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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022
OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________

Commission File Number: 001-35895

THRYV HOLDINGS, INC.
(Exact name of registrant as specified in its charter)     
Delaware13-2740040
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2200 West Airfield Drive, P.O. Box 619810, D/FW Airport, TX
75261
(Address of principal executive offices)(Zip Code)
(972)453-7000
     (Registrant’s telephone number, including area code)    

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareTHRY
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13 (a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).
Yes ☐ No x

As of August 2, 2022, there were 34,437,980 shares of the registrant's common stock outstanding.



THRYV HOLDINGS, INC.
TABLE OF CONTENTS

Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements, that reflect our current views with respect to future events and financial performance. Such statements are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995 and include, without limitation, statements concerning the conditions of our industry and our operations, performance, and financial condition, including, in particular, statements relating to our business, growth strategies, product development efforts, and future expenses. Forward-looking statements include all statements that do not relate solely to historical or current facts and generally can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “could,” “estimates,” “expects,” “likely,” “may,” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance, such as those contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Accordingly, we caution you against relying on forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national, or global political, economic, business, competitive, market, and regulatory conditions and the following:

•significant competition for our Marketing Services solutions and SaaS offerings, including from companies that use components of our SaaS offerings provided by third parties;
•our ability to maintain profitability;
•our ability to manage our growth effectively;
•our ability to transition our Marketing Services clients to our Thryv platform, sell our platform into new markets or further penetrate existing markets;
•the effect of the coronavirus commonly referred to as COVID-19 (“COVID-19”) on our business, including the measures to reduce its spread, and the impact on the economy and demand for our services, which may precipitate or exacerbate other risks and uncertainties;
•our ability to maintain our strategic relationships with third-party service providers;
•internet search engines and portals potentially terminating or materially altering their agreements with us;
•our ability to keep pace with rapid technological changes and evolving industry standards;
•our small to medium-sized businesses (“SMBs”) clients potentially opting not to renew their agreements with us or renewing at lower spend;
•potential system interruptions or failures, including cyber-security breaches, identity theft, data loss, unauthorized access to data or other disruptions that could compromise our information;
•our potential failure to identify suitable acquisition candidates and consummate such acquisitions;
•our ability to successfully integrate acquired businesses into our operations or recognize the benefits of acquisitions, including the failure of an acquired business to achieve its plans and objectives;
•the potential loss of one or more key employees or our inability to attract and to retain highly skilled employees;
•our ability to maintain the compatibility of our Thryv platform with third-party applications;
•our ability to successfully expand our operations and current offerings into new markets, including internationally, or further penetrate existing markets;
•our potential failure to provide new or enhanced functionality and features;
•our potential failure to comply with applicable privacy, security and data laws, regulations and standards;
•potential changes in regulations governing privacy concerns and laws or other domestic or foreign data protection regulations;
•our potential failure to meet service level commitments under our client contracts;
•our potential failure to offer high-quality or technical support services;
•our Thryv platform and add-ons potentially failing to perform properly;
•the potential impact of future labor negotiations;
•our ability to protect our intellectual property rights, proprietary technology, information, processes, and know-how;
•rising inflation and our ability to control costs, including operating expenses;
•general macro-economic conditions, including a recession or an economic slowdown in the U.S. or internationally;
•volatility and weakness in bank and capital markets; and
•costs, obligations and liabilities incurred as a result of and in connection with being a public company.
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For additional information regarding known material factors that could cause the Company’s actual results to differ from its projected results, see Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2021 as well as our subsequent Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on forward-looking statements contained in this report, which speak only as of the date of this report. Except as required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements publicly after the date they are made, whether as a result of new information, future events, or otherwise.
In this Quarterly Report on Form 10-Q, the terms “our Company,” “we,” “us,” “our,” “Company” and “Thryv” refer to Thryv Holdings, Inc. and its subsidiaries, unless the context indicates otherwise.


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Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

Thryv Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income (Loss)
(unaudited)

Three Months EndedSix Months Ended
June 30,June 30,
(in thousands, except share and per share data)2022202120222021
Revenue$333,995 $291,047 $642,370 $571,653 
Cost of services 106,013 112,607 216,532 210,767 
Gross profit227,982 178,440 425,838 360,886 
Operating expenses:
Sales and marketing91,813 87,394 185,768 163,934 
General and administrative52,650 33,100 104,844 74,379 
Impairment charges222 3,611 222 3,611 
Total operating expenses144,685 124,105 290,834 241,924 
Operating income83,297 54,335 135,004 118,962 
Other income (expense):
Interest expense(13,756)(14,502)(26,864)(26,109)
Interest expense, related party(896)(4,668)(2,655)(8,733)
Other components of net periodic pension benefit9,153 272 9,223 725 
Other income (expense)2,404 (2,966)8,626 (4,059)
Income before income tax expense80,202 32,471 123,334 80,786 
Income tax expense(22,200)(8,112)(31,821)(19,921)
Net income$58,002 $24,359 $91,513 $60,865 
Other comprehensive income (loss):
Foreign currency translation adjustment(10,139)(1,478)(4,691)(4,445)
Comprehensive income$47,863 $22,881 $86,822 $56,420 
Net income per common share:
Basic$1.69 $0.72 $2.68 $1.82 
Diluted$1.61 $0.66 $2.47 $1.72 
Weighted-average shares used in computing basic and diluted net income per common share:
Basic34,250,706 33,622,666 34,205,593 33,367,734 
Diluted36,137,989 36,687,030 37,048,087 35,352,445 
The accompanying notes are an integral part of the consolidated financial statements.





