded accrued interest of ~~$1.4~~$1.3 million and ~~$1.2~~$1.1 million as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively. Accrued interest is included in Other current liabilities on the Company's consolidated balance sheets.

The Term Loan, which was incurred by Thryv, Inc., the Company’s operating subsidiary, is secured by all the assets of Thryv, Inc., certain of its subsidiaries and the Company, and is guaranteed by the Company and certain of its subsidiaries.

Term Loan Covenants

The Term Loan contains certain covenants that, subject to exceptions, limit or restrict the borrower's incurrence of additional indebtedness, liens, investments, loans, advances, guarantees, acquisitions, sales of assets, sale-leaseback transactions, swap agreements, payments of dividends or distributions, payments in respect of certain indebtedness, certain affiliate transactions, restrictive amendments to agreements, changes in business, amendments of certain material documents, capital expenditures, mergers, consolidations and liquidations, and use of the proceeds. Additionally, the Company is required to maintain compliance with a Total Net Leverage Ratio, calculated as Net Debt to Consolidated EBITDA, which shall not be greater than 3.0 to 1.0 as of the last day of each fiscal quarter. As of ~~September 30, 2023,~~March 31, 2024, the Company was in compliance with its Term Loan covenants. The Company also expects to be in compliance with these covenants for the next twelve months.

ABL Facility

On March 1, 2021, the Company entered into an agreement to amend (the “ABL Amendment”) the June 30, 2017 asset-based lending (“ABL”) facility (the “ABL Facility”). The ABL Amendment was entered into in order to permit the ~~Senior Term Loan~~term loan refinancing, the Thryv Australia Acquisition and make certain other changes to the ABL credit agreement, including, among others:

•revise the maximum revolver amount to $175.0 million;

•reduce the interest rate per annum to (i) 3-month LIBOR plus 3.00% for LIBOR loans and (ii) base rate plus 2.00% for base rate loans;

•reduce the commitment fee on undrawn amounts under the ABL Facility to 0.375%;

•extend the maturity date of the ABL Facility to the earlier of March 1, 2026 and 91 days prior to the stated maturity

date of the Term Loan Facility;

•add the Australian subsidiaries acquired pursuant to the Thryv Australia Acquisition as borrowers and guarantors, and establish an Australian borrowing base; and

•make certain other conforming changes consistent with the Term Loan agreement.

On June 1, 2023, the Company entered into an agreement to amend its existing ABL Facility (the “ABL Seventh Amendment”). The ABL Seventh Amendment replaced the 3-month LIBOR benchmark applicable to the facility with a ~~SOFR based~~SOFR-based rate, defined as the Adjusted Daily Simple SOFR. Borrowings under the ABL Facility bear interest at a rate per annum equal to (i) Adjusted Daily Simple SOFR plus 3.00% for SOFR loans and (ii) base rate plus 2.00% for base rate loans. In connection with these amendments, the Company applied the modification accounting relief provided by the FASB in ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”.

As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had debt issuance costs with a remaining balance of $~~1.6~~1.3 million and ~~$2.0~~$1.4 million, respectively. These debt issuance costs are included in Other assets on the Company's consolidated balance sheets.

As of ~~September 30, 2023,~~March 31, 2024, the Company had borrowing ~~capacity~~base availability of $~~36.7 million~~40.2 million. As a result of certain restrictions in the Company's debt agreements, as of March 31, 2024, approximately $27.9 million was available to be drawn upon under the ABL Facility.

ABL Facility Covenants

The ABL Facility contains certain covenants that, subject to exceptions, limit or restrict the borrower's incurrence of additional indebtedness, liens, investments, loans, advances, guarantees, acquisitions, disposals of assets, payments of certain indebtedness, certain affiliate transactions, changes in fiscal year or accounting methods, issuance or sale of equity instruments, mergers, liquidations and consolidations, use of proceeds, maintenance of certain deposit accounts, compliance with certain ERISA requirements and compliance with certain Australian tax requirements. The Company is required to maintain compliance with a fixed charge coverage ratio that must exceed a ratio of 1.00. The fixed charge coverage ratio is defined as, with respect to any fiscal period determined on a consolidated basis in accordance with GAAP, the ratio of (a) Consolidated EBITDA as defined in the ABL credit agreement for such period minus capital expenditures incurred during such period, to (b) fixed charges. Fixed charges is defined as, with respect to any fiscal period determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) consolidated interest expense accrued (other than amortization of debt issuance costs, and other non-cash interest expense) during such period, (b) scheduled principal

payments in respect of indebtedness paid during such period, (c) all federal, state, and local income taxes accrued during such period, (d) all management, consulting, monitoring, and advisory fees paid to certain individuals or their affiliates during such period, and (e) all restricted payments paid during such period (whether in cash or other property, other than common equity interest). The Company is also required to maintain excess availability of at least $14.0 million, and U.S. excess

availability of $10.0 million, in each case, at all times. As of ~~September 30, 2023,~~March 31, 2024, the Company was in compliance with its ABL Facility covenants. The Company also expects to be in compliance with these covenants for the next twelve months.

Note 9 Pensions

The Company maintains pension obligations associated with non-contributory defined benefit pension plans that are currently frozen and incur no additional service costs.

The Company immediately recognizes actuarial gains and losses in its operating results in the period in which the gains and losses occur. The Company estimates the interest cost component of net periodic pension cost by utilizing a full yield curve approach and applying the specific spot rates along the yield curve used in the determination of the benefit obligations of the relevant projected cash flows. This method provides a more precise measurement of interest costs by improving the correlation between projected cash flows to the corresponding spot yield curve rates.

Net Periodic Pension Cost

The following table details the other components of net periodic pension cost ~~(benefit)~~ for the Company's pension plans:


	Three Months Ended March 31,
	Three Months Ended March 31,
	Three Months Ended March 31,
(in thousands)
(in thousands)
(in thousands)
Interest cost
Interest cost
Interest cost
Expected return on assets
Expected return on assets
Expected return on assets

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Interest cost	$	5,138	$	3,624	$	16,048	$	10,460
Expected return on assets	(3,223)		(3,224)		(10,384)		(10,201)
Settlement loss (gain)	—		62		(420)		(328)
Remeasurement loss (gain)	(13)		3,466		(1,356)		(5,226)
Net periodic pension cost (benefit)	$	1,902	$	3,928	$	3,888	$	(5,295)
Net periodic pension cost

Net periodic pension cost

Net periodic pension cost

Since all pension plans are frozen and no employees accrue future pension benefits under any of the pension plans, the rate of compensation increase assumption is no longer needed. The Company determines the weighted-average discount rate by applying a yield curve comprised of the yields on several hundred high-quality, fixed income corporate bonds available on the measurement date to expected future benefit cash flows.

During the three ~~and nine~~ months ended ~~September 30, 2023, the Company recognized a settlement gain of less than $0.1 million and $0.4 million, respectively, a~~nd as a result of an interim actuarial valuation due to the settlement of one of the Company's pension plans, the Company recognized a remeasurement gain of less $0.1 million and $1.4 million, respectively. ~~During the~~ ~~three and nine months ended September 30, 2022, the Company recognized a settlement loss of~~ ~~$0.1 million~~ ~~and a settlement gain of~~ ~~$0.3 million, respectively,~~ ~~and as a result of an interim actuarial valuation due to the settlement of one of the Company's pension plans, the Company recognized a remeasurement loss of~~ ~~$3.5 million~~ ~~and a remeasurement gain of~~ ~~$5.2 million, respectively~~.

~~During the three and nine months ended September 30, 2023,~~March 31, 2024, the Company made no contributions to the qualified plans and contributions and associated payments of $0.1 million ~~and~~ ~~$0.4 million~~to the non-qualified plans. During the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, the Company made no cash contributions of ~~$7.5 million~~ ~~and~~ ~~$22.5 million~~ to the qualified plans, and contributions and associated payments of $0.1 million ~~and~~ ~~$0.4 million~~to the non-qualified plans.

For the fiscal year ~~2023,~~2024, the Company ~~is not anticipating making any contributions~~expects to contribute approximately $6.0 million to the qualified plans and ~~expects to contribute~~ approximately ~~$0.8~~$0.5 million to the non-qualified plans.

1716

Note 10 Stock-Based Compensation and Stockholders' Equity

Stock-Based Compensation Expense

The following table sets forth stock-based compensation expense recognized by the Company in the following line items in the Company's consolidated statements of operations and comprehensive income ~~(loss)~~ during the periods presented:




		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		2023		2022
(in thousands)
(in thousands)
Cost of services
Cost of services
Cost of services	Cost of services	$	174	$	107	$	496	$	314
Sales and marketing	Sales and marketing	2,691		1,967		8,303		4,569
Sales and marketing
Sales and marketing
General and administrative
General and administrative
General and administrative	General and administrative	2,597		2,328		7,854		5,257
Stock-based compensation expense	Stock-based compensation expense	$	5,462	$	4,402	$	16,653	$	10,140
Stock-based compensation expense
Stock-based compensation expense

The following table sets forth stock-based compensation expense by award type during the periods presented:




		Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	(in thousands)	2023		2022		2023		2022
(in thousands)
(in thousands)
RSUs
RSUs
RSUs	RSUs	$	2,423	$	1,404	$	7,243	$	2,196
PSUs	PSUs	2,379		1,194		6,994		1,947
PSUs
PSUs
Stock options
Stock options
Stock options	Stock options	419		1,561		1,260		4,621
ESPP	ESPP	241		243		1,156		1,376
ESPP
ESPP
Stock-based compensation expense	Stock-based compensation expense	$	5,462	$	4,402	$	16,653	$	10,140
Stock-based compensation expense
Stock-based compensation expense

Restricted Stock Units

The following table sets forth the Company's restricted stock unit (“RSU”) activity during the ~~nine~~three months ended ~~September 30, 2023:~~March 31, 2024:

Number of Restricted Stock Units

Weighted-Average Grant-Date Fair Value

Nonvested balance as of December 31, 2022

517,135

25.93

Nonvested balance as of December 31, 2023

Granted

709,175

19.58

Vested

(204,849)

25.65

Vested

Forfeited

(22,192)

23.44

Nonvested balance as of September 30, 2023

999,269

21.54

Forfeited

Nonvested balance as of March 31, 2024

The Company grants RSUs to the Company's employees and non-employee directors under the Company’s 2020 Incentive Award Plan (the “2020 Plan”). Pursuant to the RSU award agreements, each RSU entitles the recipient to one share of the Company’s common stock, subject to time-based vesting conditions set forth in individual agreements.

The fair value of each RSU grant is determined based upon the market closing price of the Company’s common stock on the date of grant. The RSUs vest over the requisite service period, which ranges between one year and three years from the date of grant, subject to the continued employment of the employees and services of the non-employee board members.

As of ~~September 30, 2023,~~March 31, 2024, the unrecognized stock-based compensation expense related to the unvested portion of the Company's RSU awards was approximately $~~16.0~~22.3 million and is expected to be recognized over a weighted-average period of ~~1.91~~2.19 years.

During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, the Company issued an aggregate of ~~205,739~~374,520 shares of common stock to employees and non-employee directors upon the vesting of RSUs previously granted under the 2020 Plan.

1817

Performance-Based Restricted Stock Units

The following table sets forth the Company's performance-based restricted stock unit (“PSU”) activity during the ~~nine~~three months ended ~~September 30, 2023:~~March 31, 2024:

Number of Performance-Based Restricted Stock Units

Weighted-Average Grant-Date Fair Value

Nonvested balance as of December 31, 2022

473,371

26.76

Nonvested balance as of December 31, 2023

Granted

657,408

21.46

Vested

—

Vested

Forfeited

—

Nonvested balance as of September 30, 2023

1,130,779

23.68

Forfeited

Nonvested balance as of March 31, 2024

The Company also grants PSUs to employees under the Company’s 2020 Plan. Pursuant to the PSU Award Agreement, each PSU entitles the recipient to up to 1.5 shares of the Company’s common stock, subject to ~~performance-based vesting conditions~~certain performance measures set forth in individual agreements.

The PSUs will vest, if at all, following the achievement of certain performance measures over a three year performance period, relative to certain performance and market conditions. ~~Grant~~The grant date fair value of PSUs that vest relative to a performance condition is measured based upon the market closing price of the Company’s common stock on the date of grant and expensed on a straight-line basis when it becomes probable that the performance conditions will be satisfied, net of forfeitures, over the service period of the awards, which is generally the vesting term of three years. ~~Grant~~The grant date fair value of PSUs that vest relative to a market condition is measured using a Monte Carlo simulation model and expensed on a straight-line basis, net of forfeitures, over the service period of the awards, which is generally the vesting term of three years. As of ~~September 30, 2023,~~March 31, 2024, the nonvested balance of PSUs that vest based on performance and market conditions are ~~452,316~~712,328 and ~~678,463~~1,068,473 shares, respectively.

As of ~~September 30, 2023,~~March 31, 2024, the unrecognized stock-based compensation expense related to the unvested portion of the Company's PSU awards was approximately $~~16.6~~18.9 million and is expected to be recognized over a weighted-average period of ~~1.85~~1.87 years.

