| Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies General Thryv Holdings, Inc. (“ Thryv Holdings, Inc. ” 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 ”) and Internet Yellow Pages (“ IYP ”) and provides a comprehensive offering of digital marketing services such as 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 business management tools designed for SMBs. On October 1, 2020, the Company completed a direct listing of the Company’s common stock on the Nasdaq Capital Market (“ Nasdaq ”), under the symbol “THRY”. 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 include the financial statements of Thryv Holdings, Inc. and its wholly owned subsidiaries. The accompanying consolidated financial statements reflect all adjustments, consisting of only normal recurring items and accruals, necessary to fairly present the financial position, results of operations and cash flows of the Company for the periods presented. All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the December 31, 2019 and 2018 consolidated financial statements and accompanying notes to conform to the December 31, 2020 presentation. All conforming reclassifications were immaterial and did not impact the Company’s Net income. These conforming reclassifications did not result in material changes to the presentation of the financial statements for the years ended December 31, 2019 and 2018. Reverse Stock Split The Company’s consolidated financial statements reflect a 1-for-1.8 reverse stock split of the Company’s common stock, which became effective on August 26, 2020. All share and per share data for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retrospectively, where applicable, to reflect the reverse stock split. 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, capitalized costs to obtain a contract, certain amounts relating to the accounting for income taxes, including net valuation allowance, indemnification asset, stock-based compensation expense, operating lease right-of-use assets and operating lease liabilities, accrued service credits, and net pension obligation. 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. Due to the novel strain of coronavirus, commonly referred to as COVID-19 (“ COVID-19 ”) and the uncertainty of the extent of the impacts related thereto, certain estimates and assumptions may require increased judgment. As events continue to evolve and additional information becomes available, these estimates may change in future periods. It is difficult to predict what the ongoing impact of the pandemic will be on future periods. Summary of Significant Accounting Policies Revenue Recognition The Company recognizes revenue based on the revenue recognition standard, Revenue from Contracts with Customers (Topic 606), (“ ASC 606 ”). The Company determines the amount of revenue to be recognized through application of the following five steps: identify a customer contract, identify performance obligations, determine the transaction price, allocate the transaction price, and recognize revenue. Identify the Customer Contract The Company accounts for a contract with a client when approval and commitment from all parties is obtained, the rights of the parties and payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. Revenue is recognized when control of the promised services or goods is transferred to the client and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services or goods. Typical payment terms provide that the Company’s clients pay within 20 days of the invoice. Identify the Performance Obligations in the Contract and Recognize Revenue The Company has determined that each of its 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. Therefore, revenue associated with print services is recognized at a point in time upon delivery to the intended market. SaaS and digital 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 services is recognized over time using an output method to measure the progress toward satisfying a performance obligation. As part of the SaaS offerings, the Company enters into certain development and reseller agreements with third parties. Based upon the control indicators outlined in ASC 606, the Company acts as a principal in these arrangements and recognizes revenue on a gross basis because it controls the services before they are transferred to clients. Determine and Allocate the Transaction Price to the Performance Obligations in the Contract The transaction price of a contract consists of fixed and variable consideration components pursuant to the applicable contractual terms and excludes sales tax. The Company’s contracts have variable consideration in the form of price concessions and service credits. Service credits may be issued to a client at the discretion of the Company related to client satisfaction issues and claims. The Company performs a monthly review of expected service credits at a portfolio level based on the Company’s history of adjustments and expected trends. The provision for service credits is recorded as a reduction to revenue in the Company’s consolidated statements of operations. For performance obligations recognized under the series guidance, variable consideration is allocated to the distinct days of the services to which it pertains. When necessary, variable consideration is estimated and included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur. These judgments involve consideration of historical and expected experience with the client and other similar clients. The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates the transaction price to each performance obligation based on its relative standalone selling price. Standalone selling price is the price at which the Company would