Business Wire | Nov 11, 2021 07:30AM EST

Thryv Grows SaaS Revenue 41% Year-Over-Year for Third Quarter 2021

Nov. 11, 2021

DALLAS--(BUSINESS WIRE)--Nov. 11, 2021--Thryv Holdings, Inc. (NASDAQ:THRY) ("Thryv" or the "Company"), the provider of Thryv(r) software, the end-to-end client experience platform for growing small businesses, announced financial results for the third quarter 2021. The Company has also raised its 2021 outlook for its SaaS segment.

"We are experiencing the modernization of the local economy with SMB's beginning to embrace cloud technologies and we see Thryv as leading the charge. This wave of adoption has propelled Thryv software to faster and faster growth," said Joe Walsh, CEO and president of Thryv. "We are seeing improvements in customer engagement, average spend and retention. These trends are delivering durable SaaS growth for Thryv. We are pleased to, once again, raise SaaS revenue guidance for 2021."

Third Quarter 2021 Financial Highlights:

* US SaaS revenue was $45 million, a 41% increase year-over-year * US Marketing Services revenue was $213 million * Thryv International revenue was $39 million * Consolidated total revenue was $297 million, an increase of 24% year-over-year * Consolidated net income was $36 million * Consolidated adjusted EBITDA was $102 million, representing an adjusted EBITDA margin of 34% * Consolidated gross profit was $193 million, an increase of 43% year-over-year * Consolidated adjusted gross profit was $208 million

Additional US Business Highlights

* SaaS Average Revenue per Unit ("ARPU")1 increased to $340 for the third quarter of 2021, compared to $260 in the third quarter of 2020 * Total SaaS clients increased by 2% year-over-year to 45,000 for the third quarter of 2021 * SaaS Monthly Churn2 was 2.1% for the third quarter of 2021, compared to 2.7% for the third quarter of 2020 * SaaS Monthly Seasoned Churn3 was 1.7% for the third quarter of 2021 * Net Dollar Retention4 improved 11 percentage points to 90% at end of the third quarter of 2021, when compared to the third quarter of 2020 * Seasoned Net Dollar Retention5 improved 9 percentage points to 95% at end of the third quarter of 2021, when compared to the third quarter of 2020 * SaaS active users and usage frequency reached a new all-time high as monthly active users6 increased 15%year-over-year

Outlook

The Company is updating guidance7 for fiscal year 2021 as indicated below.

* US SaaS year-over-year revenue guidance was raised to $169 - $171 million, up from the previously-announced $157 - $160 million * US Marketing Services revenue range raised to $785 - $790 million, up from the previously-announced $750 - $770 million * Thryv International fourth quarter revenue guidance range updated to A$53 million to A$57 million8

Earnings Conference Call Information

Thryv will host a conference call on Thursday, November 11, 2021 at 8:30 a.m. (Eastern Time) to discuss the Company's third quarter 2021 results. The conference call will be available via the Internet at investor.thryv.com. There will be several slides accompanying the webcast. Please go to the website at least 15 minutes prior to the call to register, download and install any necessary software. The recorded webcast will also be available on the Company's website.

If you are unable to participate in the conference call, a replay will be available. To access the replay, please dial (800) 770-2030 or (647) 362-9199 and enter "87769."

________________________________

1 Defined as total client billings by month divided by the number of revenue-generating units during the month.

2 Calculated as the percentage decrease in billable clients in the current month compared to the prior month.

3 SaaS Monthly Seasoned Churn is defined as monthly churn excluding clients acquired over the previous 12 months.

4 Defined as the percentage of revenue from clients with monthly billed revenue in the current month compared to the same month in prior year.

5 Seasoned Net Dollar Retention is defined as net dollar retention excluding clients acquired over the previous 12 months.

6 Defined as a client with one or more users who log into our SaaS solutions at least once during the calendar month.

These statements are forward-looking and actual results may materially7 differ. Refer to the "Forward-Looking Statements" section below for information on the factors that could cause our actual results to materially differ from these forward-looking statements.

8 Thryv International includes Sensis Pty Ltd ("Sensis" or "Thryv Australia") results subsequent to the March 1, 2021 acquisition date.

