UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-35895 THRYV HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 13-2740040 (State or othe ...

Call Start: 16:30 January 1, 0000 5:09 PM ET Thryv Holdings, Inc. (NASDAQ:THRY) Q1 2022 Earnings Conference Call May 4, 2022 04:30 PM ET Company Participants Cameron Lazard - Investor Relations Joe Walsh - Chairman and Chief Executive Officer Paul Rouse - Chief Financial Officer Conference Call Participants Arjun Bhatia - William Blair & Company John Godin - Needham & Company Zach Cummings - B. Riley Securities Shrenik Kothari - Robert W. Baird & Co. Daniel Moore - CJS Securities, Inc. Operator Ladies and g ...

thryv 1ST QUARTER 2022 INVESTOR PRESENTATION ©2022 Thryv, Inc. All Rights Reserved. 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 ' ...

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-35895 THRYV HOLDINGS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Exact name of registrant as specified in its charter) Delaware 13-2740040 (State or other jur ...

Thryv Holdings, Inc. (NASDAQ:THRY) Q4 2021 Earnings Conference Call March 10, 2022 8:30 AM ET Company Participants Cameron Lazard - Investor Relations Joe Walsh - Chairman and Chief Executive Officer Paul Rouse - Chief Financial Officer Conference Call Participants Arjun Bhatia - William Blair Scott Berg - Needham Daniel Moore - CJS Securities Zach Cummings - B. Riley Securities Shrenik Kothari - Baird Operator Good morning. My name is Emma and I will be your conference operator today. At this time, I would ...

Exhibit 99.2 Investor Supplement Fourth Quarter and FY 2021 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, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-35895 THRYV HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 13-2740040 (State or ...

Thryv Holdings, Inc. (NASDAQ:THRY) Q3 2021 Earnings Conference Call November 11, 2021 8:30 AM ET Company Participants Cameron Lazard - Director of IR and Capital Markets Joe Walsh - CEO and President Paul Rouse - EVP and CFO Grant Freeman - Chief Customer Officer Ryan Cantor - Chief Product Officer Conference Call Participants Arjun Bhatia - William Blair Rob Oliver - Baird Daniel Moore - CJS Securities Zach Cummings - B. Riley Securities Ryan MacWilliams - Barclays Operator Good morning. My name is Rob and ...

Exhibit 99.2 Investor Supplement Third Quarter 2021 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,'' ''see ...

FORM 10-Q [Registrant Information](index=1&type=section&id=Registrant%20Information) This quarterly report for Thryv Holdings, Inc. covers the period ended June 30, 2021, detailing its Delaware registration, Nasdaq listing (THRY), and 33,865,449 common shares outstanding as of August 9, 2021 - The company is a non-accelerated filer, has submitted all required reports, and has electronically filed all interactive data files[3](index=3&type=chunk) Registrant Information Details | Metric | Detail | | :--- | :--- | | Report Type | Quarterly Report (FORM 10-Q) | | Period End | June 30, 2021 | | Jurisdiction of Incorporation | Delaware | | Stock Ticker | THRY | | Listing Exchange | Nasdaq Capital Market | | Shares Outstanding (as of August 9, 2021) | 33,865,449 shares | [TABLE OF CONTENTS](index=2&type=section&id=TABLE%20OF%20CONTENTS) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This report contains forward-looking statements about the company's industry, operations, performance, and financial position, subject to inherent uncertainties and risks - Forward-looking statements cover industry conditions, operations, performance, financial position, business, growth strategies, product development, and future expenses[8](index=8&type=chunk) - Significant risk factors include intense competition for market service solutions and SaaS products, maintaining profitability, effectively managing growth, customer transition to the Thryv platform, COVID-19 impacts, third-party service provider relationships, changes in internet search engine agreements, technological changes, SMB customer renewal rates, system disruptions or failures (including cybersecurity), acquisition integration capabilities, loss of key employees, platform compatibility, market expansion, new feature offerings, privacy regulation compliance, service level commitments, platform performance, labor negotiations, intellectual property protection, banking and capital market fluctuations, and costs and obligations as a public company[9](index=9&type=chunk) - The company does not undertake any obligation to publicly update or revise any forward-looking statements, unless required by applicable law[10](index=10&type=chunk) [Part I. FINANCIAL INFORMATION](index=5&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Thryv Holdings, Inc.'s unaudited condensed consolidated financial statements, including statements of operations, comprehensive income, balance sheets, changes in stockholders' equity, and cash flows, with related notes [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section provides the company's condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020 Condensed Consolidated Statements of Operations (Three Months Ended June 30) | Metric (in thousands of USD) | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 291,047 | 303,612 | | Cost of Sales | 112,607 | 110,605 | | Gross Profit | 178,440 | 193,007 | | Total Operating Expenses | 124,105 | 141,431 | | Operating Income | 54,335 | 51,576 | | Income Before Income Taxes | 32,471 | 32,628 | | Income Tax (Provision) | (8,112) | (21,164) | | Net Income | 24,359 | 11,464 | | Basic Net Income Per Share | 0.72 | 0.36 | | Diluted Net Income Per Share | 0.66 | 0.34 | Condensed Consolidated Statements of Operations (Six Months Ended June 30) | Metric (in thousands of USD) | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 571,653 | 622,182 | | Cost of Sales | 210,767 | 228,581 | | Gross Profit | 360,886 | 393,601 | | Total Operating Expenses | 241,924 | 280,383 | | Operating Income | 118,962 | 113,218 | | Income Before Income Taxes | 80,786 | 74,139 | | Income Tax (Provision) | (19,921) | (34,573) | | Net Income | 60,865 | 39,566 | | Basic Net Income Per Share | 1.82 | 1.24 | | Diluted Net Income Per Share | 1.72 | 1.15 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2021 and 2020 Condensed Consolidated Statements of Comprehensive Income (Three Months Ended June 30) | Metric (in thousands of USD) | 2021 | 2020 | | :--- | :--- | :--- | | Net Income | 24,359 | 11,464 | | Foreign Currency Translation Adjustment | (1,478) | — | | Comprehensive Income | 22,881 | 11,464 | Condensed Consolidated Statements of Comprehensive Income (Six Months Ended June 30) | Metric (in thousands of USD) | 2021 | 2020 | | :--- | :--- | :--- | | Net