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Thryv Grows SaaS Revenue 26% Year-Over-Year in Third Quarter 2022

11/03/2022

Raises Revenue and EBITDA Guidance for Full Year 2022

DALLAS--(BUSINESS WIRE)-- Thryv Holdings, Inc. (NASDAQ:THRY) (“Thryv” or the “Company”), the leading small business software platform, announced that it grew its SaaS revenue 26% year-over-year in the third quarter of 2022 and has raised revenue guidance for full year 2022.

“We are pleased to report a strong third quarter as we continue to make tremendous progress on our strategic priorities,” said Joe Walsh, Chairman and CEO. “Our SaaS revenue growth, up 26% year-over-year, was ahead of our SaaS guidance targets. Subscribers and ARPU both grew at double digits year-over-year. These strides reflect our investment in our product and client success team.”

As a result of a strong third quarter exceeding guidance, Thryv is increasing guidance for full year 2022 SaaS revenue and Marketing Services revenue and Adjusted EBITDA.

“We are transforming the small business sector one business at a time, supporting entrepreneurs as they move their operations to the cloud. We focus on our clients' engagement and usage which drives their loyalty and spend and allows us to deliver on our objectives," Walsh continued. "In support of our goal of international expansion, we recently announced the opening of our regional HQ in Toronto, the hiring of our Canadian sales team and key partnerships with GetinTheLoop and the Canadian Franchise Association. Marie Caron, our international president, is succeeding in making a difference and assisting our clients as we expand across the globe.”

“On a daily basis, our employees are helping small businesses succeed. We view employee experience as strategically important because clients benefit from our employees' commitment. In fact, Thryv was named to Newsweek's America's 100 Most Loved Workplaces for 2022. We are proud our employees feel this way - and in return, it helps our clients have a great experience when they work with us.”

Third Quarter 2022 Financial Highlights:

Revenue

  • Total SaaS1 revenue was $56.6 million, a 26.1% increase year-over-year
  • Total Marketing Services2 revenue was $224.0 million, an 11.2% decrease year-over-year
  • Consolidated total revenue was $280.7 million, a decrease of 5.6% year-over-year

Profitability

  • Consolidated net income was $13.3 million
  • Consolidated Adjusted EBITDA3 was $65.4 million, representing an Adjusted EBITDA margin of 23.3%
  • Total SaaS4 Adjusted EBITDA loss was $2.2 million
  • Total Marketing Services5 Adjusted EBITDA was $67.6 million, representing an Adjusted EBITDA margin of 30.2%
  • Consolidated Gross Profit was $175.6 million, a decrease of 9.1% year-over-year
  • Consolidated Adjusted Gross Profit6 was $185.6 million
  • SaaS Gross Profit was $34.4 million, representing a Gross Profit Margin of 60.8%
  • SaaS Adjusted Gross Profit7 was $35.9 million, representing an Adjusted Gross Profit Margin of 63.5%

SaaS Metrics

  • SaaS monthly Average Revenue per Unit (“ARPU”)8 increased to $377 for the third quarter of 2022, compared to $340 in the third quarter of 2021
  • Total SaaS clients increased 13% year-over-year to 51 thousand for the third quarter of 2022
  • Seasoned Net Dollar Retention9 was 92% at end of the third quarter of 2022
  • SaaS monthly active users10 increased 19% year-over-year to 37 thousand active users for the third quarter of 2022
  • ThryvPay annualized total payment volume of approximately $160 million for the third quarter of 2022

Outlook

Based on information available as of November 3, 2022, Thryv is raising guidance11 for the full year 2022 as indicated below:

For the fourth quarter of 2022, the Company expects:

  • Total SaaS revenue in a range of $57.0 to $58.0 million
  • Total SaaS Adjusted EBITDA loss11 in a range of $3.4 to $4.4 million
  • Total Marketing Services revenue in a range of $199.0 to $209.0 million

For the full year 2022, the Company expects:

  • Total SaaS revenue in a range of $214.0 to $215.0 million
  • Total SaaS Adjusted EBITDA loss12 in a range of $14.5 to $15.5 million
  • Total Marketing Services revenue in a range of $965.0 to $975.0 million
  • Total Marketing Services Adjusted EBITDA13 in a range of $338.0 to $341.0 million

1 Total SaaS revenue in the U.S. and International segments was $55.4 million and $1.3 million for the three months ended September 30, 2022, respectively.

