– Grows SaaS subscribers 30% year-over-year –
Optimizes capital structure by refinancing maturing credit
facility – Announces $40 million inaugural share repurchase
program
Thryv Holdings, Inc. (NASDAQ:THRY) (“Thryv” or the “Company”),
the provider of Thryv®, the leading small business software
platform, reported SaaS revenue growth of 24% year-over-year in the
first quarter of 2024.
“We are pleased with our first quarter results and are raising
SaaS guidance for the full year,” said Joe Walsh, Thryv Chairman
and CEO. “Today’s authorization of our first-ever share repurchase
program demonstrates the confidence we have in our continued
financial momentum and business trajectory. We have also finalized
a more flexible credit agreement that provides us incremental cost
savings as well as enhanced financial flexibility. Further
development of our market-leading software is now in the capable
hands of Rees Johnson, our new Chief Product Officer, who will
direct the evolution of our product strategy. Rees has over 20
years of product leadership experience and will bring a
collaborative and quality focused discipline to our product
process.”
“It's exciting to be leading the next phase of growth in Thryv's
platform innovation and ensuring all of our clients experience the
value of our products,” said Rees Johnson, Chief Product Officer.
“I can't think of many jobs more challenging than that of a small
business owner, and it's an honor to lead a talented product team
dedicated to making it easier for our clients to grow and more
efficiently operate their business."
Additionally, today Thryv issued an 8-K detailing the
refinancing of its Term Loan and ABL, along with a press release
regarding its new share repurchase program.
“We had a solid start to 2024 and raising full year guidance for
SaaS,” stated Paul Rouse, Chief Financial Officer. “In the first
quarter, we reported SaaS revenue growth of 24% and our primary
focus continues to be accelerating profitable growth in the SaaS
business while maintaining a strong and healthy balance sheet.”
First Quarter 2024 Highlights:
- Total SaaS revenue was $74.3 million, a 24% increase
year-over-year
- Total Marketing Services revenue was $159.3 million, a 14%
decrease year-over-year
- Consolidated total revenue was $233.6 million, a decrease of 5%
year-over-year
- Consolidated net income was $8.4 million, or $0.22 per diluted
share; compared to net income of $9.3 million, or $0.25 per diluted
share, for the first quarter of 2023
- Consolidated Adjusted EBITDA was $54.1 million, representing an
Adjusted EBITDA margin of 23.2%
- Total SaaS Adjusted EBITDA was $3.4 million, representing an
Adjusted EBITDA margin of 4.6%
- Total Marketing Services Adjusted EBITDA was $50.7 million,
representing an Adjusted EBITDA margin of 31.8%
- Consolidated Gross Profit was $153.6 million
- Consolidated Adjusted Gross Profit1 was $159.6 million
- SaaS Gross Profit was $49.1 million
- SaaS Adjusted Gross Profit was $50.9 million, representing an
Adjusted Gross Profit Margin of 68.4%
SaaS Metrics
- Total SaaS clients increased 30% year-over-year to 70 thousand
for the first quarter of 2024
- Seasoned Net Dollar Retention2 was 94% for the first quarter of
2024, an increase of 300 bps year-over-year
- SaaS monthly Average Revenue per Unit (“ARPU”)3 was $369 for
the first quarter of 2024
- ThryvPay total payment volume was $62 million, an increase of
40% year-over-year
Outlook
Based on information available as of May 1, 2024, Thryv is
issuing guidance4 for the second quarter of 2024 and full year 2024
as indicated below:
2nd Quarter
Full Year
(in millions)
2024
2024
SaaS Revenue
$77.5 - $79.5
$326 - $329
SaaS Adjusted EBITDA
$6.5 - $7.5
$28 - $30
2nd Quarter
3rd Quarter
4th Quarter
Full Year
(in millions)
2024
2024
2024
2024
Marketing Services Revenue
$141 - $144
$97 - $99
$90 - $92
$487 - $494
Marketing Services Adjusted EBITDA
$130 - $133
_______________ 1 Defined as Gross profit adjusted to exclude
the impact of depreciation and amortization expense and stock-based
compensation expense. 2 Seasoned Net Dollar Retention is defined as
net dollar retention excluding clients acquired over the previous
12 months. 3 Defined as total client billings for a particular
month divided by the number of clients that have one or more
revenue-generating solutions in that same month. 4 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.
Earnings Conference Call Information
Thryv will host a conference call on Thursday, May 2, 2024 at
8:30 a.m. (Eastern Time) to discuss the Company's first quarter
2024 results.
For analysts to register for this conference call, please use
this link. 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. To listen to the webcast, please use this
link or visit Thryv's Investor Relations website at
investor.thryv.com. 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 “44819.”