Stock Options

As of ~~September 30, 2023,~~March 31, 2024, the unrecognized stock-based compensation expense related to the unvested portion of the Company's stock options was approximately ~~$0.9~~$0.3 million, and is expected to be recognized over a weighted average period of ~~0.41~~0.54 years. As of ~~September 30, 2023,~~March 31, 2024, there were ~~578,336~~83,334 stock options expected to vest with a weighted-average grant-date fair value of $12.98.

During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, the Company issued an aggregate of ~~194,435~~270,943 shares of common stock to employees upon the exercise of options previously granted under the 2016 Stock Incentive Plan and 2020 Plan at exercise prices ranging from $3.68 to $13.82 per share.

During the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, the Company issued an aggregate of ~~170,006~~113,620 shares of common stock to employees upon the exercise of options previously granted under the 2016 Stock Incentive Plan and 2020 Plan at exercise prices ranging from $3.68 to $13.82 per share.

Employee Stock Purchase Plan

During the ~~nine~~three months ended ~~September 30,~~March 31, 2024 and 2023, ~~the Company issued~~ ~~189,837~~no shares were issued through the Employee Stock Purchase Plan (“ESPP”). ~~During the nine months ended September 30, 2022, the Company issued 157,250 shares through the ESPP.~~

~~Stock Warrants~~

~~As of December 31, 2022, the Company had fully vested outstanding warrants of 9,427,343. As of December 31, 2022,~~ the holders of such warrants were entitled to purchase, in the aggregate, up to 5,237,413 shares of common stock at an exercise price of $24.39 per share. The warrants were issued in 2016 upon the Company's emergence from its pre-packaged bankruptcy.

1918

~~During the three and nine months ended September 30, 2023, 1,162,835 and~~ ~~1,173,348~~ ~~warrants, respectively, were exercised.~~ ~~During the three and nine months ended September 30, 2022, 4,721 warrants were exercised. Cash proceeds from exercises of stock warrants during the~~ ~~three and nine months ended September 30, 2023~~ ~~were $15.8 million and~~ ~~$15.9 million,~~ ~~respectively, and are recorded in Other under Cash flows from financing activities on the Company's consolidated statements of cash flows.~~

~~On August 15, 2023, 8,253,997~~ ~~warrants expired unexercised. As of August 16, 2023, the Company did not have any warrants outstanding~~.

Note 11 Earnings per Share

The following table sets forth the calculation of the Company's basic and diluted earnings per share for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except share and per share amounts) 2023 2022 2023 2022
Basic net (loss) income per share:
Net (loss) income $ (27,046) $ 13,280 $ (1,754) $ 104,793
Weighted-average common shares outstanding during the period 34,848,899 34,269,274 34,619,794 34,289,333
Basic net (loss) income per share $ (0.78) $ 0.39 $ (0.05) $ 3.06


	Three Months Ended March 31,
(in thousands, except share and per share amounts)	2024		2023
Basic net income per share:
Net income	$	8,424	$	9,314
Weighted-average common shares outstanding during the period	35,186,121		34,606,864
Basic net income per share	$	0.24	$	0.27

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands, except share and per share amounts) 2023 2022 2023 2022
Diluted net (loss) income per share:
Net (loss) income $ (27,046) $ 13,280 $ (1,754) $ 104,793
Basic shares outstanding during the period 34,848,899 34,269,274 34,619,794 34,289,333
Plus: Common stock equivalents associated with stock-based compensation — 1,542,199 — 2,409,062
Diluted shares outstanding 34,848,899 35,811,473 34,619,794 36,698,395
Diluted net (loss) income per share $ (0.78) $ 0.37 $ (0.05) $ 2.86


	Three Months Ended March 31,
(in thousands, except share and per share amounts)	2024		2023
Diluted net income per share:
Net income	$	8,424	$	9,314
Weighted-average basic shares outstanding during the period	35,186,121		34,606,864
Plus: Common stock equivalents associated with stock-based compensation	2,799,664		2,374,788
Weighted-average diluted shares outstanding	37,985,785		36,981,652
Diluted net income per share	$	0.22	$	0.25

The computation of weighted-average diluted shares outstanding excluded the following share amounts as their effect would have been anti-dilutive for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Outstanding RSUs — — 218,804 175,245
Outstanding PSUs 147,914 331,358 238,655 394,474
Outstanding ESPP shares 38,581 26,391 64,091 19,828
Outstanding stock warrants — 5,237,415 3,489,662 1,745,805


	Three Months Ended March 31,
	2024	2023
Outstanding RSUs	139,664	317,240
Outstanding PSUs	96,515	284,025
Outstanding ESPP shares	42,764	48,133
Outstanding stock warrants	—	5,237,415

Note 12 Income Taxes

The Company’s effective tax rate (“ETR”) was ~~27.5% and 83.9%~~39.0% for the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, and ~~32.0% and 26.6%~~32.6% for the three ~~and nine~~ months ended ~~September 30, 2022.~~March 31, 2023. The Company's ETR differs from the 21.0% U.S. Federal statutory rate primarily due to permanent differences, including state taxes, non-deductible executive compensation, non-U.S. taxing jurisdictions, tax credits, change in valuation allowance due to expiring net operating losses, and the discrete impact of interest accrual on uncertain tax ~~positions and the settlement of the indemnification asset further discussed in Note 13,~~ ~~Contingent Liabilities, and return to provision adjustments.~~positions.

2019

As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the amount of unrecognized tax benefits was ~~$16.7~~$17.8 million and ~~$21.4~~$17.1 million, respectively, excluding interest and penalties, that if recognized, would impact the effective tax rate. As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had ~~$8.4~~$9.5 million and ~~$11.7~~$9.0 million, respectively, recorded for interest on the Company's consolidated balance sheets. The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. The Company expects to complete resolution of certain tax years with various tax authorities within the next 12 months. The Company believes it is reasonably possible that its existing gross unrecognized tax benefits may be reduced by up to $15.6 million within the next 12 months, affecting the Company’s ETR if realized. See Note 13, Contingent Liabilities.

Risks Related to Taxes and Tariffs

The international tax environment remains highly uncertain and increasingly complex as evidenced by initiatives put forth by the Organization for Economic Co-operation and Development (“OECD”), which includes the introduction of a global minimum tax at a rate of 15% under the OECD’s Pillar Two rules. We continue to monitor these proposals closely and, if enacted by various countries in which we do business, they may increase our taxes in the applicable jurisdictions or cause us to change the way we operate our business and result in increased taxation of our international earnings. As of the quarter ended March 31, 2024, Pillar Two legislation enacted by countries in which Thryv operates is not expected to materially impact the Company’s taxes in 2024.

Note 13 Contingent Liabilities

Litigation

The Company is subject to various lawsuits and other claims in the normal course of business. In addition, from time to time, the Company receives communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdictions in which the Company operates.

The Company establishes reserves for the estimated losses on specific contingent liabilities for regulatory and legal actions where the Company deems a loss to be probable and the amount of the loss can be reasonably estimated. In other instances, losses are considered probable, but the Company is not able to make a reasonable estimate of the liability because of the uncertainties related to the outcome or the amount or range of potential loss. For these matters, disclosure is made when material, but no amount is reserved. The Company does not expect that the ultimate resolution of pending regulatory and legal matters in future periods will have a material adverse effect on the Company's consolidated statements of operations and comprehensive income, ~~(loss),~~ balance sheets or cash flows.

Section 199 and Research and Development Tax Case

Section 199 of the Internal Revenue Code of 1986, as amended (the “Tax Code”), provides for deductions for manufacturing performed in the U.S. The Internal Revenue Service (“IRS”) has taken the position that directory providers are not entitled to take advantage of the deductions because printing vendors are already taking deductions and only one taxpayer can claim the deduction. The Tax Code also grants tax credits related to research and development expenditures. The IRS also takes the position that the expenditures have not been sufficiently documented to be eligible for the tax credit. The Company disagrees with these positions.

The IRS has challenged the Company's positions. With respect to the tax years 2012 through June 2015 for the YP LLC partnership, the IRS sent 90-day notices to DexYP on August 29, 2018. In response, the Company filed three petitions (in the names of various related partners) in U.S. Tax Court, and the IRS filed answers to those petitions. The three cases were consolidated by the court and were referred back to IRS Administrative Appeals for settlement negotiations, during which time the litigation was suspended. ~~The~~Several appeals c~~onference~~onferences for YP ~~occurred on May 9, 2022.~~have been held. The Company is working through ongoing settlement negotiations with the Appeals ~~Officer. In advance of~~Officer related to the Section 199 disallowance. The Company and the IRS ~~Appeals conference, the parties~~also reached an agreement regarding additional research and development tax credits for the tax years at issue whereby the IRS will allow more tax credits than were originally claimed on the tax returns. With respect to the tax year from July to December 2015 for the Print Media LLC partnership, the Company ~~was~~has been unsuccessful in its attempt to negotiate a settlement with IRS ~~Administrative~~ Appeals, and the IRS issued a 90-day notice to the Company.The Company filed a petition in the U.S. Tax Court ~~on March 30, 2021~~ to challenge the IRS denial.

As of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company has reserved $~~25.5~~26.6 million and ~~$34.0~~$26.1 million, respectively, in connection with the Section 199 disallowance and less than $0.1 million related to the research and development tax credit

disallowance. See Note 4, Fair Value Measurements, for a discussion of the Company's former indemnification asset related to these matters.

On May 22, 2023, the Company received a draft Appeals Settlement document (“Draft Settlement”) from the IRS relating to the IRC Section 199 tax ~~case described in Note 15 Contingent Liabilities of our Form 10-K for year ended December 31, 2022.~~case. Once finalized, the Draft Settlement will result in a decrease in the unrecognized tax benefit recorded for this tax position. During the ~~quarter~~year ended ~~June 30,~~December 31, 2023, the Company recorded a measurement adjustment to the uncertain tax position liability to account for the new information received from the Draft Settlement. The Company is in continued discussion with the IRS regarding the finalization of this case and final tax impact that will result. As of ~~September 30, 2023,~~March 31, 2024,

the final settlement has not been issued by the IRS. Accordingly, the Company does not consider the matter effectively settled.

Note 14 Changes in Accumulated Other Comprehensive Loss

The following table summarizes the changes in accumulated other comprehensive loss, which is reported as a component of stockholders' equity, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 and ~~2022:~~2023:


		Accumulated Other Comprehensive Loss
		Accumulated Other Comprehensive Loss
		Accumulated Other Comprehensive Loss
		Accumulated Other Comprehensive Loss
(in thousands)	(in thousands)	2023		2022		(in thousands)	2024	2023
Beginning balance at January 1,	Beginning balance at January 1,	$	(16,261)	$	(8,047)
Foreign currency translation adjustment, net of tax expense of $1.8 million and $7.8 million, respectively		(4,332)		(12,611)
Ending balance at September 30,		$	(20,593)	$	(20,658)
Foreign currency translation adjustment, net of tax expense of $0.1 million and $0.7 million, respectively
Ending balance at March 31,

Note 15 Segment Information

During the first quarter of 2024, the Company changed the internal reporting provided to the CODM. As a result, the Company reevaluated its segment reporting, as discussed in Note 1,Description of Business and Summary of Significant Accounting Policies. The Company determined that the Company manages its operations using ~~four~~two operating segments, which are also its reportable segments: (1) Thryv ~~U.S. Marketing Services, (2) Thryv U.S. SaaS, (3) Thryv International~~ Marketing Services and ~~(4)~~(2) Thryv ~~International~~ SaaS. Comparative prior periods have been recast to reflect the current presentation.

The Company does not allocate assets to its segments and the ~~chief operating decision maker~~CODM does not evaluate performance or allocate resources based on segment asset data, and therefore, such information is not presented.

