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): March 10, 2022
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 | The Nasdaq Stock Market LLC |
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 March 10, 2022, Thryv Holdings, Inc. (the “Company”) issued a press release announcing its earnings for the fourth quarter and year ended December 31, 2021. This press release is attached as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
The Company will hold a conference call on March 10, 2022. A copy of the investor supplement to be 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.
| Exhibit Number | Description | | --- | --- || 99.1 | Press release, datedMarch10, 2022, issued by Thryv Holdings, Inc. | | --- | --- | | 99.2 | Investor Supplement. | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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: March 10, 2022 | By: | /s/ Paul D. Rouse |
| Name: Paul D. Rouse | ||
| Title: Chief Financial Officer, Executive Vice President and Treasurer |
Document
| Exhibit 99.1 |
|---|
Thryv Reports Strong Fourth Quarter and Fiscal Year 2021 Results, Exceeding All Guidance Targets
–Fourth Quarter Total SaaS Revenue Grows 36% Year-Over-Year
–Full Year 2021 Total SaaS Revenue Grows 32% Year-Over-Year
DALLAS, March 10, 2022 – Thryv Holdings, Inc. (NASDAQ:THRY) (“Thryv” or the “Company”), the end-to-end client experience platform for growing small businesses, announced audited financial results for the fourth quarter and fiscal year 2021. The Company has also provided guidance for first quarter and full year 2022.
"We are pleased to report a strong finish to 2021, with Q4 representing our largest SaaS revenue quarter on record," said Joe Walsh, Chairman and CEO. "We beat all of our 2021 guidance targets. These outstanding results confirm that Thryv has become the leader in moving small to medium-sized businesses to cloud software to enable them to modernize and run their businesses.”
The Company also announced that it has acquired Vivial Media Holdings, Inc. (“Vivial”), a regional provider of small business digital and print marketing services, for $21 million. On a post synergy basis, the purchase price of Vivial corresponds to an enterprise value / adjusted EBITDA multiple of approximately 2x, consistent with Thryv’s disciplined acquisition strategy and prior marketing services acquisitions.
“Vivial has a strong presence in key US markets including Hawaii, Alaska, Cincinnati, Ohio, Rochester, New York, and Lincoln, Nebraska,” said Walsh. “These fit synergistically into Thryv’s national platform. We are confident that many of Vivial’s 25,000 digital customers will adopt Thryv’s CRM software.”
"With the highly-profitable Marketing Services business providing low-cost leads into the SaaS business, the Company will continue to generate strong EBITDA margins from a consolidated standpoint," said Paul Rouse, Chief Financial Officer. "We have a strong track record of optimizing profits and we believe this trajectory will continue throughout 2022."
"Finally, we look forward to sharing more of the long-term vision at our upcoming in-person investor and analyst day in New York City on April 5th,” concluded Walsh.
Fourth Quarter 2021 Financial Highlights:
•US SaaS revenue was $47.1 million, a 35.0% increase year-over-year
•US Marketing Services revenue was $153.6 million
•Thryv International revenue was $43.8 million
•Consolidated total revenue was $244.4 million, a decrease of 1.0% year-over-year
•Consolidated net income was $5.1 million
•Consolidated adjusted EBITDA was $46.5 million, representing an adjusted EBITDA margin of 19.0%
•Consolidated gross profit was $151.3 million, an increase of 7.2% year-over-year
•Consolidated adjusted gross profit was $161.6 million
Full Year 2021 Financial Highlights:
•US SaaS revenue was $170.5 million, a 31.3% increase year-over-year
•US Marketing Services revenue was $797.5 million
•Thryv International revenue was $145.4 million
•Consolidated total revenue was $1,113.4 million, an increase of 0.4% year-over-year
•Consolidated net income was $101.6 million
•Consolidated adjusted EBITDA was $350.5 million, representing an adjusted EBITDA margin of 31.5%
•Consolidated gross profit was $705.3 million, an increase of 5.3% year-over-year
•Consolidated adjusted gross profit was $759.0 million
SaaS Highlights
•SaaS Average Revenue per Unit (“ARPU”)1 increased to $351 for the fourth quarter of 2021, compared to $293 in the fourth quarter of 2020
•Total SaaS clients increased to 46 thousand for the fourth quarter of 2021
•SaaS Monthly Churn2 was 2.1% for the fourth quarter of 2021, compared to 2.4% for the fourth quarter of 2020
•SaaS Monthly Seasoned Churn3 improved to 1.5% for the fourth quarter of 2021
•Net Dollar Retention4 improved 5 percentage points to 88% at end of the fourth quarter of 2021, when compared to the fourth quarter of 2020
•Seasoned Net Dollar Retention5 improved 4 percentage points to 94% at end of the fourth quarter of 2021, when compared to the fourth quarter of 2020
•SaaS monthly active users6 increased 7.1% year-over-year to 30 thousand active users. Daily and Weekly users increased 12.3% year-over-year.