Final Results

Thryv Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income (Loss)

(unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

(in thousands,except share and 2021 2020 2021 2020 per share data)

Revenue $ 297,290 $ 240,325 $ 868,943 $ 862,507

Cost of services 104,167 105,444 314,934 334,025

Gross profit 193,123 134,881 554,009 528,482



Operating expenses:

Sales and 94,343 73,306 258,277 241,703 marketing

General and 32,983 39,002 107,362 132,758 administrative

Impairment - 1,184 3,611 19,414 charges

Total operating 127,326 113,492 369,250 393,875 expenses



Operating income 65,797 21,389 184,759 134,607

Other income (expense):

Interest expense (12,050 ) (11,442 ) (38,159 ) (39,648 )

Interestexpense, related (4,496 ) (4,167 ) (13,229 ) (13,903 ) party

Other componentsof net periodic 273 (30,175 ) 998 (31,312 ) pension benefit(cost)

Other expense (98 ) - (4,157 ) -

Income (loss)before income 49,426 (24,395 ) 130,212 49,744 tax (expense)benefit

Income tax(expense) (13,802 ) 24,250 (33,723 ) (10,323 ) benefit

Net income $ 35,624 $ (145 ) $ 96,489 $ 39,421 (loss)

Othercomprehensive income (loss):

Foreign currencytranslation (4,100 ) - (8,545 ) - adjustment

Comprehensive $ 31,524 $ (145 ) $ 87,944 $ 39,421 income (loss)



Net income(loss) per common share:

Basic $ 1.05 $ - $ 2.87 $ 1.25

Diluted $ 0.95 $ - $ 2.67 $ 1.16



Weighted-averageshares used incomputing basicand diluted net income (loss)per commonshare:

Basic 34,013,897 30,857,617 33,585,488 31,621,039

Diluted 37,620,116 30,857,617 36,110,702 33,990,771

Thryv Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share data)

September 30, 2021

December 31, 2020

Assets

(unaudited)

Current assets

Cash and cash equivalents

$

10,374

$

2,406

Accounts receivable, net of allowance of $19,365 in 2021 and $33,030 in 2020

313,285

296,570

Contract assets, net of allowance of $114 in 2021 and $338 in 2020

7,024

10,975

Taxes receivable

1,890

9,229

Prepaid expenses and other current assets

33,084

26,172

Indemnification asset

25,594

24,346

Total current assets

391,251

369,698

Fixed assets and capitalized software, net

70,269

89,044

Goodwill

676,440

609,457

Intangible assets, net

101,189

31,777

Deferred tax assets

114,062

93,099

Other assets

24,278

21,902

Total assets

$

1,377,489

$

1,214,977

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

16,929

$

8,927

Accrued liabilities

153,234

139,613

Current portion of unrecognized tax benefits

35,109

18,942

Contract liabilities

14,238

9,896

New Term Loan, current

70,000

-

Other current liabilities

31,018

30,022

Total current liabilities

320,528

207,400

New Term Loan, net

333,938

-

New Term Loan, related party

152,286

-

Senior Term Loan, net

-

335,683

Senior Term Loan, related party

-

113,482

ABL Facility

56,181

79,238

Leaseback obligations

-

54,798

Pension obligations, net

168,793

190,827

Deferred tax liabilities

-

508

Other liabilities

41,318

36,266

Total long-term liabilities

752,516

810,802

Commitments and contingencies

Stockholders' equity

Common stock - $0.01 par value, 250,000,000 shares authorized; 60,643,781, shares issued and 33,965,371 shares outstanding at September 30, 2021; and 59,590,422 shares issued and 32,912,012 shares outstanding at December 31, 2020

606

596

Additional paid-in capital

1,079,340

1,059,624

Treasury stock - 26,678,410 shares at September 30, 2021 and December 31, 2020

(468,613

)

(468,613

)

Accumulated other comprehensive income (loss)

(8,545

)

-

Accumulated deficit

(298,343

)

(394,832

)

Total stockholders' equity

304,445

196,775

Total liabilities and stockholders' equity

$

1,377,489

$

1,214,977

Thryv Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share data) September 30, December 31, 2021 2020

Assets (unaudited)

Current assets

Cash and cash equivalents $ 10,374 $ 2,406

Accounts receivable, net of allowance of 313,285 296,570 $19,365 in 2021 and $33,030 in 2020