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


		Three Months Ended September 30, 2023
		Thryv U.S.				Thryv International
	Three Months Ended March 31, 2024														Three Months Ended March 31, 2024
(in thousands)	(in thousands)	Marketing Services		SaaS		Marketing Services		SaaS		Total		(in thousands)	Thryv Marketing Services	Thryv SaaS		Total
Revenue	Revenue	$	92,884	$	64,650	$	23,578	$	2,710	$	183,822
Segment Gross Profit	Segment Gross Profit	50,610		40,957		10,166		1,911		103,644
Segment Adjusted EBITDA	Segment Adjusted EBITDA	5,369		1,986		2,466		(2,490)		7,331

Three Months Ended September 30, 2022
Thryv U.S. Thryv International
(in thousands) Marketing Services SaaS Marketing Services SaaS Total
Revenue $ 197,174 $ 55,353 $ 26,833 $ 1,290 $ 280,650
Segment Gross Profit 126,846 33,827 14,351 615 175,639
Segment Adjusted EBITDA 61,802 398 5,807 (2,575) 65,432


		Nine Months Ended September 30, 2023
		Thryv U.S.				Thryv International
	Three Months Ended March 31, 2023														Three Months Ended March 31, 2023
(in thousands)	(in thousands)	Marketing Services		SaaS		Marketing Services		SaaS		Total		(in thousands)	Thryv Marketing Services	Thryv SaaS		Total
Revenue	Revenue	$	377,868	$	182,927	$	113,183	$	6,820	$	680,798
Segment Gross Profit	Segment Gross Profit	231,807		114,480		67,498		4,752		418,537
Segment Adjusted EBITDA	Segment Adjusted EBITDA	84,866		10,231		44,851		(4,709)		135,239

2221

Nine Months Ended September 30, 2022
Thryv U.S. Thryv International
(in thousands) Marketing Services SaaS Marketing Services SaaS Total
Revenue $ 632,277 $ 153,863 $ 133,715 $ 3,165 $ 923,020
Segment Gross Profit 415,130 95,328 89,694 1,325 601,477
Segment Adjusted EBITDA 211,871 (3,769) 64,449 (7,402) 265,149

A reconciliation of the Company’s ~~(Loss) income~~Income before income tax ~~benefit (expense)~~expense to total Segment Adjusted EBITDA is as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(in thousands)	(in thousands)	2023		2022		2023		2022
(Loss) income before income tax benefit (expense)		$	(37,287)	$	19,521	$	(10,927)	$	142,855
(in thousands)
(in thousands)
Income before income tax expense
Income before income tax expense
Income before income tax expense
Interest expense
Interest expense
Interest expense	Interest expense	15,131		14,570		47,911		44,089
Depreciation and amortization expense	Depreciation and amortization expense	15,842		23,393		46,940		65,954
Depreciation and amortization expense
Depreciation and amortization expense
Stock-based compensation expense
Stock-based compensation expense
Stock-based compensation expense	Stock-based compensation expense	5,462		4,402		16,653		10,140
Restructuring and integration expenses	Restructuring and integration expenses	3,584		3,790		12,845		14,439
Restructuring and integration expenses
Restructuring and integration expenses
Transaction costs (1)	Transaction costs (1)	—		1,461		373		4,797
Other components of net periodic pension cost (benefit)		1,902		3,928		3,888		(5,295)
Non-cash (gain) loss from remeasurement of indemnification asset		—		(585)		10,734		(1,472)
Impairment charges		—		—		—		222
Transaction costs (1)
Transaction costs (1)
Other components of net periodic pension cost
Other components of net periodic pension cost
Other components of net periodic pension cost
Non-cash gain from remeasurement of indemnification asset
Non-cash gain from remeasurement of indemnification asset
Non-cash gain from remeasurement of indemnification asset

Other

Other

Other	Other	2,697		(5,048)		6,822		(10,580)
Total Segment Adjusted EBITDA	Total Segment Adjusted EBITDA	$	7,331	$	65,432	$	135,239	$	265,149
Total Segment Adjusted EBITDA
Total Segment Adjusted EBITDA

(1)Consists of expenses related to the Yellow ~~Acquisition, Vivial~~ Acquisition and other transaction costs.

The following table sets forth the Company's disaggregation of Revenue based on services for the periods indicated:

Three Months Ended September 30, Nine Months Ended September 30,
(in thousands) 2023 2022 2023 2022
Thryv U.S.
Print $ 18,273 $ 93,436 $ 133,839 $ 295,606
Digital 74,611 103,738 244,029 336,671
Total Marketing Services 92,884 197,174 377,868 632,277
SaaS 64,650 55,353 182,927 153,863
Total Thryv U.S. $ 157,534 $ 252,527 $ 560,795 $ 786,140
Thryv International
Print $ 3,949 $ 4,739 $ 52,243 $ 61,146
Digital 19,629 22,094 60,940 72,569
Total Marketing Services 23,578 26,833 113,183 133,715
SaaS 2,710 1,290 6,820 3,165
Total Thryv International $ 26,288 $ 28,123 $ 120,003 $ 136,880
Revenue $ 183,822 $ 280,650 $ 680,798 $ 923,020


	Three Months Ended March 31,
(in thousands)	2024		2023
Thryv Marketing Services
Print	$	84,636	$	77,366
Digital	74,666		108,260
Total Thryv Marketing Services	159,302		185,626
Thryv SaaS	74,322		59,929
Revenue	$	233,624	$	245,555

Revenue by geography is based on the location of the customer. The following table sets forth the Company's disaggregation of Revenuebased on geographic region for the periods indicated:


	Three Months Ended March 31,
(in thousands)	2024		2023
United States	$	196,440	$	205,427
International	37,184		40,128
Revenue	$	233,624	$	245,555

Thryv Australia's revenue attributed to the International region was approximately 14.3% and 16.3% of total revenue for the three months ended March 31, 2024 and 2023, respectively. No other individual country from the International region contributed more than 10% of total revenue for the three months ended March 31, 2024 and 2023.

Note 16 Subsequent Events

Financing Agreements

Term Loan Agreement

On May 1, 2024, the Company entered into the new Term Loan Agreement, the proceeds of which were used to refinance and pay off in full the Company’s previous term loan facility and to pay fees and expenses related to the refinancing.

The Term Loan Agreement established a senior secured term loan facility (the “NewTerm Loan Facility”) in an aggregate principal amount equal to $350.0 million. The New Term Loan Facility matures on May 1, 2029 and borrowings under the New Term Loan Facility will bear interest at a fluctuating rate per annum equal to, at the Company’s option, SOFR or base rate, in each case, plus an applicable margin per annum equal to (i) 6.75% (for SOFR loans) and (ii) 5.75% (for base rate loans). The New Term Loan Facility requires mandatory amortization payments, paid quarterly commencing June 30, 2024, equal to (i) $52.5 million per year for the first two years following the closing date of the Term Loan Agreement, and (ii) $35.0 million per year thereafter.

ABL Credit Agreement

On May 1, 2024, the Company entered into a new Credit Agreement (the “ABL Credit Agreement”), which established a new $85.0 million asset-based revolving loan facility (the “NewABL Facility”). TheNewABL Facility refinanced the Company’s previous asset-based revolving loan facility. Proceeds of the New ABL Facility may be used by the Company for ongoing general corporate purposes and working capital.

As of May 1, 2024, the Company had borrowing base availability of $55.0 million. As a result of certain restrictions in the Company's debt agreements, as of May 1, 2024, approximately $44.4 million was available to be drawn upon under the New ABL Facility.

The New ABL Facility matures on May 1, 2028 and borrowings under the New ABL Facility will bear interest at a fluctuating rate per annum equal to, at the Company’s option, SOFR or base rate, in each case, plus an applicable margin per annum, depending on the average excess availability under the New ABL Facility, equal to (i) 2.50%-2.75% (for SOFR loans) and (ii) 1.50%-1.75% (for base rate loans). The fee for undrawn commitments under the New ABL Facility is equal to 0.375% per annum.

Share Repurchase Program

On April 30, 2024, the Board authorized a new share repurchase program (the “Share Repurchase Program”), under which the Company may repurchase up to $40.0 million in shares of Common Stock through April 30, 2029. The repurchase program will be subject to market conditions, the periodic capital needs of the Company’s operating activities, and the continued satisfaction of all covenants under the Company’s new Term Loan Agreement and ABL Credit Agreement. The Share Repurchase Program does not obligate the Company to repurchase shares and may be suspended, terminated, or modified at any time. As of May 2, 2024, the Company had not repurchased any shares under the Share Repurchase Program.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented and should be read in conjunction with our unaudited interim consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report. This discussion and analysis contains forward-looking statements, including statements regarding industry outlook, our expectations for the future of our business, and our liquidity and capital resources as well as other non-historical statements. These statements are based on current expectations and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “Risk Factors” in our 2023 Form 10-K, elsewhere in this Quarterly Report on Form 10-Q, particularly Part II, Item 1A. "Risk Factors," and “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements.

Overview

We are dedicated to supporting local, independent businesses and franchises by providing innovative marketing solutions and cloud-based tools to the entrepreneurs who run them. We are one of the largest ~~domestic~~ providers of SaaS ~~all-in-one small business management~~end-to-end customer experience tools and digital marketing solutions (“Digital”) to small-to-medium sized businesses (“SMBs”). Our solutions enable our SMB clients to generate new business leads, manage their customer relationships and run their day-to-day business operations. ~~As of September 30, 2023, we~~We serve approximately ~~360,000~~330,000 SMB clients globally through ~~four~~two business segments: Thryv ~~U.S. Marketing Services, Thryv U.S. SaaS, Thryv International~~ Marketing Services and Thryv ~~International~~ SaaS.

Our Thryv ~~U.S.~~ Marketing Services segment provides both print and digital solutions and generated $~~92.9~~159.3 million and ~~$197.2~~$185.6 million of consolidated revenue for the three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022, respectively, and~~ ~~$377.9 million~~ ~~and $632.3 million of consolidated revenues for the nine months ended September 30, 2023 and 2022,~~ respectively. Our Marketing Services offerings include our owned and operated Print Yellow Pages (“Print”), which carry the “The Real Yellow Pages” tagline, ~~and other digital marketing services (“Digital”),~~ ~~which includes~~ our proprietary Internet Yellow Pages, known by the Yellowpages.com, Superpages.com, and Dexknows.com URLs, search engine marketing solutions and other digital media solutions, which include online display ~~and social~~ advertising, online presence, ~~and video~~ and search engine optimization tools.

Our Thryv Marketing Services segment includes Thryv Australia Pty Ltd (

~~On January 21, 2022,~~“Thryv Australia”), and Yellow Holdings Limited (“Yellow”), a New Zealand marketing services company, which we acquired ~~Vivial Media Holdings, Inc. (“Vivial”), a marketing and advertising company,~~on April 3, 2023 for ~~$22.8~~$8.9 million in cash ~~(the~~(the “~~Vivial~~Yellow Acquisition”), subject to certain adjustments. ~~Vivial's results~~Thryv Australia and Yellow serve approximately 90,000 and 18,000SMBs, respectively, many of which we believe are ~~included in~~ideal candidates for the Thryv ~~U.S. Marketing Services segment.~~platform.

Our Thryv ~~U.S.~~ SaaS segment generated $~~64.7~~74.3 million and ~~$55.4~~$59.9 million of consolidated revenue for the three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively ~~and~~ ~~$182.9 million~~. ~~and $153.9 million of consolidated revenues for the nine months ended September 30, 2023~~ ~~and 2022, respectively.~~ Our primary SaaS offerings ~~include Thryv®~~are comprised of Thryv®, our flagship all-in-one small business management platform ~~now known as~~(“Thryv Platform”), which includes Command Center, Business Center, Marketing Center, ThryvPaySM, and Thryv Add-Ons. Thryv Command Center enables SMBs to centralize all their communications through a modular, easily expandable, and customizable platform. Command Center allows an SMB to do the following to provide a centralized inbox for all customer communication:

•Connect their pre-existing email, Facebook and Instagram accounts;

•Install Command Center’s WebChat client on their website; and

•Use Voice over Internet Protocol (“VoIP”) in-platform telephony services, Short Message Service (“SMS”) and video calls.

Thryv Business Center is designed to allow a ~~small business owner~~SMB everything necessary to streamline day-to-day business, including customer relationship management, appointment scheduling, estimate and invoice creation, and online review management. Thryv Marketing Center is a fully integrated next generation marketing and advertising platform operated by the end user. ~~Thryv~~ Marketing Center contains everything a small business owner needs to market and grow their business effectively, including easy to understand, artificial intelligence (“(“AI”) driven analytics. ThryvPaySM, is our own branded payment solution that allows users to get paid via credit card and ACH and is tailored to service focused businesses that want to provide consumers safe, contactless, and fast-online payment options. Thryv Add-Ons include ~~an automated machine learning optimized lead generation application that fully integrates with our Thryv Business Center, AI assisted~~AI-assisted website development, SEO tools, Google My Business Profile optimization, and Hub by ThryvSM. These optional platform subscription-based add-ons provide a seamless user experience for our end-users and drive higher engagement within the Thryv Platform while also producing incremental revenue growth.

~~Our Thryv International Marketing Services segment is comprised of Thryv Australia Pty Ltd (“Thryv Australia”), which we acquired on March 1, 2021, and Yellow Holdings Limited (“Yellow”), a New Zealand marketing services company, which we acquired on April 3, 2023 for $8.9 million in cash~~ ~~(the “Yellow Acquisition~~”)~~, subject to certain adjustments. Our Thryv International Marketing Services segment provides both print and digital solutions and generated $23.6 millionand $26.8 million of consolidated~~ ~~revenues for the three months ended September 30, 2023 and 2022, respectively, and~~ ~~$113.2 million~~ ~~and~~ ~~$133.7 million~~ ~~of consolidated revenues for the nine months ended September 30, 2023 and 2022, respectively. Thryv Australia and Yellow serve more than 100,000 and 21,000SMBs, respectively, many of which we believe are ideal candidates for the Thryv platform.~~

~~Our Thryv International SaaS segment is comprised of Thryv Business Center, Hub By Thryv, Thryv Add-ons and~~ ~~ThryvPay~~SM~~, and generated $2.7 millionand $1.3 million of consolidated revenues~~ ~~for the three months ended September 30, 2023 and 2022, respectively, and~~ ~~$6.8 million~~ ~~and~~ ~~$3.2 million~~ ~~of consolidated revenues for the nine months ended September 30, 2023 and 2022, respectively.~~

Our expertise in delivering solutions for our client base is rooted in our deep history of serving SMBs. In ~~2023,~~2024, SMB demand for integrated technology solutions continues to grow as SMBs adapt their business and service model to facilitate remote working and virtual interactions.

