# Thryv Holdings, Inc. (THRY) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from Thryv Holdings, Inc.'s 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1556739/000155673925000015/thry-20241231.htm
Accession: 0001556739-25-000015
Filing date: 2025-02-27
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high

Company profile: /company/THRY/
All MD&A years: /company/THRY/mda/
Previous year: /company/THRY/mda/fy2023/ (FY 2023)
Next year: /company/THRY/mda/fy2025/ (FY 2025)

Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented and should be read in conjunction with our audited consolidated financial statements and the related notes thereto included elsewhere in this Annual Report. This discussion and analysis contains forward-looking statements, including statements regarding industry outlook, our expectations for the future of our business, and our liquidity and capital resources as well as other non-historical statements. These statements are based on current expectations and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements.

Overview

We are dedicated to supporting local, independent businesses and franchises by providing innovative marketing solutions and cloud-based tools to the entrepreneurs who run them. We are one of the largest providers of SaaS end-to-end customer experience tools and digital marketing solutions to small-to-medium sized businesses. Our solutions enable our SMB clients to generate new business leads, manage their customer relationships and run their day-to-day business operations.

Our expertise in delivering solutions for our client base is rooted in our deep history of serving SMBs. In 2024, SMB demand for integrated technology solutions continues to grow as SMBs adapt their business and service model to facilitate remote working and virtual interactions.

We serve approximately 300,000 SMB clients globally through two business segments: Thryv SaaS and Thryv Marketing Services.

Thryv Marketing Services. Our Thryv Marketing Services segment provides both print and digital solutions and generated $480.7 million, $653.2 million, and $986.0 million of consolidated revenues for the years ended December 31, 2024, 2023, and 2022, respectively. Our Marketing Services offerings include our owned and operated Print Yellow Pages, which carry the “The Real Yellow Pages” tagline, our proprietary Internet Yellow Pages, known by the Yellowpages.com, Superpages.com, and Dexknows.com URLs, search engine marketing solutions and other digital media solutions, which include online display and social advertising, online presence, and video and search engine optimization tools. Our Thryv Marketing Services segment includes Thryv Australia Pty Ltd (“Thryv Australia”), and Yellow Holdings Limited (“Yellow”), a New Zealand marketing services company, which we acquired on April 3, 2023 for $8.9 million in cash (the “Yellow Acquisition”). Thryv Australia and Yellow serve approximately 80,000 and 15,000 SMBs, respectively, many of which we believe are ideal candidates for the Thryv Platform. On January 21, 2022, we acquired Vivial Media Holdings, Inc. (“Vivial”), a marketing and advertising company, for $22.8 million in cash, subject to certain adjustments. Vivial results are included in the Thryv Marketing Services segment. During the third quarter of 2024, we made a strategic decision to terminate our Marketing Services solutions by the end of 2028.

Thryv SaaS. Our Thryv SaaS segment generated $343.5 million, $263.7 million, and $216.3 million of consolidated revenues for the years ended December 31, 2024, 2023, and 2022, respectively. Our primary SaaS offerings are comprised of Thryv®, our flagship all-in-one small business management platform, which includes Command Center, Business Center, Marketing Center, ThryvPaySM, Thryv Add-Ons, and Keap Automations. Thryv Command Center enables SMBs to centralize all their internal and external communications through a modular, easily expandable, and customizable platform. Command Center allows an SMB to perform the following tasks to provide a centralized inbox for all customer communication:

•connect their pre-existing email, Facebook and Instagram accounts;

•install Command Center’s WebChat client on their website; and

•use Voice over Internet Protocol in-platform telephony services, Short Message Service and video calls.

Thryv Business Center is designed to allow an SMB everything necessary to streamline day-to-day business operations, including customer relationship management, appointment scheduling, estimate and invoice creation, and online review management. Thryv Marketing Center is a fully integrated next generation marketing and advertising platform operated by the end user. Marketing Center contains everything a small business owner needs to market and grow their business effectively, including easy to understand, AI driven analytics and lead attribution, helping them understand what marketing is working for them. ThryvPaySM, is our own branded payment solution that allows users to get paid via credit card and ACH and is tailored to service focused businesses that want to provide consumers safe, contactless, and fast-online payment options. Thryv Add-Ons include AI-assisted website development, SEO tools, Google Business Profile optimization, Hub by

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ThryvSM, and Thryv Leads. These optional platform subscription-based add-ons provide a seamless user experience for our end-users and drive higher engagement within the Thryv Platform while also producing incremental revenue growth. Keap Automations is Thryv's sales and marketing automation engine that helps SMBs efficiently grow, allowing automation of repetitive tasks, campaigns, processes, and tools.

Keap Acquisition. On October 31, 2024, we acquired all of the outstanding capital stock of Keap for $76.9 million in cash (net of $7.6 million of cash acquired), subject to adjustment. Keap was founded in 2001 and operates a SaaS e-mail marketing and sales platform for small businesses, including products to manage customers, customer relationship management, marketing and e-commerce. As of December 31, 2024, Keap's customer base consisted of approximately 15,000 subscribers. Keap results are included in the Thryv SaaS segment.

To finance the purchase price, we closed an underwritten public offering of 5,715,000 shares of common stock, generating proceeds of $76.8 million (after deducting underwriting discounts and commissions) and borrowed $5.5 million under our New ABL Facility. Additionally, on November 12, 2024, the underwriter of the offering exercised its option to purchase an additional 857,250 shares of common stock, generating additional proceeds of $11.5 million (after deducting underwriting discounts and commissions).

Transition of Digital Marketing Services Clients to the Thryv Platform. During the fourth quarter of 2023, we made a strategic decision to accelerate the transition of clients with digital Marketing Services solutions to our Thryv Platform by converting clients with certain Marketing Services products to the Thryv Platform outside of the sales process at no additional base cost to these clients at the time of upgrade. During 2024, we converted approximately 46,000 clients from our digital Marketing Services to our Thryv Platform, generating a $37.1 million increase in SaaS revenue during 2024. As of December 31, 2024, approximately 38,000 of these clients remained as active SaaS clients.

The conversion of these clients decreases the number of clients in and the revenue of the Thryv Marketing Services segment and increases the number of clients in and the revenue of the Thryv SaaS segment. While we believe these clients are receiving a valuable upgrade to our Thryv Platform and will be more likely to subscribe for additional features of the Thryv Platform in the future, the conversion of these clients outside of the sales process could result in these clients cancelling their services with us (known as “churn”) at a materially higher rate than the other clients in our SaaS segment. During 2024, the churn of clients converted from our digital Marketing Services solutions was in line with the churn from the other clients in our SaaS segment. The conversion of clients to our Thryv Platform at no additional base cost resulted in a decrease to our SaaS monthly ARPU.