Contract assets, net of allowance of $114 in 7,024 10,975 2021 and $338 in 2020

Taxes receivable 1,890 9,229

Prepaid expenses and other current assets 33,084 26,172

Indemnification asset 25,594 24,346

Total current assets 391,251 369,698

Fixed assets and capitalized software, net 70,269 89,044

Goodwill 676,440 609,457

Intangible assets, net 101,189 31,777

Deferred tax assets 114,062 93,099

Other assets 24,278 21,902

Total assets $ 1,377,489 $ 1,214,977

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable $ 16,929 $ 8,927

Accrued liabilities 153,234 139,613

Current portion of unrecognized tax benefits 35,109 18,942

Contract liabilities 14,238 9,896

New Term Loan, current 70,000 -

Other current liabilities 31,018 30,022

Total current liabilities 320,528 207,400

New Term Loan, net 333,938 -

New Term Loan, related party 152,286 -

Senior Term Loan, net - 335,683

Senior Term Loan, related party - 113,482

ABL Facility 56,181 79,238

Leaseback obligations - 54,798

Pension obligations, net 168,793 190,827

Deferred tax liabilities - 508

Other liabilities 41,318 36,266

Total long-term liabilities 752,516 810,802

Commitments and contingencies

Stockholders' equity

Common stock - $0.01 par value, 250,000,000shares authorized; 60,643,781, shares issuedand 33,965,371 shares outstanding at 606 596 September 30, 2021; and 59,590,422 sharesissued and 32,912,012 shares outstanding atDecember 31, 2020

Additional paid-in capital 1,079,340 1,059,624

Treasury stock - 26,678,410 shares at (468,613 ) (468,613 ) September 30, 2021 and December 31, 2020

Accumulated other comprehensive income (loss) (8,545 ) -

Accumulated deficit (298,343 ) (394,832 )

Total stockholders' equity 304,445 196,775

Total liabilities and stockholders' equity $ 1,377,489 $ 1,214,977

Thryv Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

(in thousands)

2021

2020

Cash Flows from Operating Activities

(unaudited)

(unaudited)

Net income

$

96,489

$

39,421

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

80,675

110,883

Amortization of debt issuance costs

3,431

801

Deferred income taxes

(57,823

)

(42,346

)

Provision for credit losses

3,211

27,709

Provision for service credits

10,595

28,268

Stock-based compensation expense (benefit)

6,232

(4,195

)

Other components of net periodic pension (benefit) cost

(998

)

31,312

Loss on termination of leaseback obligations

3,409

-

(Gain) loss on disposal/write-off of fixed assets and capitalized software

(44

)

3,476

Impairment charges

3,611

19,414

Non-cash (gain) loss from remeasurement of indemnification asset

(1,248

)

3,878

Other, net

592

-

Changes in working capital items, excluding acquisitions:

Accounts receivable

48,791

15,742

Contract assets

3,837

(803

)

Prepaid expenses and other assets

(3,184

)

(3,785

)

Accounts payable and accrued liabilities

(64,377

)

(44,380

)

Operating lease liability

(2,366

)

(3,998

)

Contract liabilities

(9,294

)

(5,911

)

Settlement of stock option liability

-

(896

)

Net cash provided by operating activities

121,539

174,590

Cash Flows from Investing Activities

Additions to fixed assets and capitalized software

(20,053

)

(17,030

)

Proceeds from the sale of building and fixed assets

63

1,546

Acquisition of a business, net of cash acquired

(175,370

)

-

Net cash (used in) investing activities

(195,360

)

(15,484

)

Cash Flows from Financing Activities

Proceeds from New Term Loan

418,070

-

Proceeds from New Term Loan, related party

260,930

-

Payments of New Tern Loan

(86,199

)

-

Payments of New Term Loan, related party

(36,801

)

-

Payments of Senior Term Loan

(335,821

)

(72,629

)

Payments of Senior Term Loan, related party

(113,789

)

(32,761

)

Proceeds from ABL Facility

793,604

868,811

Payments of ABL Facility

(816,661

)

(892,155

)

Purchase of treasury stock

-

(30,626

)

Other

4,184

113

Net cash provided by (used in) financing activities

87,517

(159,247

)

Effect of exchange rate changes on cash and cash equivalents

(3,446

)

-

Increase (decrease) in cash and cash equivalents and restricted cash

10,250

(141

)

Cash and cash equivalents and restricted cash, beginning of period

2,406

1,912

Cash and cash equivalents and restricted cash, end of period

$

12,656

$

1,771

Supplemental Information

Cash paid for interest

$

52,491

$

56,845

Cash paid for income taxes, net

$

58,491

$

15,757

Thryv Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

(in thousands) 2021 2020

Cash Flows from Operating Activities (unaudited) (unaudited)

Net income $ 96,489 $ 39,421

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 80,675 110,883

Amortization of debt issuance costs 3,431 801

Deferred income taxes (57,823 ) (42,346 )