2021 Product Innovation and Accolades
•Google My Business Optimization service launched to help small businesses get found online and chosen over their competition
•Free Online Tools launched, including invoice generator, Google review link generator, Online Experience Scan, as well as several calculators and quizzes to improve business practices
•Google My Business Dashboard launched, to centralize all-things Google for small businesses
•Gmail Email Service integration with Thryv launched
•Fully-integrated Verticalized Platform with enhanced CRM launched
•G2: Leader in 14 categories
•Capterra Highest-Rated Marketing Software to Help Your Business Succeed in 2022
•Top 10 CIO Applications Customer Service Solution Providers
•MyTechMag Top 10 CRM Solution Provider
•Appealie Overall SaaS Award – Customer Service
•Appealie SaaS Customer Success Award
•GetApp Category Leaders: Social Media Marketing, Lead Management, Reputation Management, Real Estate CRM and Review Management
•Software Advice Front Runners: Social Media Marketing, Lead Management, Account Management
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
Based on information available as of March 10, 2022, Thryv is issuing guidance7 for the first quarter and full year 2022 as indicated below:
For the first quarter 2022, the Company expects:
•Total SaaS revenue range of $47.5 to $47.7 million
•Total SaaS EBITDA loss of $12 to $13 million
•Total Marketing Services revenue range of $238 to $240 million
For the full year 2022, the Company currently expects:
•Total SaaS revenue range of $206 to $208 million
•Total SaaS EBITDA loss of $21 to $25 million
•Total Marketing Services revenue range of $870 to $890 million
•Total Marketing Services EBITDA of $305 to $312 million
Earnings Conference Call Information
Thryv will host a conference call on Thursday, March 10, 2022 at 8:30 a.m. (Eastern Time) to discuss the Company's fourth quarter and full year 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.
Final Results
Thryv Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income
| Three Months Ended December 31, | Years Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands, except share and per share data) | 2021 | 2020 | 2021 | 2020 | ||||
| Revenue | $ | 244,439 | $ | 246,928 | $ | 1,113,382 | $ | 1,109,435 |
| Cost of services | 93,109 | 105,717 | 408,043 | 439,742 | ||||
| Gross profit | 151,330 | 141,211 | 705,339 | 669,693 | ||||
| Operating expenses: | ||||||||
| Sales and marketing | 99,536 | 73,492 | 357,813 | 315,195 | ||||
| General and administrative | 46,540 | 44,816 | 153,902 | 177,574 | ||||
| Impairment charges | — | 5,497 | 3,611 | 24,911 | ||||
| Total operating expenses | 146,076 | 123,805 | 515,326 | 517,680 | ||||
| Operating income | 5,254 | 17,406 | 190,013 | 152,013 | ||||
| Other income (expense): | ||||||||
| Interest expense | (10,708) | (11,889) | (48,867) | (51,537) | ||||
| Interest expense, related party | (4,278) | (3,099) | (17,507) | (17,002) | ||||
| Other components of net periodic pension benefit (cost) | 13,831 | (10,924) | 14,829 | (42,236) | ||||
| Other income (expense) | 3 | — | (4,154) | — | ||||
| Income (loss) before income tax benefit (expense) | 4,102 | (8,506) | 134,314 | 41,238 | ||||
| Income tax benefit (expense) | 986 | 118,306 | (32,737) | 107,983 | ||||
| Net income | $ | 5,088 | $ | 109,800 | $ | 101,577 | $ | 149,221 |
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | 498 | — | (8,047) | — | ||||