Impairment Charges

Our impairment tests resulted in non-cash impairments of our goodwill of $83.1 million, $268.8 million and $102.2 million during the years ended December 31, 2024, 2023 and 2022, respectively, to reduce goodwill in our Thryv Marketing Services reporting unit. The impairment charge during the year ended December 31, 2024 was primarily driven by the Company’s strategic decision during the third quarter of 2024 to terminate its Marketing Services solutions by the end of 2028. This strategic decision resulted in an additional accelerated decline in estimated future cash flows, partially offset by operating cost savings from terminating our Marketing Services solutions.

While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our reporting units, it is possible a material change could occur to the estimated fair value of these assets. If our actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.

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Factors Affecting Our Performance

Our operations can be impacted by, among other factors, general economic conditions and increased competition with the introduction of new technologies and market entrants. We believe that our performance and future success depend on several factors that present significant opportunities for us, but also pose risks and challenges, including those listed below and those discussed in the section titled “Risk Factors.”

Ability to Attract and Retain Clients

Our revenue growth is driven by our ability to attract, retain and expand the spend of SMB clients. To do so, we must deliver solutions that address the challenges currently faced by SMBs at a value-based price point that SMBs can afford.

Our strategy is to expand the use of our SaaS solutions by introducing our SaaS solutions to new SMB clients, as well as our current Thryv Marketing Services clients and our existing SaaS client base, offering them additional SaaS solutions. This strategy includes capitalizing on the increased needs of SMBs for solutions that facilitate a remote working environment and virtual interactions. This strategy will require substantial sales and marketing capital. This strategy poses a risk if our Marketing Services clients do not fully embrace the transition to SaaS offerings by purchasing additional SaaS offerings or if they have higher churn rates.

Investment in Growth

We intend to continue to develop and grow a profitable SaaS segment to better help SMBs manage their businesses, while maintaining strong profitability within our Marketing Services segment, which we expect to continue to serve as an efficient customer acquisition channel for our SaaS platform until its termination in 2028. As a result, SaaS has been able to achieve profitable growth. We will continue to improve our SaaS solutions by analyzing user behavior, expanding features, improving usability, enhancing our onboarding services and customer support and making version updates available to SMBs. We believe these initiatives will ultimately drive revenue growth; however, such improvements will also increase our operating expenses.

Ability to Grow Through Expansion and Acquisition

Our growth prospects depend upon our ability to successfully develop new markets. We currently primarily serve the United States, Australia, New Zealand, Canada, and Europe SMB markets and plan to leverage strategic acquisitions or initiatives to expand our client base domestically and enter new markets internationally. Identifying proper targets and executing strategic acquisitions may take substantial time and capital. In July 2022, we began operations in Canada through our own sales force and a re-seller agreement. On April 3, 2023, we completed the acquisition of Yellow, a New Zealand marketing services company. Additionally, on October 31, 2024, we completed the acquisition of Keap, a prominent player in customer relationship management and marketing automation for SMBs. Keap primarily serves SMBs in North America, Australia, New Zealand and Europe. We believe that strategic acquisitions of SaaS and marketing services companies globally will expand our client base and provide additional opportunities to offer our SaaS solutions.

Print Publication Cycle

We recognize revenue for print services at a point in time upon delivery of the published PYP directories containing customer advertisements to the intended market. Our PYP directories typically have 12-month publication cycles in Australia, 18-month publication cycles in New Zealand, and 18 to 24-month publication cycles in the U.S. As a result, we typically record revenue for each publication only once every 12 to 24 months, depending on the publication cycle of the directory. The amount of revenue we recognize each quarter from our PYP directories is therefore directly related to the number of PYP directories we deliver to the intended market each quarter, which can vary based on the timing of the publication cycles.

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Key Business Metrics

We review several operating metrics, including the following key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe these key metrics are useful to investors both because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and they may be used by investors to help analyze the health of our business.

Total Clients

We define total clients as the number of SMB accounts with one or more revenue-generating solutions in a particular period. For quarter- and year-ending periods, total clients from the last month in the period are reported. A single client may have separate revenue-generating accounts for multiple Marketing Services solutions or SaaS offerings, but we count these as one client when the accounts are managed by the same business entity or individual. Although infrequent, where a single organization has multiple subsidiaries, divisions, or segments, each business entity that is invoiced by us is treated as a separate client. We believe that the number of total clients is an indicator of our market penetration and potential future business opportunities. We view the mix between Marketing Services clients and SaaS clients as an indicator of potential future opportunities to offer our SaaS solutions to our Marketing Services clients.

[[GREPCENT_TABLE]]
[["","As of December 31,"],["(in thousands)","2024","","2023","","2022"],["Clients"],["Marketing Services (1)","233","","","314","","","362"],["SaaS (2)","114","","","66","","","52"],["Total (3)","296","","","346","","","387"]]
[[/GREPCENT_TABLE]]

(1)     Clients that purchase one or more of our Marketing Services solutions are included in this metric. These clients may or may not also purchase subscriptions to our SaaS offerings.

(2)     Clients that purchase subscriptions to our SaaS offerings are included in this metric, as well as clients who are converted from our digital Marketing Services solutions to our SaaS offerings. These clients may or may not also purchase one or more of our Marketing Services solutions.

(3)     Total clients is less than the sum of the Marketing Services and SaaS, since clients that purchase both Marketing Services and SaaS products are counted in each category, but only counted once in the Total.

Marketing Services clients decreased by 81 thousand, or 26%, as of December 31, 2024 as compared to December 31, 2023. Marketing Services clients decreased by 48 thousand, or 13%, as of December 31, 2023 as compared to December 31, 2022. These decreases were related to the secular decline in the print media industry and significant competition in the digital media space, from focusing on offering our SaaS solutions to our current Marketing Services clients, and from our strategic decision to accelerate the conversion of clients from digital Marketing Services solutions to SaaS offerings.

SaaS clients increased by 48 thousand, or 73%, as of December 31, 2024 as compared to December 31, 2023, primarily due to the conversion of clients from digital Marketing Services solutions to the Thryv Platform during 2024. In addition, during the fourth quarter of 2024, we added 15 thousand clients from the Keap Acquisition. SaaS clients increased by 14 thousand, or 27%, as of December 31, 2023 as compared to December 31, 2022 due to our continuing focus on new SaaS client acquisition through improved identification of prospects, improved selling methods, introduction of new product features, a growing international footprint, and the transition of clients from digital Marketing Services solutions to SaaS offerings.

Total clients decreased by 50 thousand, or 14%, as of December 31, 2024 as compared to December 31, 2023. Total clients decreased by 41 thousand, or 11%, as of December 31, 2023 as compared to December 31, 2022. The primary driver of these decreases was the secular decline in the print media business combined with increasing competition in the digital media and SaaS space, partially offset by an increase in SaaS clients.