Provision for credit losses 3,211 27,709

Provision for service credits 10,595 28,268

Stock-based compensation expense (benefit) 6,232 (4,195 )

Other components of net periodic pension (benefit) (998 ) 31,312 cost

Loss on termination of leaseback obligations 3,409 -

(Gain) loss on disposal/write-off of fixed assets (44 ) 3,476 and capitalized software

Impairment charges 3,611 19,414

Non-cash (gain) loss from remeasurement of (1,248 ) 3,878 indemnification asset

Other, net 592 -

Changes in working capital items, excluding acquisitions:

Accounts receivable 48,791 15,742

Contract assets 3,837 (803 )

Prepaid expenses and other assets (3,184 ) (3,785 )

Accounts payable and accrued liabilities (64,377 ) (44,380 )

Operating lease liability (2,366 ) (3,998 )

Contract liabilities (9,294 ) (5,911 )

Settlement of stock option liability - (896 )

Net cash provided by operating activities 121,539 174,590



Cash Flows from Investing Activities

Additions to fixed assets and capitalized software (20,053 ) (17,030 )

Proceeds from the sale of building and fixed assets 63 1,546

Acquisition of a business, net of cash acquired (175,370 ) -

Net cash (used in) investing activities (195,360 ) (15,484 )



Cash Flows from Financing Activities

Proceeds from New Term Loan 418,070 -

Proceeds from New Term Loan, related party 260,930 -

Payments of New Tern Loan (86,199 ) -

Payments of New Term Loan, related party (36,801 ) -

Payments of Senior Term Loan (335,821 ) (72,629 )

Payments of Senior Term Loan, related party (113,789 ) (32,761 )

Proceeds from ABL Facility 793,604 868,811

Payments of ABL Facility (816,661 ) (892,155 )

Purchase of treasury stock - (30,626 )

Other 4,184 113

Net cash provided by (used in) financing activities 87,517 (159,247 )



Effect of exchange rate changes on cash and cash (3,446 ) - equivalents

Increase (decrease) in cash and cash equivalents 10,250 (141 ) and restricted cash

Cash and cash equivalents and restricted cash, 2,406 1,912 beginning of period

Cash and cash equivalents and restricted cash, end $ 12,656 $ 1,771 of period



Supplemental Information

Cash paid for interest $ 52,491 $ 56,845

Cash paid for income taxes, net $ 58,491 $ 15,757

Three Months Ended September 30,

Change

2021

2020

Amount

%

(in thousands of $)

(unaudited)

Revenue

Marketing Services

$

213,210

$

208,504

$

4,706

2.3

%

SaaS

44,800

31,821

12,979

40.8

%

Thryv International (1)

39,280

-

39,280

NM

Consolidated Revenue

$

297,290

$

240,325

$

56,965

23.7

%

Segment EBITDA

Marketing Services

$

96,231

$

66,733

$

29,498

44.2

%

SaaS

(5,508

)

2,561

(8,069

)

NM

Thryv International (1)

11,636

-

11,636

NM

Consolidated Adjusted EBITDA

$

102,359

$

69,294

$

33,065

47.7

%

Three Months Ended September Change 30,

2021 2020 Amount %

(in thousands of $) (unaudited)

Revenue

Marketing Services $ 213,210 $ 208,504 $ 4,706 2.3 %

SaaS 44,800 31,821 12,979 40.8 %

Thryv International ^(1) 39,280 - 39,280 NM

Consolidated Revenue $ 297,290 $ 240,325 $ 56,965 23.7 %



Segment EBITDA

Marketing Services $ 96,231 $ 66,733 $ 29,498 44.2 %

SaaS (5,508 ) 2,561 (8,069 ) NM

Thryv International ^(1) 11,636 - 11,636 NM

Consolidated Adjusted $ 102,359 $ 69,294 $ 33,065 47.7 %EBITDA

Nine Months Ended September 30,

Change

2021

2020

Amount

%

(in thousands of $)

(unaudited)

Revenue

Marketing Services

$

643,938

$

767,553

$

(123,615

)

(16.1

)%

SaaS

123,437

94,954

28,483

30.0

%

Thryv International(1)

101,568

-

101,568

NM

Consolidated Revenue

$

868,943

$

862,507

$

6,436

0.7

%

Segment EBITDA

Marketing Services

$

277,546

$

289,423

$

(11,877

)

(4.1

)%

SaaS

(7,311

)