Income | 60,865 | 39,566 | | Foreign Currency Translation Adjustment | (4,445) | — | | Comprehensive Income | 56,420 | 39,566 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides the company's condensed consolidated balance sheets as of June 30, 2021, and December 31, 2020 Condensed Consolidated Balance Sheets (as of June 30) | Metric (in thousands of USD) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | 15,785 | 2,406 | | Accounts Receivable, Net | 312,457 | 296,570 | | Total Current Assets | 400,107 | 369,698 | | Goodwill | 678,793 | 609,457 | | Intangible Assets, Net | 123,907 | 31,777 | | Deferred Tax Assets | 106,069 | 93,099 | | Total Assets | 1,412,135 | 1,214,977 | | **Liabilities and Stockholders' Equity** | | | | Accounts Payable | 30,024 | 8,927 | | Accrued Liabilities | 168,602 | 139,613 | | Total Current Liabilities | 344,372 | 207,400 | | New Term Loan, Net | 365,189 | — | | Net Pension Liabilities | 174,217 | 190,827 | | Total Long-Term Liabilities | 798,060 | 810,802 | | Total Stockholders' Equity | 269,703 | 196,775 | | Total Liabilities and Stockholders' Equity | 1,412,135 | 1,214,977 | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details the changes in the company's stockholders' equity for the six months ended June 30, 2021 Changes in Stockholders' Equity (Six Months Ended June 30, 2021) | Metric (in thousands of USD) | Balance as of December 31, 2020 | Balance as of June 30, 2021 | | :--- | :--- | :--- | | Common Stock | 596 | 604 | | Additional Paid-in Capital | 1,059,624 | 1,076,124 | | Treasury Stock | (468,613) | (468,613) | | Accumulated Other Comprehensive Income (Loss) | — | (4,445) | | Accumulated Deficit | (394,832) | (333,967) | | **Total Stockholders' Equity** | **196,775** | **269,703** | - For the six months ended June 30, 2021, stockholders' equity increased primarily due to **$60.865 million** in net income, **$2 thousand** from stock option exercises, **$13.680 million** from warrant exercises, and **$3.892 million** in stock-based compensation expense, partially offset by **$4.445 million** in accumulated foreign currency translation adjustments[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020 Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activities (in thousands of USD) | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 81,802 | 97,871 | | Net Cash from Investing Activities | (188,442) | (11,473) | | Net Cash from Financing Activities | 123,479 | (86,721) | | Effect of Exchange Rate Changes | (819) | — | | Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | 16,020 | (323) | | Cash, Cash Equivalents, and Restricted Cash at End of Period | 18,426 | 1,589 | - In the first half of 2021, operating cash flow decreased, investing cash flow significantly increased (primarily due to the Sensis acquisition), and financing cash flow turned positive, leading to a substantial increase in cash and cash equivalents at period-end[29](index=29&type=chunk)[30](index=30&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering business, accounting policies, acquisitions, revenue, fair value, and assets [Note 1 Description of Business and Summary of Significant Accounting Policies](index=12&type=section&id=Note%201%20Description%20of%20Business%20and%20Summary%20of%20Significant%20Accounting%20Policies) Thryv Holdings, Inc. provides marketing and SaaS tools to SMBs, acquired Sensis in 2021, and this note outlines financial statement preparation and accounting policy changes - The company's primary businesses include print Yellow Pages (PYP), Internet Yellow Pages (IYP), and digital marketing services (e.g., SEM, online display advertising, SEO tools), and it offers SaaS business management tools through the Thryv® platform[32](index=32&type=chunk) - On March 1, 2021, the company acquired Sensis Holding Limited, an Australian SMB marketing solutions provider, expanding its market share and customer base[33](index=33&type=chunk) - The company revised its condensed consolidated statements of operations format, adding a gross profit subtotal and reclassifying depreciation and amortization to cost of sales, selling and marketing expenses, and general and administrative expenses[36](index=36&type=chunk)[38](index=38&type=chunk) - The company adopted ASU 2019-12 on January 1, 2021, simplifying income tax accounting, with no material impact on financial statements[51](index=51&type=chunk) Restricted Cash (in thousands of USD) | Metric | June 30, 2021 | June 30, 2020 | December 31, 2020 | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 15,785 | 1,589 | 2,406 | | Restricted Cash (included in prepaid expenses and other current assets) | 2,641 | — | — | | **Total Cash, Cash Equivalents, and Restricted Cash** | **18,426** | **1,589** | **2,406** | - In the first half of 2021, the company recognized **$3.6 million** in operating lease right-of-use asset impairment charges, primarily in the Thryv International segment, due to its 'remote-first' work environment decision; in the same period of 2020, the company recognized **$15.2 million** in operating lease right-of-use asset impairment and **$2.9 million** in property and equipment impairment for similar reasons[45](index=45&type=chunk)[46](index=46&type=chunk) [Note 2 Acquisitions](index=15&type=section&id=Note%202%20Acquisitions) This note details the company's acquisition of Sensis Holding Limited on March 1, 2021, for approximately $215 million in cash, financed by new term loans, aiming to expand market share and customer base in Australia - The Sensis acquisition was completed on March 1, 2021, aiming to expand the company's market share and customer base in Australia[52](index=52&type=chunk) - The acquisition consideration was approximately **$215 million** in cash, financed through new term loans[53](index=53&type=chunk) Preliminary Purchase Price Allocation for Sensis Acquisition (in thousands of USD) | Item | Amount | | :--- | :--- | | Total Cash Consideration | 214,984 | | Cash and Cash Equivalents | 40,794 | | Accounts Receivable and Other Current Assets | 88,529 | | Property and Equipment and Capitalized Software | 40,957 | | Intangible Assets (Customer Relationships, Trademarks) | 126,716 | | Total Liabilities | (163,132) | | **Total Identifiable Net Assets** | **143,053** | | **Goodwill** | **71,931** | | **Total Net Assets Acquired** | **214,984** | - The Sensis acquisition contributed **$62.3 million** in revenue and **($20.3 million)** in net loss[56](index=56&type=chunk) Pro Forma Results of Sensis Acquisition (in thousands of USD) | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Revenue | 321,162 | 368,598 | 639,914 | 727,802 | | Net Income | 45,816 | 24,651 | 98,231 | 37,724 | [Note 3 Revenue