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Monthly ARPU

We define monthly average revenue per unit (“ARPU”) as our 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. For each reporting period, the weighted-average monthly ARPU from all the months in the period are reported. ARPU varies based on product mix, product volumes, and the amounts we charge for our services. We believe that ARPU is an important measure of client spend and that growth in ARPU is an indicator of client satisfaction with our services.

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2024","","2023","","2022"],["ARPU (Monthly)"],["Marketing Services","$","133","","","$","158","","","$","178"],["SaaS","330","","","372","","","369"]]
[[/GREPCENT_TABLE]]

Monthly ARPU for Marketing Services decreased by $25, or 16%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, and $20, or 11%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease in ARPU for these periods was related to reduced spend by clients on our print media offerings due to the secular decline of the industry, caused by the continuing shift of advertising spend to larger digital media audiences, and our strategic decision to accelerate the conversion of clients from digital Marketing Services solutions to SaaS offerings.

Monthly ARPU for SaaS decreased by $42, or 11%, during the year ended December 31, 2024 compared to the year ended December 31, 2023, and increased by $3, or 1%, during the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease in SaaS ARPU during the year ended December 31, 2024 primarily resulted from our strategic decision to accelerate the conversion of clients from digital Marketing Services solutions to our SaaS offerings at no additional base cost at the time of upgrade. The sale of our newer Marketing Center product to our SaaS clients offset a portion of the SaaS decline. The increase in SaaS ARPU during the year ended December 31, 2023 was attributable to upsell of higher value solutions to existing customers and price increases, partially offset by the strategic decision to accelerate the conversion of clients from digital Marketing Services solutions to SaaS offerings at no additional base cost at the time of upgrade. In addition, the sale of add-on features to our Thryv Platform, such as Thryv Leads and Thryv Pay contributed to Monthly SaaS ARPU growth.

Seasoned Net Revenue Retention for SaaS

We believe that Seasoned Net Revenue Retention (“Seasoned NRR”) is an indicator of our ability to retain and expand revenue for established clients that have had one or more SaaS offerings for at least a year. Seasoned NRR is calculated by dividing the recurring revenue of all SaaS clients as of the last month of the year or quarter, as applicable, (net of expansions, downsell, and churns) by the same client's recurring revenue one year ago, removing clients acquired over the last 12 months, including clients acquired in the Keap Acquisition.

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2024","","2023","","2022"],["Seasoned NRR","98","%","","96","%","","91","%"]]
[[/GREPCENT_TABLE]]

Seasoned NRR increased by 2% for the year ended December 31, 2024 compared to the year ended December 31, 2023, and increased by 5% during the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase in Seasoned NRR during the year ended December 31, 2024 resulted from selling other SaaS products to existing SaaS clients, a price increase for SaaS clients in the third quarter of 2024, and our strategic decision to accelerate the conversion of clients from digital Marketing Services solutions to our SaaS offerings that included instances where Marketing Services clients already had at least one of our SaaS solutions and SaaS revenue increased for those clients. The increase in Seasoned NRR during the year ended December 31, 2023 resulted from selling other SaaS products to existing SaaS clients, a price increase for SaaS clients in the third quarter of 2023, and our strategic decision to accelerate the conversion of clients from digital Marketing Services solutions to our SaaS offerings that included instances where Marketing Services clients already had at least one of our SaaS solutions and SaaS revenue increased for those clients.

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Key Components of Our Results of Operations

Revenue

We generate revenue from our two business segments: Thryv Marketing Services and Thryv SaaS. Our primary sources of revenue in our Thryv Marketing Services segment are Print and Digital services. Our primary source of revenue in our Thryv SaaS segment is our SaaS solutions.

Cost of Services

Cost of services consists of expenses related to delivering our solutions, such as publishing, printing, and distribution of our Print directories and fulfillment of our Digital and SaaS offerings, including traffic acquisition, managed hosting, and other third-party service providers. Additionally, Cost of services includes personnel-related expenses such as salaries, benefits, and stock-based compensation for our operations team, information technology expenses, non-capitalizable software and hardware purchases, and allocated overhead costs, which includes depreciation of fixed assets, and amortization associated with capitalized software and intangible assets.

Operating Expenses

Sales and Marketing

Sales and marketing expense consists primarily of base salaries, stock-based compensation, sales commissions paid to our inside and outside sales force and other expenses incurred by personnel within the sales, marketing, sales training, and client care departments. Additionally, Sales and marketing expense includes advertising costs such as media, promotional material, branding, online advertising, information technology expenses and allocated overhead costs which includes depreciation of fixed assets, and amortization associated with capitalized software and intangible assets.

General and Administrative

General and administrative expense primarily consists of salaries, benefits and stock-based compensation incurred by corporate management and administrative functions such as information technology, finance and accounting, legal, internal audit, human resources, billing and receivables, and management personnel. In addition, General and administrative expense includes bad debt expense, non-recurring charges, and other corporate expenses such as professional fees, operating taxes, and insurance. General and administrative expense also includes allocated overhead costs which includes depreciation of fixed assets, and amortization associated with capitalized software and intangible assets.

Other Income (Expense)

Other income (expense) consists of interest expense, other components of net periodic pension (cost) benefit, and other income (expense), which includes a loss on early extinguishment of debt during the year ended December 31, 2024, a bargain purchase gain as a result of the Vivial Acquisition during the year ended December 31, 2022, and foreign currency-related income and expense.

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Results of Operations

Consolidated Results of Operations

The following table sets forth certain consolidated financial data for each of the periods indicated:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["","2024 (1)","","2023 (2)"],["(in thousands of $)","Amount","","% of Revenue","","Amount","","% of Revenue"],["Revenue","$","824,156","","","100","%","","$","916,961","","","100","%"],["Cost of services","286,919","","","34.8","%","","338,714","","","36.9","%"],["Gross profit","537,237","","","65.2","%","","578,247","","","63.1","%"],["Operating expenses:"],["Sales and marketing","270,146","","","32.8","%","","300,538","","","32.8","%"],["General and administrative","217,296","","","26.4","%","","208,880","","","22.8","%"],["Impairment charges","83,094","","","10.1","%","","268,846","","","29.3","%"],["Total operating expenses","570,536","","","69.2","%","","778,264","","","84.9","%"],["Operating (loss)","(33,299)","","","4.0","%","","(200,017)","","","21.8","%"],["Other income (expense):"],["Interest expense","(46,771)","","","5.7","%","","(61,728)","","","6.7","%"],["Other components of net periodic pension benefit","24,806","","","3.0","%","","2,719","","","0.3","%"],["Other expense","(10,734)","","","1.3","%","","(1,518)","","","0.2","%"],["(Loss) before income tax (expense) benefit","(65,998)","","","8.0","%","","(260,544)","","","28.4","%"],["Income tax (expense) benefit","(8,218)","","","1.0","%","","1,249","","","0.1","%"],["Net (loss)","$","(74,216)","","","9.0","%","","$","(259,295)","","","28.3","%"],["Other financial data:"],["Adjusted EBITDA(3)","$","162,431","","","19.7","%","","$","187,515","","","20.4","%"],["Adjusted Gross Profit(4)","$","558,906","","","","","$","605,849"],["Adjusted Gross Margin(5)","67.8","%","","","","66.1","%"]]
[[/GREPCENT_TABLE]]

(1)Consolidated results of operations includes Keap's results of operations subsequent to the October 31, 2024 acquisition date.