10,785

(18,096

)

NM

Thryv International (1)

33,810

-

33,810

NM

Consolidated Adjusted EBITDA

$

304,045

$

300,208

$

3,837

1.3

%

Nine Months Ended September Change 30,

2021 2020 Amount %

(in thousands of $) (unaudited)

Revenue

Marketing Services $ 643,938 $ 767,553 $ (123,615 ) (16.1 ) %

SaaS 123,437 94,954 28,483 30.0 %

Thryv International^(1) 101,568 - 101,568 NM

Consolidated Revenue $ 868,943 $ 862,507 $ 6,436 0.7 %



Segment EBITDA

Marketing Services $ 277,546 $ 289,423 $ (11,877 ) (4.1 ) %

SaaS (7,311 ) 10,785 (18,096 ) NM

Thryv International ^(1) 33,810 - 33,810 NM

Consolidated Adjusted $ 304,045 $ 300,208 $ 3,837 1.3 %EBITDA

(1)

Thryv International includes Thryv Australia revenue subsequent to the March 1, 2021 acquisition date.

Non-GAAP Measures

Our results included in this press release include Adjusted EBITDA and Adjusted Gross Profit, which are not presented in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP measures are presented for supplemental informational purposes only and are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the tables below for a reconciliation of Adjusted EBITDA to Net income (loss), and Adjusted Gross Profit to gross profit. Both Net income (loss) and Gross profit are the most comparable GAAP financial measure to Adjusted EBITDA and Adjusted Gross Profit, respectively.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.

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

(1) Thryv International includes Thryv Australia revenue subsequent to the March 1, 2021 acquisition date.

Non-GAAP Measures

Our results included in this press release include Adjusted EBITDA and Adjusted Gross Profit, which are not presented in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP measures are presented for supplemental informational purposes only and are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the tables below for a reconciliation of Adjusted EBITDA to Net income (loss), and Adjusted Gross Profit to gross profit. Both Net income (loss) and Gross profit are the most comparable GAAP financial measure to Adjusted EBITDA and Adjusted Gross Profit, respectively.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.

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

Three Months Ended September Nine Months Ended September 30, 30,

(in thousands) 2021 2020 2021 2020

Reconciliation of Adjusted EBITDA

Net income (loss) $ 35,624 $ (145 ) $ 96,489 $ 39,421

Interest expense 16,546 15,609 51,388 53,551

Income tax expense 13,802 (24,250 ) 33,723 10,323 (benefit)

Depreciation andamortization 31,049 35,454 80,675 110,883 expense

Loss ontermination of - - 3,409 - leasebackobligations

Restructuring andintegration 2,312 6,710 15,036 23,902 expenses ^(1)

Transaction costs 3,987 4,913 19,973 14,679 ^(2)

Stock-basedcompensation 2,340 1,289 6,232 (4,195 ) expense (benefit)^(3)

Other componentsof net periodic (273 ) 30,175 (998 ) 31,312 pension (benefit)cost ^(4)

Non-cash (gain)loss fromremeasurement of (404 ) (540 ) (1,248 ) 3,878 indemnificationasset ^(5)

Impairment charges - 1,184 3,611 19,414

Other ^(6) (2,624 ) (1,105 ) (4,245 ) (2,960 )

Adjusted EBITDA $ 102,359 $ 69,294 $ 304,045 $ 300,208

(1)

For the three and nine months ended September 30, 2021 and 2020, expenses relate to periodic efforts to enhance efficiencies and reduce costs, and include severance benefits, loss on disposal of fixed assets and capitalized software, and costs associated with abandoned facilities and system consolidation.

(2)

Expenses related to the Company's direct listing, Sensis acquisition and other transaction costs.

(3)

Company records stock-based compensation expense related to the amortization of grant date fair value of the Company's stock-based compensation awards. Additionally, stock-based compensation expense includes the remeasurement of these awards at each period end, prior to October 1, 2020.

(4)

Other components of net periodic pension cost 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 cost relates to the mark to market pension remeasurement.

(5)

In connection with the YP Acquisition, the seller provided the Company indemnity 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.

(6)

Other primarily includes expenses related to potential non income-based tax liabilities. Additionally, during the three and nine months ended September 30, 2021, other includes foreign exchange related expense.

The following is a reconciliation of Adjusted Gross Profit, to its most directly comparable GAAP measure, Gross profit

For the three and nine months ended September 30, 2021 and 2020, expenses relate to periodic efforts to enhance efficiencies and reduce costs, and(1) include severance benefits, loss on disposal of fixed assets and capitalized software, and costs associated with abandoned facilities and system consolidation.