Recognition](index=17&type=section&id=Note%203%20Revenue%20Recognition) The company recognizes print service revenue at delivery and SaaS/digital service revenue over the contract term using an output method, with COVID-19 related customer credits significantly reduced in the first half of 2021 - Print service revenue is recognized at the point in time when directories are delivered to the target market; SaaS and digital service revenue is recognized over the contract term using an output method[59](index=59&type=chunk) - In the first half of 2021, COVID-19 related customer credits were **$0.8 million** for three months and **$3.0 million** for six months, a significant reduction from **$5.7 million** and **$6.4 million** in the same periods of 2020, indicating a diminished pandemic impact[61](index=61&type=chunk) - For the three and six months ended June 30, 2021, the company recognized **$4.7 million** and **$9.5 million** in contract liability revenue, respectively[60](index=60&type=chunk) [Note 4 Fair Value Measurements](index=17&type=section&id=Note%204%20Fair%20Value%20Measurements) This note describes the company's fair value measurement methods, including a three-level hierarchy, and details a compensation asset reclassification, with no liability-classified equity incentives - Fair value measurements utilize a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[62](index=62&type=chunk)[63](index=63&type=chunk) - The company's compensation asset (related to the YP acquisition) fair value was reclassified from Level 3 (based on unobservable inputs) to Level 1 (based on THRY Nasdaq per share price)[68](index=68&type=chunk) Compensation Asset Fair Value (in thousands of USD) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Balance as of January 1 | — | 29,789 | | Change in Fair Value | — | (4,418) | | Balance as of June 30 | — | 25,371 | - As of June 30, 2021, and December 31, 2020, the fair value of Level 1 compensation assets was **$25.2 million** and **$24.3 million**, respectively[69](index=69&type=chunk) - As of June 30, 2021, the company had no liability-classified equity incentives[71](index=71&type=chunk) Carrying Value and Fair Value of New Term Loans and Senior Term Loans (in thousands of USD) | Loan Type | Carrying Value as of June 30, 2021 | Fair Value as of June 30, 2021 | Carrying Value as of December 31, 2020 | Fair Value as of December 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | New Term Loan, Net | 589,886 | 588,411 | — | — | | Senior Term Loan, Net | — | — | 449,165 | 441,742 | [Note 5 Goodwill and Intangible Assets](index=20&type=section&id=Note%205%20Goodwill%20and%20Intangible%20Assets) This note details changes in goodwill and intangible assets, with total goodwill at **$678.8 million** and net intangible assets at **$123.9 million** Goodwill Changes (Six Months Ended June 30, 2021, in thousands of USD) | Segment | Balance as of December 31, 2020 | Sensis Acquisition | Foreign Currency Translation Impact | Balance as of June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Marketing Services | 390,573 | — | — | 390,573 | | SaaS | 218,884 | — | — | 218,884 | | Thryv International | — | 71,931 | (2,595) | 69,336 | | **Total** | **609,457** | **71,931** | **(2,595)** | **678,793** | Intangible Asset Details (as of June 30, 2021, in thousands of USD) | Intangible Asset Type | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation Impact | Net Carrying Amount | Weighted-Average Remaining Amortization Period (Years) | | :--- | :--- | :--- | :--- | :--- | :--- | | Customer Relationships | 803,641 | 720,886 | 3,126 | 79,629 | 3.3 | | Trademarks and Domain Names | 225,177 | 181,050 | 785 | 43,342 | 2.4 | | Patented Technology | 19,600 | 19,600 | — | — | 0.0 | | Non-Compete Agreements | 1,954 | 1,018 | — | 936 | 2.0 | | **Total Intangible Assets** | **1,050,372** | **922,554** | **3,911** | **123,907** | **3.0** | - For the three and six months ended June 30, 2021, intangible asset amortization expense was **$21.0 million** and **$30.9 million**, respectively[78](index=78&type=chunk) Estimated Future Intangible Asset Amortization Expense (in thousands of USD) | Fiscal Year | Estimated Future Amortization Expense | | :--- | :--- | | 2021 | 42,200 | | 2022 | 50,835 | | 2023 | 21,926 | | 2024 | 8,946 | | **Total** | **123,907** | [Note 6 Allowance for Credit Losses](index=21&type=section&id=Note%206%20Allowance%20for%20Credit%20Losses) This note details the allowance for credit losses, which decreased to **$21.606 million** by June 30, 2021, with bad debt expense significantly lower in the first half of 2021, indicating reduced COVID-19 impact Changes in Allowance for Credit Losses (in thousands of USD) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Balance as of January 1 | 33,368 | 26,828 | | Sensis Acquisition (as of March 1, 2021) | 2,733 | — | | Additions | 292 | 22,436 | | Deductions | (14,787) | (12,635) | | **Balance as of June 30** | **21,606** | **36,629** | - In the first half of 2021, the company's bad debt expense was **$0.3 million**, while in the same period of 2020 it was **$22.4 million**, indicating that the incremental impact of the COVID-19 pandemic on credit losses was no longer significant in 2021[80](index=80&type=chunk) - As of June 30, 2021, **$21.4 million** of the allowance for credit losses was attributable to accounts receivable, and **$0.2 million** to contract assets[81](index=81&type=chunk) [Note 7 Accrued Liabilities](index=21&type=section&id=Note%207%20Accrued%20Liabilities) This note details accrued liabilities, totaling **$168.6 million** as of June 30, 2021, an increase from **$139.6 million**, primarily due to higher accrued taxes, with 2021 severance expenses unrelated to COVID-19 Accrued Liabilities Composition (in thousands of USD) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Accrued Payroll and Related Expenses | 50,779 | 53,844 | | Accrued Severance | 872 | 2,280 | | Accrued Taxes | 48,571 | 26,209 | | Accrued Expenses | 63,398 | 51,284 | | Accrued Service Credits | 4,982 | 5,996 | | **Total Accrued Liabilities** | **168,602** | **139,613** | - In the first half of 2021, the company incurred **$1.2 million** in severance expenses, all unrelated to the COVID-19 pandemic; in contrast, **$5.0 million** in severance expenses in the first half of 2020 were due to employee departures caused by the pandemic[81](index=81&type=chunk)[82](index=82&type=chunk) [Note 8 Debt Obligations](index=22&type=section&id=Note%208%20Debt%20Obligations) This note details the company's debt obligations, totaling **$647.9 million** as of June 30, 2021, including a new **$700 million** term loan for the Sensis acquisition and refinancing, and an amended ABL facility Outstanding Debt Obligations (in thousands of USD) | Debt Type | Maturity Date | Interest Rate | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | New Term Loan, Net | March 1, 2026 | LIBOR + 8.5% | 589,886 | — | | Senior Term Loan, Net | December 31, 2023 | LIBOR + 9.0% | — | 449,165 | | ABL Facility (Fifth Amendment) | March 1, 2026 | 3-month LIBOR + 3.0% | 58,022 | — | | ABL Facility (Fourth Amendment) | September 30, 2023 | 3-month LIBOR + 4.0% | — | 79,238 | | **Total Debt Obligations** | | | **647,908** | **528,403** | | Less: Current Portion of New Term Loan | | | 70,000 | — | | **Total Long-Term Debt Obligations** | | | **577,908** | **528,403** | - On March 1, 2021, the company entered into a new **$700 million** term loan for the Sensis acquisition and refinancing of existing senior term loans[84](index=84&type=chunk)[85](index=85&type=chunk) - The new term loan requires mandatory quarterly amortization payments of **$17.5 million** starting June 30, 2021[85](index=85&type=chunk) - As of June 30, 2021, the company was in compliance with all covenants of the new term loan, including a total net leverage ratio not exceeding **3.0 to 1.0**[91](index=91&type=chunk) - The ABL facility agreement was amended, increasing the maximum revolving loan commitment to **$175 million**, lowering interest rates, and extending the maturity date[92](index=92&type=chunk) - As of June 30, 2021, the company had **$77.7 million** in borrowing capacity under the ABL facility and was in compliance with all covenants[94](index=94&type=chunk)[95](index=95&type=chunk) - The company paid **$10.2 million** in cash in June 2021 to terminate sale-leaseback obligations, resulting in a **$3.1 million** loss[96](index=96&type=chunk) [Note 9 Pensions](index=25&type=section&id=Note%209%20Pensions) This note discloses the company's frozen non-contributory defined benefit pension plans, which no longer accrue service costs, and details actuarial gain/loss recognition - The company's pension plans are non-contributory defined benefit plans, currently frozen, and do not accrue additional service costs[98](index=98&type=chunk) Net Periodic Pension Cost (Benefit) Components (in thousands of USD) | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Interest Cost | 2,618 | 4,199 | 5,234 | 8,433 | | Expected Return on Assets | (2,890) | (4,026) | (5,780) | (8,059) | | Settlement (Gain)/Loss | — | 24 | (15) | 24 | | Remeasurement (Gain)/Loss | — | 739 | (164) | 739 | | **Net Periodic Pension (Benefit) Cost** | **(272)** | **936** | **(725)** | **1,137** | - In the first half of 2021, the company contributed **$15.0 million** in cash to qualified plans and **$0.9 million** to non-qualified plans; for fiscal year 2021, expected contributions are approximately **$25.0 million** to qualified plans and **$1.4 million** to non-qualified plans[101](index=101&type=chunk)[102](index=102&type=chunk) [Note 10 Stock-Based Compensation and Stockholders' Equity](index=25&type=section&id=Note%2010%20Stock-Based%20Compensation%20and%20Stockholders'%20Equity) This note details stock-based compensation and equity changes, including common share issuance from options and ESPP, with total stock-based compensation expense of **$3.892 million** - In the first half of 2021, the company issued **239,275** shares of common stock from stock option exercises[103](index=103&type=chunk) - In the first half of 2021, the Employee Stock Purchase Plan (ESPP) issued **149,865** shares, with related stock-based compensation expense of **$0.7 million**[105](index=105&type=chunk) Stock-Based Compensation Expense (Benefit) Details (in thousands of USD) | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 83 | 70 | 164 | (246) | | Selling and Marketing | 794 | 213 | 1,626 | (319) | | General and Administrative | 1,044 | 297 | 2,102 | (4,919) | | **Total Stock-Based Compensation Expense (Benefit)** | **1,921** | **580** | **3,892** | **(5,484)** | - As of June 30, 2021, the company had **9.4 million** fully vested warrants, exercisable for **5.2 million** shares of common stock, with an exercise price of **$24.39 per share**, expiring on August 15, 2023; in the first half of 2021, **1,011,424** warrants were exercised, generating **$13.7 million** in proceeds[107](index=107&type=chunk) - The company did not repurchase any shares in the first half of 2021[108](index=108&type=chunk) [Note 11 Earnings per Share](index=27&type=section&id=Note%2011%20Earnings%20per%20Share) This note provides basic and diluted earnings per share calculations, with basic EPS at **$0.72** and diluted EPS at **$0.66** for the three months ended June 30, 2021, and **$1.82** and **$1.72** for the six months, respectively Basic and Diluted Earnings per Share (Three Months Ended June 30) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Net Income (in thousands of USD) | 24,359 | 11,464 | | Basic Net Income Per Share | 0.72 | 0.36 | | Diluted Net Income Per Share | 0.66 | 0.34 | | Basic Weighted-Average Shares Outstanding | 33,622,666 | 31,435,941 | | Diluted Weighted-Average Shares Outstanding | 36,687,030 | 33,803,465 | Basic and Diluted Earnings per Share (Six Months Ended June 30) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Net Income (in thousands of USD) | 60,865 | 39,566 | | Basic Net Income Per Share | 1.82 | 1.24 | | Diluted Net Income Per Share | 1.72 | 1.15 | | Basic Weighted-Average Shares Outstanding | 33,367,734 | 32,007,114 | | Diluted Weighted-Average Shares Outstanding | 35,352,445 | 34,414,996 | - In the first half of 2021, diluted EPS calculations excluded **0.4 million** stock options, less than **0.1 million** ESPP shares, and **10.5 million** warrants due to their anti-dilutive effect[110](index=110&type=chunk) [Note 12 Income Taxes](index=27&type=section&id=Note%2012%20Income%20Taxes) This note discloses the company's effective tax rates (ETR) of **25.0%** and **24.7%** for the three and six months ended June 30, 2021, respectively, significantly lower than 2020, and details unrecognized tax benefits Effective Tax Rate (ETR) | Period | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | ETR | 25.0% | 64.9% | 24.7% | 46.6% | - As of June 30, 2021, unrecognized tax benefits totaled **$23.5 million** (excluding interest and penalties), of which up to **$23.5 million** would impact the company's effective tax rate if recognized[112](index=112&type=chunk) - The company expects existing unrecognized tax benefits to potentially decrease by up to **$21.6 million** within the next 12 months[112](index=112&type=chunk) [Note 13 Contingent Liabilities](index=27&type=section&id=Note%2013%20Contingent%20Liabilities) This note discloses the company's contingent liabilities, including tax cases related to Section 199 of the Tax Code and R&D tax credits, and sales, use, and excise tax audits in Texas