2 Total Marketing Services revenue in the U.S. and International segments was $197.2 million and $26.8 million for the three months ended September 30, 2022, respectively.

3Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See “Non-GAAP Measures” below for additional information.

4 Total SaaS Adjusted EBITDA in the U.S. was $0.4 million and Total SaaS International Adjusted EBITDA loss was $2.6 million for the three months ended September 30, 2022.

5 Marketing Services Adjusted EBITDA in the U.S. and International segments was $61.8 million and $5.8 million for the three months ended September 30, 2022, respectively. Total Marketing Services Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See “Supplemental Financial Information” below for more information.

6 Adjusted Gross Profit is a non-GAAP financial measure. See “Non-GAAP Measures" below for additional information.

7 SaaS Adjusted Gross Profit and Adjusted Gross Profit margin are non-GAAP financial measures. See “Supplemental Financial Information” below for more information.

8 Defined as total client billings by month divided by the number of revenue-generating units during the month.

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

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

11 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.

12 A reconciliation of Total SaaS Adjusted EBITDA loss, a non-GAAP financial measure, to a corresponding GAAP measure is not available on a forward-looking basis without unreasonable efforts due to the unavailability of reconciling information, including income tax expense and net periodic pension cost.

13 A reconciliation of Total Marketing Services Adjusted EBITDA, a non-GAAP financial measure, to a corresponding GAAP measure is not available on a forward-looking basis without unreasonable efforts due to the unavailability of reconciling information, including income tax expense and net periodic pension cost.

Earnings Conference Call Information

Thryv will host a conference call on Thursday, November 3, 2022 at 8:30 a.m. (Eastern Time) to discuss the Company's third quarter 2022 results.

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

If you are unable to participate in the conference call, a replay will be available. To access the replay, please dial (800) 770-2030 or (647) 362-9199 and enter “87769.”

Final Results

 

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(in thousands, except share and per share data)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenue

$

280,650

 

 

$

297,290

 

 

$

923,020

 

 

$

868,943

 

Cost of services

 

105,011

 

 

 

104,167

 

 

 

321,543

 

 

 

314,934

 

Gross profit

 

175,639

 

 

 

193,123

 

 

 

601,477

 

 

 

554,009

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

89,891

 

 

 

94,343

 

 

 

275,659

 

 

 

258,277

 

General and administrative

 

54,670

 

 

 

32,983

 

 

 

159,514

 

 

 

107,362

 

Impairment charges

 

 

 

 

 

 

 

222

 

 

 

3,611

 

Total operating expenses

 

144,561

 

 

 

127,326

 

 

 

435,395

 

 

 

369,250

 

 

 

 

 

 

 

 

 

Operating income

 

31,078

 

 

 

65,797

 

 

 

166,082

 

 

 

184,759

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense

 

(13,720

)

 

 

(12,050

)

 

 

(40,584

)

 

 

(38,159

)

Interest expense, related party

 

(850

)

 

 

(4,496

)

 

 

(3,505

)

 

 

(13,229

)

Other components of net periodic pension (cost) benefit

 

(3,928

)

 

 

273

 

 

 

5,295

 

 

 

998

 

Other income (expense)

 

6,941

 

 

 

(98

)

 

 

15,567

 

 

 

(4,157

)

Income before income tax expense

 

19,521

 

 

 

49,426

 

 

 

142,855

 

 

 

130,212

 

Income tax expense

 

(6,241

)

 

 

(13,802

)

 

 

(38,062

)

 

 

(33,723

)

Net income

$

13,280

 

 

$

35,624

 

 

$

104,793

 

 

$

96,489

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

(7,920

)

 

 

(4,100

)

 

 

(12,611

)

 

 

(8,545

)

Comprehensive income

$

5,360

 

 

$

31,524

 

 

$

92,182

 

 

$

87,944

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

Basic

$

0.39

 

 

$

1.05

 

 

$

3.06

 

 

$

2.87

 

Diluted

$

0.37

 

 

$

0.95

 

 

$

2.86

 

 

$

2.67

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Basic

 

34,269,274

 

 

 

34,013,897

 

 

 

34,289,333

 

 

 

33,585,488

 

Diluted

 

35,811,473

 

 

 

37,620,116

 

 

 

36,698,395

 

 

 

36,110,702

 

Thryv Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

 

(in thousands, except share data)

September 30,
2022

 

December 31,
2021

Assets

(unaudited)