| Comprehensive income | $ | 5,586 | $ | 109,800 | $ | 93,530 | $ | 149,221 |
| Net income per common share: | ||||||||
| Basic | $ | 0.15 | $ | 3.52 | $ | 3.02 | $ | 4.73 |
| Diluted | $ | 0.13 | $ | 3.31 | $ | 2.78 | $ | 4.42 |
| Weighted-average shares used in computing basic and diluted net income per common share: | ||||||||
| Basic | 34,006,358 | 31,230,392 | 33,607,446 | 31,522,845 | ||||
| Diluted | 37,983,847 | 33,212,192 | 36,495,746 | 33,795,594 |
Thryv Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
| (in thousands, except share data) | December 31, 2021 | December 31, 2020 | ||
|---|---|---|---|---|
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | $ | 11,262 | $ | 2,406 |
| Accounts receivable, net of allowance of $17,387 in 2021 and $33,030 in 2020 | 279,053 | 296,570 | ||
| Contract assets, net of allowance of $88 in 2021 and $338 in 2020 | 5,259 | 10,975 | ||
| Taxes receivable | 14,711 | 9,229 | ||
| Prepaid expenses | 22,418 | 13,411 | ||
| Indemnification asset | 24,346 | 24,346 | ||
| Other current assets | 13,596 | 12,761 | ||
| Total current assets | 370,645 | 369,698 | ||
| Fixed assets and capitalized software, net | 50,938 | 89,044 | ||
| Goodwill | 671,886 | 609,457 | ||
| Intangible assets, net | 82,577 | 31,777 | ||
| Deferred tax assets | 90,565 | 93,099 | ||
| Other assets | 33,891 | 21,902 | ||
| Total assets | $ | 1,300,502 | $ | 1,214,977 |
| Liabilities and Stockholders' Equity | ||||
| Current liabilities | ||||
| Accounts payable | $ | 8,610 | $ | 8,927 |
| Accrued liabilities | 131,813 | 139,613 | ||
| Current portion of unrecognized tax benefits | 29,771 | 30,022 | ||
| Contract liabilities | 51,726 | 18,942 | ||
| Current portion of long-term debt | 70,000 | — | ||
| Other current liabilities | 15,214 | 9,896 | ||
| Total current liabilities | 307,134 | 207,400 | ||
| New Term Loan, net | 309,672 | — | ||
| New Term Loan, related party | 142,875 | — | ||
| Senior Term Loan, net | — | 335,683 | ||
| Senior Term Loan, related party | — | 113,482 | ||
| ABL Facility | 39,929 | 79,238 | ||
| Leaseback obligations | — | 54,798 | ||
| Pension obligations, net | 140,167 | 190,827 | ||
| Deferred tax liabilities | 10,798 | 508 | ||
| Other liabilities | 35,212 | 36,266 | ||
| Total long-term liabilities | 678,653 | 810,802 | ||
| Commitments and contingencies | ||||
| Stockholders' equity | ||||
| Common stock - $0.01 par value, 250,000,000 shares authorized; 60,830,853, shares issued and 34,145,311 shares outstanding at December 31, 2021; and 59,590,422 shares issued and 32,912,012 shares outstanding at December 31, 2020 | 608 | 596 | ||
| Additional paid-in capital | 1,084,288 | 1,059,624 | ||
| Treasury stock - 26,685,542 shares at December 31, 2021 and 26,678,410 shares at December 31, 2020 | (468,879) | (468,613) | ||
| Accumulated other comprehensive loss | (8,047) | — | ||
| Accumulated deficit | (293,255) | (394,832) | ||
| Total stockholders' equity | 314,715 | 196,775 | ||
| Total liabilities and stockholders' equity | $ | 1,300,502 | $ | 1,214,977 |
Thryv Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
| Years Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|
| (in thousands) | 2021 | 2020 | |||||
| Cash Flows from Operating Activities | |||||||
| Net income | $ | 101,577 | $ | 149,221 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 105,473 | 146,523 | |||||
| Amortization of debt issuance costs | 4,919 | 1,068 | |||||
| Deferred income taxes | (20,438) | (147,329) | |||||