The expanding global scope of our business and the heightened volatility of global markets, driven by factors, such as inflation, expose us to the risk of rising interest rates, increased operating costs and fluctuations in foreign currency markets. Recently the United States Dollar has strengthened significantly against certain foreign currencies in the markets in which we operate, particularly against the Australian Dollar. We also expect further interest rate changes in the future. Further changes in global economic conditions may adversely impact our revenue, profit margins, cash flow and liquidity. See “~~Item 3. Quantitative and Qualitative Disclosures About Market Risk” for a description of interest rate and foreign exchange currency risks.~~

Factors Affecting Our Performance

Our operations can be impacted by, among other factors, general economic conditions and increased competition with the introduction of new technologies and market entrants. We believe that our performance and future success depend on several factors that present significant opportunities for us, but also pose risks and challenges, including those listed below and those discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements.”

Ability to Attract and Retain Clients

Our revenue growth is driven by our ability to attract and retain SMB clients. To do so, we must deliver solutions that address the challenges currently faced by SMBs at a value-based price point that SMBs can afford.

Our strategy is to expand the use of our solutions by introducing our SaaS solutions to new SMB clients, as well as our current Thryv ~~U.S. Marketing Services and Thryv International~~ Marketing Services clients. This strategy includes capitalizing on the increased needs of SMBs for solutions that facilitate a remote working environment and virtual interactions. This strategy will require substantial sales and marketing capital.

Investment in Growth

We intend to continue to ~~invest in the growth of~~develop and grow a profitable SaaS segment to better help SMBs manage their businesses, while maintaining strong profitability within our ~~U.S. and international SaaS segments. We have selectively utilized a portion of the cash generated from our Thryv U.S.~~ Marketing Services ~~and Thryv International Marketing Services segments~~segment, which serves as an efficient customer acquisition channel for our SaaS platform. As a result, SaaS has been able to ~~support initiatives in our evolving U.S. and international SaaS segments, which has represented an increasing percentage of consolidated revenue since launch.~~achieve profitable growth. We will continue to improve our SaaS solutions by analyzing user behavior, expanding features, improving usability, enhancing our onboarding services and customer support and making version updates available to SMBs. We believe these initiatives will ultimately drive revenue growth; however, such improvements will also increase our operating expenses.

Ability to Grow Through Acquisition

Our growth prospects depend upon our ability to successfully develop new markets. We currently serve SMB markets in the United States, ~~Australian,~~Australia, New Zealand and ~~Canadian SMB markets~~Canada and plan to leverage strategic acquisitions or initiatives to expand our client base domestically and enter new markets ~~internationally, such as our recent acquisition in New Zealand.~~internationally. Identifying proper targets and executing strategic acquisitions may take substantial time and capital. On March 1, 2021, we completed the acquisition of Thryv Australia, Australia’s leading provider of marketing solutions serving SMBs. In July 2022, we began operations in Canada through our own sales force and a re-seller agreement. On April 3, 2023, we completed the acquisition of ~~Yellow.~~Yellow, a New Zealand marketing services company. We believe that strategic acquisitions of marketing services companies globally will expand our client base and provide additional opportunities to offer our SaaS solutions.

Print Publication Cycle

We recognize revenue for print services at a point in time upon delivery of the published PYP directories containing customer advertisements to the intended market. Our PYP directories typically have 12-month publication cycles in Australia, ~~and~~18-month publication cycles in New Zealand, and 15 to 18-month publication cycles in the U.S. As a result, we typically record revenue for each publication only once every 12 to 18 months, depending on the publication cycle of the directory. The amount of revenue we recognize each quarter from our PYP directories is therefore directly related to the number of PYP directories we deliver to the intended market each quarter, which can vary based on the timing ~~and delivery~~ of the publication cycles.

Key Business Metrics

We review several operating metrics, including the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe these key metrics are useful to investors both because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and they may be used by investors to help analyze the health of our business.

Total Clients

We define total clients as the number of SMB accounts with one or more revenue-generating solutions in a particular period. For quarter- and year-ending periods, total clients from the last month in the period are reported. A single client may have separate ~~revenue-generating~~revenue-generating accounts for multiple Marketing Services solutions or SaaS offerings, but we count these as one client when the accounts are managed by the same business entity or individual. Although infrequent, where a single organization has multiple subsidiaries, divisions, or segments, each business entity that is invoiced by us is treated as a separate client. We believe that the number of total clients is an indicator of our market penetration and potential future business opportunities. We view the mix between Marketing Services clients and SaaS clients as an indicator of potential future opportunities to offer our SaaS solutions to our Marketing Services clients.

As of September 30,

As of March 31,

(in thousands)

2023

2022

(in thousands)

2024

2023

Clients (1)

Marketing Services (2)

335

374

Marketing Services (2)

SaaS (3)

Total (4)

364

399

(1) Clients include total clients from ~~all four~~both of our business segments: Thryv ~~U.S. Marketing Services, Thryv U.S. SaaS, Thryv International~~ Marketing Services and Thryv ~~International~~ SaaS.

(2) Clients that purchase one or more of our Marketing Services solutions are included in this metric. These clients may or may not also purchase subscriptions to our SaaS offerings.

(3) Clients that purchase subscriptions to our SaaS offerings are included in this metric. These clients may or may not also purchase one or more of our Marketing Services solutions.

(4) Total clients is less than the sum of the Marketing Services and SaaS, since clients that purchase both Marketing Services and SaaS products are counted in each category, but only counted once in the Total.

Marketing Services clients decreased by 3953 thousand, or ~~10%~~15%, as of ~~September 30, 2023~~March 31, 2024 as compared to ~~September 30, 2022.~~March 31, 2023. The decrease in Marketing Services clients was related to athe secular decline in the print media industry and significant competition in the digital media ~~space.~~

~~SaaS clients increased by~~ ~~fifteen thousand, or~~ ~~29%, as of September 30, 2023 as compared to September 30, 2022.~~ ~~The increase in SaaS clients was a result of~~space and from focusing on offering our SaaS solutions to our current Marketing Services clients. This was partially offset by acquisitions of companies with Marketing Services clients.

SaaS clients increased by 16 thousand, or 30%, as of March 31, 2024 as compared to March 31, 2023. The increase in SaaS clients resulted from focusing on offering our SaaS solutions to our current Marketing Services clients, as well as continuing to focus on new SaaS client acquisition through improved identification of prospects, improved selling methods, introduction of new product features, and a small but growing international footprint.

Total clients decreased by 3544 thousand, or 9%12%, as of ~~September 30, 2023~~March 31, 2024 as compared to ~~September 30, 2022.~~March 31, 2023. The primary driver of the decrease in total clients was the secular decline in the print media business combined with increasing competition in the digital media space, partially offset by an increase in SaaS clients and acquisitions of companies with established clients.

Monthly ARPU

We define monthly average revenue per unit (“ARPU”) as our 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. For each reporting period, the weighted-average monthly ARPU from all the months in the period are reported. ARPU varies based on product mix, product volumes, and the amounts we charge for our ~~services,~~services. We believe that ARPU is an important measure of client spend and growth in ARPU is an indicator of client satisfaction with our services.

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
ARPU (Monthly)
Marketing Services (1)
$ 155 $ 175 $ 161 $ 181
SaaS (1)
365 377 373 363

~~(1) Marketing Services and SaaS ARPU include combined results from both our U.S. and Thryv International Marketing Services and SaaS businesses, respectively.~~


	Three Months Ended March 31,
	2024		2023
ARPU (Monthly)
Marketing Services	$	145	$	167
SaaS	369		379

Monthly ARPU for Marketing Services decreased by ~~$20,~~$22, or ~~11%~~13%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022, and decreased by $20, or 11%, for the~~ ~~nine months ended September 30,~~March 31, 2023 ~~compared to the~~ ~~nine months ended September 30, 2022.~~ . The decrease in ARPU for these periods was related to reduced spend by clients on our print media offerings due to the secular decline of the industry, caused by the continuing shift of advertising spend to less expensive digital media. This decrease in ARPU was further driven by a reduction of our resale of high-spend, low margin third-party local search and display services that were not hosted on our owned and operated platforms.

Monthly ARPU for SaaS decreased by ~~$12,~~$10, or 3%, during the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022, and increased by $10, or 3%, for the~~ ~~nine months ended September 30,~~March 31, 2023 ~~compared to the~~ ~~nine months ended September 30, 2022.~~. The decrease in SaaS ARPU during the three months ended ~~September 30, 2023~~March 31, 2024 resulted from ~~offering~~ our strategic decision to accelerate the conversion of clients from digital Marketing Services solutions to SaaS solutions ~~primarily Marketing Center, to our Marketing Services clients. These solutions are priced~~at a price lower than some of our ~~Thryv Add-On~~SaaS products. The ~~increase in ARPU during the~~ ~~nine months ended September 30, 2023~~ ~~was driven by our strategic shift to selling to higher spend clients and, at the same time, discontinuing our~~ sale of ~~the lower-priced tiers of our Thryv platform. In addition, the sale of add-on features~~Marketing Center to ~~our Thryv platform such as Thryv Leads and Thryv Pay contributed to Monthly SaaS ARPU growth. This was partially offset by offering our SaaS solutions to our Marketing Services clients.~~

~~Monthly Active Users - SaaS~~

We define a monthly active user for SaaS offerings as a unique user who logs into our SaaS solutions at least once during the calendar month. One client can have multiple unique users. Individuals who register for, and use, multiple accounts across computer and mobile devices may be counted more than once, and as a result, may overstate the number of unique users who actively use our Thryv platform within a month. Additionally, some of our original SaaS clients exclusively use the website features of their Thryv platform which does not require a login and those users are not included in our active users count. For each reporting period, active users from the last month in the period are reported. We believe that monthly active users best reflects our ability to engage, retain, and monetize our users, and thereby drive increases in revenue. We view monthly active users as a key measure of user engagement for our Thryv platform.

As of September 30,
(in thousands) 2023 2022
Monthly Active Users - SaaS
45 37

~~Monthly active users increased by~~ ~~eight thousand, or~~ ~~22%~~, during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The number of monthly active users increased period-over-period as we continued efforts to increase engagement among our SaaS clients ~~such as enhancing~~offset a portion of the initial sales process, the client onboarding experience, and lifecycle management. The increase was also driven by our focus on obtaining higher retention, higher spend clients as these clients are more engaged with our platform. Additionally, we experienced an increase in engagement from existing clients, as SMBs increased virtual interactions with their customers in lieu of in-person interactions.SaaS decline.

Key Components of Our Results of Operations

Revenue

We generate revenue from our ~~four~~two business segments: Thryv ~~U.S. Marketing Services, Thryv U.S. SaaS, Thryv International~~ Marketing Services and Thryv ~~International~~ SaaS. Our primary sources of revenue in our Thryv ~~U.S.~~ Marketing Services ~~and Thryv International Marketing Services segments~~segment are Print and Digital services. Our primary source of revenue in our Thryv ~~U.S.~~ SaaS ~~and Thryv International~~segment are our SaaS ~~segments is our Thryv platform.~~solutions.

Cost of Services

Cost of services consists of expenses related to delivering our solutions, such as publishing, printing, and distribution of our Print directories and fulfillment of our Digital and SaaS offerings, including traffic acquisition, managed hosting, and other third-party service providers. Additionally, Cost of services includes personnel-related expenses such as salaries, benefits, and stock-based compensation for our operations team, information technology expenses, non-capitalizable software and hardware purchases, and allocated overhead costs, which includes depreciation of fixed assets, and amortization associated with capitalized software and intangible assets.

Operating Expenses

Sales and Marketing

Sales and marketing expense consists primarily of base salaries, stock-based compensation, sales commissions paid to our inside and outside sales force and other expenses incurred by personnel within the sales, marketing, sales training, and client care departments. Additionally, Sales and marketing expense includes advertising costs such as media, promotional material, branding, online advertising, information technology expenses and allocated overhead costs which includes depreciation of fixed assets, and amortization associated with capitalized software and intangible assets.

General and Administrative

General and administrative expense primarily consists of salaries, benefits and stock-based compensation incurred by corporate management and administrative functions such as information technology, finance and accounting, legal, internal audit, human resources, billing and receivables, and management personnel. In addition, General and administrative expense includes bad debt expense, non-recurring charges, and other corporate expenses such as professional fees, operating taxes, and insurance. General and administrative expense also includes allocated overhead costs which includes depreciation of fixed assets, and amortization associated with capitalized software and intangible assets.

Other Income (Expense)

Other income (expense) consists of interest expense, other components of net periodic pension ~~(cost) benefit, and~~cost, other income (expense), ~~which includes a bargain purchase gain as a result of the Vivial Acquisition during the nine months ended September 30, 2022,~~ and foreign currency-related income and expense.