 

 

Current assets

 

 

 

Cash and cash equivalents

$

14,312

 

 

$

11,262

 

Accounts receivable, net of allowance of $13,142 in 2022 and $17,387 in 2021

 

290,103

 

 

 

279,053

 

Contract assets, net of allowance of $42 in 2022 and $88 in 2021

 

3,121

 

 

 

5,259

 

Taxes receivable

 

12,860

 

 

 

14,711

 

Prepaid expenses

 

28,253

 

 

 

22,418

 

Indemnification asset

 

25,818

 

 

 

24,346

 

Other current assets

 

12,626

 

 

 

13,596

 

Total current assets

 

387,093

 

 

 

370,645

 

Fixed assets and capitalized software, net

 

42,144

 

 

 

50,938

 

Goodwill

 

664,619

 

 

 

671,886

 

Intangible assets, net

 

45,330

 

 

 

82,577

 

Deferred tax assets

 

126,721

 

 

 

90,565

 

Other assets

 

23,974

 

 

 

33,891

 

Total assets

$

1,289,881

 

 

$

1,300,502

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

18,203

 

 

$

8,610

 

Accrued liabilities

 

133,063

 

 

 

131,813

 

Current portion of unrecognized tax benefits

 

31,243

 

 

 

29,771

 

Contract liabilities

 

31,733

 

 

 

51,726

 

Current portion of long-term debt

 

70,000

 

 

 

70,000

 

Other current liabilities

 

11,644

 

 

 

15,214

 

Total current liabilities

 

295,886

 

 

 

307,134

 

Term Loan, net

 

349,044

 

 

 

309,672

 

Term Loan, related party

 

25,827

 

 

 

142,875

 

ABL Facility

 

58,856

 

 

 

39,929

 

Pension obligations, net

 

111,942

 

 

 

140,167

 

Deferred tax liabilities

 

832

 

 

 

10,798

 

Other liabilities

 

25,568

 

 

 

35,212

 

Total long-term liabilities

 

572,069

 

 

 

678,653

 

Commitments and contingencies

 

 

 

Stockholders' equity

 

 

 

Common stock - $0.01 par value, 250,000,000 shares authorized; 61,160,731 shares issued and 34,475,189 shares outstanding at September 30, 2022; and 60,830,853 shares issued and 34,145,311 shares outstanding at December 31, 2021

 

612

 

 

 

608

 

Additional paid-in capital

 

1,099,313

 

 

 

1,084,288

 

Treasury stock - 26,685,542 shares at September 30, 2022 and December 31, 2021

 

(468,879

)

 

 

(468,879

)

Accumulated other comprehensive income (loss)

 

(20,658

)

 

 

(8,047

)

Accumulated deficit

 

(188,462

)

 

 

(293,255

)

Total stockholders' equity

 

421,926

 

 

 

314,715

 

Total liabilities and stockholders' equity

$

1,289,881

 

 

$

1,300,502

 

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

 

 

Nine Months Ended
September 30,

(in thousands)

 

2022

 

 

 

2021

 

Cash Flows from Operating Activities

(unaudited)

 

(unaudited)

Net income

$

104,793

 

 

$

96,489

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

65,954

 

 

 

80,675

 

Amortization of debt issuance costs

 

4,327

 

 

 

3,431

 

Deferred income taxes

 

(23,222

)

 

 

(57,823

)

Provision for credit losses and service credits

 

18,325

 

 

 

13,806

 

Stock-based compensation expense

 

10,140

 

 

 

6,232

 

Other components of net periodic pension (benefit)

 

(5,295

)

 

 

(998

)

Impairment charges

 

222

 

 

 

3,611

 

(Gain) loss on foreign currency exchange rates

 

(4,447

)

 

 

748

 

Bargain purchase gain

 

(10,245

)

 

 

 

Other

 

489

 

 

 

1,961

 

Changes in working capital items, excluding acquisitions:

 

 

 

Accounts receivable

 

(8,930

)

 

 

48,791

 

Contract assets

 

2,226

 

 

 

3,837

 

Prepaid expenses and other assets

 

16,485

 

 

 

(3,184

)

Accounts payable and accrued liabilities

 

(36,956

)

 

 

(64,377

)

Other liabilities

 

(29,645

)

 

 

(11,660

)

Net cash provided by operating activities

 

104,221

 

 

 

121,539

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

Additions to fixed assets and capitalized software

 