| Provision for credit losses | 8,031 | 32,077 | |||||
| Provision for service credits | 11,363 | 32,550 | |||||
| Stock-based compensation expense (benefit) | 8,094 | (2,895) | |||||
| Other components of net periodic pension (benefit) cost | (14,829) | 42,236 | |||||
| Loss on termination of leaseback obligations | 3,409 | — | |||||
| (Gain) loss on disposal/write-off of fixed assets and capitalized software | (5,536) | 3,544 | |||||
| Impairment charges | 3,611 | 24,911 | |||||
| Non-cash (gain) loss from remeasurement of indemnification asset | (1) | 5,443 | |||||
| Other, net | 304 | — | |||||
| Changes in working capital items, excluding acquisitions: | |||||||
| Accounts receivable | 74,368 | 41,382 | |||||
| Contract assets | 5,628 | 369 | |||||
| Prepaid expenses and other current assets | 6,084 | 472 | |||||
| Accounts payable and accrued liabilities | (125,883) | (86,161) | |||||
| Operating lease liability | (3,370) | (4,006) | |||||
| Contract liabilities | 7,767 | (5,737) | |||||
| Settlement of stock option liability | — | (896) | |||||
| Net cash provided by operating activities | 170,571 | 232,772 | |||||
| Cash Flows from Investing Activities | |||||||
| Additions to fixed assets and capitalized software | (26,849) | (27,757) | |||||
| Proceeds from the sale of assets | 6,836 | 1,546 | |||||
| Acquisition of a business, net of cash acquired | (175,370) | — | |||||
| Other | (1,192) | — | |||||
| Net cash (used in) investing activities | (196,575) | (26,211) | |||||
| 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 | (110,215) | — | |||||
| Payments of New Term Loan, related party | (47,785) | — | |||||
| Payments of Senior Term Loan | (335,821) | (113,747) | |||||
| Payments of Senior Term Loan, related party | (113,789) | (46,643) | |||||
| Proceeds from ABL Facility | 1,046,249 | 1,143,700 | |||||
| Payments of ABL Facility | (1,085,558) | (1,169,446) | |||||
| Purchase of treasury stock | — | (30,626) | |||||
| Proceeds from exercise of stock options | 7,047 | 11,241 | |||||
| Proceeds from exercise of stock warrants | 13,920 | — | |||||
| Proceeds from private placement | — | 445 | |||||
| Payments of lease obligations | (10,532) | (411) | |||||
| Other | (3,428) | (580) | |||||
| Net cash provided by (used in) financing activities | 39,088 | (206,067) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1,933) | — | |||||
| Increase in cash and cash equivalents and restricted cash | 11,151 | 494 | |||||
| Cash and cash equivalents and restricted cash, beginning of period | 2,406 | 1,912 | |||||
| Cash and cash equivalents and restricted cash, end of period | $ | 13,557 | $ | 2,406 | |||
| Supplemental Information | |||||||
| Cash paid for interest | $ | 66,737 | $ | 72,931 | |||
| Cash paid for income taxes, net | $ | 63,893 | $ | 24,799 | |||
| Change | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| 2020 | Amount | % | |||||
| (in thousands of ) | |||||||
| Revenue | |||||||
| Marketing Services | 153,555 | $ | 212,058 | $ | (58,503) | (27.6) | % |
| SaaS | 34,870 | 12,191 | 35.0 | % | |||
| Thryv International (1) | — | 43,823 | NM | ||||
| Consolidated Revenue | 244,439 | $ | 246,928 | $ | (2,489) | (1.0) | % |
| Segment EBITDA | |||||||
| Marketing Services | 40,684 | $ | 69,381 | $ | (28,697) | (41.4) | % |
| SaaS | 2,250 | (8,943) | (397.5) | % | |||
| Thryv International (1) | — | 12,487 | NM | ||||
| Consolidated Adjusted EBITDA | 46,478 | $ | 71,631 | $ | (25,153) | (35.1) | % |
All values are in US Dollars.