and New York - The company faces IRS challenges related to Section 199 of the Tax Code (U.S. manufacturing deduction) and R&D tax credits, having filed petitions with the U.S. Tax Court[115](index=115&type=chunk)[116](index=116&type=chunk) - As of June 30, 2021, the company accrued approximately **$32.7 million** for Section 199 related liabilities and less than **$0.1 million** for R&D tax credit related liabilities[117](index=117&type=chunk) - Under the YP acquisition agreement, the company is entitled to indemnification for R&D tax liabilities and, after paying the first **$8.0 million** of liabilities, for Section 199 tax liabilities, limited by the value of escrowed stock (approximately **$25.2 million** as of June 30, 2021)[117](index=117&type=chunk) - The company has accrued **$2.6 million** and **$2.8 million** for sales, use, and excise tax audits in Texas and New York, respectively[118](index=118&type=chunk)[119](index=119&type=chunk) [Note 14 Changes in Accumulated Other Comprehensive Income (Loss)](index=29&type=section&id=Note%2014%20Changes%20in%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note outlines changes in accumulated other comprehensive income (loss) for the six months ended June 30, 2021, primarily driven by foreign currency translation adjustments, resulting in an ending balance of **($4.445 million)** Changes in Accumulated Other Comprehensive Income (Loss) (Six Months Ended June 30, 2021) | Item | Accumulated Foreign Currency Translation Adjustments (in thousands of USD) | | :--- | :--- | | Balance as of January 1, 2021 | — | | Foreign Currency Translation Adjustments (net of **$1.5 million** tax) | (4,445) | | **Balance as of June 30, 2021** | **(4,445)** | [Note 15 Segment Information](index=29&type=section&id=Note%2015%20Segment%20Information) This note presents segment information for Marketing Services, SaaS, and Thryv International, providing revenue and EBITDA data for Q2 and H1 2021 and 2020 - The company's operations are divided into three reportable segments: Marketing Services, SaaS, and Thryv International[121](index=121&type=chunk) Segment Operating Performance (Three Months Ended June 30, 2021, in thousands of USD) | Segment | Revenue | Segment EBITDA | | :--- | :--- | :--- | | Marketing Services | 202,795 | 82,684 | | SaaS | 41,386 | (2,119) | | Thryv International | 46,866 | 16,188 | | **Total** | **291,047** | **96,753** | Segment Operating Performance (Three Months Ended June 30, 2020, in thousands of USD) | Segment | Revenue | Segment EBITDA | | :--- | :--- | :--- | | Marketing Services | 272,327 | 112,612 | | SaaS | 31,285 | 5,523 | | Thryv International | — | — | | **Total** | **303,612** | **118,135** | Segment Operating Performance (Six Months Ended June 30, 2021, in thousands of USD) | Segment | Revenue | Segment EBITDA | | :--- | :--- | :--- | | Marketing Services | 430,728 | 181,315 | | SaaS | 78,637 | (1,803) | | Thryv International | 62,288 | 22,174 | | **Total** | **571,653** | **201,686** | Segment Operating Performance (Six Months Ended June 30, 2020, in thousands of USD) | Segment | Revenue | Segment EBITDA | | :--- | :--- | :--- | | Marketing Services | 559,049 | 222,690 | | SaaS | 63,133 | 8,224 | | Thryv International | — | — | | **Total** | **622,182** | **230,914** | Revenue by Service Type (Three Months Ended June 30, in thousands of USD) | Service Type | 2021 | 2020 | | :--- | :--- | :--- | | **Marketing Services** | | | | PYP | 93,753 | 139,160 | | IYP | 61,004 | 69,321 | | SEM | 32,202 | 40,951 | | Other | 15,836 | 22,895 | | **SaaS** | | | | Thryv Platform | 26,798 | 24,263 | | Thryv Add-on Services | 14,588 | 7,022 | | **Thryv International** | | | | PYP | 15,231 | — | | IYP | 18,361 | — | | SEM | 6,030 | — | | Other | 7,235 | — | | Thryv Platform | 6 | — | | Thryv Add-on Services | 3 | — | | **Total Revenue** | **291,047** | **303,612** | Revenue by Service Type (Six Months Ended June 30, in thousands of USD) | Service Type | 2021 | 2020 | | :--- | :--- | :--- | | **Marketing Services** | | | | PYP | 206,664 | 276,547 | | IYP | 125,099 | 144,267 | | SEM | 66,634 | 90,659 | | Other | 32,331 | 47,576 | | **SaaS** | | | | Thryv Platform | 52,698 | 49,531 | | Thryv Add-on Services | 25,939 | 13,602 | | **Thryv International** | | | | PYP | 20,944 | — | | IYP | 24,931 | — | | SEM | 8,031 | — | | Other | 8,373 | — | | Thryv Platform | 6 | — | | Thryv Add-on Services | 3 | — | | **Total Revenue** | **571,653** | **622,182** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and operating results, covering an overview, COVID-19 impacts, performance factors, key metrics, and non-GAAP measures [Overview](index=31&type=section&id=Overview) The company is a leading provider of SaaS end-to-end customer experience tools and digital marketing solutions, serving over 400,000 SMB clients globally through three operating segments - The company is one of the largest providers of SaaS end-to-end customer experience tools and digital marketing solutions in the U.S., serving over **400 thousand** SMB customers globally[126](index=126&type=chunk)[127](index=127&type=chunk) - The company operates through three business segments: Marketing Services, SaaS, and Thryv International[127](index=127&type=chunk) Revenue by Segment (in thousands of USD) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Marketing Services | 202,800 | 272,300 | 430,700 | 559,000 | | SaaS | 41,400 | 31,300 | 78,600 | 63,100 | | Thryv International | 46,900 | — | 62,300 | — | - The Thryv International segment comprises Sensis Pty Ltd, acquired on March 1, 2021, which is a leading provider of marketing solutions to SMBs in Australia[129](index=129&type=chunk) [Recent Developments - COVID-19](index=31&type=section&id=Recent%20Developments%20-%20COVID-19) The COVID-19 pandemic's impact on the company's financial and operational performance eased in the first half of 2021, with reduced customer credits and no pandemic-related severance expenses - The COVID-19 pandemic's impact on the company's financial and operational performance eased in the first half of 2021, as many SMB customers are service-based or 'essential' businesses and have adapted to remote operations[132](index=132&type=chunk)[138](index=138&type=chunk) - Marketing Services segment revenue continued to decline in the first half of 2021, primarily influenced by pre-pandemic trends and increased competition[133](index=133&type=chunk) - Demand for the SaaS segment continued to grow as SMBs sought cloud-based solutions to facilitate virtual interactions[134](index=134&type=chunk) - In the first half of 2021, the company provided COVID-19 related customer credits of **$0.8 million** for three months and **$3.0 million** for six months, a significant reduction from **$5.7 