(19,345

)

 

 

(20,053

)

Proceeds from the sale of fixed assets

 

 

 

 

63

 

Acquisition of a business, net of cash acquired

 

(22,793

)

 

 

(175,370

)

Net cash (used in) investing activities

 

(42,138

)

 

 

(195,360

)

 

 

 

 

Cash Flows from Financing Activities

 

 

 

Proceeds from Term Loan

 

 

 

 

418,070

 

Proceeds from Term Loan, related party

 

 

 

 

260,930

 

Payments of Term Loan

 

(73,164

)

 

 

(86,199

)

Payments of Term Loan, related party

 

(8,347

)

 

 

(36,801

)

Payments of Senior Term Loan

 

 

 

 

(335,821

)

Payments of Senior Term Loan, related party

 

 

 

 

(113,789

)

Proceeds from ABL Facility

 

746,689

 

 

 

793,604

 

Payments of ABL Facility

 

(727,762

)

 

 

(816,661

)

Proceeds from exercises of stock options and stock warrants

 

4,888

 

 

 

18,144

 

Other

 

 

 

 

(13,960

)

Net cash (used in) provided by financing activities

 

(57,696

)

 

 

87,517

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(1,610

)

 

 

(3,446

)

Increase in cash and cash equivalents and restricted cash

 

2,777

 

 

 

10,250

 

Cash and cash equivalents and restricted cash, beginning of period

 

13,557

 

 

 

2,406

 

Cash and cash equivalents and restricted cash, end of period

$

16,334

 

 

$

12,656

 

 

 

 

 

Supplemental Information

 

 

 

Cash paid for interest

$

42,435

 

 

$

52,491

 

Cash paid for income taxes, net

$

53,673

 

 

$

58,491

 

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

 

Three Months Ended
September 30,

 

Change

(in thousands of $)

 

2022

 

 

 

2021

 

 

Amount

 

%

Revenue

 

 

 

 

 

 

 

Thryv U.S. (1)

 

 

 

 

 

 

 

Marketing Services

$

197,174

 

 

$

213,210

 

 

$

(16,036

)

 

(7.5

) %

SaaS

 

55,353

 

 

 

44,800

 

 

 

10,553

 

 

23.6

%

Thryv International (2)

 

 

 

 

 

 

 

Marketing Services

 

26,833

 

 

 

39,149

 

 

 

(12,316

)

 

(31.5

) %

SaaS

 

1,290

 

 

 

131

 

 

 

1,159

 

 

NM

 

Consolidated Revenue

$

280,650

 

 

$

297,290

 

 

$

(16,640

)

 

(5.6

) %

 

 

 

 

 

 

 

 

Segment Gross Profit

 

 

 

 

 

 

 

Thryv U.S. (1)

 

 

 

 

 

 

 

Marketing Services

$

126,846

 

 

$

149,252

 

 

$

(22,406

)

 

(15.0

) %

SaaS

 

33,827

 

 

 

27,753

 

 

 

6,074

 

 

21.9

%

Thryv International (2)

 

 

 

 

 

 

 

Marketing Services

 

14,351

 

 

 

16,347

 

 

 

(1,996

)

 

(12.2

) %

SaaS

 

615

 

 

 

(229

)

 

 

844

 

 

NM

 

Consolidated Segment Gross Profit

$

175,639

 

 

$

193,123

 

 

$

(17,484

)

 

(9.1

) %

 

 

 

 

 

 

 

 

Segment EBITDA

 

 

 

 

 

 

 

Thryv U.S. (1)

 

 

 

 

 

 

 

Marketing Services

$

61,802

 

 

$

96,231

 

 

$

(34,429

)

 

(35.8

) %

SaaS

 

398

 

 

 

(5,508

)

 

 

5,906

 

 

107.2

%

Thryv International (2)

 

 

 

 

 

 

 

Marketing Services

 

5,807

 

 

 

14,013

 

 

 

(8,206

)

 

(58.6

) %

SaaS

 

(2,575

)

 

 

(2,377

)

 

 

(198

)

 

8.3

%

Consolidated Adjusted EBITDA

$

65,432

 

 

$

102,359

 

 

$

(36,927

)

 

(36.1

) %

(1)

Thryv U.S. includes Vivial results of operations subsequent to the January 21, 2022 acquisition date.