Thryv Holdings, Inc. and
Subsidiaries
Consolidated Statements of Operations
and Comprehensive Income
Three Months Ended
March 31,
(in thousands, except share and per share
data)
2024
2023
Revenue
$
233,624
$
245,555
Cost of services
79,983
90,747
Gross profit
153,641
154,808
Operating expenses:
Sales and marketing
70,091
76,343
General and administrative
52,416
47,680
Total operating expenses
122,507
124,023
Operating income
31,134
30,785
Other income (expense):
Interest expense
(13,359
)
(16,488
)
Other components of net periodic pension
cost
(1,581
)
(121
)
Other expense
(2,373
)
(366
)
Income before income tax
expense
13,821
13,810
Income tax expense
(5,397
)
(4,496
)
Net income
$
8,424
$
9,314
Other comprehensive income (loss):
Foreign currency translation adjustment,
net of tax
(265
)
(2,188
)
Comprehensive income
$
8,159
$
7,126
Net income per common share:
Basic
$
0.24
$
0.27
Diluted
$
0.22
$
0.25
Weighted-average shares used in
computing basic and diluted net income per common share:
Basic
35,186,121
34,606,864
Diluted
37,985,785
36,981,652
Thryv Holdings, Inc. and
Subsidiaries
Consolidated Balance Sheets
(in thousands, except share data)
March 31, 2024
December 31, 2023
Assets
Current assets
Cash and cash equivalents
$
14,394
$
18,216
Accounts receivable, net of allowance of
$17,829 in 2024 and $14,926 in 2023
204,119
205,503
Contract assets, net of allowance of $39
in 2024 and $35 in 2023
4,578
2,909
Taxes receivable
2,855
3,085
Prepaid expenses
31,606
17,771
Deferred costs
15,106
16,722
Other current assets
2,359
2,662
Total current assets
275,017
266,868
Fixed assets and capitalized software,
net
37,836
38,599
Goodwill
299,626
302,400
Intangible assets, net
11,626
18,788
Deferred tax assets
131,357
128,051
Other assets
31,373
28,464
Total assets
$
786,835
$
783,170
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable
$
19,743
$
10,348
Accrued liabilities
89,142
105,903
Current portion of unrecognized tax
benefits
24,515
23,979
Contract liabilities
45,846
44,558
Current portion of long-term debt
52,500
70,000
Other current liabilities
7,953
8,402
Total current liabilities
239,699
263,190
Term Loan, net
239,331
230,052
ABL Facility
55,737
48,845
Pension obligations, net
70,828
69,388
Other liabilities
14,174
18,995
Total long-term liabilities
380,070
367,280
Commitments and contingencies
Stockholders' equity
Common stock - $0.01 par value,
250,000,000 shares authorized; 63,306,246 shares issued and
35,826,908 shares outstanding at March 31, 2024; and 62,660,783
shares issued and 35,302,746 shares outstanding at December 31,
2023
633
627
Additional paid-in capital
1,159,754
1,151,259
Treasury stock - 27,479,338 shares at
March 31, 2024 and 27,358,037 shares at December 31, 2023
(488,087
)
(485,793
)
Accumulated other comprehensive loss
(15,456
)
(15,191
)
Accumulated deficit
(489,778
)
(498,202
)
Total stockholders' equity
167,066
152,700
Total liabilities and stockholders'
equity
$
786,835
$
783,170
Thryv Holdings, Inc. and
Subsidiaries
Consolidated Statements of Cash
Flows
Three Months Ended March
31,
(in thousands)
2024
2023
Cash Flows from Operating
Activities
Net income
$
8,424
$
9,314
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
14,553
15,431
Amortization of deferred commissions
4,849
2,688
Amortization of debt issuance costs
1,310
1,361
Deferred income taxes
(3,110
)
(1,675
)
Provision for credit losses and service
credits
7,475
5,755
Stock-based compensation expense
5,289
5,393
Other components of net periodic pension
cost
1,581
121
Loss (gain) on foreign currency exchange
rates
2,373
(881
)
Other
(3,152
)
(756
)
Changes in working capital items,
excluding acquisitions:
Accounts receivable
(9,750
)
16,268
Contract assets
(1,670
)
463
Prepaid expenses and other assets
(18,169
)
(17,367
)
Accounts payable and accrued
liabilities
(5,754
)
(6,515
)
Other liabilities
1,189
2,711
Net cash provided by operating
activities
5,438
32,311
Cash Flows from Investing
Activities
Additions to fixed assets and capitalized
software
(7,278
)
(5,136
)
Net cash used in investing activities
(7,278
)
(5,136
)
Cash Flows from Financing
Activities
Payments of Term Loan
(9,368
)
(35,000
)
Proceeds from ABL Facility
205,351
272,857
Payments of ABL Facility
(198,459
)
(255,179
)
Other
918
267
Net cash used in financing activities
(1,558
)
(17,055
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(723
)
(290
)
(Decrease) increase in cash, cash
equivalents and restricted cash
(4,121
)
9,830
Cash, cash equivalents and restricted
cash, beginning of period
20,530
18,180
Cash, cash equivalents and restricted
cash, end of period
$
16,409
$
28,010
Supplemental Information
Cash paid for interest
$
11,911
$
15,008
Cash paid (received) for income taxes,
net
$
1,915
$
(992
)
Segment Information
During first quarter of 2024, the Company changed the internal
reporting provided to the chief operating decision maker (“CODM”).