| Change | |||||||
|---|---|---|---|---|---|---|---|
| 2020 | Amount | % | |||||
| (in thousands of ) | |||||||
| Revenue | |||||||
| Marketing Services | 797,493 | $ | 979,611 | $ | (182,118) | (18.6) | % |
| SaaS | 129,824 | 40,674 | 31.3 | % | |||
| Thryv International(1) | — | 145,391 | NM | ||||
| Consolidated Revenue | 1,113,382 | $ | 1,109,435 | $ | 3,947 | 0.4 | % |
| Segment EBITDA | |||||||
| Marketing Services | 318,230 | $ | 358,804 | $ | (40,574) | (11.3) | % |
| SaaS | 13,035 | (27,039) | (207.4) | % | |||
| Thryv International (1) | — | 46,297 | NM | ||||
| Consolidated Adjusted EBITDA | 350,523 | $ | 371,839 | $ | (21,316) | (5.7) | % |
All values are in US Dollars.
(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, and Adjusted Gross Profit to gross profit. Both Net income 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:
| Three Months Ended December 31, | Years Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2021 | 2020 | 2021 | 2020 | ||||
| Reconciliation of Adjusted EBITDA | ||||||||
| Net income | $ | 5,088 | $ | 109,800 | $ | 101,577 | $ | 149,221 |
| Interest expense | 14,986 | 14,988 | 66,374 | 68,539 | ||||
| Income tax (benefit) expense | (986) | (118,306) | 32,737 | (107,983) | ||||
| Depreciation and amortization expense | 24,798 | 35,640 | 105,473 | 146,523 | ||||
| Restructuring and integration expenses (1) | 3,109 | 4,557 | 18,145 | 28,459 | ||||
| Transaction costs (2) | 5,086 | 6,320 | 25,059 | 20,999 | ||||
| Stock-based compensation expense (benefit) (3) | 1,862 | 1,300 | 8,094 | (2,895) | ||||
| Other components of net periodic pension (benefit) cost (4) | (13,831) | 10,924 | (14,829) | 42,236 | ||||
| Non-cash loss (gain) from remeasurement of indemnification asset (5) | 1,247 | 1,565 | (1) | 5,443 | ||||
| Impairment charges | — | 5,497 | 3,611 | 24,911 | ||||
| Other (6) | 5,119 | (654) | 4,283 | (3,614) | ||||
| Adjusted EBITDA | $ | 46,478 | $ | 71,631 | $ | 350,523 | $ | 371,839 |
(1)For the year ended December 31, 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 our direct listing, Thryv Australia acquisition and other transaction costs.
(3)We record 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 us 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 year ended December 31, 2021, other includes expenses related to the valuation of certain assets as a result of the acquisition of Thryv Australia and 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 December 31, | ||||||
|---|---|---|---|---|---|---|
| (in thousands) | 2021 | 2020 | ||||
| Reconciliation of Adjusted Gross Profit | ||||||
| Gross profit | $ | 151,330 | $ | 141,211 | ||
| Plus: | ||||||
| Depreciation and amortization expense | 10,242 | 17,962 | ||||
| Stock-based compensation expense | 60 | 104 | ||||
| Adjusted Gross Profit | $ | 161,632 | $ | 159,277 | ||
| Gross Margin | 61.9 | % | 57.2 | % | ||
| Adjusted Gross Margin | 66.1 | % | 64.5 | % | ||
| Years Ended December 31, | ||||||
| --- | --- | --- | --- | --- | --- | --- |
| (in thousands) | 2021 | 2020 | ||||
| Reconciliation of Adjusted Gross Profit | ||||||
| Gross profit | $ | 705,339 | $ | 669,693 | ||
| Plus: | ||||||
| Depreciation and amortization expense | 53,233 | 73,046 | ||||
| Stock-based compensation expense (benefit) | 380 | (72) | ||||
| Adjusted Gross Profit | $ | 758,952 | $ | 742,667 | ||
| Gross Margin | 63.4 | % | 60.4 | % | ||
| Adjusted Gross Margin | 68.2 | % | 66.9 | % |
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:
Morisa Young
Gregory FCA
347.428.4325
thryv@gregoryfca.com
Investor Contact:
Cameron Lessard
Thryv, Inc.