(2)

Thryv International includes Thryv Australia results of operations subsequent to the March 1, 2021 acquisition date

 

Nine Months Ended
September 30,

 

Change

(in thousands of $)

 

2022

 

 

 

2021

 

 

Amount

 

%

Revenue

 

 

 

 

 

 

 

Thryv U.S. (1)

 

 

 

 

 

 

 

Marketing Services

$

632,277

 

 

$

643,938

 

 

$

(11,661

)

 

(1.8

) %

SaaS

 

153,863

 

 

 

123,437

 

 

 

30,426

 

 

24.6

%

Thryv International (2)

 

 

 

 

 

 

 

Marketing Services

 

133,715

 

 

 

101,428

 

 

 

32,287

 

 

31.8

%

SaaS

 

3,165

 

 

 

140

 

 

 

3,025

 

 

NM

 

Consolidated Revenue

$

923,020

 

 

$

868,943

 

 

$

54,077

 

 

6.2

%

 

 

 

 

 

 

 

 

Segment Gross Profit

 

 

 

 

 

 

 

Thryv U.S. (1)

 

 

 

 

 

 

 

Marketing Services

$

415,130

 

 

$

442,244

 

 

$

(27,114

)

 

(6.1

) %

SaaS

 

95,328

 

 

 

76,234

 

 

 

19,094

 

 

25.0

%

Thryv International (2)

 

 

 

 

 

 

 

Marketing Services

 

89,694

 

 

 

35,755

 

 

 

53,939

 

 

150.9

%

SaaS

 

1,325

 

 

 

(224

)

 

 

1,549

 

 

NM

 

Consolidated Segment Gross Profit

$

601,477

 

 

$

554,009

 

 

$

47,468

 

 

8.6

%

 

 

 

 

 

 

 

 

Segment EBITDA

 

 

 

 

 

 

 

Thryv U.S. (1)

 

 

 

 

 

 

 

Marketing Services

$

211,871

 

 

$

277,546

 

 

$

(65,675

)

 

(23.7

) %

SaaS

 

(3,769

)

 

 

(7,311

)

 

 

3,542

 

 

48.4

%

Thryv International (2)

 

 

 

 

 

 

 

Marketing Services

 

64,449

 

 

 

36,182

 

 

 

28,267

 

 

78.1

%

SaaS

 

(7,402

)

 

 

(2,372

)

 

 

(5,030

)

 

NM

 

Consolidated Adjusted EBITDA

$

265,149

 

 

$

304,045

 

 

$

(38,896

)

 

(12.8

) %

(1)

Thryv U.S. includes Vivial results subsequent to the January 21, 2022 acquisition date.

(2)

Thryv International includes Thryv Australia results subsequent to the March 1, 2021 acquisition date.

Non-GAAP Measures

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

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

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

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Reconciliation of Adjusted EBITDA

 

 

 

 

 

 

 

Net income

$

13,280

 

 

$

35,624

 

 

$

104,793

 

 

$

96,489

 

Income tax expense

 

6,241

 

 

 

13,802

 

 

 

38,062

 

 

 

33,723

 

Interest expense

 

14,570

 

 

 

16,546

 

 

 

44,089

 

 

 

51,388

 

Depreciation and amortization expense

 

23,393

 

 

 

31,049

 

 

 

65,954

 

 

 

80,675

 

Loss on termination of leaseback obligations

 

 

 

 

 

 

 

 

 

 

3,409

 

Restructuring and integration expenses (1)

 

3,790

 

 

 

2,312

 

 

 

14,439

 

 

 

15,036

 

Transaction costs (2)

 

1,461

 

 

 

3,987

 

 

 

4,797

 

 

 

19,973

 

Stock-based compensation expense (3)

 

4,402

 

 

 

2,340

 

 

 

10,140

 

 

 

6,232

 

Other components of net periodic pension cost (benefit) (4)

 

3,928

 

 

 

(273

)

 

 

(5,295

)

 

 

(998

)

Non-cash (gain) from remeasurement of indemnification asset (5)

 

(585

)

 

 

(404

)

 

 

(1,472

)

 

 

(1,248

)

Impairment charges

 

 

 

 

 

 

 

222

 

 

 

3,611

 

Other (6)

 

(5,048

)

 

 

(2,624

)

 

 

(10,580

)

 

 

(4,245

)

Adjusted EBITDA

$

65,432

 

 

$

102,359

 

 

$

265,149

 

 

$

304,045

 

(1)

For the three and nine months ended September 30, 2022 and 2021, 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 and Vivial acquisitions 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.