(2)Consolidated results of operations includes Yellow's results of operations subsequent to the April 3, 2023 acquisition date.

(3)See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net (loss) income, the most directly comparable measure presented in accordance with GAAP.

(4)See “Non-GAAP Financial Measures” for a definition of Adjusted Gross Profit and a reconciliation to Gross profit, the most directly comparable measure presented in accordance with GAAP.

(5)See “Non-GAAP Financial Measures” for a definition of Adjusted Gross Margin.

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Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

Revenue

The following table summarizes revenue by business segment for the periods indicated:

[[GREPCENT_TABLE]]
[["","Years Ended December 31,","","Change"],["","2024","","2023","","Amount","","%"],["(in thousands of $)"],["Thryv Marketing Services","$","480,680","","","$","653,244","","","$","(172,564)","","","(26.4)","%"],["Thryv SaaS","343,476","","","263,717","","","79,759","","","30.2","%"],["Total Revenue","$","824,156","","","$","916,961","","","$","(92,805)","","","(10.1)","%"]]
[[/GREPCENT_TABLE]]

Total Revenue decreased by $92.8 million, or 10.1%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in total Revenue was driven primarily by a decrease in Thryv Marketing Services Revenue of $172.6 million, partially offset by an increase in Thryv SaaS Revenue of $79.8 million.

Thryv Marketing Services Revenue

Thryv Marketing Services revenue decreased by $172.6 million, or 26.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

Print revenue decreased by $10.8 million, or 4.1%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease in Print revenue was primarily driven by the continued secular decline in industry demand for Print services, which was partially offset by the impact of publication timing differences, as a result of our Print agreements having greater than 12 month terms, and increasing the terms of our new Print publications from 18 months to 24 months in the fourth quarter.

Print revenue is recognized upon delivery of the published directories. Individual published directories have different publication cycles, with a typical lifecycle of 18 months for U.S. directories in 2024. During the fourth quarter of 2024, we began to transition to 24 month publication cycles for U.S. directories. As a result of recognizing revenue upon delivery, we typically record revenue for each published U.S. directory only once every 18 to 24 months, which does not make comparing revenue year-over-year fully representative of actual demand trends due to timing of publication cycles.

During the year ended December 31, 2024 the Company recognized more revenue on certain U.S. publications as a result of the increased publication cycles compared to the year ended December 31, 2023. Additionally, due to publication timing differences, the Company recognized revenue for more published directories during the year ended December 31, 2024 compared to the year ended December 31, 2023. However, as a result of the secular decline in industry demand for Print services, the overall impact on revenue on a publication-by-publication basis was a 32% decline for the year ended December 31, 2024.

Digital revenue decreased by $161.7 million, or 41.6%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily driven by the Company’s strategic decision during the fourth quarter of 2023 to accelerate the conversion of clients from its digital Marketing Services solutions to its SaaS offerings. For the year ended December 31, 2024, clients converted to SaaS offerings reduced Marketing Services revenue by $37.1 million. However, this resulted in the growth of SaaS revenue as highlighted below in the Thryv SaaS Revenue section. Digital revenue has further decreased due to a continued trending decline in the Company’s Marketing Services client base and significant competition in the consumer search and display space, particularly from large, well-capitalized businesses such as Google, Yelp and Facebook. For the year ended December 31, 2024, the continued trending decline and significant competition resulted in a $124.6 million decrease in digital revenue.

Thryv SaaS Revenue

Thryv SaaS revenue increased by $79.8 million, or 30.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily attributable to the Company’s strategic decision during the fourth quarter of 2023 to accelerate the conversion of clients from its digital Marketing Services solutions to its SaaS offerings. Clients converted from digital Marketing Services solutions resulted in a $37.1 million increase in SaaS revenue for the year ended December 31, 2024. SaaS revenue also increased $29.3 million as a result of increased demand for our Thryv SaaS

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solutions as SMBs accelerate their move away from manual processes and towards cloud platforms to more efficiently manage and grow their businesses, and by our success in re-focusing our go-to-market and onboarding strategy to target higher value clients. Finally, Keap contributed $13.4 million of SaaS revenue since the acquisition closed on October 31, 2024.

Cost of Services

Cost of services decreased by $51.8 million, or 15.3%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This decrease was primarily driven by the corresponding decline in revenue and strategic cost saving initiatives. Specifically, we reduced printing, distribution and digital fulfillment support costs by $25.2 million, contract services by $11.7 million, and employee-related expenses by $6.8 million. Additionally, depreciation and amortization expense decreased $6.0 million due to the accelerated amortization method used by the Company.

Gross Profit

Gross profit decreased by $41.0 million, or 7.1%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in Gross profit was primarily due to a decrease in Marketing Services revenue, partially offset by an increase in SaaS revenue and a decrease in cost of services as a result of decline in revenue and strategic cost saving initiatives. Our gross margin increased by 210 basis points, to 65.2%, for the year ended December 31, 2024 compared to 63.1% for the year ended December 31, 2023. This increase was primarily due to an increase in sales of our higher margin SaaS solutions and the reduction of our resale of high-spend, low margin third-party local search and display services that were not hosted on our owned and operated platforms.

Operating Expenses

Sales and Marketing

Sales and marketing expense decreased by $30.4 million, or 10.1%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily attributable to a decrease in employee-related costs and contract services expense of $12.3 million due to strategic cost-saving initiatives, a decrease in sales commissions of $7.8 million due to new sales commissions plans and revised targets, a decrease in stock-based compensation expense of $3.7 million, and a decrease in advertising expenses of $4.2 million. Additionally, depreciation and amortization expense decreased $3.3 million due to the accelerated amortization method used by the Company.

General and Administrative

General and administrative expense increased by $8.4 million, or 4.0%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily attributable to an increase in stock-based compensation expense of $5.6 million, an increase in third-party fees associated with our debt refinancing of $2.0 million, an increase in transaction and integration costs of $6.6 million related to the Keap Acquisition, and an increase in accelerated lease amortization of $4.2 million due to the Company's plans to vacate the acquired Keap office buildings. The increase was partially offset by the absence of a $10.7 million loss on settlement of indemnification asset that was recorded during the year ended December 31, 2023.

