8-K
Thryv Holdings, Inc. (THRY)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 11, 2021
THRYV HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-35895 | 13-2740040 |
|---|---|---|
| (State or Other Jurisdiction<br><br>of Incorporation) | (Commission<br>File Number) | (IRS Employer<br><br>Identification No.) |
| 2200 West Airfield Drive, P.O. Box 619810<br><br>D/FW Airport, TX | 75261 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(972) 453-7000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which<br><br>registered |
|---|---|---|
| Common Stock, $0.01 par value | THRY | Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
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. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 11, 2021, Thryv Holdings, Inc. (the “Company”) issued a press release announcing its earnings for the third quarter ended September 30, 2021. This press release is attached as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
The Company held a conference call on November 11, 2021. A copy of the slide materials discussed at the conference call is being furnished as Exhibit 99.2, and is incorporated herein by reference and available on the Company’s website.
The information in Item 2.02 and Item 7.01 of this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 2.02 and Item 7.01 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibits are filed with this document:
| Exhibit Number | Description | | --- | --- || 99.1 | Press release, dated November 11, 2021, issued by Thryv Holdings, Inc. | | --- | --- | | 99.2 | Investor Supplement. |
SIGNATURE
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 hereunto duly authorized.
| THRYV HOLDINGS, INC. | ||
|---|---|---|
| Date: November 12, 2021 | By: | /s/ Paul D. Rouse |
| Name: Paul D. Rouse | ||
| Title: Chief Financial Officer, Executive Vice President and Treasurer |
Document
| Exhibit 99.1 |
|---|
Thryv Grows SaaS Revenue 41% Year-Over-Year for Third Quarter 2021
Raises Revenue Guidance for Full Year 2021
DALLAS, November 11, 2021 – Thryv Holdings, Inc. (NASDAQ:THRY) (“Thryv” or the “Company”), the provider of Thryv® software, the end-to-end client experience platform for growing small businesses, announced financial results for the third quarter 2021. The Company has also raised its 2021 outlook for its SaaS segment.
“We are experiencing the modernization of the local economy with SMB's beginning to embrace cloud technologies and we see Thryv as leading the charge. This wave of adoption has propelled Thryv software to faster and faster growth," said Joe Walsh, CEO and president of Thryv. “We are seeing improvements in customer engagement, average spend and retention. These trends are delivering durable SaaS growth for Thryv. We are pleased to, once again, raise SaaS revenue guidance for 2021."
Third Quarter 2021 Financial Highlights:
•US SaaS revenue was $45 million, a 41% increase year-over-year
•US Marketing Services revenue was $213 million
•Thryv International revenue was $39 million
•Consolidated total revenue was $297 million, an increase of 24% year-over-year
•Consolidated net income was $36 million
•Consolidated adjusted EBITDA was $102 million, representing an adjusted EBITDA margin of 34%
•Consolidated gross profit was $193 million, an increase of 43% year-over-year
•Consolidated adjusted gross profit was $208 million
Additional US Business Highlights
•SaaS Average Revenue per Unit ("ARPU")1 increased to $340 for the third quarter of 2021, compared to $260 in the third quarter of 2020
•Total SaaS clients increased by 2% year-over-year to 45,000 for the third quarter of 2021
•SaaS Monthly Churn2 was 2.1% for the third quarter of 2021, compared to 2.7% for the third quarter of 2020
•SaaS Monthly Seasoned Churn3 was 1.7% for the third quarter of 2021
•Net Dollar Retention4 improved 11 percentage points to 90% at end of the third quarter of 2021, when compared to the third quarter of 2020
•Seasoned Net Dollar Retention5 improved 9 percentage points to 95% at end of the third quarter of 2021, when compared to the third quarter of 2020
•SaaS active users and usage frequency reached a new all-time high as monthly active users6 increased 15% year-over-year
1 Defined as total client billings by month divided by the number of revenue-generating units during the month.
2 Calculated as the percentage decrease in billable clients in the current month compared to the prior month.
3 SaaS Monthly Seasoned Churn is defined as monthly churn excluding clients acquired over the previous 12 months.
4 Defined as the percentage of revenue from clients with monthly billed revenue in the current month compared to the same month in prior year.