As a result, the Company reevaluated its segment reporting and
determined that Thryv U.S. Marketing Services and Thryv
International Marketing Services should be reflected as a single
reportable segment, and that Thryv U.S. SaaS and Thryv
International SaaS should be reflected as a single reportable
segment. As such, beginning on January 1, 2024, the results of our
Marketing Services and SaaS businesses will be presented as two
reportable segments. Comparative prior periods have been recast to
reflect the current presentation.
The following tables summarize the operating results of the
Company's reportable segments:
Three Months Ended March
31,
Change
(in thousands)
2024
2023
Amount
%
Revenue
Marketing Services
$
159,302
$
185,626
$
(26,324
)
(14.2
)%
SaaS
74,322
59,929
14,393
24.0
%
Total Revenue
$
233,624
$
245,555
$
(11,931
)
(4.9
)%
Segment Gross Profit
Marketing Services
$
104,546
$
117,654
$
(13,108
)
(11.1
)%
SaaS
49,095
37,154
11,941
32.1
%
Consolidated Segment Gross
Profit
$
153,641
$
154,808
$
(1,167
)
(0.8
)%
Segment EBITDA
Marketing Services
$
50,679
$
58,673
$
(7,994
)
(13.6
)%
SaaS
3,435
(204
)
3,639
NM
Consolidated Adjusted EBITDA
$
54,114
$
58,469
$
(4,355
)
(7.4
)%
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 March
31,
(in thousands)
2024
2023
Reconciliation of Adjusted
EBITDA
Net income
$
8,424
$
9,314
Depreciation and amortization expense
14,553
15,431
Interest expense
13,359
16,488
Stock-based compensation expense (1)
5,289
5,393
Restructuring and integration expenses
(2)
5,265
5,340
Non-cash gain from remeasurement of
indemnification asset (3)
—
(756
)
Transaction costs (4)
—
373
Income tax expense
5,397
4,496
Other components of net periodic pension
cost (5)
1,581
121
Other (6)
246
2,269
Adjusted EBITDA
$
54,114
$
58,469
(1)
We record stock-based compensation expense
related to the amortization of grant date fair value of the
Company’s stock-based compensation awards.
(2)
For the three months ended March 31, 2024
and 2023, expenses relate to periodic efforts to enhance
efficiencies and reduce costs, and include severance benefits, and
costs associated with abandoned facilities and system
consolidation.
(3)
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.
(4)
Expenses related to the Yellow acquisition
and other transaction costs.
(5)
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 periodic mark-to-market pension
remeasurement.
(6)
Other primarily represents foreign
exchange-related expense.
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 March 31,
2024
(in thousands)
Marketing Services
SaaS
Total
Reconciliation of Adjusted Gross
Profit
Gross profit
$
104,546
$
49,095
$
153,641
Plus:
Depreciation and amortization expense
4,072
1,704
5,776
Stock-based compensation expense
113
60
173
Adjusted Gross Profit
$
108,731
$
50,859
$
159,590
Gross Margin
65.6
%
66.1
%
65.8
%
Adjusted Gross Margin
68.3
%
68.4
%
68.3
%
Three Months Ended March 31,
2023
(in thousands)
Marketing Services
SaaS
Total
Reconciliation of Adjusted Gross
Profit
Gross profit
$
117,654
$
37,154
$
154,808
Plus:
Depreciation and amortization expense
5,697
1,287
6,984
Stock-based compensation expense
103
46
149
Adjusted Gross Profit
$
123,454
$
38,487
$
161,941
Gross Margin
63.4
%
62.0
%
63.0
%
Adjusted Gross Margin
66.5
%
64.2
%
65.9
%
Supplemental Financial Information
The following supplemental financial information provides
Revenue, Adjusted EBITDA and Adjusted EBITDA Margin by (i)
Marketing Services businesses and (ii) SaaS businesses. 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 March 31,
2024
(in thousands)
Marketing Services
SaaS
Total
Revenue
$
159,302
$
74,322
$
233,624
Adjusted EBITDA
50,679
3,435
54,114
Adjusted EBITDA Margin
31.8
%
4.6
%
23.2
%
Three Months Ended March 31,
2023
(in thousands)
Marketing Services
SaaS
Total
Revenue
$
185,626
$
59,929
$
245,555
Adjusted EBITDA
58,673
(204
)
58,469
Adjusted EBITDA Margin
31.6
%
(0.3
)%
23.8
%
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: 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 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
Thryv Holdings, Inc. (NASDAQ:THRY) is the provider of the
leading do-it-all small business software platform that empowers
small businesses to modernize how they work. It offers small
business owners everything they need to communicate effectively,
manage their day-to-day operations, and grow — all in one place —
giving up to 20 hours back in their week. Thryv's customizable
platform features three centers: Thryv Command Center, a freemium
central communications hub, Business CenterSM and Marketing
CenterSM. Over 300,000 businesses globally use Thryv to connect
with local customers and take care of everything they do, start to
finish. For more information, visit thryv.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240502885239/en/
Media Contact: Julie Murphy Thryv, Inc. 617.967.5426
julie.murphy@thryv.com
Investor Contact: Cameron Lessard Thryv, Inc.
214.773.7022 cameron.lessard@thryv.com
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