Impairment Charges

Impairment charges decreased by $185.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. Impairment charges of $83.1 million were recognized as a result of a goodwill impairment in our Thryv Marketing Services reporting unit as a result of our strategic decision during the year ended December 31, 2024 to terminate our Marketing Services solutions by the end of 2028, while $268.8 million of impairment charges were recognized in our Thryv Marketing Services reporting unit during the year ended December 31, 2023 as a result of the continued secular decline in the Thryv Marketing Services reporting unit and the strategic decision to accelerate the conversion of additional clients and services from our digital Marketing Services solutions to our SaaS offerings.

Other Income (Expense)

Interest Expense

Interest expense decreased by $15.0 million, or 24.2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, driven primarily by lower outstanding debt balances, as well as lower interest rates.

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Other Components of Net Periodic Pension Benefit

Other components of net periodic pension benefit increased by $22.1 million for the year ended December 31, 2024. This increase was primarily due to remeasurement gain of $31.1 million recorded for the year ended December 31, 2024, compared to a remeasurement gain of $9.9 million that was recorded during the year ended December 31, 2023. The increase in the remeasurement gain was a result of increasing discount rates due to changes in corporate bond markets, actuarial assumption updates to reflect recent plan experience and current market conditions, plan experience different than expected, and actual asset performance exceeding expectations. These increases were partially offset by $2.1 million of lower interest cost due to lower interest rates.

Other Expense

Other expense increased by $9.2 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was primarily due to a loss on extinguishment of debt of $6.6 million recorded during the year ended December 31, 2024 and an increase in foreign-currency related loss of $2.6 million.

Income Tax (Expense) Benefit

Income tax expense increased by $9.5 million, or 758.0%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The effective tax rate was (12.4%) and 0.5% for the year ended December 31, 2024 and 2023, respectively. The effective tax rate differs from the 21.0% U.S. Federal statutory rate in the current year primarily due to the impact of the goodwill impairment allocated to non-deductible goodwill.

Adjusted EBITDA

Adjusted EBITDA decreased by $25.1 million, or 13.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in Adjusted EBITDA was primarily driven by the secular decline in our Thryv Marketing Services segment. The decrease was partially offset by the growth in our Thryv SaaS segment. See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net income (loss), the most directly comparable measure presented in accordance with GAAP.

Years Ended December 31, 2023 and 2022

For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K year ended December 31, 2023.

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Non-GAAP Financial Measures

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). We also present Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin, as defined below, as non-GAAP financial measures in this Annual Report.

We have included Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin in this report because management believes they provide useful information to investors in gaining an overall understanding of our current financial performance and provide consistency and comparability with past financial performance. Specifically, we believe Adjusted EBITDA provides useful information to management and investors by excluding certain non-operating items that we believe are not indicative of our core operating results. In addition, Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin are used by management for budgeting and forecasting as well as measuring the Company’s performance. We believe Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin provide investors with the financial measures that closely align with our internal processes.

We define Adjusted EBITDA (“Adjusted EBITDA”) as Net (loss) income plus Interest expense, Income tax expense (benefit), Depreciation and amortization expense, Restructuring and integration expenses, Loss on early extinguishment of debt, Transaction costs, Stock-based compensation expense, Impairment charges and non-operating expenses, such as, Other components of net periodic pension cost (benefit), Non-cash loss (gain) from remeasurement of indemnification asset, and certain unusual and non-recurring charges that might have been incurred. Adjusted EBITDA should not be considered as an alternative to Net (loss) income as a performance measure. We define Adjusted Gross Profit (“Adjusted Gross Profit”) and Adjusted Gross Margin (“Adjusted Gross Margin”) as Gross profit and Gross margin, respectively, adjusted to exclude the impact of depreciation and amortization expense and stock-based compensation expense.

Non-GAAP financial information has limitations as an analytical tool and is presented for supplemental informational purposes only. Such information should not be considered a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP measures used by other companies.

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

[[GREPCENT_TABLE]]
[["","Years Ended December 31,"],["(in thousands)","2024","","2023","","2022"],["Reconciliation of Adjusted EBITDA"],["Net (loss) income","$","(74,216)","","","$","(259,295)","","","$","54,348"],["Impairment charges","83,094","","","268,846","","","102,222"],["Depreciation and amortization expense","52,789","","","63,251","","","88,392"],["Interest expense","46,771","","","61,728","","","60,407"],["Stock-based compensation expense (1)","24,118","","","22,201","","","14,628"],["Restructuring and integration expenses (2)","32,697","","","14,612","","","17,804"],["Loss on early extinguishment of debt (3)","6,638","","","\u2014","","","\u2014"],["Non-cash loss (gain) from remeasurement of indemnification asset (4)","\u2014","","","10,734","","","(2,148)"],["Transaction costs (5)","5,145","","","373","","","6,119"],["Income tax expense (benefit)","8,218","","","(1,249)","","","44,627"],["Other components of net periodic pension benefit (6)","(24,806)","","","(2,719)","","","(44,612)"],["Other (7)","1,983","","","9,033","","","(8,445)"],["Adjusted EBITDA","$","162,431","","","$","187,515","","","$","333,342"]]
[[/GREPCENT_TABLE]]

(1)The Company records Stock-based compensation expense related to the amortization of grant date fair value of the Company’s stock-based compensation awards. See Note 12, Stock-Based Compensation and Stockholders' Equity, to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information.

(2)See the table below for detail of Restructuring and integration expenses for the years ended December 31, 2024, 2023, and 2022.

(3)In connection with the debt refinancing completed on May 1, 2024, the Company recorded a Loss on early extinguishment of debt related to the write-off of certain unamortized debt issuance costs on the Company's Prior Term Loan and Prior ABL Facility. See Note 10, Debt Obligations, to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information.

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(4)In connection with the YP Acquisition, the seller indemnified the Company 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. See Note 4, Fair Value Measurements, to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information.

(5)Expenses related to the Keap Acquisition, Yellow Acquisition, Vivial Acquisition and other transaction costs.

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

(7)During the year ended December 31, 2024, Other primarily includes foreign exchange-related expense. During the year ended December 31, 2023, Other includes expenses related to the valuation of certain assets as a result of the acquisition of Thryv Australia and foreign exchange related expense. During the year ended December 31, 2022, Other primarily represents the bargain purchase gain as a result of the Vivial Acquisition, partially offset by foreign exchange-related expense.