(4)

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

(5)

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

(6)

Other primarily includes expenses related to potential non income-based tax liabilities and foreign exchange-related expense. Additionally, during the nine months ended September 30, 2022, Other includes the bargain purchase gain as a result of the Vivial Acquisition.

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

 

Three Months Ended September 30, 2022

 

Thryv U.S.

 

Thryv International

 

 

(in thousands)

Marketing
Services

 

SaaS

 

Marketing
Services

 

SaaS

 

Total

Reconciliation of Adjusted Gross Profit

 

 

 

 

 

 

 

 

 

Gross profit

$

126,846

 

 

$

33,827

 

 

$

14,351

 

 

$

615

 

 

$

175,639

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

4,593

 

 

 

1,287

 

 

 

3,739

 

 

 

195

 

 

 

9,814

 

Stock-based compensation expense

 

85

 

 

 

22

 

 

 

 

 

 

 

 

 

107

 

Adjusted Gross Profit

$

131,524

 

 

$

35,136

 

 

$

18,090

 

 

$

810

 

 

$

185,560

 

Gross Margin

 

64.3

%

 

 

61.1

%

 

 

53.5

%

 

 

47.7

%

 

 

62.6

%

Adjusted Gross Margin

 

66.7

%

 

 

63.5

%

 

 

67.4

%

 

 

62.8

%

 

 

66.1

%

 

Three Months Ended September 30, 2021

 

Thryv U.S.

 

Thryv International

 

 

(in thousands)

Marketing
Services

 

SaaS

 

Marketing
Services

 

SaaS

 

Total

Reconciliation of Adjusted Gross Profit

 

 

 

 

 

 

 

 

 

Gross profit

$

149,252

 

 

$

27,753

 

 

$

16,347

 

 

$

(229

)

 

$

193,123

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

4,442

 

 

 

942

 

 

 

9,510

 

 

 

36

 

 

 

14,930

 

Stock-based compensation expense

 

127

 

 

 

29

 

 

 

 

 

 

 

 

 

156

 

Adjusted Gross Profit

$

153,821

 

 

$

28,724

 

 

$

25,857

 

 

$

(193

)

 

$

208,209

 

Gross Margin

 

70.0

%

 

 

61.9

%

 

 

41.8

%

 

 

(174.8

) %

 

 

65.0

%

Adjusted Gross Margin

 

72.1

%

 

 

64.1

%

 

 

66.0

%

 

 

(147.3

) %

 

 

70.0

%

 

Nine Months Ended September 30, 2022

 

Thryv U.S.

 

Thryv International

 

 

(in thousands)

Marketing
Services

 

SaaS

 

Marketing
Services

 

SaaS

 

Total

Reconciliation of Adjusted Gross Profit

 

 

 

 

 

 

 

 

 

Gross profit

$

415,130

 

 

$

95,328

 

 

$

89,694

 

 

$

1,325

 

 

$

601,477

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

13,381

 

 

 

3,278

 

 

 

11,771

 

 

 

337

 

 

 

28,767

 

Stock-based compensation expense

 

251

 

 

 

63

 

 

 

 

 

 

 

 

 

314

 

Adjusted Gross Profit

$

428,762

 

 

$

98,669

 

 

$

101,465

 

 

$

1,662

 

 

$

630,558

 

Gross Margin

 

65.7

%

 

 

62.0

%

 

 

67.1

%

 

 

41.9

%

 

 

65.2

%

Adjusted Gross Margin

 

67.8

%

 

 

64.1

%

 

 

75.9

%

 

 

52.5

%

 

 

68.3

%

 

Nine Months Ended September 30, 2021

 

Thryv U.S.

 

Thryv International

 

 

(in thousands)

Marketing
Services

 

SaaS

 

Marketing
Services

 

SaaS

 

Total

Reconciliation of Adjusted Gross Profit

 

 

 

 

 

 

 

 

 

Gross profit

$

442,244

 

 

$

76,234

 

 

$

35,755

 

 

$

(224

)

 

$

554,009

 

Plus:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

13,485

 

 

 

2,598

 

 

 

26,869

 

 

 

39

 

 

 

42,991

 

Stock-based compensation expense

 

265

 

 

 

55

 

 

 

 

 

 

 

 

 

320

 

Adjusted Gross Profit

$

455,994

 

 

$

78,887

 

 

$

62,624

 

 

$

(185

)

 

$

597,320

 

Gross Margin

 

68.7

%

 

 

61.8

%

 

 

35.3

%

 

 

(160.0

) %

 

 

63.8

%

Adjusted Gross Margin

 

70.8

%

 

 

63.9

%

 

 

61.7

%

 

 

(132.1

) %

 

 

68.7

%

Supplemental Financial Information

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

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

 

Three Months Ended September 30, 2022

(in thousands)

Marketing Services

 

SaaS

 

U.S.