5 Seasoned Net Dollar Retention is defined as net dollar retention excluding clients acquired over the previous 12 months.
6 Defined as a client with one or more users who log into our SaaS solutions at least once during the calendar month.
Outlook:
The Company is updating guidance7 for fiscal year 2021 as indicated below.
•US SaaS year-over-year revenue guidance was raised to $169 – $171 million, up from the previously-announced $157 - $160 million
•US Marketing Services revenue range raised to $785 - $790 million, up from the previously-announced $750 - $770 million
•Thryv International fourth quarter revenue guidance range updated to A$53 million to A$57 million8
Earnings Conference Call Information
Thryv will host a conference call on Thursday, November 11, 2021 at 8:30 a.m. (Eastern Time) to discuss the Company's third quarter 2021 results. The conference call will be available via the Internet at investor.thryv.com. There will be several slides accompanying the webcast. Please go to the website at least 15 minutes prior to the call to register, download and install any necessary software. The recorded webcast will also be available on the Company's website.
If you are unable to participate in the conference call, a replay will be available. To access the replay, please dial (800) 770-2030 or (647) 362-9199 and enter “87769.”
7 These statements are forward-looking and actual results may materially differ. Refer to the “Forward-Looking Statements” section below for information on the factors that could cause our actual results to materially differ from these forward-looking statements.
8 Thryv International includes Sensis Pty Ltd (“Sensis” or "Thryv Australia") results subsequent to the March 1, 2021 acquisition date.
Final Results
Thryv Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(unaudited)
| Three Months Ended | Nine Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||||
| (in thousands, except share and per share data) | 2021 | 2020 | 2021 | 2020 | ||||
| Revenue | $ | 297,290 | $ | 240,325 | $ | 868,943 | $ | 862,507 |
| Cost of services | 104,167 | 105,444 | 314,934 | 334,025 | ||||
| Gross profit | 193,123 | 134,881 | 554,009 | 528,482 | ||||
| Operating expenses: | ||||||||
| Sales and marketing | 94,343 | 73,306 | 258,277 | 241,703 | ||||
| General and administrative | 32,983 | 39,002 | 107,362 | 132,758 | ||||
| Impairment charges | — | 1,184 | 3,611 | 19,414 | ||||
| Total operating expenses | 127,326 | 113,492 | 369,250 | 393,875 | ||||
| Operating income | 65,797 | 21,389 | 184,759 | 134,607 | ||||
| Other income (expense): | ||||||||
| Interest expense | (12,050) | (11,442) | (38,159) | (39,648) | ||||
| Interest expense, related party | (4,496) | (4,167) | (13,229) | (13,903) | ||||
| Other components of net periodic pension benefit (cost) | 273 | (30,175) | 998 | (31,312) | ||||
| Other expense | (98) | — | (4,157) | — | ||||
| Income (loss) before income tax (expense) benefit | 49,426 | (24,395) | 130,212 | 49,744 | ||||
| Income tax (expense) benefit | (13,802) | 24,250 | (33,723) | (10,323) | ||||
| Net income (loss) | $ | 35,624 | $ | (145) | $ | 96,489 | $ | 39,421 |
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | (4,100) | — | (8,545) | — | ||||
| Comprehensive income (loss) | $ | 31,524 | $ | (145) | $ | 87,944 | $ | 39,421 |
| Net income (loss) per common share: | ||||||||
| Basic | $ | 1.05 | $ | — | $ | 2.87 | $ | 1.25 |
| Diluted | $ | 0.95 | $ | — | $ | 2.67 | $ | 1.16 |
| Weighted-average shares used in computing basic and diluted net income (loss) per common share: | ||||||||
| Basic | 34,013,897 | 30,857,617 | 33,585,488 | 31,621,039 | ||||
| Diluted | 37,620,116 | 30,857,617 | 36,110,702 | 33,990,771 |