The following is a reconciliation of Restructuring and integration expenses that are included in the Adjusted EBITDA to Net (loss) income reconciliation above:

[[GREPCENT_TABLE]]
[["(in thousands)","Years Ended December 31,"],["Reconciliation of Restructuring and integration expenses","2024","","2023","","2022"],["Abandoned facility costs (a)","$","8,303","","","$","3,999","","","$","7,461"],["Severance charges (b)","12,668","","","5,834","","","3,491"],["Post-acquisition and integration expenses (c)","5,902","","","3,995","","","5,567"],["Tax, accounting, and legal fees (d)","5,824","","","784","","","1,285"],["Total Restructuring and integration expenses","$","32,697","","","$","14,612","","","$","17,804"]]
[[/GREPCENT_TABLE]]

(a)Represents expenses related to maintenance, utilities, and general upkeep at the Company’s leased buildings. During the COVID-19 pandemic, the Company decided to operate in a Remote First working environment. Because we did not terminate existing lease agreements at any of our facilities, we continue to incur these costs until the lease agreements end. The most significant lease agreement is for our Corporate headquarters, which ends on December 31, 2025 and will not be renewed. Costs for the year ended December 31, 2024 also includes $4.2 million of accelerated amortization expense for the Keap headquarters. The Keap headquarters lease agreement ends on December 31, 2026 and will not be renewed.

(b)We incur severance charges related to certain reduction in force actions taken by our management. These reduction in force actions are designed to streamline the Company’s operations and drive lower operating expenses as we continue to shift from our Marketing Services activities and drive continued focus on our SaaS business. Specifically, we incurred severance charges of $10.9 million, $5.4 million and $2.3 million in the years ended December 31, 2024, 2023, and 2022, respectively, primarily related to our legacy Marketing Services employees and our shift from Marketing Services activities. Additionally, certain severance charges resulted from strategic integration activities to right-size our workforce following an acquisition. Specifically, we incurred severance charges of $1.8 million, $0.4 million and $1.2 million in the years ended December 31, 2024, 2023, and 2022, respectively, resulting from the acquisitions of Keap in 2024, Yellow New Zealand in 2023, and Vivial in 2022.

(c)We incur professional services, system integration costs and other fees related to each of our acquisitions. Such costs vary in nature and amount due to factors specific to each acquisition and create a lack of comparability between periods.

(d)These costs consist of legal expenses related to legal cases inherited from acquisitions and accounting fees related to acquisitions.

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The following is a reconciliation of Adjusted Gross Profit and Adjusted Gross Margin, to their most directly comparable GAAP measures, Gross profit and Gross margin:

[[GREPCENT_TABLE]]
[["","Year Ended December 31, 2024"],["(in thousands)","Thryv Marketing Services","","Thryv SaaS","","Total"],["Reconciliation of Adjusted Gross Profit"],["Gross profit","$","299,015","","","$","238,222","","","$","537,237"],["Plus:"],["Depreciation and amortization expense","12,406","","","8,600","","","21,006"],["Stock-based compensation expense","327","","","336","","","663"],["Adjusted Gross Profit","$","311,748","","","$","247,158","","","$","558,906"],["Gross Margin","62.2","%","","69.4","%","","65.2","%"],["Adjusted Gross Margin","64.9","%","","72.0","%","","67.8","%"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","Year Ended December 31, 2023"],["(in thousands)","Thryv Marketing Services","","Thryv SaaS","","Total"],["Reconciliation of Adjusted Gross Profit"],["Gross profit","$","409,057","","","$","169,190","","","$","578,247"],["Plus:"],["Depreciation and amortization expense","20,811","","","6,178","","","26,989"],["Stock-based compensation expense","399","","","214","","","613"],["Adjusted Gross Profit","$","430,267","","","$","175,582","","","$","605,849"],["Gross Margin","62.6","%","","64.2","%","","63.1","%"],["Adjusted Gross Margin","65.9","%","","66.6","%","","66.1","%"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","Year Ended December 31, 2022"],["(in thousands)","Thryv Marketing Services","","Thryv SaaS","","Total"],["Reconciliation of Adjusted Gross Profit"],["Gross profit","$","648,039","","","$","132,343","","","$","780,382"],["Plus:"],["Depreciation and amortization expense","33,185","","","5,162","","","38,347"],["Stock-based compensation expense","332","","","89","","","421"],["Adjusted Gross Profit","$","681,556","","","$","137,594","","","$","819,150"],["Gross Margin","65.7","%","","61.2","%","","64.9","%"],["Adjusted Gross Margin","69.1","%","","63.6","%","","68.1","%"]]
[[/GREPCENT_TABLE]]

Liquidity and Capital Resources

Thryv Holdings, Inc. is a holding company that does not conduct any business operations of its own. We derive cash flows from cash transfers and other distributions from our operating subsidiary, Thryv Inc., which in turn generates cash flow from its own operations and operations of its subsidiaries, and has cash and cash equivalents on hand, funds provided under the New Term Loan (as defined below) and funds available under the New ABL Facility (as defined below). The agreements governing our debt may restrict the ability of our subsidiaries to make loans or otherwise transfer assets to us. Further, our subsidiaries are permitted under the terms of our senior credit facilities and other indebtedness to incur additional indebtedness that may restrict or prohibit the making of distributions or the making of loans by such subsidiaries to us. Our and our subsidiaries’ ability to meet our debt service requirements is dependent on our ability to generate sufficient cash flows from operations.

We believe that expected cash flows from operations, available cash and cash equivalents, and funds available under our

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New ABL Facility will be sufficient to meet our liquidity requirements, such as working capital requirements for our operations, business development and investment activities, and debt payment obligations, for the following 12 months. Any projections of future earnings and cash flows are subject to substantial uncertainty. Our future success and capital adequacy will depend on, among other things, our ability to achieve anticipated levels of revenues and cash flows from operations and our ability to address our annual cash obligations and reduce our outstanding debt, all of which are subject to general economic, financial, competitive, and other factors beyond our control. We continue to monitor our capital requirements to ensure our needs are in line with available capital resources.

In addition, our Board authorizes us to undertake share repurchases from time to time. The amount and timing of any share repurchases that we make will depend on a variety of factors, including available liquidity, cash flows, our capacity to make repurchases under our debt agreements and market conditions.

For a discussion on contingent obligations, see Note 15, Contingent Liabilities, to our audited consolidated financial statements included in Part II, Item 8 in this Annual Report.

Sources and Uses of Cash

The following table sets forth a summary of our cash flows from operating, investing and financing activities for the periods indicated:

[[GREPCENT_TABLE]]
[["","","Years Ended December 31,","","$"],["(in thousands)","","2024","","2023","","Change"],["Cash flows provided by (used in):"],["Operating activities","","$","89,783","","","$","148,226","","","$","(58,443)"],["Investing activities","","(110,424)","","","(42,516)","","","(67,908)"],["Financing activities","","19,216","","","(103,493)","","","122,709"],["Effects of exchange rate changes on cash, cash equivalents and restricted cash","","(1,344)","","","133","","","(1,477)"],["(Decrease) increase in cash, cash equivalents and restricted cash","","$","(2,769)","","","$","2,350","","","$","(5,119)"]]
[[/GREPCENT_TABLE]]

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by $58.4 million, or 39.4%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to changes in working capital, particularly accounts receivable, which was primarily impacted by the timing of payments and an overall decline in our sales. Additionally, the Company made income tax payments of $15.4 million for the year ended December 31, 2024 compared to income taxes paid of $9.3 million for the year ended December 31, 2023 and pension funding payments of $6.5 million for the year ended December 31, 2024 compared to funding payments of $0.8 million for the year ended December 31, 2023. This was offset by lower interest payments of $13.0 million compared to the year ended December 31, 2023.