214.773.7022
cameron.lessard@thryv.com
exhibit992-4q21investors
Investor Supplement Fourth Quarter and FY 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
4th Quarter SaaS Highlights 3 Total SaaS Revenue Revenue +36% YoY Efficient Customer Acquisition Strategy +70% clients new to the company Growing Subscribers 46k (+5% YoY) ARPU Expansion $351 (+20% YoY) Record Retention 1.5% Seasoned Monthly Churn 94% Seasoned NDR ThryvPay Represents >50% of online payment volume by Q4
4th Quarter and FY 2021 Financial Highlights 4 Key Highlights: • US SaaS revenue accelerated to 35% in Q4 and 31% for FY21 • Customer mix, upsell opportunities, and additional features driving ARPU growth of +20% YoY • Client retention at record levels due to deepening engagement • US Marketing Services highly profitable while serving as attractive customer pool to drive cost-effective growth in SaaS subscribers $ in Thousands Q4-21 Q4-20 YoY FY21 FY20 YoY US SaaS Revenue $47,061 $34,870 35.0% $170,498 $129,824 31.3% EBITDA (6,693) 2,250 (14,004) 13,035 EBITDA % (14.2%) 6.5% (8.2%) 10.0% US Marketing Services Revenue $153,555 $212,058 (27.6)% $797,493 $979,611 (18.6)% EBITDA 40,684 69,381 318,230 358,804 EBITDA % 26.5% 32.7% 39.9% 36.6% Thryv International Revenue $43,823 - $145,391 - EBITDA 12,487 - 46,297 - EBITDA % 28.5% - 31.8% - Total Thryv Revenue $244,439 $246,928 (1.0)% $1,113,382 $1,109,435 0.4% EBITDA 46,478 71,631 350,523 371,839 EBITDA % 19.0% 29.0% 31.5% 33.5%
Strategic investments in 2021 led to revenue acceleration and Thryv is well-positioned sustained and durable growth SaaS 4th Quarter and FY 2021 Financial Highlights1 5 8% 36% Revenue YoY % Q4-20 Q4-21 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% 1% 32% Revenue YoY % FY20 FY21 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 180.0 (10%) (5%) 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 1Includes Domestic and International SaaS
Marketing Services FY21 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 (PYP) remains strong within target demo (55+, suburban, homeowners) • Higher margin Internet Yellow Pages (IYP) along with Print (PYP) accounts for 76% of Marketing Services revenue in 2021 Note: Results reflect U.S. Marketing Services segment only $980 $797 37% 40% Revenue EBITDA Margin % FY20 FY21 • 7+ billion references to directories representing over 90% of industry total (3.1b print, 4.3b online) • Highly variable cost structure to maintain strong EBITDA margins for many years • Source of low CAC for conversion into Thryv SaaS platform
US Marketing Services Predictable Billings Performance 7 • Marketing Services billings steady and predictable rate of decline has stayed very consistent over time and has shown improvement • Most print directories are published on cycles greater than 12 months 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 Q4-21 0 100 200 300 400 500 -30% -25% -20% -15% -10% -5% 0% $ in Thousands Q4-21 Q4-20 Billings Marketing Services $180,961 $232,456 YoY % (22%) (21%)
SaaS Metrics 8 ARPU $293 $351 Q4-20 Q4-21 # Sales from New Acquisition Channels 14% 26% Q4-20 Q4-21 MAUs (k) 28.5 30.4 Q4-20 Q4-21 # Clients (k) YoY Change 44 46 -7% 5% # Clients (k) YoY Change % Q4-20 Q4-21
SaaS Retention Monthly Churn 2.4% 2.1% Q4-20 Q4-21 Seasoned Monthly Churn 2.1% 1.5% Q4-20 Q4-21 Seasoned Net Dollar Retention 90% 94% Q4-20 Q4-21 Net Dollar Retention 83% 88% Q4-20 Q4-21 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 daily and weekly active users increased 12% vs. Q4-20 • 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: as of January 2022 MAUs by Frequency (k) 28.5 30.4 Daily Weekly Monthly Q4-20 Q4-21 +12%