sell a promised service separately to a client. Judgment is required to determine the standalone selling price for each distinct performance obligation. Often, the Company does not have sufficient standalone sales information, as contracts with customers generally include multiple performance obligations. When standalone sales information is not available, the Company estimates standalone selling price using information that may include market conditions, entity specific factors such as pricing and discounting strategies, and other inputs. Costs to Obtain and Fulfill a Contract with a Customer The Company has determined that sales commissions paid to employees and certified marketing representatives associated with selling the Company’s print and digital advertising services are considered incremental and recoverable costs of obtaining a contract. Commissions related to renewal contracts are not commensurate with costs incurred to obtain an initial contract. Therefore, commissions incurred to obtain a new contract are capitalized and recognized over the benefit period, which is determined to be two years based on expected contract renewals, the Company’s technology development life-cycle, and other factors. Commissions for renewals of existing contracts are expensed as incurred under the practical expedient, which allows an entity to expense costs to obtain a contract with an amortization period of less than twelve months. Deferred costs to obtain contracts are classified as current or non-current based on the timing of when the Company expects to recognize the expense. The current portion is included in Prepaid expenses and other current assets and the non-current portion is included in Other assets on the Company’s consolidated balance sheets. Amortization of deferred costs to obtain contracts is included as a component of Sales and marketing expense. As of December 31, 2020, the current and non-current assets related to deferred costs to obtain contracts totaled $9.1 million and $2.8 million, respectively. During the year ended December 31, 2020, the Company amortized $13.6 million of costs to obtain contracts. As of December 31, 2019, the current and non-current assets related to deferred costs to obtain contracts totaled $10.5 million and $3.1 million, respectively. During the year ended December 31, 2019, the Company amortized $14.1 million of costs to obtain contracts. As of December 31, 2018, the current and non-current assets related to deferred costs to obtain contracts totaled $10.3 million and $3.5 million, respectively. During the year ended December 31, 2018, the Company amortized $9.9 million of costs to obtain contracts. Direct costs associated with fulfilling PYP contracts with a client include costs related to printing and distribution. Directly attributable costs incurred to fulfill print services are capitalized as incurred and then expensed at the time of delivery, in line with the recognition of revenue. Costs to fulfill SaaS and digital contracts with clients are expensed as incurred. As of December 31, 2020 and 2019, the Company had outstanding deferred costs to fulfill contracts of $2.7 million and $4.8 million, respectively, recorded in Prepaid expenses and other current assets on its consolidated balance sheets. During the years ended December 31, 2020, 2019 and 2018, the Company amortized $4.8 million, $6.6 million and $8.4 million, respectively, of fulfillment costs. These costs were recorded in Cost of services. The Company recorded no impairment losses associated with these deferred costs during the years ended December 31, 2020, 2019 and 2018. Cash and Cash Equivalents Highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. The Company’s cash and cash equivalents consist of bank deposits. Cash equivalents are stated at cost, which approximates market value. The Company does not have any restricted cash. Accounts Receivable, Net of Allowance Accounts receivable represents billed amounts for which invoices have been provided to clients and unbilled amounts for which revenue has been recognized but amounts have not yet been billed to the client. Accounts receivable are recorded net of an allowance for credit losses. 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. See Note 7, Allowance for Credit Losses, for additional information. The following table represents the components of Accounts receivable, net of allowance (in thousands): December 31, 2020 2019 Accounts receivable $ 128,145 $ 129,953 Unbilled accounts receivable 201,793 266,565 Total accounts receivable 329,938 396,518 Less: allowance for credit losses (33,368) (26,828) Accounts receivable, net of allowance $ 296,570 $ 369,690 Concentrations of Credit Risk Financial instruments subject to concentrations of credit risk consist primarily of trade receivables. The Company deposits cash on hand with major financial institutions. Cash balances at major financial institutions may exceed limits insured by the Federal Deposit Insurance Corporation. Approximately 89% of revenue in all periods presented was derived from sales to local SMBs that operate in limited geographical areas. These SMBs are usually billed in monthly installments when the services begin and, in turn, make monthly payments, requiring the Company to extend credit to these clients. This practice is widely accepted within the industry. While most new SMBs and those wanting to expand their current media presence through the Company’s services are subject to a credit review, the default rates of SMBs are generally higher than those of larger companies. The remaining approximate 11% of revenue in all periods presented was derived from the sale of marketing services to larger businesses that advertise regionally or