Thryv Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
| (in thousands, except share data) | September 30, 2021 | December 31, 2020 | ||
|---|---|---|---|---|
| Assets | (unaudited) | |||
| Current assets | ||||
| Cash and cash equivalents | $ | 10,374 | $ | 2,406 |
| Accounts receivable, net of allowance of $19,365 in 2021 and $33,030 in 2020 | 313,285 | 296,570 | ||
| Contract assets, net of allowance of $114 in 2021 and $338 in 2020 | 7,024 | 10,975 | ||
| Taxes receivable | 1,890 | 9,229 | ||
| Prepaid expenses and other current assets | 33,084 | 26,172 | ||
| Indemnification asset | 25,594 | 24,346 | ||
| Total current assets | 391,251 | 369,698 | ||
| Fixed assets and capitalized software, net | 70,269 | 89,044 | ||
| Goodwill | 676,440 | 609,457 | ||
| Intangible assets, net | 101,189 | 31,777 | ||
| Deferred tax assets | 114,062 | 93,099 | ||
| Other assets | 24,278 | 21,902 | ||
| Total assets | $ | 1,377,489 | $ | 1,214,977 |
| Liabilities and Stockholders' Equity | ||||
| Current liabilities | ||||
| Accounts payable | $ | 16,929 | $ | 8,927 |
| Accrued liabilities | 153,234 | 139,613 | ||
| Current portion of unrecognized tax benefits | 35,109 | 18,942 | ||
| Contract liabilities | 14,238 | 9,896 | ||
| New Term Loan, current | 70,000 | — | ||
| Other current liabilities | 31,018 | 30,022 | ||
| Total current liabilities | 320,528 | 207,400 | ||
| New Term Loan, net | 333,938 | — | ||
| New Term Loan, related party | 152,286 | — | ||
| Senior Term Loan, net | — | 335,683 | ||
| Senior Term Loan, related party | — | 113,482 | ||
| ABL Facility | 56,181 | 79,238 | ||
| Leaseback obligations | — | 54,798 | ||
| Pension obligations, net | 168,793 | 190,827 | ||
| Deferred tax liabilities | — | 508 | ||
| Other liabilities | 41,318 | 36,266 | ||
| Total long-term liabilities | 752,516 | 810,802 | ||
| Commitments and contingencies | ||||
| Stockholders' equity | ||||
| Common stock - $0.01 par value, 250,000,000 shares authorized; 60,643,781, shares issued and 33,965,371 shares outstanding at September 30, 2021; and 59,590,422 shares issued and 32,912,012 shares outstanding at December 31, 2020 | 606 | 596 | ||
| Additional paid-in capital | 1,079,340 | 1,059,624 | ||
| Treasury stock - 26,678,410 shares at September 30, 2021 and December 31, 2020 | (468,613) | (468,613) | ||
| Accumulated other comprehensive income (loss) | (8,545) | — | ||
| Accumulated deficit | (298,343) | (394,832) | ||
| Total stockholders' equity | 304,445 | 196,775 | ||
| Total liabilities and stockholders' equity | $ | 1,377,489 | $ | 1,214,977 |
Thryv Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
| Nine Months Ended September 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2021 | 2020 | ||||||
| Cash Flows from Operating Activities | (unaudited) | (unaudited) | ||||||
| Net income | $ | 96,489 | $ | 39,421 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 80,675 | 110,883 | ||||||
| Amortization of debt issuance costs | 3,431 | 801 | ||||||
| Deferred income taxes | (57,823) | (42,346) | ||||||
| Provision for credit losses | 3,211 | 27,709 | ||||||
| Provision for service credits | 10,595 | 28,268 | ||||||
| Stock-based compensation expense (benefit) | 6,232 | (4,195) | ||||||
| Other components of net periodic pension (benefit) cost | (998) | 31,312 | ||||||
| Loss on termination of leaseback obligations | 3,409 | — | ||||||
| (Gain) loss on disposal/write-off of fixed assets and capitalized software | (44) | 3,476 | ||||||
| Impairment charges | 3,611 | 19,414 | ||||||
| Non-cash (gain) loss from remeasurement of indemnification asset | (1,248) | 3,878 | ||||||
| Other, net | 592 | — | ||||||