million** and **$6.4 million** in the same periods of 2020[136](index=136&type=chunk) - As of June 30, 2021, the company had largely ceased offering COVID-19 credits and customer requests to pause search activities[136](index=136&type=chunk) - In the first half of 2021, severance expenses incurred by the company were unrelated to the COVID-19 pandemic, whereas in the same period of 2020, **$4.0 million** (three months) and **$5.0 million** (six months) in severance expenses were pandemic-related[137](index=137&type=chunk) - The company anticipates no significant future financial impact from the COVID-19 pandemic unless there is a substantial increase in cases leading to renewed local business shutdowns[139](index=139&type=chunk) [Factors Affecting Our Performance](index=34&type=section&id=Factors%20Affecting%20Our%20Performance) The company's performance is influenced by macroeconomic conditions and new technology competition, with key success factors including customer acquisition/retention, SaaS investment, and strategic acquisitions for market expansion - The company's performance is affected by macroeconomic conditions and competition from the introduction of new technologies[140](index=140&type=chunk) - The company expands its customer base by promoting SaaS solutions to new customers and existing Marketing Services and Thryv International customers[142](index=142&type=chunk) - The company plans to continue investing in SaaS business growth by analyzing user behavior, expanding features, enhancing usability, optimizing customer support, and releasing version updates to improve SaaS solutions[143](index=143&type=chunk) - The company achieves growth through strategic acquisitions, such as the Sensis acquisition on March 1, 2021, to expand its customer base and enter new markets[144](index=144&type=chunk) [Key Business Metrics](index=34&type=section&id=Key%20Business%20Metrics) The company assesses performance using total customers, Marketing Services, SaaS customers, ARPU, and SaaS monthly active users, noting SaaS growth despite overall decline Customer Count (in thousands) | Customer Type | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Marketing Services Customers | 284 | 349 | | SaaS Customers | 45 | 44 | | **Total Customers** | **302** | **365** | - Marketing Services customers decreased by **65 thousand**, a **19%** year-over-year decline, primarily due to the long-term decline in print media and increased competition in digital services[150](index=150&type=chunk) - SaaS customers increased by **1 thousand**, a **2%** year-over-year rise, driven by new customer growth and reduced churn, aligning with the company's strategy to target higher-spending, higher-retention customers[151](index=151&type=chunk) Average Revenue Per User (ARPU) | ARPU (Monthly) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Marketing Services | $213 | $220 | $213 | $224 | | SaaS | $323 | $232 | $314 | $236 | | **Total** | **$248** | **$239** | **$246** | **$243** | - SaaS segment monthly ARPU grew by **39%** (three months) and **33%** (six months) in the first half of 2021, primarily due to the company's strategic shift towards higher-spending customers[156](index=156&type=chunk) SaaS Monthly Active Users (in thousands) | Metric | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | SaaS Monthly Active Users | 30 | 27 | - SaaS monthly active users increased by **3 thousand**, an **11%** year-over-year rise, driven by improvements in sales processes, customer onboarding experience, and lifecycle management, as well as increased demand for virtual interactions among SMBs during the pandemic[158](index=158&type=chunk)[159](index=159&type=chunk) [Key Components of Our Results of Operations](index=37&type=section&id=Key%20Components%20of%20Our%20Results%20of%20Operations) This section defines key components of the company's operating results, including revenue from marketing services, SaaS, and Thryv International, along with service costs, operating expenses, and other income/expenses - Revenue sources include Marketing Services (print and digital services), SaaS (Thryv platform), and Thryv International[160](index=160&type=chunk) - Cost of services includes publishing, printing, distribution, digital, and SaaS fulfillment expenses, as well as personnel-related costs for operating teams, non-capitalized software and hardware purchases, and allocated overhead[161](index=161&type=chunk) - Selling and marketing expenses primarily include sales personnel salaries, commissions, stock-based compensation, advertising costs, and allocated overhead[162](index=162&type=chunk) - General and administrative expenses primarily include salaries, benefits, stock-based compensation for corporate management and administrative functions, bad debt expense, non-recurring expenses, professional service fees, and allocated overhead[163](index=163&type=chunk) - Other income (expense) includes interest expense, other components of net periodic pension benefit (cost), (loss) on termination of sale-leaseback obligations, and other expenses[164](index=164&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's consolidated operating results for the three and six months ended June 30, 2021, versus 2020 [Consolidated Results of Operations (Three Months Ended June 30, 2021 to 2020)](index=38&type=section&id=Consolidated%20Results%20of%20Operations%20(Three%20Months%20Ended%20June%2030%2C%202021%20to%202020)) For the three months ended June 30, 2021, total revenue decreased by **4.1%** to **$291.0 million**, net income increased to **$24.359 million**, and adjusted EBITDA decreased by **18.1%** to **$96.753 million** Consolidated Results of Operations (Three Months Ended June 30, in thousands of USD) | Metric | 2021 | 2020 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Revenue | 291,047 | 303,612 | (12,565) | (4.1)% | | Cost of Sales | 112,607 | 110,605 | 2,002 | 1.8% | | Gross Profit | 178,440 | 193,007 | (14,567) | (7.5)% | | Total Operating Expenses | 124,105 | 141,431 | (17,326) | (12.2)% | | Operating Income | 54,335 | 51,576 | 2,759 | 5.3% | | Income Before Income Taxes | 32,471 | 32,628 | (157) | (0.5)% | | Income Tax (Provision) | (8,112) | (21,164) | 13,052 | (61.7)% | | Net Income | 24,359 | 11,464 | 12,895 | 112.5% | | Adjusted EBITDA | 96,753 | 118,135 | (21,382) | (18.1)% | - Marketing Services revenue decreased by **25.5%**, primarily due to the long-term decline in print services demand and increased competition in digital services[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - SaaS revenue grew by **32.3%**, primarily driven by increased demand for the Thryv platform and the company's strategy to target higher-spending, higher-engagement customers[171](index=171&type=chunk) - Thryv