nationally. Contracted certified marketing representatives (“ CMRs ”) purchase advertising on behalf of these businesses. Payment for advertising is due when the advertising is published and is received directly from the CMRs, net of the CMRs’ commission. The CMRs are responsible for billing and collecting from these businesses. While the Company still has exposure to credit risks, historically, the losses from this client set have been less than that of local SMBs. The Company conducts its operations in the United States of America. In 2020, the Company's top ten directories, as measured by revenue, accounted for approximately 2% of total revenue. No single directory or client accounted for more than 1% of the Company’s revenue for the years ended December 31, 2020, 2019 and 2018. Additionally, no single client or CMR accounted for more than 5% of the Company’s outstanding accounts receivable as of December 31, 2020 and December 31, 2019. Fixed Assets and Capitalized Software Property, plant and equipment are stated at cost less accumulated depreciation and amortization. The cost of additions and improvements associated with fixed assets are capitalized if they have a useful life in excess of one year. Expenditures for repairs and maintenance, including the cost of replacing minor items that are not considered substantial improvements, are expensed as incurred. When fixed assets are sold or retired, the related cost and accumulated depreciation are deducted from the accounts and any gains or losses on disposition are recognized in the Company’s consolidated statements of operations. Fixed assets are reviewed for impairment whenever events or changes in circumstances may indicate that the carrying amount of a fixed asset may not be recoverable. Costs associated with internal use software are capitalized during the application development stage, if they have a useful life in excess of one year. Subsequent additions, modifications, or upgrades to internal use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Capitalized software is reviewed for impairment whenever events or changes in circumstances may indicate that the carrying amount of a capitalized software may not be recoverable. The remaining useful lives of fixed assets and capitalized software are reviewed annually for reasonableness. Fixed assets and capitalized software are depreciated on a straight-line basis over the estimated useful lives of the assets, which are presented in the following table: Estimated Buildings and building improvements 8 - 30 years Leasehold improvements (1) 1 - 8 years Computer and data processing equipment 3 years Furniture and fixtures 7 years Capitalized software 1.5 - 5 years Other 3 - 7 years (1) Leasehold improvements are depreciated at the shorter of their estimated useful lives or the lease term. See Note 8, Fixed Assets and Capitalized Software. Leases Effective January 1, 2019, the Company adopted Accounting Standards Update (“ ASU ”) No. 2016-02, Leases (Topic 842), (“ ASU 2016-02 ”), requiring lessees to recognize right-of-use assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. See Note 10, Leases. This pronouncement, along with subsequent ASUs that were issued to clarify certain provisions of ASU 2016-02, is now referred to as ASC 842, Leases (“ ASC 842 ”). The Company adopted the standard using the modified retrospective approach allowing the Company to not adjust comparative periods. The Company elected the practical expedients package permitted under the transition guidance and did not reassess historical conclusions related to lease identification, lease classification, and initial direct costs for leases that commenced prior to the adoption date. The Company elected to combine lease and non-lease components for all asset classes, except real estate leases. For real estate leases, consideration is allocated to lease and non-lease components based on a relative standalone price. The Company made an accounting policy election not to apply the balance sheet recognition requirements to leases with a term of twelve months or less. Under ASC 842, the Company determines if an arrangement is a lease or contains a lease at inception. The Company elected to combine lease and non-lease components for all asset classes, except real estate leases. For real estate leases, consideration is allocated to lease and non-lease components based on a relative standalone price. The Company made an accounting policy election not to apply the balance sheet recognition requirements to leases with a term of twelve months or less. Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the lease payments over the lease term. If applicable, the right-of-use asset may include any initial direct costs incurred, lease payments made prior to the commencement, and is recorded net of any lease incentives received. For these calculations, the Company considers only payments that are fixed or determinable at the time of commencement or any variable payments that depend on an index or a rate. The Company determines an incremental borrowing rate (‘‘ IBR ’’) based on the information available at commencement date to calculate the present value of lease payments. The IBR represents the rate of interest estimated that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment. Lease terms may include options to extend or terminate a lease. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably certain. Operating leases are included in Other assets; Other current liabilities; and Other liabilities on the consolidated balance sheets. The Company recognizes lease expense on a straight-line basis over the lease term. Lease expense is recorded within General and administrative expense in the consolidated statement of operations. Goodwill and Intangible Assets Goodwill Goodwill represents the excess of the aggregate fair value of the consideration transferred in a business combination over the fair value of the assets acquired net of liabilities assumed, recorded in accordance with ASC 805, Business Combinations, (‘‘ ASC 805 ’’). Goodwill was also generated as part of fresh-start accounting following the Company’s pre-packaged bankruptcy and represents the excess of the reorganization value over the identified assets recorded in accordance with ASC 852, Reorganizations. Goodwill is not amortized but rather subject to an annual impairment test at the reporting unit level. Management performs its annual goodwill impairment test on October 1 or more frequently if events or changes in circumstances indicate that the goodwill may be impaired. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Performing a qualitative impairment assessment requires an examination of relevant events and circumstances that could have a negative impact on the carrying value of the Company, such as macroeconomic conditions, industry and market conditions, earnings and cash flows, overall financial performance and other relevant entity-specific events. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then additional impairment testing is not required. However, if the Company concludes otherwise, then it is required to perform a quantitative assessment for impairment. If the quantitative assessment indicates that the reporting unit’s carrying amount exceeds its fair value, the Company will recognize an impairment charge up to this amount but not to exceed the total carrying value of the reporting unit’s goodwill. The Company uses income and market-based valuation approaches to determine the fair value of its reporting units. Intangible Assets The Company has definite-lived intangible assets consisting of client relationships, trademarks and domain names, covenants not to compete, and patented technologies. These intangible assets are amortized using the income forecast method over their useful lives, with the exception of covenants not to compete which are amortized on a straight-line basis over the terms of the agreements. These assets are allocated to their respective reporting units for impairment review purposes. Whenever events or changes in circumstances indicate the carrying amount of the reporting unit’s intangible assets may not be recoverable, an impairment analysis of the reporting unit is completed. An impairment loss, if applicable, is measured as the amount by which the carrying amount of the reporting unit’s definite-lived intangible asset exceeds its fair value. The Company uses the estimated future cash flows directly associated with and that are expected to arise as a result of the use and eventual disposal of such reporting unit assets in determining fair values of definite-lived intangible assets. The Company’s intangible assets and their estimated useful lives are presented in the table below: Estimated Client relationships 3.5 - 4 years Trademarks and domain names 2.5 - 6 years Patented technologies 3 - 3.5 years Covenants not to compete 3 years See Note 5, Goodwill and Intangible Assets. Net Pension Obligation The Company maintains net pension obligations associated with non-contributory defined benefit pension plans that are currently frozen and incur no additional service costs. Although the plans are frozen, the Company continues to incur interest cost as well as gains/(losses) associated with changes in fair value of plan assets, all of which are referred to as net periodic pension cost. In determining the net pension obligations at each reporting period, management makes certain actuarial assumptions, including discount rates and mortality rates. For these assumptions, management consults with actuaries, monitors plan provisions and demographics, and reviews public market data and general economic information. Changes in these assumptions can have a significant impact on the projected pension obligations, funding requirement, and net periodic pension cost. The Company sponsors two frozen pension plans for its employees, the Consolidated Pension Plan of Dex Media and the YP Pension Plan. The Company also maintains two non-qualified pension plans for certain executives, the Dex One Pension Benefit Equalization Plan and the SuperMedia Excess Pension Plan, which are also frozen plans. Pension assets related to the Company’s qualified pension plans, which are held in master trusts and recorded in Pension obligations, net on the Company’s consolidated balance sheets, are valued in accordance with ASC 820, Fair Value Measurement. See Note 12, Pensions, for additional information. Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes (‘‘ ASC 740 ’’). On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act ”) was enacted and signed into law. The CARES Act includes several provisions for corporations including increasing the amount of deductible interest, allowing companies to carryback certain Net Operating Losses (“ NOLs ”) and increasing the amount of NOLs that corporations can use to offset income. The CARES Act did not materially affect the Company's year-to-date income tax provision, deferred tax assets and liabilities, and related taxes payable. Deferred tax assets or liabilities are recorded to reflect the expected future tax consequences of temporary differences between the financial reporting basis of assets and liabilities and their tax basis at each year-end. These amounts are adjusted as appropriate to reflect enacted changes in tax rates expected to be in effect when the temporary differences reverse. The likelihood that deferred tax assets can be recovered must be assessed. If