Thryv(US:THRY)2024-11-07 12:32Revenue Performance - Revenue for the three months ended September 30, 2024, was $179,852, a decrease of 2.6% compared to $183,822 for the same period in 2023[10]. - Total revenue for the three months ended September 30, 2024, was $179.9 million, a decrease of 2.5% from $183.8 million in the same period of 2023[128]. - Revenue from the United States for the three months ended September 30, 2024, was $156.0 million, slightly down from $157.5 million in 2023[129]. - International revenue for the same period was $23.8 million, a decrease from $26.3 million in 2023, reflecting a decline of 9.3%[129]. - The total revenue for the Thryv Marketing Services segment was $92.8 million for the three months ended September 30, 2024, down from $116.5 million in the same period of 2023, representing a decrease of approximately 20.3%[123]. - The Thryv SaaS segment generated revenue of $87.1 million for the three months ended September 30, 2024, compared to $67.4 million in the same period of 2023, reflecting an increase of approximately 29.2%[123]. - Revenue decreased by $4.0 million, or 2.2%, for the three months ended September 30, 2024, compared to the same period in 2023, with a $23.7 million decrease in Thryv Marketing Services revenue partially offset by a $19.7 million increase in Thryv SaaS revenue[167]. Profitability and Loss - Gross profit increased to $111,981 for the three months ended September 30, 2024, compared to $103,644 in the prior year, reflecting a gross margin improvement[10]. - The net loss for the three months ended September 30, 2024, was $96,071, compared to a net loss of $27,046 for the same period in 2023, indicating a worsening financial position[10]. - The company reported a basic net loss per share of $2.65 for the three months ended September 30, 2024, compared to a loss of $0.78 per share in the same period last year[10]. - Adjusted EBITDA for the three months ended September 30, 2024, was $19.6 million, representing 10.9% of revenue, compared to $7.3 million, or 4.0% of revenue, for the same period in 2023[165]. - The company reported a total segment adjusted EBITDA of $19.6 million for the three months ended September 30, 2024, compared to $7.3 million for the same period in 2023, indicating a significant improvement[123]. - Adjusted EBITDA decreased by $2.2 million, or 1.6%, for the nine months ended September 30, 2024, primarily due to a secular decline in the Thryv Marketing Services segment[204]. Expenses and Charges - Operating expenses totaled $200,550 for the three months ended September 30, 2024, significantly higher than $123,022 in the same period last year, primarily due to impairment charges of $83,094[10]. - The company incurred impairment charges of $83,094 thousand during the nine months ended September 30, 2024[20]. - Impairment charges increased by $83.1 million for the three months ended September 30, 2024, attributed to goodwill impairment in the Thryv Marketing Services reporting unit[178]. - General and administrative expenses increased by $2.7 million, or 5.6%, for the three months ended September 30, 2024, mainly due to transaction costs related to the Keap acquisition[177]. - Sales and marketing expenses decreased by $8.3 million, or 11.1%, for the three months ended September 30, 2024, primarily due to reductions in employee-related costs and contract services[176]. Assets and Liabilities - Total assets decreased to $654,753 as of September 30, 2024, down from $783,170 at December 31, 2023, reflecting a reduction in goodwill and other assets[13]. - Current liabilities decreased to $221,948 as of September 30, 2024, from $263,190 at December 31, 2023, indicating improved short-term financial health[13]. - Total stockholders' equity decreased to $94,532 as of September 30, 2024, from $152,700 at December 31, 2023, indicating a decline in shareholder value[13]. - The company’s accumulated deficit increased to $580,301 as of September 30, 2024, compared to $498,202 at the end of 2023, reflecting ongoing losses[13]. - As of September 30, 2024, total debt obligations amounted to $307.8 million, a decrease from $348.9 million as of December 31, 2023[69]. Client Base and Market Strategy - The company serves approximately 300,000 SMB clients globally, indicating a stable client base despite revenue fluctuations[135]. - Total clients decreased by 69 thousand, or 19%, as of September 30, 2024, compared to September 30, 2023, primarily due to the decline in the print media business and increased competition in the digital media space[154]. - Marketing Services clients decreased by 84 thousand, or 25%, as of September 30, 2024, compared to the previous year, attributed to the secular decline in the print media industry and significant competition in digital media[152]. - SaaS clients increased by 30 thousand, or 45%, as of September 30, 2024, driven by the strategic decision to accelerate the conversion of clients from digital Marketing Services to SaaS solutions[153]. - The company aims to expand its SaaS solutions to new SMB clients and existing Marketing Services clients, focusing on the growing demand for integrated technology solutions[145]. Acquisitions and Investments - The company acquired Yellow Holdings Limited, a New Zealand marketing services company, on April 3, 2023[22]. - The Yellow Acquisition on April 3, 2023, cost $8.9 million, expanding the company's market share and client base in New Zealand[34]. - The company completed the acquisition of Keap for $80.0 million in cash on October 31, 2024, to enhance its SaaS offerings[130]. - To finance the Keap acquisition, the company raised $76.0 million through a public offering of 5,715,000 shares of common stock[131]. Tax and Compliance - The company's effective tax rate (ETR) was 5.3% for the three months ended September 30, 2024, significantly lower than the 27.5% ETR for the same period in 2023[110]. - As of September 30, 2024, the company had unrecognized tax benefits amounting to $18.1 million, which could impact the effective tax rate if recognized[111]. - The effective tax rate was (8.8%) for the nine months ended September 30, 2024, compared to 83.9% for the same period in 2023, influenced by various permanent differences[203]. - The company expects to resolve certain tax years with various tax authorities within the next 12 months, with a potential reduction of up to $15.6 million in existing gross unrecognized tax benefits[111]. Strategic Changes - The company plans to terminate its Marketing Services solutions by the end of 2028, reflecting a strategic shift towards SaaS solutions[54]. - The company has restructured its segment reporting, combining Thryv U.S. Marketing Services and Thryv International Marketing Services into a single reportable segment[23]. - The company expects to implement new segment disclosures as per ASU No. 2023-07, effective for fiscal years beginning after December 15, 2023, without a material impact on financial statements[31]. - The company is currently under investigation by the SEC regarding its strategic conversion of clients from digital marketing services to SaaS solutions, and is cooperating fully with the inquiry[115].