| Changes in working capital items, excluding acquisitions: | ||||||||
| Accounts receivable | 48,791 | 15,742 | ||||||
| Contract assets | 3,837 | (803) | ||||||
| Prepaid expenses and other assets | (3,184) | (3,785) | ||||||
| Accounts payable and accrued liabilities | (64,377) | (44,380) | ||||||
| Operating lease liability | (2,366) | (3,998) | ||||||
| Contract liabilities | (9,294) | (5,911) | ||||||
| Settlement of stock option liability | — | (896) | ||||||
| Net cash provided by operating activities | 121,539 | 174,590 | ||||||
| Cash Flows from Investing Activities | ||||||||
| Additions to fixed assets and capitalized software | (20,053) | (17,030) | ||||||
| Proceeds from the sale of building and fixed assets | 63 | 1,546 | ||||||
| Acquisition of a business, net of cash acquired | (175,370) | — | ||||||
| Net cash (used in) investing activities | (195,360) | (15,484) | ||||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from New Term Loan | 418,070 | — | ||||||
| Proceeds from New Term Loan, related party | 260,930 | — | ||||||
| Payments of New Tern Loan | (86,199) | — | ||||||
| Payments of New Term Loan, related party | (36,801) | — | ||||||
| Payments of Senior Term Loan | (335,821) | (72,629) | ||||||
| Payments of Senior Term Loan, related party | (113,789) | (32,761) | ||||||
| Proceeds from ABL Facility | 793,604 | 868,811 | ||||||
| Payments of ABL Facility | (816,661) | (892,155) | ||||||
| Purchase of treasury stock | — | (30,626) | ||||||
| Other | 4,184 | 113 | ||||||
| Net cash provided by (used in) financing activities | 87,517 | (159,247) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (3,446) | — | ||||||
| Increase (decrease) in cash and cash equivalents and restricted cash | 10,250 | (141) | ||||||
| Cash and cash equivalents and restricted cash, beginning of period | 2,406 | 1,912 | ||||||
| Cash and cash equivalents and restricted cash, end of period | $ | 12,656 | $ | 1,771 | ||||
| Supplemental Information | ||||||||
| Cash paid for interest | $ | 52,491 | $ | 56,845 | ||||
| Cash paid for income taxes, net | $ | 58,491 | $ | 15,757 | ||||
| Three Months Ended September 30, | Change | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | Amount | % | |||||
| (in thousands of $) | (unaudited) | |||||||
| Revenue | ||||||||
| Marketing Services | $ | 213,210 | $ | 208,504 | $ | 4,706 | 2.3 | % |
| SaaS | 44,800 | 31,821 | 12,979 | 40.8 | % | |||
| Thryv International (1) | 39,280 | — | 39,280 | NM | ||||
| Consolidated Revenue | $ | 297,290 | $ | 240,325 | $ | 56,965 | 23.7 | % |
| Segment EBITDA | ||||||||
| Marketing Services | $ | 96,231 | $ | 66,733 | $ | 29,498 | 44.2 | % |
| SaaS | (5,508) | 2,561 | (8,069) | NM | ||||
| Thryv International (1) | 11,636 | — | 11,636 | NM | ||||
| Consolidated Adjusted EBITDA | $ | 102,359 | $ | 69,294 | $ | 33,065 | 47.7 | % |
| Nine Months Ended September 30, | Change | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | Amount | % | |||||
| (in thousands of $) | (unaudited) | |||||||
| Revenue | ||||||||
| Marketing Services | $ | 643,938 | $ | 767,553 | $ | (123,615) | (16.1) | % |
| SaaS | 123,437 | 94,954 | 28,483 | 30.0 | % | |||
| Thryv International(1) | 101,568 | — | 101,568 | NM | ||||
| Consolidated Revenue | $ | 868,943 | $ | 862,507 | $ | 6,436 | 0.7 | % |
| Segment EBITDA | ||||||||
| Marketing Services | $ | 277,546 | $ | 289,423 | $ | (11,877) | (4.1) | % |
| SaaS | (7,311) | 10,785 | (18,096) | NM | ||||
| Thryv International (1) | 33,810 | — | 33,810 | NM | ||||
| Consolidated Adjusted EBITDA | $ | 304,045 | $ | 300,208 | $ | 3,837 | 1.3 | % |
(1) Thryv International includes Thryv Australia revenue subsequent to the March 1, 2021 acquisition date.
