Thryv Holdings, Inc., a significant player in the marketing solutions and cloud-based tools sector for small-to-medium-sized businesses (SMBs), has released its financial results for the second quarter of 2024. While the company has shown resilience in certain areas, overall performance trends indicate challenges that may require strategic adjustments.

1. Financial Overview

For the three months ending June 30, 2024, Thryv reported a revenue of $223.1 million. This marks a 10.9% decrease compared to the same period last year, reflecting the broader economic pressures facing SMBs. The following key financial metrics highlight the company's performance during this period:

Gross Profit: $147.3 million, down 7.2% year-over-year.

Operating Expenses: $123.5 million, a decrease of 10.3% from Q2 2023.

Net Income: $23.8 million, a decline of 14.6% compared to the previous year.

For the first half of 2024, Thryv's total revenue was reported at $458.9 million, a 7.9% decrease from the same period in 2023. The company’s net income for the six months was $51.1 million, reflecting a 14.6% decline compared to the prior year.

Income Statement of Thryv Holdings, Inc.

	Aug 2023	Aug 2024
Net Income	-11.87M	-270.6M
Profit	-11.87M	-270.6M
Net Income Continuing	-11.87M	-270.6M
Income Tax Expense	13.87M	9.69M
Pretax Income	2.00M	-260.9M
Non-operating Income	-23.80M	-61.88M
Operating Income	25.81M	-199.0M
Revenue	1.05B	877.6M
Costs and Expenses	1.03B	1.07B
Cost of Revenue	387.5M	312.1M
Operating Expenses	643.6M	764.6M
Impairment Expense	102M	268.8M
Selling, General & Administrative	541.6M	495.7M

2. Segment Performance

Thryv operates through two primary segments: Thryv Marketing Services and Thryv SaaS. In Q2 2024, the segment performance varied considerably:

Thryv Marketing Services

Revenue: $146.3 million, a significant 22.6% decrease compared to Q2 2023. This decline can be attributed to a reduction in total clients, which fell by 68,000 or 18% year-over-year.

Thryv SaaS

Revenue: $77.8 million, representing a robust 24.6% increase compared to the same period last year. This growth indicates a shift in SMBs towards more digital solutions as they adapt to changing market conditions.

3. Geographic and Operational Insights

Thryv operates across various markets, including the United States, Australia, New Zealand, and Canada. The company experienced a 34.5 million decline in revenue from the U.S. market, illustrating the competitive pressures in the domestic landscape. Meanwhile, international revenue also experienced a slight decline of 4.8 million.

The company acquired Yellow, a New Zealand marketing services firm, in April 2023, for $8.9 million, which may provide long-term synergies, although its immediate impact is not reflected in the current quarter's results.

4. Liquidity and Capital Resources

Thryv reported cash and cash equivalents of $143.8 million as of June 30, 2024. However, the company also carries a total debt of $342.1 million, which necessitates careful management in the context of fluctuating revenues.

The company recently announced a $40 million share repurchase program, reflecting confidence in its long-term prospects despite current challenges. This program is set to run through April 2029.

Balance Sheet of Thryv Holdings, Inc.

	Aug 2023	Aug 2024
Total Assets	1.10B	785.4M
Total Current Assets	309.3M	260.6M
Cash and Equivalents	15.24M	15.51M
Accounts Receivable	243.8M	193.7M
Non-trade Receivables	3.64M	1.51M
Prepaid Expenses	29.31M	23.12M
Other Current Assets	17.30M	26.73M
Total Non-current Assets	791.8M	524.8M
Intangible Assets	601.1M	307.6M
Non-current Deferred Tax Assets	122.5M	152.1M
Net PP&E	38.56M	37.80M
Other Non-current Assets	29.61M	27.25M
Total Liabilities and Equity	1.10B	785.4M
Total Liabilities	696.9M	602.4M
Total Current Liabilities	237.9M	228.1M
Accounts Payable and Accrued Liabilities	113.9M	118.8M
Current Debt	70M	52.5M
Current Deferred Revenue	20.13M	25.66M
Other Current Liabilities	33.85M	31.08M
Total Non-current Liabilities	458.9M	374.3M
Long-term Debt	363.4M	289.5M
Other Non-current Liabilities	95.50M	84.72M
Total Equity and Non-controlling Interests	404.3M	183.0M
Total Equity	404.3M	183.0M

5. Adjusted EBITDA and Future Outlook

Adjusted EBITDA for the first half of 2024 decreased by 11.3% to $113.5 million, indicating pressure on profitability. The reduction in average revenue per unit (ARPU) for both Marketing Services and SaaS segments is concerning, suggesting a need for Thryv to innovate and differentiate its offerings.

Management Discussion

Management has expressed intentions to focus on enhancing customer engagement and product innovation to combat the declines in traditional service lines. The recent appointment of Rees Johnson as the new Chief Product Officer is expected to bring fresh perspectives and strategies to the product development team.

6. Conclusion

Thryv Holdings, Inc. faces a pivotal moment as it navigates through declining revenues and shifting market dynamics. The strong performance of the SaaS segment provides a beacon of hope, but sustained efforts in client retention and service innovation will be critical for reversing the downward trends observed in traditional marketing services. Stakeholders will be keenly observing how the company adapts to these challenges in the upcoming quarters.

As Thryv continues to refine its offerings and expand its reach, the focus will be on leveraging its strengths while addressing the vulnerabilities that have emerged in a rapidly evolving market landscape.

Original filing: sec.gov