Cash Flows from Investing Activities

Net cash used in investing activities increased by $67.9 million, or 159.7%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily due to $76.9 million of cash paid related to the Keap Acquisition during the year ended December 31, 2024, compared to $8.9 million of cash paid related to the Yellow Acquisition during the year ended December 31, 2023.

Cash Flows from Financing Activities

Net cash from financing activities was $19.2 million for the year ended December 31, 2024 compared to net cash used in financing activities of $103.5 million the year ended December 31, 2023. This was primarily due to $87.4 million of net proceeds from our common stock offering during the year ended December 31, 2024. Additionally, $44.4 million of net payments on the Company's Prior Term Loan and New Term Loan agreements during the year ended December 31, 2024, compared to $120.0 million of net payments on the Company's Prior Term Loan during the year ended December 31, 2023. The decrease in payments on the Prior Term Loan and New Term Loan was partially offset by $25.0 million of net payments on the Company's Prior ABL Facility and New ABL Facility during the year ended December 31, 2024, compared to $5.7 million of net payments on the Company's Prior ABL Facility during the year ended December 31, 2023. Additionally,

60

the decrease in payments on the Prior Term Loan and New Term Loan was partially offset by $15.9 million of cash received as a result of the exercise of stock warrants during the year ended December 31, 2023. The Company also paid $5.5 million of debt issuance costs during the year ended December 31, 2024 related to the New Term Loan.

Debt

New Term Loan

On May 1, 2024, the Company entered into a new Term Loan Credit Agreement (the “New Term Loan”), the proceeds of which were used to refinance and pay off in full the Company’s previous term loan facility (the “Prior Term Loan”) and to pay fees and expenses related to the refinancing.

The New Term Loan established a senior secured term loan facility (the “New Term Loan Facility”) in an aggregate principal amount equal to $350.0 million, of which 40.0% was held by a related party who was an equity holder of the Company as of May 1, 2024. The Company defines a related party as any shareholder owning more than 5% of the Company's voting securities. As of December 31, 2024, 40.0% of the New Term Loan was held by a related party who was an equity holder of the Company as of that date.

The New Term Loan Facility matures on May 1, 2029 and borrowings under the New Term Loan Facility bear interest at a fluctuating rate per annum equal to, at the Company’s option, SOFR or base rate, in each case, plus an applicable margin per annum equal to (i) 6.75% (for SOFR loans) and (ii) 5.75% (for base rate loans). The New Term Loan Facility requires mandatory amortization payments, paid quarterly commencing June 30, 2024, equal to (i) $52.5 million per year for the first two years following the closing date of the New Term Loan, and (ii) $35.0 million per year thereafter.

New ABL Facility

On May 1, 2024, the Company entered into a new Credit Agreement (the “ABL Credit Agreement”), which established a new $85.0 million asset-based revolving loan facility (the “New ABL Facility”). The New ABL Facility refinanced the Company’s previous asset-based revolving loan facility (the “Prior ABL Facility”). Proceeds of the New ABL Facility may be used by the Company for ongoing general corporate purposes and working capital.

The New ABL Facility matures on May 1, 2028 and borrowings under the New ABL Facility bear interest at a fluctuating rate per annum equal to, at the Company’s option, SOFR or base rate, in each case, plus an applicable margin per annum, depending on the average excess availability under the New ABL Facility, equal to (i) 2.50% to 2.75% (for SOFR loans) and (ii) 1.50% to 1.75% (for base rate loans). The fee for undrawn commitments under the New ABL Facility is equal to 0.375% per annum.

As of December 31, 2024, the Company had borrowing base availability of $56.9 million. As a result of certain restrictions in the Company's debt agreements, as of December 31, 2024, approximately $46.5 million was available to be drawn upon under the New ABL Facility.

We maintain debt levels that we consider appropriate after evaluating a number of factors, including cash requirements for ongoing operations, investment and financing plans (including acquisitions and share repurchase activities), and overall cost of capital. Per the terms of the New Term Loan Facility, payments of the New Term Loan balance are determined by the Company's Excess Cash Flow (as defined in the New Term Loan Facility). We are in compliance with all covenants under the New Term Loan and New ABL Facility as of December 31, 2024. We had total recorded debt outstanding of $284.3 million (net of $10.8 million of unamortized original issue discount and debt issuance cost) at December 31, 2024, which was comprised of amounts outstanding under the New Term Loan of $271.3 million and New ABL Facility of $23.9 million.

Share Repurchase Program

On April 30, 2024, the Board authorized a new share repurchase program (the “Share Repurchase Program”), under which the Company may repurchase up to $40 million in shares of common stock through April 30, 2029. The repurchase program is subject to market conditions, the periodic capital needs of the Company’s operating activities, and the continued satisfaction of all covenants under the Company’s New Term Loan and ABL Credit Agreement. The Share Repurchase Program does not obligate the Company to repurchase shares and may be suspended, terminated, or modified at any time.

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On June 20, 2024, the Company repurchased approximately 26,495 shares of its outstanding common stock. The total purchase price of this transaction was approximately $0.5 million. The shares acquired were recorded as Treasury stock upon repurchase.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our audited consolidated financial statements, which have been prepared in accordance with U.S. GAAP. In preparing our financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our reported revenues, results of operations and net income or loss, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods. These estimates, assumptions, and judgments are necessary because future events and their effects on our results and the value of our assets cannot be determined with certainty and are made based on our historical experience and other assumptions that we believe to be reasonable under the circumstances. These estimates may change as new events occur or additional information is obtained, and we may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates.

We believe that the assumptions and estimates associated with revenue recognition, business combinations, goodwill, pension obligations, and income taxes have the greatest potential impact on our audited consolidated financial statements. Therefore, we consider these to be our critical accounting estimates. See Note 1, Description of Business and Summary of Significant Accounting Policies, to our audited consolidated financial statements included in Part II, Item 8 in this Annual Report for further information on these and our other significant accounting policies and estimates as well as our disclosures on recent accounting pronouncements. Our most critical accounting estimates are summarized below.

Revenue Recognition

We recognize revenue based on the revenue recognition standard, Revenue from Contracts with Customers (Topic 606), (“ASC 606”). The Company determines the amount of revenue to be recognized through application of the five-step model as described in Note 1, Description of Business and Summary of Significant Accounting Policies, to our audited consolidated financial statements included in Part II, Item 8 in this Annual Report.