Non-GAAP Measures
Our results included in this press release include Adjusted EBITDA and Adjusted Gross Profit, which are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are presented for supplemental informational purposes only and are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the tables below for a reconciliation of Adjusted EBITDA to Net income (loss), and Adjusted Gross Profit to gross profit. Both Net income (loss) and Gross profit are the most comparable GAAP financial measure to Adjusted EBITDA and Adjusted Gross Profit, respectively.
We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for
greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.
The following is a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, Net income (loss):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2021 | 2020 | 2021 | 2020 | ||||
| Reconciliation of Adjusted EBITDA | ||||||||
| Net income (loss) | $ | 35,624 | $ | (145) | $ | 96,489 | $ | 39,421 |
| Interest expense | 16,546 | 15,609 | 51,388 | 53,551 | ||||
| Income tax expense (benefit) | 13,802 | (24,250) | 33,723 | 10,323 | ||||
| Depreciation and amortization expense | 31,049 | 35,454 | 80,675 | 110,883 | ||||
| Loss on termination of leaseback obligations | — | — | 3,409 | — | ||||
| Restructuring and integration expenses (1) | 2,312 | 6,710 | 15,036 | 23,902 | ||||
| Transaction costs (2) | 3,987 | 4,913 | 19,973 | 14,679 | ||||
| Stock-based compensation expense (benefit) (3) | 2,340 | 1,289 | 6,232 | (4,195) | ||||
| Other components of net periodic pension (benefit) cost (4) | (273) | 30,175 | (998) | 31,312 | ||||
| Non-cash (gain) loss from remeasurement of indemnification asset (5) | (404) | (540) | (1,248) | 3,878 | ||||
| Impairment charges | — | 1,184 | 3,611 | 19,414 | ||||
| Other (6) | (2,624) | (1,105) | (4,245) | (2,960) | ||||
| Adjusted EBITDA | $ | 102,359 | $ | 69,294 | $ | 304,045 | $ | 300,208 |
(1)For the three and nine months ended September 30, 2021 and 2020, expenses relate to periodic efforts to enhance efficiencies and reduce costs, and include severance benefits, loss on disposal of fixed assets and capitalized software, and costs associated with abandoned facilities and system consolidation.
(2)Expenses related to the Company's direct listing, Sensis acquisition and other transaction costs.
(3)Company records stock-based compensation expense related to the amortization of grant date fair value of the Company’s stock-based compensation awards. Additionally, stock-based compensation expense includes the remeasurement of these awards at each period end, prior to October 1, 2020.
(4)Other components of net periodic pension cost 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 relates to the mark to market pension remeasurement.
(5)In connection with the YP Acquisition, the seller provided the Company indemnity 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.
(6)Other primarily includes expenses related to potential non income-based tax liabilities. Additionally, during the three and nine months ended September 30, 2021, other includes foreign exchange related expense.