International revenue was **$46.9 million**, primarily from the Sensis acquisition[172](index=172&type=chunk) - Gross margin decreased from **63.6%** to **61.3%**, primarily impacted by the decline in total revenue[175](index=175&type=chunk) - General and administrative expenses decreased by **25.1%**, primarily due to an **$11.9 million** decrease in bad debt expense and a **$3.9 million** decrease in non-recurring expenses[177](index=177&type=chunk) - Income tax provision decreased by **61.7%**, with the effective tax rate falling from **64.9%** to **25.0%**[183](index=183&type=chunk) [Consolidated Results of Operations (Six Months Ended June 30, 2021 to 2020)](index=42&type=section&id=Consolidated%20Results%20of%20Operations%20(Six%20Months%20Ended%20June%2030%2C%202021%20to%202020)) For the six months ended June 30, 2021, total revenue decreased by **8.1%** to **$571.7 million**, net income increased to **$60.865 million**, and adjusted EBITDA decreased by **12.7%** to **$201.7 million** Consolidated Results of Operations (Six Months Ended June 30, in thousands of USD) | Metric | 2021 | 2020 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Revenue | 571,653 | 622,182 | (50,529) | (8.1)% | | Cost of Sales | 210,767 | 228,581 | (17,814) | (7.8)% | | Gross Profit | 360,886 | 393,601 | (32,715) | (8.3)% | | Total Operating Expenses | 241,924 | 280,383 | (38,459) | (13.7)% | | Operating Income | 118,962 | 113,218 | 5,744 | 5.1% | | Income Before Income Taxes | 80,786 | 74,139 | 6,647 | 9.0% | | Income Tax (Provision) | (19,921) | (34,573) | 14,652 | (42.4)% | | Net Income | 60,865 | 39,566 | 21,299 | 53.8% | | Adjusted EBITDA | 201,686 | 230,914 | (29,228) | (12.7)% | - Marketing Services revenue decreased by **23.0%**, primarily due to the long-term decline in print services demand and increased competition in digital services[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - SaaS revenue grew by **24.6%**, primarily driven by increased demand for the Thryv platform and the company's strategy to target higher-spending, higher-engagement customers[191](index=191&type=chunk) - Thryv International revenue was **$62.3 million**, primarily from the Sensis acquisition[192](index=192&type=chunk) - Gross margin slightly decreased from **63.3%** to **63.1%**, primarily impacted by the decline in total revenue[196](index=196&type=chunk) - General and administrative expenses decreased by **20.7%**, primarily due to a **$21.4 million** decrease in bad debt expense and a **$5.2 million** decrease in compensation asset remeasurement loss[198](index=198&type=chunk) - Income tax provision decreased by **42.4%**, with the effective tax rate falling from **46.6%** to **24.7%**[204](index=204&type=chunk) [Non-GAAP Financial Measures](index=46&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures, including Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin, which management uses to assess core operating performance - Adjusted EBITDA is defined as net income plus interest expense, income tax (benefit) provision, depreciation and amortization expense, loss on early extinguishment of debt, restructuring and integration costs, transaction costs, stock-based compensation expense (benefit), impairment charges, and other non-operating and certain non-recurring expenses[208](index=208&type=chunk) - Adjusted Gross Profit and Adjusted Gross Margin are defined as gross profit and gross margin, adjusted to exclude the impact of depreciation and amortization expense and stock-based compensation expense (benefit)[208](index=208&type=chunk) Adjusted EBITDA Reconciliation (Three Months Ended June 30, in thousands of USD) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Net Income | 24,359 | 11,464 | | Interest Expense | 19,170 | 18,012 | | Income Tax Provision | 8,112 | 21,164 | | Depreciation and Amortization Expense | 29,908 | 37,606 | | Loss on Termination of Sale-Leaseback Obligations | 3,110 | — | | Restructuring and Integration Costs | 3,489 | 7,347 | | Transaction Costs | 5,440 | 3,232 | | Stock-Based Compensation Expense (Benefit) | 1,921 | 580 | | Other Components of Net Periodic Pension (Benefit) Cost | (272) | 936 | | Non-Cash (Gain) Loss on Remeasurement of Compensation Asset | (844) | 617 | | Impairment Charges | 3,611 | 18,132 | | Other | (1,251) | (955) | | **Adjusted EBITDA** | **96,753** | **118,135** | Adjusted EBITDA Reconciliation (Six Months Ended June 30, in thousands of USD) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Net Income | 60,865 | 39,566 | | Interest Expense | 34,842 | 37,942 | | Income Tax Provision | 19,921 | 34,573 | | Depreciation and Amortization Expense | 49,626 | 75,429 | | Loss on Termination of Sale-Leaseback Obligations | 3,409 | — | | Restructuring and Integration Costs | 12,723 | 17,192 | | Transaction Costs | 15,986 | 9,766 | | Stock-Based Compensation Expense (Benefit) | 3,892 | (5,484) | | Other Components of Net Periodic Pension (Benefit) Cost | (725) | 1,137 | | Non-Cash (Gain) Loss on Remeasurement of Compensation Asset | (844) | 4,418 | | Impairment Charges | 3,611 | 18,230 | | Other | (1,620) | (1,855) | | **Adjusted EBITDA** | **201,686** | **230,914** | Adjusted Gross Profit and Gross Margin Reconciliation (Three Months Ended June 30, in thousands of USD) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Gross Profit | 178,440 | 193,007 | | Add: Depreciation and Amortization Expense | 16,817 | 18,632 | | Stock-Based Compensation Expense | 83 | 70 | | **Adjusted Gross Profit** | **195,340** | **211,709** | | Gross Margin | 61.3% | 63.6% | | **Adjusted Gross Margin** | **67.1%** | **69.7%** | Adjusted Gross Profit and Gross Margin Reconciliation (Six Months Ended June 30, in thousands of USD) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Gross Profit | 360,886 | 393,601 | | Add: Depreciation and Amortization Expense | 28,061 | 36,987 | | Stock-Based Compensation Expense (Benefit) | 164 | (246) | | **Adjusted Gross Profit** | **389,111** | **430,342** | | Gross Margin | 63.1% | 63.3% | | **Adjusted Gross Margin** | **68.1%** | **69.2%** | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company expects operating cash flow, available cash, and ABL facility funds to meet liquidity needs for the next 12 months, maintaining appropriate debt levels and compliance with covenants, while monitoring COVID-19 impacts - The company expects future operating cash flow, available cash and cash equivalents, and funds under its ABL facility to be sufficient to meet its liquidity needs for the next 12 months[215](index=215&type=chunk) - The COVID-19 pandemic has not materially impacted the company's liquidity to date, but the company continues to assess its business operations and potential financial impacts