2827

Results of Operations

Consolidated Results of Operations

The following table sets forth certain consolidated financial data for each of the periods indicated:


		Three Months Ended September 30,
		2023 (1)					2022
		(unaudited)
	Three Months Ended March 31,																											Three Months Ended March 31,
	2024(1)																				2024(1)								2023
	(unaudited)																											(unaudited)
(in thousands of $)	(in thousands of $)	Amount			% of Revenue		Amount			% of Revenue		(in thousands of $)		Amount					% of Revenue					Amount						% of Revenue
Revenue	Revenue	$	183,822		100	%	$	280,650		100	%	Revenue		$	233,624		100			100		%			$	245,555		100			100	%
Cost of services	Cost of services	80,178			43.6	%	105,011			37.4	%	Cost of services		79,983			34.2			34.2		%			90,747			37.0			37.0	%
Gross profit	Gross profit	103,644			56.4	%	175,639			62.6	%	Gross profit		153,641			65.8			65.8		%			154,808			63.0			63.0	%

Operating expenses:	Operating expenses:
Operating expenses:
Operating expenses:
Sales and marketing
Sales and marketing
Sales and marketing	Sales and marketing	74,755			40.7	%	89,891			32.0	%	70,091				30.0		30.0		%			76,343				31.1			31.1	%
General and administrative	General and administrative	48,267			26.3	%	54,670			19.5	%	General and administrative		52,416			22.4			22.4		%			47,680			19.4			19.4	%

Total operating expenses	Total operating expenses	123,022			66.9	%	144,561			51.5	%
Total operating expenses
Total operating expenses														122,507					52.4		%			124,023						50.5	%

Operating (loss) income		(19,378)			10.5	%	31,078			11.1	%
Operating income
Operating income
Operating income														31,134					13.3		%			30,785						12.5	%

Other income (expense):	Other income (expense):
Other income (expense):
Other income (expense):
Interest expense	Interest expense	(15,131)			8.2	%	(14,570)			5.2	%
Other components of net periodic pension (cost) benefit		(1,902)			1.0	%	(3,928)			1.4	%
Other income (expense)		(876)			0.5	%	6,941			2.5	%
(Loss) income before income tax benefit (expense)		(37,287)			20.3	%	19,521			7.0	%
Income tax benefit (expense)		10,241			5.6	%	(6,241)			2.2	%
Net (loss) income		$	(27,046)		14.7	%	$	13,280		4.7	%
Interest expense
Interest expense														(13,359)					5.7		%			(16,488)						6.7	%
Other components of net periodic pension cost												Other components of net periodic pension cost		(1,581)					0.7		%			(121)						—	%
Other expense												Other expense		(2,373)					1.0		%			(366)						0.1	%
Income before income tax expense												Income before income tax expense		13,821					5.9		%			13,810						5.6	%
Income tax expense												Income tax expense		(5,397)					2.3		%			(4,496)						1.8	%
Net income												Net income		$	8,424				3.6		%			$	9,314					3.8	%
Other financial data:	Other financial data:
Adjusted EBITDA(2)
Adjusted EBITDA(2)
Adjusted EBITDA(2)	Adjusted EBITDA(2)	$	7,331		4.0	%	$	65,432		23.3	%	$	54,114			23.2		23.2		%			$	58,469			23.8			23.8	%
Adjusted Gross Profit(3)	Adjusted Gross Profit(3)	$	110,604				$	185,560
Adjusted Gross Margin(4)	Adjusted Gross Margin(4)	60.2		%			66.1		%
Adjusted Gross Margin(4)
Adjusted Gross Margin(4)

(1) Consolidated results of operations includes Yellow's results of operations subsequent to the ~~Yellow~~ ~~Acquisition~~.April 3, 2023 acquisition date.

(2) See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net ~~(loss)~~ income, the most directly comparable measure presented in accordance with GAAP.

(3) See “Non-GAAP Financial Measures” for a definition of Adjusted Gross Profit and a reconciliation to Gross profit, the most directly comparable measure presented in accordance with GAAP.

(4) See “Non-GAAP Financial Measures” for a definition of Adjusted Gross Margin.

2928

Comparison of the Three Months Ended ~~September 30, 2023~~March 31, 2024 to the Three Months Ended ~~September 30, 2022~~March 31, 2023

Revenue

The following table summarizes Revenue by business segment for the periods indicated:

Three Months Ended September 30, Change
2023 (1)
2022 Amount %
(in thousands of $) (unaudited)
Thryv U.S.
Marketing Services $ 92,884 $ 197,174 $ (104,290) (52.9) %
SaaS 64,650 55,353 9,297 16.8 %
Thryv International
Marketing Services 23,578 26,833 (3,255) (12.1) %
SaaS 2,710 1,290 1,420 110.1 %
Total Revenue $ 183,822 $ 280,650 $ (96,828) (34.5) %


	Three Months Ended March 31,				Change
	2024		2023		Amount		%
(in thousands of $)	(unaudited)
Thryv Marketing Services	$	159,302	$	185,626	$	(26,324)	(14.2)	%
Thryv SaaS	74,322		59,929		14,393		24.0	%
Revenue	$	233,624	$	245,555	$	(11,931)	(4.9)	%

~~(1)~~ ~~Thryv International Marketing Services includes Yellow revenue subsequent to the~~ ~~Yellow Acquisition~~.

~~Total~~ Revenue decreased by ~~$96.8~~$11.9 million, or ~~34.5%~~4.9%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023. The decrease ~~in total Revenue~~ was driven by a decrease in Thryv ~~U.S.~~ Marketing Services ~~Revenue~~revenue of ~~$104.3~~$26.3 million, ~~and a decrease in Thryv International Marketing Services Revenue of $3.3 million,~~ partially offset by an increase in Thryv ~~U.S.~~ SaaS ~~Revenue~~revenue of ~~$9.3 million and an increase in Thryv International SaaS Revenue of $1.4~~$14.4 million.

Thryv ~~U.S. Revenue~~

Marketing Services Revenue

Thryv ~~U.S.~~ Marketing Services revenue decreased by ~~$104.3~~$26.3 million, or ~~52.9%~~14.2%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023.

Print revenue ~~decreased~~increased by ~~$75.2~~$7.3 million, or ~~80.4%~~9.4%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023. This ~~decrease~~increase in Print revenue was primarily driven by the impact of publication timing differences of our U.S directories, as a result of our Print agreements having greater than 12 month terms ~~and~~. This increase was partially offset by the continued secular decline in U.S. and international industry demand for Print services.

Print revenue is recognized upon delivery of the published directories. Individual published directories have different publication cycles, with a typical lifecycle of ~~15 to~~ 18 months for ~~directories published during the three months ended September 30, 2022, as compared to 18 months during the three months ended September 30, 2023.~~U.S. directories. As a result of recognizing revenue upon delivery, we typically record revenue for each published U.S. directory only once every ~~15 to~~ 18 months, depending on the publication cycle of the individual published directory, which does not make comparing quarterly revenue year-over-year fully representative of actual demand trends due to timing of publication cycles. The ~~greater contract value~~Company recognized revenue for ~~individual~~more published directories during the three months ended ~~September 30,~~March 31, 2024 compared to the three months ended March 31, 2023 ~~increased Print revenue per published directory because the revenue was based on an 18 month contract value for publications with new terms.~~. This increase in ~~per~~ published ~~directory revenue~~directories was partially offset by the secular decline in industry demand for Print services, resulting in an overall ~~29%~~31% decline in revenue for the quarter when comparing on a publication-by-publication basis.

Digital revenue decreased by ~~$29.1~~$33.6 million, or ~~28.1%~~31.0%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023. The decrease was primarily driven by a continued trending decline in the Company’s Marketing Services client base and significant competition in the consumer search and display space, particularly from large, well-capitalized businesses such as Google, Yelp and Facebook. Digital revenue further decreased as a result of the Company’s strategic decision during the fourth quarter of 2023 to accelerate the upgrade of clients from its digital Marketing Services solutions to its SaaS solutions.

Thryv SaaS Revenue

Thryv ~~U.S.~~ SaaS revenue increased by ~~$9.3~~$14.4 million, or ~~16.8%~~24.0%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023. The increase was driven by increased demand for our Thryv SaaS ~~product~~solutions as SMBs accelerate their move away from manual processes and towards cloud platforms to more efficiently manage and grow their businesses, and by our success in re-focusing our go-to-market and onboarding strategy to target higher value clients.

~~Thryv International Revenue~~

~~Marketing Services Revenue~~

~~Thryv International Marketing Services~~ SaaS revenue decreased by $3.3 million, or 12.1%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. The decrease in revenue was driven by lower Print and digital revenue primarily resulting from the secular decline in industry demand for Print services in Australia and negative impact from changes in foreign currency rates. This decrease was partially offset by Print and digital revenue recognizedalso increased as a result of the ~~Yellow Acquisition.~~

Company’s strategic decision during the fourth quarter of 2023 to accelerate the conversion of clients from its digital Marketing Services solutions to its SaaS ~~Revenue~~

Thryv International SaaS revenue increased $1.4 million, or 110.1%, for the three months ended September 30, 2023 compared to the three months ended September 30, 2022. The increase was driven by increased demand for our Thryv platform as we continue to increase sales to SMBs in Australia.solutions.

Cost of Services

Cost of services decreased by ~~$24.8~~$10.8 million, or ~~23.6%~~11.9%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023. This decrease was primarily driven by the corresponding decline in revenue and strategic cost saving initiatives. Specifically, we reduced printing, distribution, digital and ~~digital~~ fulfillment ~~support~~ costs by ~~$21.9~~$4.8 million, contract

services by $3.1 million and ~~a decrease in~~employee-related expenses by $1.1 million. Additionally, depreciation and amortization expense ~~of $2.9~~decreased by $1.2 million, ~~due to~~driven by the accelerated amortization method used by the Company.

Gross Profit

Gross profit decreased by ~~$72.0~~$1.2 million, or ~~41.0%~~0.8%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022. Our gross margin decreased by 620 basis points to 56.4% for the three months ended September 30, 2023 compared to 62.6% for the three months ended September 30, 2022.~~March 31, 2023. The decrease in Gross profit was primarily due to a decrease in Marketing Services revenue, partially offset by an increase in SaaS revenue and a decrease in cost of services as a result of the decline in revenue and strategic cost saving initiatives. Our gross margin increased by 280 basis points to 65.8% for the three months ended March 31, 2024 compared to 63.0% for the three months ended March 31, 2023. This increase was primarily due to an increase in sales of our higher margin SaaS solutions and the reduction of our resale of high-spend, low margin third-party local search and display services that were not hosted on our owned and operated platforms.

Operating Expenses

Sales and Marketing

Sales and marketing expense decreased by ~~$15.1~~$6.3 million, or ~~16.8%~~8.2%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023. The decrease was primarily attributable to a decrease in employee-related costs and contract services expense of $~~6.1~~2.8 million due to strategic cost-saving initiatives, a decrease in stock based compensation of $1.6 million, and a decrease in sales commissions of $~~4.8~~1.1 million, due to new sales commissions plans and revised ~~targets, a decrease in depreciation and amortization expense of $3.0 million due to the accelerated amortization method used by the Company, and a decrease in sales promotion expenses of $2.1 million, primarily driven by improvements in the client acquisition funnel.~~targets.

General and Administrative

General and administrative expense ~~decreased~~increased by ~~$6.4~~$4.7 million, or ~~11.7%~~9.9%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023. This ~~decrease~~increase was primarily attributable to ~~a decrease~~an increase in ~~employee related costs of~~ ~~$5.0 million, driven primarily by cost saving initiatives, and~~ ~~a decrease in depreciation and amortization~~bad debt expense of ~~$1.7~~$2.1 million, ~~due to the accelerated amortization method used by the Company.~~an increase in employee-related costs and contract services expense of $1.8 million, and an increase in stock-based compensation expense of $1.5 million

Other Income (Expense)

Interest Expense

Interest expense ~~increased~~decreased by ~~$0.6~~$3.1 million, or ~~3.9%~~19.0%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022,~~March 31, 2023, driven primarily by the ~~impact of higher interest rates during the quarter, partially offset by~~ lower outstanding debt balances resulting from payments made on our Term ~~Loan.~~Loan and ABL Facility.

Other Components of Net Periodic Pension ~~(Cost) Benefit~~Cost

Other components of net periodic pension cost ~~decreased~~increased by $1.5 million for the three months ended March 31, 2024. This increase was primarily due to higher interest cost of $1.3 million due to higher interest rates during the three months ended March 31, 2024.

