Thryv(US:THRY)2025-07-30 11:32PART I. FINANCIAL INFORMATION Financial Statements Provides unaudited consolidated financial statements for Q2 2025 and 2024, highlighting key financial performance and position | Financial Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue (in thousands) | $210,470 | $224,084 | $391,841 | $457,708 | | Gross Profit (in thousands) | $146,620 | $148,588 | $265,908 | $302,229 | | Operating Income (in thousands) | $29,540 | $31,338 | $26,506 | $62,472 | | Net Income (in thousands) | $13,931 | $5,548 | $4,313 | $13,972 | | Diluted EPS | $0.31 | $0.15 | $0.10 | $0.37 | | Balance Sheet Item | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets (in thousands) | $189,067 | $210,720 | | Total Assets (in thousands) | $687,704 | $712,165 | | Total Current Liabilities (in thousands) | $157,898 | $196,260 | | Total Liabilities (in thousands) | $472,820 | $515,245 | | Total Stockholders' Equity (in thousands) | $214,884 | $196,920 | | Cash Flow Item (Six Months Ended June 30) | 2025 (unaudited) | 2024 (unaudited) | | :--- | :--- | :--- | | Net cash provided by operating activities (in thousands) | $19,075 | $27,660 | | Net cash used in investing activities (in thousands) | ($14,998) | ($16,230) | | Net cash used in financing activities (in thousands) | ($10,060) | ($10,514) | Notes to Consolidated Financial Statements Details accounting policies, segment performance, debt obligations, and the Keap acquisition, alongside an SEC inquiry - The company operates through two reportable segments: SaaS, which includes its all-in-one small business management software platform, and Marketing Services, which includes Print and Digital solutions2722 - On October 31, 2024, the company acquired Keap for $77.0 million in net cash, adding $34.9 million in goodwill to the SaaS segment, financed by a public stock offering and ABL Facility borrowing363739 - In May 2024, the company refinanced its debt by entering into a new $350.0 million Term Loan and an $85.0 million ABL Facility6575 - In October 2024, the company received a subpoena from the SEC's Division of Enforcement regarding its strategy of converting clients from Marketing Services to its SaaS platform, with the company cooperating with the inquiry107 | Segment Revenue (in thousands) | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | SaaS | $115,005 | $77,794 | +47.8% | | Marketing Services | $95,465 | $146,290 | -34.7% | | Total | $210,470 | $224,084 | -6.1% | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, strategic shift to SaaS, key business metrics, and liquidity Overview and Key Business Metrics Focuses on the strategic shift to SaaS, client conversion initiatives, and key performance indicators - The company made a strategic decision to terminate its Marketing Services solutions by the end of 2028, focusing on transitioning these clients to its SaaS platform123 - Over the twelve months ended June 30, 2025, Thryv converted approximately 29,000 Marketing Services clients to its SaaS platform, increasing SaaS revenue by $9.1 million in Q2 2025128 | Client Count (in thousands) | As of June 30, 2025 | As of June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Marketing Services | 199 | 271 | -26.6% | | SaaS | 106 | 85 | +24.7% | | Total | 261 | 307 | -15.0% | - SaaS Seasoned Net Revenue Retention (NRR) increased to 103% as of June 30, 2025, up from 94% a year prior, driven by additional product sales, price increases, and client conversions148147 Results of Operations Compares financial performance for Q2 and six months ended June 30, 2025, versus 2024, detailing revenue and EBITDA changes | Revenue Change (Q2 2025 vs Q2 2024) | Amount (in thousands) | % Change | | :--- | :--- | :--- | | SaaS Revenue | $37,211 | 47.8% | | Marketing Services Revenue | ($50,825) | -34.7% | | Total Revenue | ($13,614) | -6.1% | - The $37.2 million increase in Q2 SaaS revenue was primarily driven by the Keap acquisition ($17.7 million), conversion of Marketing Services clients ($4.6 million), new sales and price increases ($9.5 million), and net expansion from previously converted clients ($5.4 million)157 - The $50.8 million decrease in Q2 Marketing Services revenue was driven by a $15.6 million decline in Print revenue due to publication timing and secular decline, and a $35.2 million decline in Digital revenue due to client conversions and competition159160163 - Adjusted EBITDA decreased by $8.1 million (13.6%) to $51.2 million for Q2 2025, compared to $59.3 million in Q2 2024, mainly due to the decline in Marketing Services sales173 Liquidity and Capital Resources Assesses the company's ability to meet short-term and long-term obligations, including cash flow, debt, and share repurchase program - Net cash from operating activities decreased by $8.6 million to $19.1 million for the six months ended June 30, 2025, compared to the prior year, mainly due to lower sales and working capital changes207208 - As of June 30, 2025, total debt outstanding was $275.6 million (net), comprised of a $245.0 million Term Loan and $39.9 million drawn on the ABL Facility218221 - The company has a $40 million share repurchase program authorized through April 2029, with $39.5 million remaining available as of June 30, 2025219220 - As of June 30, 2025, the company had approximately $14.0 million available to be drawn upon under its ABL Facility217 Quantitative and Qualitative Disclosures about Market Risk Identifies primary market risks as interest rate and foreign exchange currency risk, and their potential financial impact - The company is exposed to interest rate risk as substantially all of its $275.6 million in debt has floating rates, where a hypothetical 100 basis point increase would raise annual interest expense by approximately $2.8 million221 - The company has foreign currency risk related to revenue and expenses denominated in Australian and New Zealand dollars but does not currently use hedging instruments for this risk222223 Controls and Procedures Management concluded that disclosure controls and procedures were effective, with ongoing integration of controls for the Keap acquisition - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective as of June 30, 2025224 - No material changes to internal control over financial reporting occurred during the quarter, other than the ongoing integration of controls for the acquired Keap business225 PART II. OTHER INFORMATION Legal Proceedings Refers to Note 13 for details on legal proceedings, including an SEC inquiry and a settled tax case - Information on legal proceedings is incorporated by reference from Note 13, Contingent Liabilities226 - Key matters disclosed in Note 13 include an ongoing SEC inquiry related to client conversion strategy and a tax case with the IRS that has been largely settled107110112 Risk Factors States that there have been no material changes to previously disclosed risk factors from the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors set forth in the company's 2024 Annual Report on Form 10-K227 Other Information (Items 2-6) Covers standard disclosures including no unregistered equity sales, no defaults on senior securities, and no 10b5-1 trading arrangement changes - Item 2: The company reported no unregistered sales of equity securities228 - Item 3: The company reported no defaults upon senior securities229 - Item 5: No officers or directors adopted or terminated a non-Rule 10b5-1 trading arrangement during the second quarter of 2025231