The following is a reconciliation of Adjusted Gross Profit, to its most directly comparable GAAP measure, Gross profit:
| Three Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| (in thousands) | 2021 | 2020 | ||||
| Reconciliation of Adjusted Gross Profit | ||||||
| Gross profit | $ | 193,123 | $ | 134,881 | ||
| Plus: | ||||||
| Depreciation and amortization expense | 14,930 | 18,097 | ||||
| Stock-based compensation expense | 156 | 70 | ||||
| Adjusted Gross Profit | $ | 208,209 | $ | 153,048 | ||
| Gross Margin | 65.0 | % | 56.1 | % | ||
| Adjusted Gross Margin | 70.0 | % | 63.7 | % | ||
| Nine Months Ended September 30, | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| (in thousands) | 2021 | 2020 | ||||
| Reconciliation of Adjusted Gross Profit | ||||||
| Gross profit | $ | 554,009 | $ | 528,482 | ||
| Plus: | ||||||
| Depreciation and amortization expense | 42,991 | 55,084 | ||||
| Stock-based compensation expense (benefit) | 320 | (176) | ||||
| Adjusted Gross Profit | $ | 597,320 | $ | 583,390 | ||
| Gross Margin | 63.8 | % | 61.3 | % | ||
| Adjusted Gross Margin | 68.7 | % | 67.6 | % |
Forward-Looking Statements
Some statements included in this release constitute forward-looking statements. Statements that include the words “may”, “will”, “could”, “should”, “would”, “believe”, “anticipate”, “forecast”, “estimate”, “expect”, “preliminary”, “intend”, “plan”, “project”, “outlook”, “future”, “forward”, “guidance” and similar statements of a future or forward-looking nature identify forward-looking statements. These statements are not guarantees of future performance. Forward-looking statements provide current expectations with respect to our financial performance and future events with respect to our business and industry in general. Forward-looking statements are based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: risks related to the ongoing COVID-19 pandemic, the Company’s ability to maintain adequate liquidity to fund operations; the Company’s future operating and financial performance; the Company’s ability to consummate acquisitions, or, if consummated, to successfully integrate acquired businesses into the Company’s operations, the Company’s ability to recognize the benefits of acquisitions, or the failure of an acquired company to achieve its plans and objectives; limitations on our operating and strategic flexibility and the ability to operate our business, finance our capital needs or expand business strategies under the terms of our credit facilities; our ability to retain existing business and obtain and retain new business; general economic or business conditions affecting the markets we serve; declining use of print yellow page directories by consumers; our ability to collect trade receivables from clients to whom we extend credit; credit risk associated with our reliance on small and medium sized businesses as clients; our ability to attract and retain key managers; increased
competition in our markets; our ability to obtain future financing due to changes in the lending markets or our financial position; our ability to maintain agreements with major Internet search and local media companies; reduced advertising spending and increased contract cancellations by our clients, which causes reduced revenue; and our ability to anticipate or respond effectively to changes in technology and consumer preferences. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.
If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. For these reasons, we caution you against relying on forward-looking statements. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. These forward-looking statements speak only as of the date hereof and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Thryv Holdings, Inc.
Thryv Holdings, Inc. (NASDAQ: THRY) is a global software and marketing services company that empowers small- to medium-sized businesses (SMBs), franchises and agencies to grow and modernize their operations so they can compete and win in today's economy. Over 45,000 businesses use our award-winning SaaS platform, Thryv®, to manage their end-to-end customer experience, which has helped businesses across the U.S. and overseas grow their bottom line. Thryv also manages digital and print presence for over 400,000 businesses, connecting these SMBs to local consumers via proprietary local search portals and print directories. For more information about Thryv Holdings, Inc, visit thryv.com.
Media Contact:
Paige Blankenship
Thryv, Inc.
972.453.3012
paige.blankenship@thryv.com
Investor Contacts:
Cameron Lessard
Thryv, Inc.
214.773.7022
cameron.lessard@thryv.com
exhibit992-3q21investors
Investor Supplement Third Quarter 2021 Exhibit 99.2