We derive revenue from our two business segments: Thryv Marketing Services and Thryv SaaS. The Company has determined that each of its services is distinct and represents a separate performance obligation because the SMB can benefit from each service on its own or together with other resources that are readily available to the SMB, and services are separately identifiable from other promises in the contract. Revenue for all services is recognized when control transfers to the SMB. For print solutions, control transfers upon delivery of the published directories. Control over SaaS and digital services transfers to the SMB evenly over the service period.

The transaction price of a contract primarily consists of fixed consideration components pursuant to the applicable contractual terms and may involve the use of estimates. These judgments involve consideration of historical and expected experience with the customer and other similar customers. The Company’s contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates the transaction price to each performance obligation based on its relative standalone selling price. Standalone selling price is the price at which the Company would sell a promised service separately to a client. Judgment is required to determine the standalone selling price for each distinct performance obligation. Often, the Company does not have sufficient standalone sales information, as contracts with customers generally include multiple performance obligations. When standalone sales information is not available, the Company estimates the standalone selling price using information that may include market conditions, entity-specific factors such as pricing and discounting strategies, and other inputs.

Business Combinations

We have completed several acquisitions of other businesses in the past, including the Keap Acquisition on October 31, 2024, the Yellow Acquisition on April 3, 2023 and the Vivial Acquisition on January 21, 2022. In an acquisition, we first review if substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If such concentration exists, the transaction is considered an asset acquisition rather than a business combination.

The results of businesses acquired in a business combination are included in our audited consolidated financial statements from the date of acquisition. We allocate the purchase price, which is the sum of the consideration paid and may

62

consist of cash, equity, or a combination of the two, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and assumed liabilities requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, and discount rates.

We use all available information to estimate fair values. We typically engage outside appraisal firms to assist in determining the fair value of tangible and identifiable intangible assets such as client relationships, trademarks, and any other significant assets or liabilities. During the measurement period, of up to one year after the acquisition date, we may adjust the values attributed to the assets acquired and assumed liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date.

Our purchase price allocation methodology contains uncertainties because it requires assumptions and management’s judgment to estimate the fair value of assets acquired and assumed liabilities at the acquisition date. Key judgments used to estimate the fair value of intangible assets include projected revenue growth and operating margins, discount rates, client attrition rates, as well as the estimated economic life of intangible assets. Management estimates the fair value of assets and liabilities based upon quoted market prices, the carrying value of the acquired assets, and widely accepted valuation techniques, including discounted cash flows. Our estimates are inherently uncertain and subject to refinement. Unanticipated events or circumstances may occur which could affect the accuracy of our fair value estimates, including assumptions regarding industry economic factors and business strategies.

Goodwill

Goodwill represents the excess of the purchase price of an acquired business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is tested annually for impairment as of October 1st and at any time upon the occurrence of certain triggering events or changes in circumstances. The Company performs its goodwill impairment test at the reporting unit level. In assessing goodwill for impairment, an entity has the option to assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Performing a qualitative impairment assessment requires an examination of relevant events and circumstances that could have a negative impact on the carrying value of our Company, such as macroeconomic conditions, industry and market conditions, earnings and cash flows, overall financial performance, and other relevant entity-specific events. If the Company concludes an impairment is more likely than not through its qualitative assessment, then it is required to perform a quantitative assessment for impairment. The quantitative estimates of the fair value of the Company’s reporting units are primarily determined using an income approach based on discounted cash flows. The discounted cash flow methodology requires significant judgment, including estimation of future cash flows, which is dependent on internal forecasts, current and anticipated economic conditions and trends, the estimation of the long-term growth rate of the Company’s business, and the determination of the Company’s weighted average cost of capital. Changes in the estimates and assumptions incorporated in our impairment assessment could materially affect the determination of fair value and the associated impairment charge.

During the third quarter of 2024, the Company made a strategic decision to terminate its Marketing Services solutions by the end of 2028. This strategic decision resulted in an additional accelerated decline in estimated future cash flows from the Thryv Marketing Services reporting unit, partially offset by operating cost savings from terminating our Marketing Services solutions, and the Company concluded that a triggering event had occurred in the Thryv Marketing Services reporting unit during the third quarter of 2024. As a result, the Company recorded a non-cash impairment charge of $83.1 million during the third quarter of 2024, reducing the goodwill in its Thryv Marketing Services reporting unit to zero.

On October 1, 2024, we performed a qualitative impairment assessment in accordance with ASC 350-30-35, Intangibles-Goodwill and Other and determined that it was not more likely than not that the fair value of the SaaS reporting unit was less than its carrying value and that no impairment existed. Additionally, the Company concluded that an impairment triggering event did not occur during the three months ended December 31, 2024. During the year ended December 31, 2023, the Company recognized a non-cash impairment charge of $268.8 million to reduce goodwill in its Thryv Marketing Services reporting unit. During the year ended December 31, 2022, the Company recorded a goodwill impairment charge of $102.0 million in its Thryv Marketing Services reporting unit.

As of December 31, 2024, goodwill was $253.3 million. For additional information related to goodwill, see Note 5, Goodwill and Intangible Assets to our consolidated financial statements included in Part II, Item 8 in this Annual Report.

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Pension Obligations

The Company maintains pension obligations associated with non-contributory defined benefit pension plans that are currently frozen and incur no additional service costs.

Although the plans are frozen, the Company continues to incur interest cost as well as gains or losses associated with changes in fair value of plan assets, all of which are referred to as net periodic pension cost. In determining the pension obligations at each reporting period, management makes certain actuarial assumptions, including discount rates and mortality rates. For these assumptions, management consults with actuaries, monitors plan provisions and demographics, and reviews public market data and general economic information. Changes in these assumptions can have a significant impact on the projected pension obligations, funding requirement, and net periodic pension cost. The Company immediately recognizes actuarial gains and losses in its operating results in the year in which the gains and losses occur.

Income Taxes

Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weight of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character, for example, ordinary income or capital gain within the carryback or carryforward periods available under the applicable tax law. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, and tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our income tax provision would increase or decrease in the period in which the assessment is changed.

The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. The amount of income taxes we pay is subject to ongoing audits by federal and state tax authorities, which often result in proposed assessments. Significant judgment is required in determining income tax provisions and evaluating tax positions. We establish reserves for open tax years for uncertain tax positions that may be subject to challenge by various tax authorities. The consolidated tax provision and related accruals include the impact of such reasonably estimable losses and related interest and penalties as deemed appropriate. Tax benefits recognized in the financial statements from uncertain tax positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

Recent Accounting Pronouncements

See Note 1, Description of Business and Summary of Significant Accounting Policies, to our audited consolidated financial statements as of and for the years ended December 31, 2024, 2023, and 2022, included in Part II, Item 8 in this Annual Report, for a discussion of recent accounting pronouncements.