Other (Expense)

Other (expense) increased by $2.0 million for the three months ended ~~September 30, 2023. This decrease was primarily due to a remeasurement gain of $0.1 million during the~~ ~~three months ended September 30, 2023, compared to a loss of~~ ~~$3.5 million during the~~ ~~three months ended September 30, 2022. Partially offset by an increase in interest cost of~~ ~~$1.5 million, due to rising interest rates, during the~~ ~~three months ended September 30, 2023.~~

~~Other Income (Expense)~~

Other income (expense) decreased by $7.8 million for the three months ended September 30, 2023. This decrease was primarily due to a $3.2 million bargain purchase gain recorded during the three months ended September 30, 2022 as a result of the Vivial Acquisition. Additionally, theMarch 31, 2024. The Company recorded a ~~$1.0~~$2.4 million foreign currency-related loss during the three months ended ~~September 30, 2023,~~March 31, 2024, compared to a ~~$2.8~~$0.9 million foreign currency-related gain during three months ended ~~September 30, 2022.~~March 31, 2023.

Income Tax Expense

The Company's effective tax rate (“ETR”) was ~~27.5%~~39.0% and ~~32.0%~~32.6% for the three months ended ~~September 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively. The Company's ETR differs from the U.S. statutory rate of 21% primarily due to permanent differences including state taxes, non-deductible executive compensation, non-U.S. taxing jurisdictions, tax credits, change in valuation allowance due to expiring net operating losses, and the discrete impact of interest accrual on uncertain tax ~~positions and the settlement of the indemnification asset further discussed in Note 13,~~ ~~Contingent Liabilities,~~ ~~and return to provision adjustments~~.positions.

Adjusted EBITDA

Adjusted EBITDA decreased by ~~$58.1~~$4.4 million, or ~~88.8%~~7.4%, for the three months ended ~~September 30, 2023~~March 31, 2024 compared to the three months ended ~~September 30, 2022.~~March 31, 2023. The decrease in Adjusted EBITDA was primarily driven by the secular decline in ~~both~~ our Thryv ~~U.S. and International~~ Marketing Services ~~segments.~~segment. The decrease was partially offset by the growth in our Thryv ~~U.S. and International~~ SaaS ~~segments.~~segment. See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net income, the most directly comparable measure presented in accordance with GAAP.

3231

~~Results of Operations~~

~~Consolidated Results of Operations~~

~~The following table sets forth certain consolidated financial data for each of the periods indicated:~~

Nine Months Ended September 30,
2023 (1)
2022 (2)
(unaudited)
(in thousands of $) Amount % of Revenue Amount % of Revenue
Revenue $ 680,798 100 % $ 923,020 100 %
Cost of services 262,261 38.5 % 321,543 34.8 %
Gross profit 418,537 61.5 % 601,477 65.2 %

Operating expenses:
Sales and marketing 226,781 33.3 % 275,659 29.9 %
General and administrative 149,642 22.0 % 159,514 17.3 %
Impairment charges — — % 222 — %
Total operating expenses 376,423 55.3 % 435,395 47.2 %
Operating income 42,114 6.2 % 166,082 18.0 %
Other income (expense):
Interest expense (47,911) 7.0 % (44,089) 4.8 %
Other components of net periodic pension (cost) benefit (3,888) 0.6 % 5,295 0.6 %
Other income (expense) (1,242) 0.2 % 15,567 1.7 %
(Loss) income before income tax benefit (expense) (10,927) 1.6 % 142,855 15.5 %
Income tax benefit (expense) 9,173 1.3 % (38,062) 4.1 %
Net (loss) income $ (1,754) 0.3 % $ 104,793 11.4 %
Other financial data:
Adjusted EBITDA(3)
$ 135,239 19.9 % $ 265,149 28.7 %
Adjusted Gross Profit(4)
$ 440,426 $ 630,558
Adjusted Gross Margin(5)
64.7 % 68.3 %

~~(1)~~ ~~Consolidated results of operations includes Yellow's results of operations subsequent to the Yellow Acquisition.~~

~~(2)~~ ~~Consolidated results of operations includes Vivial's results of operations subsequent to the Vivial Acquisition.~~

~~(3)~~ ~~See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net (loss) income, the most directly comparable measure presented in accordance with GAAP.~~

~~(4)See “Non-GAAP Financial Measures” for a definition of Adjusted Gross Profit and a reconciliation to Gross profit, the most directly comparable measure presented in accordance with GAAP.~~

~~(5)~~ ~~See “Non-GAAP Financial Measures” for a definition of Adjusted Gross Margin.~~

~~Comparison of the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022~~

~~Revenue~~

~~The following table summarizes Revenue by business segment for the periods indicated~~:

Nine Months Ended September 30, Change
2023 (1)
2022 (2)
Amount %
(in thousands of $) (unaudited)
Thryv U.S.
Marketing Services $ 377,868 $ 632,277 $ (254,409) (40.2) %
SaaS 182,927 153,863 29,064 18.9 %
Thryv International
Marketing Services 113,183 133,715 (20,532) (15.4) %
SaaS 6,820 3,165 3,655 115.5 %
Total Revenue $ 680,798 $ 923,020 $ (242,222) (26.2) %

~~(1)~~ ~~Thryv International Marketing Services includes Yellow revenue subsequent to the Yellow Acquisition.~~

~~(2)~~ ~~Thryv U.S. Marketing Services includes Vivial revenue subsequent to the Vivial Acquisition.~~

Total Revenue decreased by $242.2 million, or 26.2%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The decrease in total Revenue was driven by a decrease in Thryv U.S. Marketing Services Revenue of $254.4 million and a decrease in Thryv International Marketing Services Revenue of $20.5 million, partially offset by an increase in Thryv U.S. SaaS Revenue of $29.1 million and an increase in Thryv International SaaS Revenue of $3.7 million.

~~Thryv U.S. Revenue~~

~~Marketing Services Revenue~~

~~Thryv U.S. Marketing Services revenue decreased by $254.4 million, or 40.2%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.~~

Print revenue decreased by $161.8 million, or 54.7%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This decrease in Print revenue was primarily driven by the impact of publication timing differences, as a result of our Print agreements having greater than 12 month terms, and the continued secular decline in industry demand for Print services, which is partially offset by increasing the terms of our new Print publications from 15 months to 18 months.

Print revenue is recognized upon delivery of the published directories. Individual published directories have different publication cycles, with a typical lifecycle of 15 to 18 months for directories published during the nine months ended September 30, 2022, as compared to 18 months during the nine months ended September 30, 2023. As a result of recognizing revenue upon delivery, we typically record revenue for each published directory only once every 15 to 18 months, depending on the publication cycle of the individual published directory, which does not make comparing quarterly revenue year-over-year fully representative of actual demand trends due to timing of publication cycles. The greater contract value for individual published directories during the nine months ended September 30, 2023 increased Print revenue per published directory because the revenue was based on an 18 month contract value for publications with new terms. This increase in per published directory revenue partially offset the secular decline in industry demand for Print services, resulting in an overall 14% decline in revenue for the nine months ended September 30, 2023 when comparing on a publication-by-publication basis.

Digital revenue decreased by $92.6 million, or 27.5%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The decrease was primarily driven by a continued trending decline in the Company’s Marketing Services client base and significant competition in the consumer search and display space, particularly from large, well-capitalized businesses such as Google, Yelp and Facebook.

~~SaaS Revenue~~

Thryv U.S. SaaS revenue increased by $29.1 million, or 18.9%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The increase was driven by increased demand for our Thryv SaaS product as SMBs accelerate their move away from manual processes and towards cloud platforms to more efficiently manage and grow their businesses, and by our success in re-focusing our go-to-market and onboarding strategy to target higher value clients.

~~Thryv International Revenue~~

~~Marketing Services Revenue~~

Thryv International Marketing Services revenue decreased by $20.5 million, or 15.4%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The decrease in revenue was driven by lower Print and digital revenue primarily resulting from the secular decline in industry demand for Print services in Australia and negative impact from changes in foreign currency rates. This decrease was partially offset by Print and digital revenue recognized as a result of the Yellow Acquisition.

~~SaaS Revenue~~

Thryv International SaaS revenue increased $3.7 million, or 115.5%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The increase was driven by increased demand for our Thryv platform as we continue to increase sales to SMBs in Australia.

~~Cost of Services~~

Cost of services decreased by $59.3 million, or 18.4%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This decrease was primarily driven by the corresponding decline in revenue and strategic cost saving initiatives. Specifically, we reduced printing, distribution and digital fulfillment support costs by $51.8 million. Additionally, depreciation and amortization expense decreased $7.3 million due to the accelerated amortization method used by the Company.

~~Gross Profit~~

Gross profit decreased by $182.9 million, or 30.4%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. Our gross margin decreased by 370 basis points to 61.5% for the nine months ended September 30, 2023 compared to 65.2% for the nine months ended September 30, 2022. The decrease was primarily due to a decrease in Marketing Services revenue, partially offset by an increase in SaaS revenue and a decrease in cost of services as a result of decline in revenue and strategic cost saving initiatives.

~~Operating Expenses~~

~~Sales and Marketing~~

Sales and marketing expense decreased by $48.9 million, or 17.7%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The decrease was primarily attributable to a decrease in sales commissions of $17.5 million, due to new sales commissions plans and revised targets, a decrease in employee-related costs of ~~$13.2 million~~, due to strategic cost-saving initiatives, a decrease in sales promotion expenses of $11.9 million, primarily driven by improvements in the client acquisition funnel, and a decrease in depreciation and amortization expense of ~~$7.8 million~~ ~~due to the accelerated amortization method used by the Company.~~

~~General and Administrative~~

General and administrative expense decreased by $9.9 million, or 6.2%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This decrease was primarily attributable to decreases in employee related costs of ~~$6.2 million, a decrease in software costs of~~ ~~$5.2 million, a decrease in facilities expense of~~ ~~$4.8 million, driven primarily by cost savings initiatives, and a decrease in depreciation and amortization expense of~~ ~~$3.9 million~~, due to the accelerated amortization method used by the Company. These decreases were partially offset by the loss on the settlement of an indemnification asset of $10.7 million during the nine months ended September 30, 2023 compared to a gain of ~~$1.5 million~~ ~~during the nine months ended September 30, 2022.~~

~~Other Income (Expense)~~

~~Interest Expense~~

Interest expense increased by $3.8 million, or 8.7%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, driven primarily by the impact of higher interest rates during the year, partially offset by lower outstanding debt balances resulting from payments made on our Term Loan.

~~Other Components of Net Periodic Pension (Cost) Benefit~~

~~Other components of net periodic pension cost increased~~ by ~~$9.2 million~~ ~~for the nine months ended September 30, 2023. This increase was primarily due to a remeasurement gain, as a result of pension settlement accounting, of $1.4 million during the~~ ~~nine months ended September 30, 2023, compared to a gain of~~ ~~$5.2 million during the~~ ~~nine months ended September 30, 2022. Additionally, interest cost increased by~~ ~~$5.6 million, due to rising interest rates, during the~~ ~~nine months ended September 30, 2023.~~

~~Other Income (Expense)~~

~~Other income (expense)~~ ~~decreased~~ ~~by $16.8 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. This decrease was primarily due to a~~ ~~$10.2 million~~ bargain purchase gain that was recorded during the nine months ended September 30, 2022 as a result of the Vivial Acquisition. Additionally, the Company recorded a $0.1 million foreign currency-related loss during the nine months ended September 30, 2023, compared to a foreign currency-related gain of ~~$4.4 million during the nine months ended September 30, 2022.~~

~~Income Tax Expense~~

~~The Company's effective tax rate (“ETR”) was~~ ~~83.9%~~ and 26.6% for the nine months ended September 30, 2023 and 2022, respectively. The Company's ETR differs from the U.S. statutory rate of 21% primarily due to permanent differences including state taxes, non-deductible executive compensation, non-U.S. taxing jurisdictions, tax credits, and the discrete impact of uncertain tax positions and the settlement of the indemnification asset further discussed in Note 13, ~~Contingent Liabilities,~~ ~~and return to provision adjustments.~~

~~Adjusted EBITDA~~

Adjusted EBITDA decreased by $129.9 million, or 49.0%, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The decrease in Adjusted EBITDA was primarily driven by the secular decline in both our Thryv U.S. and International Marketing Services segments. The decrease was partially offset by the result of increasing the terms of our Print publications from 15 months to 18 months in our Thryv U.S. Marketing Services segment and growth in our Thryv U.S. SaaS segment. See “~~Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net income, the most directly comparable measure presented in accordance with GAAP.~~

Non-GAAP Financial Measures

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States. We also present Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin, as defined below, as non-GAAP financial measures in this Quarterly Report.

We have included Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin in this report because management believes they provide useful information to investors in gaining an overall understanding of our current financial performance and provide consistency and comparability with past financial performance. Specifically, we believe Adjusted EBITDA provides useful information to management and investors by excluding certain non-operating items that we believe are not indicative of our core operating results. In addition, Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin are used by management for budgeting and forecasting as well as measuring the Company’s performance. We believe Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin provide investors with the financial measures that closely align with our internal processes.