11 Recognition for 2021 Leading Research Firms Recognize Thryv's Leadership Position Highlights: • G2: Leader in 14 categories • Capterra Highest-Rated Marketing Software to Help Your Business Succeed in 2022 • CIO Applications Top 10 CX Solution Provider • MyTechMag Top 10 CRM Solution Provider • Appealie Overall SaaS Award – Customer Service • Appealie SaaS Customer Success Award • GetApp Category Leaders: Social Media Marketing, Lead Management, Reputation Management, Real Estate CRM and Review Management • Software Advice Front Runners: Social Media Marketing, Lead Management, Account Management • Digital Transformation & Operational Excellence Awards: Best Achievement in Operational Excellence to deliver Digital Transformation, Best Achievement in Operational Excellence to deliver an outstanding CX Excellence • SaaS Awards: Best SaaS Product for Customer Services / CRM • Cloud Awards: Best SaaS – USA (SMB)
1st Quarter and FY 2022 SaaS Outlook1 12 Q1-22 FY 2022 Management Commentary Total SaaS Revenue $47.5 to $47.7 million $206 to $208 million • Company expects 20% to 22% growth for FY22 EBITDA $12 to $13 million loss $21 to $25 million loss • Company expects FY22 Total SaaS EBITDA margin in range of -10% to -12%, similar to FY21 • Strategic investments to support engineering, product development, GTM efforts and product innovation roadmap 1Includes Domestic and International SaaS
FY 2022 Marketing Services Outlook 13 FY 2022 Management Commentary Total Marketing Services1 $870 to $890 million • Q1: Range of $238 to $240 million • Q2: Range of $248 to $250 million • Q3: Range of $192 to $200 million • Q4: Range of $192 to $200 million EBITDA $305 to $312 million • Company expects EBITDA margins of ~35% for FY22 1Includes Domestic and International revenue
14 Engagement Effective onboarding and education delivered record level engagement and retention in FY21 Drive Cloud Adoption In SMB Market Team selling model delivered strong growth from mix of new and legacy sales channels Sensis Integration & SaaS Launch Integration complete Rebranded to Thryv Australia Successful SaaS launch and solid traction in marketplace Capital Allocation Term debt paydown of $158 million Pension liability reduced by $51 million. 2021 Priorities Successful
15 Appendix
Appendix: Non-GAAP Financial Reconciliation 16 $ in Thousands Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 FY20 FY21 Net Income (loss) $ 28,102 $ 11,464 $ (145) $ 109,800 $ 36,506 $ 24,359 $ 35,624 $ 5,088 $ 149,221 $ 101,577 Interest expense 19,930 18,012 15,609 14,988 15,672 19,170 16,546 14,986 68,539 66,374 Income tax expense (benefit) 13,409 21,164 (24,250) (118,306) 11,809 8,112 13,802 (986) (107,983) 32,737 Dep. and amort. expense 37,823 37,606 35,454 35,640 19,718 29,908 31,049 24,798 146,523 105,473 Restructuring and integration exp. 9,845 7,347 6,710 4,557 9,234 3,489 2,312 3,109 28,459 18,145 Transaction costs 6,534 3,232 4,913 6,320 10,546 5,440 3,987 5,086 20,999 25,059 Stock-based comp. (benefit) exp. (6,064) 580 1,289 1,300 1,971 1,921 2,340 1,862 (2,895) 8,094 Other components of net periodic pension cost (benefit) 201 936 30,175 10,924 (453) (272) (273) (13,831) 42,236 (14,829) Loss (gain) on remeasurement of indemnification asset 3,801 617 (540) 1,565 (844) (404) 1,247 5,443 (1) Impairment charges 98 18,132 1,184 5,497 3,611 — — 24,911 3,611 Other (900) (955) (1,105) (654) (70) 1,859 (2,624) 5,119 (3,614) 4,283 Adjusted EBITDA $ 112,779 $ 118,135 $ 69,294 $ 71,631 $ 104,933 $ 96,753 $ 102,359 $ 46,478 $ 371,839 $ 350,523 *Figures may not foot due to rounding.