(2) Expenses related to the Company's direct listing, Sensis acquisition and other transaction costs.

Company records stock-based compensation expense related to the amortization of grant date fair value of the Company's stock-based(3) compensation awards. Additionally, stock-based compensation expense includes the remeasurement of these awards at each period end, prior to October 1, 2020.

Other components of net periodic pension cost is from our non-contributory defined benefit pension plans that are currently frozen and incur no(4) additional service costs. The most significant component of other components of net periodic pension cost relates to the mark to market pension remeasurement.

In connection with the YP Acquisition, the seller provided the Company(5) indemnity 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.

Other primarily includes expenses related to potential non income-based(6) tax liabilities. Additionally, during the three and nine months ended September 30, 2021, other includes foreign exchange related expense.

The following is a reconciliation of Adjusted Gross Profit, to its most directly comparable GAAP measure, Gross profit

Three Months Ended September 30,

(in thousands) 2021 2020

Reconciliation of Adjusted Gross Profit

Gross profit $ 193,123 $ 134,881

Plus:

Depreciation and amortization expense 14,930 18,097

Stock-based compensation expense 156 70

Adjusted Gross Profit $ 208,209 $ 153,048

Gross Margin 65.0 % 56.1 %

Adjusted Gross Margin 70.0 % 63.7 %

Nine Months Ended September 30,

(in thousands) 2021 2020

Reconciliation of Adjusted Gross Profit

Gross profit $ 554,009 $ 528,482

Plus:

Depreciation and amortization expense 42,991 55,084

Stock-based compensation expense (benefit) 320 (176 )

Adjusted Gross Profit $ 597,320 $ 583,390

Gross Margin 63.8 % 61.3 %

Adjusted Gross Margin 68.7 % 67.6 %

Forward-Looking Statements

Some statements included in this release constitute forward-looking statements. Statements that include the words "may", "will", "could", "should", "would", "believe", "anticipate", "forecast", "estimate", "expect", "preliminary", "intend", "plan", "project", "outlook", "future", "forward", "guidance" and similar statements of a future or forward-looking nature identify forward-looking statements. These statements are not guarantees of future performance. Forward-looking statements provide current expectations with respect to our financial performance and future events with respect to our business and industry in general. Forward-looking statements are based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: risks related to the ongoing COVID-19 pandemic, the Company's ability to maintain adequate liquidity to fund operations; the Company's future operating and financial performance; the Company's ability to consummate acquisitions, or, if consummated, to successfully integrate acquired businesses into the Company's operations, the Company's ability to recognize the benefits of acquisitions, or the failure of an acquired company to achieve its plans and objectives; limitations on our operating and strategic flexibility and the ability to operate our business, finance our capital needs or expand business strategies under the terms of our credit facilities; our ability to retain existing business and obtain and retain new business; general economic or business conditions affecting the markets we serve; declining use of print yellow page directories by consumers; our ability to collect trade receivables from clients to whom we extend credit; credit risk associated with our reliance on small and medium sized businesses as clients; our ability to attract and retain key managers; increased competition in our markets; our ability to obtain future financing due to changes in the lending markets or our financial position; our ability to maintain agreements with major Internet search and local media companies; reduced advertising spending and increased contract cancellations by our clients, which causes reduced revenue; and our ability to anticipate or respond effectively to changes in technology and consumer preferences. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.

If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. For these reasons, we caution you against relying on forward-looking statements. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. These forward-looking statements speak only as of the date hereof and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Thryv Holdings, Inc.

Thryv Holdings, Inc. (NASDAQ: THRY) is a global software and marketing services company that empowers small- to medium-sized businesses (SMBs), franchises and agencies to grow and modernize their operations so they can compete and win in today's economy. Over 45,000 businesses use our award-winning SaaS platform, Thryv(r), to manage their end-to-end customer experience, which has helped businesses across the U.S. and overseas grow their bottom line. Thryv also manages digital and print presence for over 400,000 businesses, connecting these SMBs to local consumers via proprietary local search portals and print directories. For more information about Thryv Holdings, Inc, visit thryv.com.

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CONTACT: Media Contact: Paige Blankenship Thryv, Inc. 972.453.3012 paige.blankenship@thryv.com

CONTACT: Investor Contacts: Cameron Lessard Thryv, Inc. 214.773.7022 cameron.lessard@thryv.com