We define Adjusted EBITDA (“Adjusted EBITDA”) as Net ~~(loss)~~ income plus Interest expense, Income tax ~~expense, Interest~~ expense, Depreciation and amortization expense, Restructuring and integration expenses, Transaction costs, Stock-based compensation expense, and non-operating expenses, such as, Other components of net periodic pension cost, ~~(benefit),~~ Non-cash ~~(gain) loss~~

gain from remeasurement of indemnification asset, and certain unusual and non-recurring charges that might have been incurred. Adjusted EBITDA should not be considered as an alternative to Net income as a performance measure. We define Adjusted Gross Profit (“Adjusted Gross Profit”) and Adjusted Gross Margin (“Adjusted Gross Margin”) as Gross profit and Gross margin, respectively, adjusted to exclude the impact of Depreciation and amortization expense and Stock-based compensation expense.

Non-GAAP financial information has limitations as an analytical tool and is presented for supplemental informational purposes only. Such information should not be considered a substitute for financial information presented in accordance with U.S. GAAP and may be different from similarly-titled non-GAAP measures used by other companies.

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


		Three Months Ended March 31,
		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,

		Three Months Ended March 31,
(in thousands)
(in thousands)
(in thousands)	(in thousands)	2023		2022		2023		2022
Reconciliation of Adjusted EBITDA	Reconciliation of Adjusted EBITDA
Net (loss) income		$	(27,046)	$	13,280	$	(1,754)	$	104,793
Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA
Net income
Net income
Net income
Interest expense
Interest expense
Interest expense	Interest expense	15,131		14,570		47,911		44,089
Depreciation and amortization expense	Depreciation and amortization expense	15,842		23,393		46,940		65,954
Depreciation and amortization expense
Depreciation and amortization expense
Stock-based compensation expense (1)
Stock-based compensation expense (1)
Stock-based compensation expense (1)	Stock-based compensation expense (1)	5,462		4,402		16,653		10,140
Restructuring and integration expenses (2)	Restructuring and integration expenses (2)	3,584		3,790		12,845		14,439
Income tax (benefit) expense		(10,241)		6,241		(9,173)		38,062
Restructuring and integration expenses (2)
Restructuring and integration expenses (2)
Income tax expense
Income tax expense
Income tax expense
Transaction costs (3)	Transaction costs (3)	—		1,461		373		4,797
Other components of net periodic pension cost (benefit) (4)		1,902		3,928		3,888		(5,295)
Non-cash (gain) loss from remeasurement of indemnification asset (5)		—		(585)		10,734		(1,472)
Impairment charges		—		—		—		222
Transaction costs (3)
Transaction costs (3)
Other components of net periodic pension cost (4)
Other components of net periodic pension cost (4)
Other components of net periodic pension cost (4)
Non-cash gain from remeasurement of indemnification asset (5)
Non-cash gain from remeasurement of indemnification asset (5)
Non-cash gain from remeasurement of indemnification asset (5)

Other (6)

Other (6)

Other (6)	Other (6)	2,697		(5,048)		6,822		(10,580)
Adjusted EBITDA	Adjusted EBITDA	$	7,331	$	65,432	$	135,239	$	265,149
Adjusted EBITDA
Adjusted EBITDA

(1)The Company records Stock-based compensation expense related to the amortization of grant date fair value of the Company’s stock-based compensation awards. See Note 10, Stock-Based Compensation and Stockholders' Equity, to our consolidated financial statements included in Part I, Item 1 in this Quarterly Report for more information.

(2)For the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~2022~~2023, expenses ~~relate~~related to periodic efforts to enhance efficiencies and reduce costs, and include severance benefits, and costs associated with abandoned facilities and system consolidation.

(3)Expenses related to the Yellow ~~Acquisition, Vivial~~ Acquisition and other transaction costs.

(4)Other components of net periodic pension cost ~~(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 cost ~~(benefit)~~ relates to periodic mark-to-market pension remeasurement.

(5)In connection with the YP Acquisition, the seller indemnified the Company 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. See Note 4, Fair Value Measurements, to our consolidated financial statements included in Part I, Item 1 in this Quarterly Report for more information.

(6)Other primarily includes foreign exchange-related expense. ~~Additionally, during the nine months ended September 30, 2022, Other includes the bargain purchase gain as a result of the Vivial Acquisition~~.

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 September 30, 2023
		Thryv U.S.						Thryv International
	Three Months Ended March 31, 2024																					Three Months Ended March 31, 2024
(in thousands)	(in thousands)	Marketing Services			SaaS			Marketing Services			SaaS			Total			(in thousands)	Marketing Services		SaaS			Total
Reconciliation of Adjusted Gross Profit	Reconciliation of Adjusted Gross Profit
Gross profit	Gross profit	$	50,610		$	40,957		$	10,166		$	1,911		$	103,644
Gross profit
Gross profit
Plus:	Plus:
Depreciation and amortization expense
Depreciation and amortization expense
Depreciation and amortization expense	Depreciation and amortization expense	2,298			1,602			2,587			299			6,786
Stock-based compensation expense	Stock-based compensation expense	103			71			—			—			174
Adjusted Gross Profit	Adjusted Gross Profit	$	53,011		$	42,630		$	12,753		$	2,210		$	110,604
Gross Margin	Gross Margin	54.5		%	63.4		%	43.1		%	70.5		%	56.4		%	Gross Margin	65.6	%	66.1	%		65.8	%
Adjusted Gross Margin	Adjusted Gross Margin	57.1		%	65.9		%	54.1		%	81.5		%	60.2		%	Adjusted Gross Margin	68.3	%	68.4	%		68.3	%

Three Months Ended September 30, 2022
Thryv U.S. Thryv International
(in thousands) Marketing Services SaaS Marketing Services SaaS Total
Reconciliation of Adjusted Gross Profit
Gross profit $ 126,846 $ 33,827 $ 14,351 $ 615 $ 175,639
Plus:
Depreciation and amortization expense 4,593 1,287 3,739 195 9,814
Stock-based compensation expense 85 22 — — 107
Adjusted Gross Profit $ 131,524 $ 35,136 $ 18,090 $ 810 $ 185,560
Gross Margin 64.3 % 61.1 % 53.5 % 47.7 % 62.6 %
Adjusted Gross Margin 66.7 % 63.5 % 67.4 % 62.8 % 66.1 %

Nine Months Ended September 30, 2023
Thryv U.S. Thryv International
(in thousands) Marketing Services SaaS Marketing Services SaaS Total
Reconciliation of Adjusted Gross Profit
Gross profit $ 231,807 $ 114,480 $ 67,498 $ 4,752 $ 418,537
Plus:
Depreciation and amortization expense 8,101 4,004 8,689 599 21,393
Stock-based compensation expense 325 171 — — 496
Adjusted Gross Profit $ 240,233 $ 118,655 $ 76,187 $ 5,351 $ 440,426
Gross Margin 61.3 % 62.6 % 59.6 % 69.7 % 61.5 %
Adjusted Gross Margin 63.6 % 64.9 % 67.3 % 78.5 % 64.7 %


		Nine Months Ended September 30, 2022
		Thryv U.S.						Thryv International
	Three Months Ended March 31, 2023																					Three Months Ended March 31, 2023
(in thousands)	(in thousands)	Marketing Services			SaaS			Marketing Services			SaaS			Total			(in thousands)	Marketing Services		SaaS			Total
Reconciliation of Adjusted Gross Profit	Reconciliation of Adjusted Gross Profit
Gross profit	Gross profit	$	415,130		$	95,328		$	89,694		$	1,325		$	601,477
Gross profit
Gross profit
Plus:	Plus:
Depreciation and amortization expense
Depreciation and amortization expense
Depreciation and amortization expense	Depreciation and amortization expense	13,381			3,278			11,771			337			28,767
Stock-based compensation expense	Stock-based compensation expense	251			63			—			—			314
Adjusted Gross Profit	Adjusted Gross Profit	$	428,762		$	98,669		$	101,465		$	1,662		$	630,558
Gross Margin	Gross Margin	65.7		%	62.0		%	67.1		%	41.9		%	65.2		%	Gross Margin	63.4	%	62.0	%		63.0	%
Adjusted Gross Margin	Adjusted Gross Margin	67.8		%	64.1		%	75.9		%	52.5		%	68.3		%	Adjusted Gross Margin	66.5	%	64.2	%		65.9	%

Liquidity and Capital Resources

Thryv Holdings, Inc. is a holding company that does not conduct any business operations of its own. We derive cash flows from cash transfers and other distributions from our operating subsidiary, Thryv, Inc., who in turn generates cash flow from its own operations and operations of its subsidiaries, and has cash and cash equivalents on hand, funds provided under the Term Loan and funds available under the ABL Facility. The agreements governing our debt may restrict the ability of our subsidiaries to make loans or otherwise transfer assets to us. Further, our subsidiaries are permitted under the terms of our senior credit facilities and other indebtedness to incur additional indebtedness that may restrict or prohibit the making of distributions or the making of loans by such subsidiaries to us. Our and our subsidiaries’ ability to meet our debt service requirements is dependent on our ability to generate sufficient cash flows from operations.

We believe that expected cash flows from operations, available cash and cash equivalents, and funds available under our ABL Facility will be sufficient to meet our liquidity requirements, such as working capital requirements for our operations, business development and investment activities, and debt payment obligations, for the following 12 months. Any projections of future earnings and cash flows are subject to substantial uncertainty. Our future success and capital adequacy will depend on, among other things, our ability to achieve anticipated levels of revenues and cash flows from operations and our ability to address our annual cash obligations and reduce our outstanding debt, all of which are subject to general economic, financial, competitive, and other factors beyond our control. We continue to monitor our capital requirements to ensure our needs are in line with available capital resources.

In addition, our Board of Directors authorizes us to undertake share repurchases from time to time. The amount and timing of any share repurchases that we make will depend on a variety of factors, including available liquidity, cash flows, our capacity to make repurchases under our debt agreements and market conditions.

For a discussion on contingent obligations, see Note 13, Contingent Liabilities, to our consolidated financial statements included in Part I, Item 1 in this Quarterly Report.

Sources and Uses of Cash

The following table sets forth a summary of our cash flows from operating, investing and financing activities for the periods indicated:


			Nine Months Ended September 30,				$
			2023		2022		Change
		Three Months Ended March 31,								Three Months Ended March 31,			$
		2024							2024		2023	Change
(in thousands)	(in thousands)		(unaudited)
Cash flows provided by (used in):	Cash flows provided by (used in):
Cash flows provided by (used in):
Cash flows provided by (used in):
Operating activities
Operating activities
Operating activities	Operating activities		$	103,648	$	104,221	$	(573)
Investing activities	Investing activities		(32,032)		(42,138)		10,106
Financing activities	Financing activities		(72,138)		(57,696)		(14,442)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	Effect of exchange rate changes on cash, cash equivalents and restricted cash		(707)		(1,610)		903
(Decrease) increase in cash, cash equivalents and restricted cash	(Decrease) increase in cash, cash equivalents and restricted cash		$	(1,229)	$	2,777	$	(4,006)

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by ~~$0.6~~$26.9 million, or ~~0.5%~~83.2%, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 compared to the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. The decrease was primarily due to changes in working capital, particularly accounts payable and accounts receivable, which were primarily impacted by the timing of annual incentive bonus payments and ~~lower tax payments of $46.1 million. This was offset by~~ the overall decline in our ~~sales and higher~~sales. Additionally, the Company made tax payments of $1.9 million for the three months ended March 31, 2024 compared to taxes received of $1.0 million for the three months ended March 31, 2023. This was offset by lower interest payments of ~~$1.6~~$3.1 million compared to the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

Cash Flows from Investing Activities

Net cash used in investing activities ~~decreased~~increased by ~~$10.1~~$2.1 million, or ~~24.0%~~41.7%, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 compared to the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. The ~~decrease~~increase was ~~primarily~~ due to the $22.8 million of net cash paid in connection with the Vivial Acquisition on January 21, 2022 compared to $8.9 million net cash paid in connection with the Yellow Acquisition on April 3, 2023. This decrease was partially offset by a ~~$3.6~~$2.1 million increase in capital ~~expenditures.~~expenditures related to the development of our SaaS solutions.

Cash Flows from Financing Activities

Net cash used in financing activities ~~increased~~decreased by ~~$14.4~~$15.5 million, or ~~25.0%~~90.9%, for the ~~nine~~three months ended ~~September 30, 2023~~March 31, 2024 compared to the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. The ~~increase~~decrease was primarily due to ~~a decrease in net proceeds from the ABL Facility of $16.1 million, as a result of lower proceeds of $49.5 million and lower~~ payments ~~of $33.4 million on the ABL Facility during the nine months ended September 30, 2022. The increase was also due to payments made~~ on the Term Loan of ~~$95.0~~$9.4 million during the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, compared to payments made on the Term Loan of $~~81.5~~35.0 million during the ~~nine~~three months ended ~~September 30, 2022. These increases were~~March 31, 2023. The decrease in Term Loan payments was partially offset by ~~$15.9~~net proceeds from the ABL Facility of $6.9 million ~~of cash received as a result of the exercise of warrants~~ during the ~~nine~~three months ended ~~September 30,~~March 31, 2024, compared to net proceeds of $17.7 million during the three months ended March 31, 2023.