recovery is not likely, the provision for taxes must be increased by recording a reserve in the form of a valuation allowance for deferred tax assets that will more likely than not be ultimately recoverable. In this process, certain relevant criteria are evaluated, including prior carryback years, the existence of deferred tax liabilities that can be used to absorb deferred tax assets, tax planning strategies, and taxable income in future years. A valuation allowance is established to offset any deferred income tax assets if, based on the available evidence, it is more likely than not that some or all of the deferred income tax assets will not be realized. The Company has netted deferred tax assets for net operating losses with related unrecognized tax benefits, if such settlement is required or expected in the event the uncertain tax position is disallowed. The Company establishes reserves for open tax years for uncertain tax positions that may be subject to challenge by various tax authorities. The consolidated tax provision and related accruals include the impact of such reasonably estimable losses and related interest and penalties as deemed appropriate. Tax benefits recognized in the financial statements from uncertain tax positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in (Provision) benefit for income taxes in the consolidated statement of operations. See Note 15, Income Taxes. Advertising Costs Advertising costs, which include media, promotional, branding and online advertising, are included in Sales and marketing expense in the Company’s consolidated statements of operations and are expensed as incurred. Advertising costs for the Company for the years ended December 31, 2020, 2019 and 2018 were $7.2 million, $5.5 million and $23.4 million, respectively. Common Stock and Stock-Based Compensation As of December 31, 2020, the Company had 59,590,422 and 32,912,012 shares of common stock issued and outstanding, respectively. As of December 31, 2019, the Company had 57,443,282 and 33,490,526 shares of common stock issued and outstanding, respectively. Each share of common stock comes with one vote with no special preferences provided to any one individual or group of common stockholders. Additionally, as of December 31, 2020 and 2019, the Company had 26,678,410 and 23,952,756 shares, respectively of common stock in treasury. Under the 2016 Stock Incentive Plan, as amended (“ 2016 Plan ”) and the 2020 Incentive Award Plan (“ 2020 Plan ”), (together the, “ Stock Incentive Plans ”), the Company has granted stock options. As of and Subsequent to October 1, 2020 As a result of completing the direct listing on October 1, 2020, the Company no longer intends to cash settle these stock options upon exercise. As of October 1, 2020, based on the Company’s intention and ability to equity settle upon exercise, these stock options were measured at fair value and classified as equity awards in accordance with ASC 718, Compensation — Stock Compensation. The Company accounts for all stock options granted using a fair value method. Compensation expense for equity classified stock-based compensation awards is based on the fair value of the awards. The measurement date for awards is generally the date of the grant. This fair value is recognized over the requisite service period (generally three Prior to October 1, 2020 Prior to the completion of the direct listing, it was the Company’s intention to cash settle options upon exercise and therefore, stock options were classified as liability awards in accordance with ASC 718, Compensation — Stock Compensation. The fair value of the liability classified stock-based compensation awards was estimated using the Black-Scholes valuation model, with re-measurement occurring each subsequent reporting date at fair value until the award was settled. Compensation expense for liability classified stock-based compensation awards was based on the current fair value of the awards. This fair value was recognized over the requisite service period (generally three years). The Company elected to account for forfeitures as they occurred as a cumulative adjustment to stock-based compensation expense. See Note 13, Stock-Based Compensation. Common Stock Fair Value The common stock fair value is one of the significant valuation inputs of the indemnification asset and stock-based compensation awards. As of and Subsequent to September 30, 2020 The Company completed a direct listing occurring on October 1, 2020. As of September 30,2020, the fair value of the Company’s common stock is based on the THRY Nasdaq per share price. Prior to September 30, 2020 The absence of an active market for the Company's common stock required the Company to determine the fair value of its common stock. The Company obtained contemporaneous third-party valuations to assist it in determining fair value. These contemporaneous third-party valuations used methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. The Company determined the fair value utilizing the income approach, which estimated value based on market participant expectations of future cash flows the Company will generate. These future cash flows are discounted to their present value using a discount rate based on the Company's weighted average cost of capital, which reflects the risk of achieving the projected cash flows. Significant inputs of the income approach also include the long-term financial projections of the Company along with its long-term growth rate and decline rate, which is used to calculate the residual value of the Company before discounting to present value. The fair value of the common stock was discounted based on the lack of marketability. Other factors taken into consideration in assessing the f |