 

International

 

Total

 

U.S.

 

International

 

Total

Revenue

$

197,174

 

 

$

26,833

 

 

$

224,007

 

 

$

55,353

 

 

$

1,290

 

 

$

56,643

 

Adjusted EBITDA

 

61,802

 

 

 

5,807

 

 

 

67,609

 

 

 

398

 

 

 

(2,575

)

 

 

(2,177

)

Adjusted EBITDA Margin

 

31.3

%

 

 

21.6

%

 

 

30.2

%

 

 

0.7

%

 

 

(199.6

) %

 

 

(3.8

) %

 

Three Months Ended September 30, 2021

(in thousands)

Marketing Services

 

SaaS

 

U.S.

 

International

 

Total

 

U.S.

 

International

 

Total

Revenue

$

213,210

 

 

$

39,149

 

 

$

252,359

 

 

$

44,800

 

 

$

131

 

 

$

44,931

 

Adjusted EBITDA

 

96,231

 

 

 

14,013

 

 

 

110,244

 

 

 

(5,508

)

 

 

(2,377

)

 

 

(7,885

)

Adjusted EBITDA Margin

 

45.1

%

 

 

35.8

%

 

 

43.7

%

 

 

(12.3

) %

 

 

NM

 

 

 

(17.5

) %

 

Nine Months Ended September 30, 2022

(in thousands)

Marketing Services

 

SaaS

 

U.S.

 

International

 

Total

 

U.S.

 

International

 

Total

Revenue

$

632,277

 

 

$

133,715

 

 

$

765,992

 

 

$

153,863

 

 

$

3,165

 

 

$

157,028

 

Adjusted EBITDA

 

211,871

 

 

 

64,449

 

 

 

276,320

 

 

 

(3,769

)

 

 

(7,402

)

 

 

(11,171

)

Adjusted EBITDA Margin

 

33.5

%

 

 

48.2

%

 

 

36.1

%

 

 

(2.4

) %

 

 

(233.9

) %

 

 

(7.1

) %

 

Nine Months Ended September 30, 2021

(in thousands)

Marketing Services

 

SaaS

 

U.S.

 

International

 

Total

 

U.S.

 

International

 

Total

Revenue

$

643,938

 

 

$

101,428

 

 

$

745,366

 

 

$

123,437

 

 

$

140

 

 

$

123,577

 

Adjusted EBITDA

 

277,546

 

 

 

36,182

 

 

 

313,728

 

 

 

(7,311

)

 

 

(2,372

)

 

 

(9,683

)

Adjusted EBITDA Margin

 

43.1

%

 

 

35.7

%

 

 

42.1

%

 

 

(5.9

) %

 

 

NM

 

 

 

(7.8

) %

Forward-Looking Statements

Certain statements contained herein are not historical facts, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. Statements that include the words “may”, “will”, “could”, “should”, “would”, “believe”, “anticipate”, “forecast”, “estimate”, “expect”, “preliminary”, “intend”, “plan”, “target”, “project”, “outlook”, “future”, “forward”, “guidance” and similar statements of a future or forward-looking nature identify forward-looking statements. These statements are not guarantees of future performance. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: 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 as well as the risks and uncertainties set forth in the Company's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on From 10-Q filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.

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

About Thryv Holdings, Inc.

Thryv Holdings, Inc. (NASDAQ: THRY) is a global software and marketing services company that empowers small- to medium-sized businesses (“SMBs”) to grow and modernize their operations so they can compete and win in today's economy. Over 50,000 businesses use our award-winning SaaS platform, Thryv®, to manage their end-to-end operations, which has helped businesses across the U.S. and overseas grow their bottom line. Thryv also manages digital and print presence for approximately 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.
214-392-9609
paige.blankenship@thryv.com

Investor Contact:
Cameron Lessard
Thryv, Inc.
214.773.7022
cameron.lessard@thryv.com

Source: Thryv

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