Debt

Term Loan

On March 1, 2021, the Company entered into athe Term ~~Loan credit agreement (the “Term Loan”).~~Loan. The proceeds of the Term Loan were used to finance the ~~acquisition of Sensis Holding Limited (the “~~Thryv Australia Acquisition,~~”),~~ refinance in full the Company's existing ~~term loan facility (the “Senior~~ Term Loan,~~”),~~ and pay fees and expenses related to the Thryv Australia Acquisition and related financing.

The Term Loan established the Term Loan Facility in an aggregate principal amount equal to $700.0 million, of which 38.4% was held by related parties who were equity holders of the Company as of March 1, 2021. The Term Loan Facility matures on March 1, 2026. Prior to June 30, 2023, borrowings under the Term Loan Facility bore interest at a fluctuating rate per annum equal to, at the Company’s option, LIBOR or a base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for LIBOR loans) and (ii) 7.50% (for base rate loans). ~~The Term Loan Facility requires mandatory amortization~~

~~payments equal to $17.5 million per fiscal quarter. As of~~ ~~September 30, 2023 and December 31, 2022, no portion of the Term Loan was held by related parties who were equity holders of the Company on those dates.~~

~~On June 21, 2023, the Company entered into an agreement to amend the Term Loan Facility (the “Term Loan Amendment”). The Term Loan Amendment replaced the LIBOR benchmark applicable to the loan with a Secured Overnight Financing Rate (“SOFR”) based rate.~~ Effective June 30, 2023, borrowings under the Term Loan Facility bear interest at a fluctuating rate per annum equal to, at the Company’s option, a Secured Overnight Financing Rate (“SOFR”) or a base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for SOFR loans) and (ii) 7.50% (for base rate loans). The Term Loan Facility requires mandatory amortization payments equal to $17.5 million per fiscal quarter. As of March 31, 2024 and December 31, 2023, no portion of the Term Loan was held by related parties who were equity holders of the Company on those dates.

ABL Facility

On March 1, 2021, the Company entered into an agreement to amend ~~(the “ABL Amendment~~”) the June 30, 2017 ~~asset-based lending (“~~ABL Facili~~ABL~~ty~~”) facility (the “ABL Facility~~”). The ABL Amendment was entered into in order to permit the ~~Senior Term Loan~~term loan refinancing, the Thryv Australia Acquisition and make certain other changes to the ABL credit agreement, including, among others:

•revise the maximum revolver amount to $175.0 million;

•reduce the interest rate per annum to (i) 3-month LIBOR plus 3.00% for LIBOR loans and (ii) base rate plus 2.00% for base rate loans;

•reduce the commitment fee on undrawn amounts under the ABL Facility to 0.375%;

•extend the maturity date of the ABL Facility to the earlier of March 1, 2026 and 91 days prior to the stated maturity

date of the Term Loan Facility;

•add the Australian subsidiaries acquired pursuant to the Thryv Australia Acquisition as borrowers and guarantors, and establish an Australian borrowing base; and

•make certain other conforming changes consistent with the Term Loan Agreement.

As of March 31, 2024, the Company had borrowing base availability of $40.2 million. As a result of certain restrictions in the Company's debt agreements, as of March 31, 2024, approximately $27.9 million was available to be drawn upon under the ABL Facility.

We maintain debt levels that we consider appropriate after evaluating a number of factors, including cash requirements for ongoing operations, investment and financing plans (including acquisitions and share repurchase activities), and overall cost of capital. Per the terms of the Term Loan Facility, payments of the Term Loan balance are determined by the Company's Excess Cash Flow (as defined within the Term Loan Facility). We are in compliance with all covenants under the Term Loan and ABL Facility as of ~~September 30, 2023.~~March 31, 2024. We had total recorded debt outstanding of ~~$381.3~~$347.6 million (net of ~~$10.5~~$8.2 million of unamortized original issue discount (“OID”) and debt issuance cost) at ~~September 30, 2023,~~March 31, 2024, which was comprised of amounts outstanding under our Term Loan of ~~$334.4~~$300.0 million and ABL Facility of ~~$57.4~~$55.7 million.

~~As of September 30, 2023, we had borrowing capacity of~~ ~~$36.7 million~~ ~~under the ABL Facility.~~

New Term Loan Agreement and ABL Credit Agreement

Term Loan Agreement

On May 1, 2024, the Company entered into a new Term Loan Credit Agreement (the “Term Loan Agreement”), the proceeds of which were used to refinance and pay off in full the Company’s previous term loan facility and to pay fees and expenses related to the refinancing.

The Term Loan Agreement established a senior secured term loan facility (the “New Term Loan Facility”) in an aggregate principal amount equal to $350.0 million. The New Term Loan Facility matures on May 1, 2029 and borrowings under the New Term Loan Facility will bear interest at a fluctuating rate per annum equal to, at the Company’s option, SOFR or base rate, in each case, plus an applicable margin per annum equal to (i) 6.75% (for SOFR loans) and (ii) 5.75% (for base rate loans). The New Term Loan Facility requires mandatory amortization payments, paid quarterly commencing June 30, 2024, equal to (i) $52.5 million per year for the first two years following the closing date of the Term Loan Agreement, and (ii) $35.0 million per year thereafter.

ABL Credit Agreement

On May 1, 2024, the Company entered into a new Credit Agreement (the “ABL Credit Agreement”), which established a new $85.0 million asset-based revolving loan facility (the “NewABL Facility”). The New ABL Facility refinanced the Company’s previous asset-based revolving loan facility. Proceeds of the New ABL Facility may be used by the Company for ongoing general corporate purposes and working capital.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates have not changed from those described in our ~~2022~~2023 Form 10-K, under “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates.”

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

As of ~~September 30, 2023~~March 31, 2024, we had total recorded debt outstanding of ~~$381.3~~$347.6 million (net of ~~$10.5~~$8.2 million of unamortized OID and debt issuance costs), which was comprised of amounts outstanding under our Term Loan of ~~$334.4~~$300.0 million and ABL Facility of ~~$57.4~~$55.7 million. Substantially all this debt bears interest at floating rates. Changes in interest rates affect the interest expense we pay on our floating rate debt. A hypothetical 100 basis point increase in interest rates would increase our interest expense by approximately $~~3.9~~3.6 million annually, based on the debt outstanding at ~~September 30, 2023~~March 31, 2024.

Foreign Exchange Currency Risk

We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the Australian dollar and New Zealand dollar. Since we translate foreign currencies into U.S. dollars for financial reporting purposes, currency fluctuations can have an impact on our financial results.

We have experienced and will continue to experience fluctuations in our ~~net~~Net income as a result of transaction gains or losses related to revaluing certain current asset and current liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. We recognized immaterial amounts of foreign currency gains and losses in each of the periods presented. We have not hedged our foreign currency transactions to date. We are evaluating the costs and benefits of initiating a hedging program and may in the future hedge selected significant transactions denominated in currencies other than the U.S. dollar as we expand our international operations and our risk grows.

Item 4. Controls and Procedures

~~Acquisition~~

We are in the process of integrating Yellow, a New Zealand marketing services company that we acquired on April 3, 2023. Management’s assessment and conclusion on the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2023 excludes an assessment of the internal control over financial reporting related to the Yellow Acquisition. The Yellow Acquisition represented 1.3% of our consolidated total assets at September 30, 2023, and 1.7% and 1.3%~~of our consolidated revenue included in our consolidated financial statements for the~~ ~~three and nine months ended September 30, 2023, respectively.~~

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of ~~September 30, 2023.~~March 31, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended ~~September 30, 2023~~March 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information in response to this item is provided in “Part I - Item 1. Note 13, Contingent Liabilities” and is incorporated by reference into Part II of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

~~There~~Other than as reflected in the following updated risk factor, there have been no material changes to ~~our~~the risk factors ~~disclosed~~set forth in our ~~2022~~Annual Report on Form 10-K for the year ended December 31, 2023:

We use artificial intelligence in our business, and ~~subsequent Quarterly Reports on Form 10-Q.~~challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations.

We incorporate artificial intelligence (“AI”) solutions into our platform, offerings, services and features, and these applications have become more important in our operations over time. Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Additionally, if the content, analyses, or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate, or biased, our business, financial condition, reputation and results of operations may be adversely affected.

The use of AI applications has resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of end users of such applications. Any such cybersecurity incidents related to our use of AI applications could adversely affect our reputation and results of operations as well as leading to litigation and regulatory risks. AI also presents emerging ethical issues, and if our use of AI becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability. The rapid evolution of AI, including potential government regulation of AI, will require significant resources to develop, test and maintain our platform, offerings, services, and features to help us implement AI ethically in order to minimize unintended, harmful impact.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

~~The adoption or termination of contracts, instructions or written plans for the purchase or sale of our securities by our officers and directors for the~~ ~~three months ended September 30, 2023, which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 Plan”), was as follows:~~

~~Name~~

~~Title~~

~~Action~~

~~Date Adopted~~

~~Expiration Date~~

~~Aggregate # of Securities to be Sold~~

~~Gordon Henry~~

~~Executive Vice President and Chief Strategy Officer~~

~~Adoption~~

~~September 14, 2023~~

~~September 9, 2024~~

~~278,370~~

None of our officers or directors adopted or terminated a ~~“non-Rule~~Rule 10b5-1 trading ~~arrangement” as defined in Item 408 of Regulation S-K~~arrangement or a non-Rule 10b5-1 trading arrangement during the three months ended ~~September 30, 2023~~March 31, 2024.

4337

Item 6. Exhibits

The following documents are filed as an exhibit to this Quarterly Report on Form 10-Q:


Exhibit No.						Description
3.1						Fourth Amended and Restated Certificate of Incorporation of Thryv Holdings, Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed on September 24, 2020)
3.2						Second Amended and Restated Bylaws of Thryv Holdings, Inc. (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-8 filed on September 24, 2020)
10.1						~~Settlement~~Separation Agreement and Release, dated as of ~~June 22, 2023, by~~March 13, 2024, between the Company and ~~between Thryv Holdings, Inc. and Yosemite Sellers Representative LLC~~Gordon Henry (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on ~~June 23, 2023)~~March 13, 2024).
10.2						Term Loan Credit Agreement by and among Thryv Holdings, Inc., Thryv, Inc., the lenders party thereto from time to time and and Citizens Bank, N.A., as the administrative agent, dated as of May 1, 2024 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on May 2, 2024).
10.3						Credit Agreement among Thryv Holdings, Inc., Thryv, Inc., the other borrowers from time to time party thereto, the lenders from time to time party thereto, and Citizens Bank, N.A., as administrative agent, dated as of May 1, 2024 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 2, 2024).
31.1*						Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*						Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**						Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**						Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*						Inline XBRL Taxonomy Extension Schema Document.
101.CAL*						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*						Inline XBRL Taxonomy Extension Definition Linkbase Document
104						The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2023,~~March 31, 2024, formatted in Inline XBRL (included in Exhibits 101).

*Filed herewith

** Furnished herewith

4438

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


THRYV HOLDINGS, INC.

~~November~~May 2, ~~2023~~2024	By:	/s/ Joseph A. Walsh
		Joseph A. Walsh Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)


~~November~~May 2, ~~2023~~2024	By:	/s/ Paul D. Rouse
		Paul D. Rouse Chief Financial Officer, Executive Vice President and Treasurer
		(Principal Financial Officer)

4539


	Three Months Ended September 30, 2022
	Thryv U.S.				Thryv International
(in thousands)	Marketing Services		SaaS		Marketing Services		SaaS		Total
Revenue	$	197,174	$	55,353	$	26,833	$	1,290	$	280,650
Segment Gross Profit	126,846		33,827		14,351		615		175,639
Segment Adjusted EBITDA	61,802		398		5,807		(2,575)		65,432


	Nine Months Ended September 30,
	2023 (1)					2022 (2)
	(unaudited)
(in thousands of $)	Amount			% of Revenue		Amount			% of Revenue
Revenue	$	680,798		100	%	$	923,020		100	%
Cost of services	262,261			38.5	%	321,543			34.8	%
Gross profit	418,537			61.5	%	601,477			65.2	%

Operating expenses:
Sales and marketing	226,781			33.3	%	275,659			29.9	%
General and administrative	149,642			22.0	%	159,514			17.3	%
Impairment charges	—			—	%	222			—	%
Total operating expenses	376,423			55.3	%	435,395			47.2	%

Operating income	42,114			6.2	%	166,082			18.0	%

Other income (expense):
Interest expense	(47,911)			7.0	%	(44,089)			4.8	%
Other components of net periodic pension (cost) benefit	(3,888)			0.6	%	5,295			0.6	%
Other income (expense)	(1,242)			0.2	%	15,567			1.7	%
(Loss) income before income tax benefit (expense)	(10,927)			1.6	%	142,855			15.5	%
Income tax benefit (expense)	9,173			1.3	%	(38,062)			4.1	%
Net (loss) income	$	(1,754)		0.3	%	$	104,793		11.4	%
Other financial data:
Adjusted EBITDA(3)	$	135,239		19.9	%	$	265,149		28.7	%
Adjusted Gross Profit(4)	$	440,426				$	630,558
Adjusted Gross Margin(5)	64.7		%			68.3		%