of the pandemic[215](index=215&type=chunk) Cash Flow Summary (Six Months Ended June 30, in thousands of USD) | Cash Flow Activities | 2021 | 2020 | Change Amount | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 81,802 | 97,871 | (16,069) | | Net Cash from Investing Activities | (188,442) | (11,473) | (176,969) | | Net Cash from Financing Activities | 123,479 | (86,721) | 210,200 | - Cash outflow from investing activities significantly increased by **$177.0 million**, primarily due to **$174.2 million** cash paid for the Sensis acquisition on March 1, 2021[221](index=221&type=chunk) - Cash flow from financing activities shifted from a net outflow in the prior year to a net inflow of **$123.5 million** in the first half of 2021, primarily due to **$679.0 million** in net proceeds from new term loans, partially offset by repayments of senior term loans and new term loans[222](index=222&type=chunk)[224](index=224&type=chunk) - As of June 30, 2021, the company's total outstanding debt was **$647.9 million**, including **$589.9 million** in new term loans and **$58.0 million** in ABL financing, with the company in compliance with all debt covenants[228](index=228&type=chunk) - The company has no off-balance sheet arrangements that have had or are reasonably likely to have a material effect on its operating results, financial condition, or liquidity[229](index=229&type=chunk) [Critical Accounting Policies](index=50&type=section&id=Critical%20Accounting%20Policies) This section discusses the company's critical accounting policies, particularly foreign currency accounting, where foreign subsidiaries' functional currency is local, and assets/liabilities are translated at period-end rates - The functional currency of the company's foreign operating subsidiaries is the local currency, with assets and liabilities translated at period-end exchange rates, and revenues and expenses translated at weighted-average exchange rates[230](index=230&type=chunk) - Foreign currency transaction gains and losses are included in other expenses[230](index=230&type=chunk) - Except for foreign currency accounting policies, the company's critical accounting policies and estimates have not materially changed from those disclosed in the 2020 Form 10-K report[231](index=231&type=chunk) [Recent Accounting Pronouncements](index=50&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 1, "Description of Business and Summary of Significant Accounting Policies," in Part I, Item 1 of this quarterly report for details on recently adopted and issued accounting pronouncements - Details on recently adopted and issued accounting pronouncements are provided in Note 1, 'Description of Business and Summary of Significant Accounting Policies,' in Part I, Item 1 of this quarterly report[231](index=231&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discloses the company's market risks, including interest rate risk (most debt is floating-rate), inflation risk (not material), and foreign currency risk (primarily AUD-denominated, with hedging under evaluation) - As of June 30, 2021, the company's total outstanding debt was **$647.9 million**, with most being floating-rate; a **100 basis point** increase in interest rates would increase annual interest expense by approximately **$6.5 million**[232](index=232&type=chunk) - The company believes inflation has no material impact on its business, operating results, or financial condition[233](index=233&type=chunk) - The company faces foreign exchange risk, primarily from AUD-denominated revenues and operating expenses; currently, the company does not hedge foreign currency transactions but is evaluating future hedging possibilities[234](index=234&type=chunk)[235](index=235&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) This section discusses the company's assessment of disclosure controls and procedures, concluding their effectiveness as of June 30, 2021, while excluding the Sensis acquisition from internal control over financial reporting assessment - Management assessed the effectiveness of disclosure controls and procedures as of June 30, 2021, concluding they were effective at a reasonable assurance level[237](index=237&type=chunk) - As of June 30, 2021, management's assessment of the effectiveness of internal control over financial reporting related to the Sensis acquisition was excluded, with Sensis representing **19%** of consolidated total assets and **16%** of consolidated revenue[236](index=236&type=chunk) - The company is integrating Sensis' controls and procedures to reflect acquisition-related risks and continuously monitors and strengthens control measures[238](index=238&type=chunk) [PART II. OTHER INFORMATION](index=52&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is provided in Note 13, "Contingent Liabilities," in Part I, Item 1 of this report, and is incorporated by reference herein - Legal proceedings information is provided in Note 13, 'Contingent Liabilities,' in Part I, Item 1[239](index=239&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred beyond those disclosed in the company's 2020 Form 10-K annual report and the Form 10-Q quarterly report for March 31, 2021 - No material changes to risk factors have occurred beyond those disclosed in the 2020 Form 10-K annual report and the Form 10-Q quarterly report for March 31, 2021[240](index=240&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during this reporting period - No unregistered sales of equity securities or use of proceeds[241](index=241&type=chunk) [Item 3. Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during this reporting period - No defaults upon senior securities[242](index=242&type=chunk) [Item 4. Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable - Not applicable[243](index=243&type=chunk) [Item 5. Other Information](index=52&type=section&id=Item%205.%20Other%20Information) No other information is disclosed for this reporting period - No other information[244](index=244&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists documents filed as exhibits to this quarterly report, including the stock purchase agreement, company bylaws, CEO and CFO certifications, and Inline XBRL taxonomy files - Exhibits include the stock purchase agreement, company bylaws, CEO and CFO certifications, and Inline XBRL taxonomy files[246](index=246&type=chunk) [SIGNATURES](index=54&type=section&id=SIGNATURES) This report was officially signed by Joseph A. Walsh, CEO and President, and Paul D. Rouse, CFO, Executive Vice President, and Treasurer of Thryv Holdings, Inc. on August 11, 2021 - The report was signed by Joseph A. Walsh, CEO and President, and Paul D. Rouse, CFO, Executive Vice President, and Treasurer on August 11, 2021[250](index=250&type=chunk)