Safe Harbor This Presentation may include certain forward-looking statements, including, 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 can be identified by words such as ‘‘anticipates,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘seeks,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘expects,’’ and similar references to future periods, or by the inclusion of forecasts or projections. 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 and risks (some of which are beyond our control) and changes in circumstances or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Except as required by law, we are under no obligation to, and expressly disclaim any obligation to, update or alter any forward-looking statements whether as a result of any such changes, new information, subsequent events or otherwise. Market data and industry information used throughout this Presentation are based on management’s knowledge of the industry and the good faith estimates of management. We also relied, to the extent available, upon management’s review of independent industry surveys and publications and other publicly available information prepared by a number of third party sources. All of the market data and industry information used in this Presentation involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although we believe that these sources are reliable, we cannot guarantee the accuracy or completeness of this information, and we have not independently verified this information. While we believe the estimated market position, market opportunity and market size information included in this presentation are generally reliable, such information, which is derived in part from management’s estimates and beliefs, is inherently uncertain and imprecise. Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties. You should not construe the contents of this Presentation as legal, tax, accounting or investment advice or a recommendation to take (or refrain from taking) any particular action. You should consult your own counsel and tax and financial advisors as to legal and related matters concerning the matters described herein. In addition to financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release and the accompanying tables contain, and the conference call will contain, non-GAAP financial measures. We present non-GAAP measures including: adjusted EBITDA, and adjusted EBITDA margin. The non-GAAP financial information is presented for supplemental informational purposes only and is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the tables for reconciliations of the non-GAAP financial measures used in this press release to the most comparable GAAP financial measures. We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry. 2
3rd Quarter SaaS Highlights 3 Continued Momentum Revenue +41% YoY Deepened Client Engagement Users spending +28% more time in platform YTD Record Active Users Daily & Weekly +21% YoY ARPU Expansion $340 (+31% YoY) Record Retention 1.7% Seasoned Monthly Churn 95% Seasoned Net Dollar Retention Note: Results U.S. Only APPEALIE Overall SaaS Award Winner Customer Service and Customer Success
3rd Quarter Financial Highlights 4 Key Highlights: • Q3 SaaS revenue accelerated to +41% YoY • Customer mix, upsell opportunities, and additional features driving improved ARPU • New acquisition channels growth (+22% of overall SaaS sales) • Client retention at record levels due to deepening engagement $ in Thousands Q3-21 Q3-20 YoY SaaS Revenue $44,800 $31,821 41% EBITDA (5,508) 2,561 EBITDA % (12.3%) 8.0% Marketing Services Revenue $213,210 $208,504 2% EBITDA 96,231 66,733 EBITDA % 45.1% 32.0% Thryv International Revenue $39,280 - EBITDA 11,636 - EBITDA % 29.6% - Total Thryv Revenue $297,290 $240,325 24% EBITDA 102,359 69,294 EBITDA % 34.4% 28.8%
Our strategy is driving momentum in a large and growing market accelerated by the need for SMBs to modernize Investments have led to revenue acceleration and Thryv is well-positioned for sustained and durable growth SaaS 3rd Quarter Financial Highlights 5 Note: Results reflect U.S. SaaS segment only 2% 8% 17% 32% 41% Revenue YoY % Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 (10%) (5%) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Marketing Services 3rd Quarter Financial Highlights 6 • Gradual structural change in market driving predictable declines • Current industry has significant runway left with sales canvass process allowing for strong visibility into future revenues • Print remains strong within target demo (55+, suburban, homeowners) Note: Results reflect U.S. Marketing Services segment only 32% 33% 43% 41% 45% Revenue EBITDA Margin % Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 0 50 100 150 200 250 300 0% 10% 20% 30% 40% 50% 60% • 7+ billion references to directories representing over 90% of industry total (3.3b print, 4.4b online) • Highly variable cost structure to maintain strong EBITDA margins for many years • Source of low CAC for conversion into Thryv SaaS platform
Historical Segment Billings 7 • Marketing Services billings steady rate of decline has stayed very consistent over time and has shown improvement • Most print directories are published on a 15-month cycle and billed ratably ensuring a predictable stream of cash inflow • Management considers billings a useful operational metric for the business Note: Results reflect U.S. Marketing Services and SaaS segments only Marketing Services Billings (in millions) Billings YoY % Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 0 100 200 300 400 500 -30% -25% -20% -15% -10% -5% 0% $ in Thousands Q3-21 Q3-20 Billings SaaS $45,930 $34,558 YoY % 33% 2% Marketing Services $194,870 $245,379 YoY % (21%) (21%) Total Thryv US $240,800 $279,937 YoY % (14%) (19%)
SaaS Metrics 8 Note: Results reflect U.S. SaaS segment only MAUs (k) 27.0 31.1 Q3-20 Q3-21 ARPU $260 $340 Q3-20 Q3-21 Sales from New Acquisition Channels (as % of Revenue) 10% 22% Q3-20 Q3-21 # Clients (k) YoY Change 44.1 45.2 -11% 2% # Clients (k) YoY Change % Q3-20 Q3-21
SaaS Retention Monthly Churn 3.4% 3.0% 2.7% 2.4% 2.5% 2.1% 2.1% Q1- 20 Q2- 20 Q3- 20 Q4- 20 Q1- 21 Q2- 21 Q3- 21 Seasoned Monthly Churn 3.0% 2.7% 2.6% 2.1% 2.0% 1.8% 1.7% Q1- 20 Q2- 20 Q3- 20 Q4- 20 Q1- 21 Q2- 21 Q3- 21 Seasoned Net Dollar Retension 81% 82% 86% 90% 94% 96% 95% Q1- 20 Q2- 20 Q3- 20 Q4- 20 Q1- 21 Q2- 21 Q3- 21 Net Dollar Retention 73% 74% 79% 83% 89% 93% 90% Q1- 20 Q2- 20 Q3- 20 Q4- 20 Q1- 21 Q2- 21 Q3- 21 9 SMB Behavior is different than enterprise behavior, as such this measure of churn and net dollar retention excludes newer clients as they are in early stages of engaging and using software. Deepened engagement begins in the latter half of the first year during the client journey when users of Thryv more fully integrate with software. The first year using the software allows clients time to learn, be coached, integrate, and engage with the software. As a result, engagement with clients that have used Thryv software over a year have lower monthly churn and higher net dollar retention to the company. Original Metrics Seasoned Metrics
Engagement 10 Highlights: • SaaS active users and usage frequency reached another new all-time high as daily and weekly active users increased 21% year-over-year • Team selling approach ensures platform is fit for the needs of the SMB • Deepening engagement over time - ◦ Strategy and coaching sessions beyond onboarding to expand usage of the platform ◦ Enhanced and catered touch aimed at enticing clients to use more of platform and solve SMB needs Note: Results reflect U.S. SaaS segment only MAUs by Frequency (k) 27.0 31.1 Daily Weekly Monthly Q3-20 Q3-21 +21% YoY
ThryvPay Update 11 Continued Strength in Adoption ~$50M TPV YTD Lifetime Avg Transaction Size mid-$400 Note: Results reflect U.S. SaaS segment only Total Payment Volume Q1'21 Q2'21 Q3'21 $0 $5,000 $10,000 $15,000 $20,000 $25,000 Most popular payment option within the Thryv Customers choose ThrvyPay >50% of the time Solid Trends in Payment Adoption Higher attachment rates on newer clients with ability to convert existing Thryv users
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Updated FY 2021 Outlook 13 FY 2021 Management Commentary U.S. SaaS Revenue $169 – $171 million • Raising previous annual guidance of $157 to $160 million • Q4: $46 to $48 million U.S. Marketing Services Revenue $785 to $790 million • Raising previous annual guidance of $750 to $770 million • Q4: $141 to $146 million Thryv International1 All amounts in AUD • Q1: A$20 million actual (1 month of ownership)2 • Q2: A$61 million actual • Q3: A$53 million actual • Q4: A$53 to $57 million range 1Net of A$13 million and A$36 million deferred revenue purchase price accounting adjustment for Q1 '21 and Q2 '21, respectively 2On a pro forma basis, Q1 revenue was A$72 million (excluding purchase price accounting adjustment)
14 Engagement Continue to educate clients on features and how to leverage capabilities within platform. Expand app marketplace and drive time in-app. Drive Cloud Adoption In SMB Market Aggressively sell Thryv via new channels as business environment recovers. Convert “unclouded”. Efficiently and effectively onboard clients. Sensis Integration & SaaS Launch Connect businesses Penetrate existing Sensis clients Sign-up new clients Capital Allocation Proactively and thoughtfully pay down debt. 2021 Priorities On Track
15 Appendix
Appendix: Non-GAAP Financial Reconciliation 16 $ in Thousands Q3-21 Q3-20 Net Income (loss) $ 35,624 $ (145) Interest expense 16,546 15,609 Income tax expense (benefit) 13,802 (24,250) Depreciation and amortization expense 31,049 35,454 Restructuring and integration expenses 2,312 6,710 Transaction costs 3,987 4,913 Stock-based compensation expense 2,340 1,289 Other components of net periodic pension (benefit) cost (273) 30,175 (Gain) on remeasurement of indemnification asset (404) (540) Impairment charges — 1,184 Other (2,624) (1,105) Adjusted EBITDA $ 102,359 $ 69,294