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Thryv Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets

(in thousands, except share data)June 30, 2022December 31, 2021
Assets(unaudited)
Current assets
Cash and cash equivalents$13,746 $11,262 
Accounts receivable, net of allowance of $16,077 in 2022 and $17,387 in 2021
296,619 279,053 
Contract assets, net of allowance of $50 in 2022 and $88 in 2021
3,554 5,259 
Taxes receivable14,821 14,711 
Prepaid expenses32,463 22,418 
Indemnification asset25,233 24,346 
Other current assets13,470 13,596 
Total current assets399,906 370,645 
Fixed assets and capitalized software, net45,078 50,938 
Goodwill668,821 671,886 
Intangible assets, net61,387 82,577 
Deferred tax assets118,639 90,565 
Other assets26,503 33,891 
Total assets$1,320,334 $1,300,502 
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable$8,254 $8,610 
Accrued liabilities143,559 131,813 
Current portion of unrecognized tax benefits30,658 29,771 
Contract liabilities24,041 51,726 
Current portion of long-term debt70,000 70,000 
Other current liabilities17,069 15,214 
Total current liabilities293,581 307,134 
Term Loan, net382,254 309,672 
Term Loan, related party30,348 142,875 
ABL Facility56,609 39,929 
Pension obligations, net115,655 140,167 
Deferred tax liabilities2,224 10,798 
Other liabilities28,049 35,212 
Total long-term liabilities615,139 678,653 
Commitments and contingencies (see Note 13)
Stockholders' equity
Common stock - $0.01 par value, 250,000,000 shares authorized; 61,121,058 shares issued and 34,435,516 shares outstanding at June 30, 2022; and 60,830,853 shares issued and 34,145,311 shares outstanding at December 31, 2021
611 608 
Additional paid-in capital1,094,362 1,084,288 
Treasury stock - 26,685,542 shares at June 30, 2022 and December 31, 2021
(468,879)(468,879)
Accumulated other comprehensive income (loss)(12,738)(8,047)
Accumulated deficit(201,742)(293,255)
Total stockholders' equity411,614 314,715 
Total liabilities and stockholders' equity$1,320,334 $1,300,502 
The accompanying notes are an integral part of the consolidated financial statements.
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Thryv Holdings, Inc. and Subsidiaries
Consolidated Statements of Changes in Stockholders' Equity
(unaudited)

Three Months Ended June 30, 2022
Common StockTreasury Stock
(in thousands, except share amounts)
SharesAmountAdditional Paid-in CapitalSharesAmountAccumulated Other Comprehensive LossAccumulated
(Deficit)		Total Stockholders'
Equity
Balance as of March 31, 202260,913,663 $609 $1,087,054 (26,685,542)$(468,879)$(2,599)$(259,744)$356,441 
Exercise of stock options207,395 2 3,498 — — — — 3,500 
Stock compensation expense— — 3,810 — — — — 3,810 
Cumulative translation adjustment— — — — — (10,139)— (10,139)
Net income — — — — — — 58,002 58,002 
Balance as of June 30, 2022
61,121,058 $611 $1,094,362 (26,685,542)$(468,879)$(12,738)$(201,742)$411,614 
Three Months Ended June 30, 2021
Common StockTreasury Stock
(in thousands, except share amounts)
SharesAmountAdditional Paid-in CapitalSharesAmountAccumulated Other Comprehensive LossAccumulated
(Deficit)		Total Stockholders'
Equity
Balance as of March 31, 202159,806,077 $598 $1,058,504 (26,678,410)$(468,613)$(2,967)$(358,326)$229,196 
Exercise of stock options23,731 — 2,024 — — — — 2,024 
Exercise of stock warrants561,789 6 13,675 — — — — 13,681 
Stock compensation expense— — 1,921 — — — — 1,921 
Cumulative translation adjustment— — — — — (1,478)— (1,478)
Net income— — — — — — 24,359 24,359 
Balance as of June 30, 2021
60,391,597 $604 $1,076,124 (26,678,410)$(468,613)$(4,445)$(333,967)$269,703 

The accompanying notes are an integral part of the consolidated financial statements.






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Six Months Ended June 30, 2022
Common StockTreasury Stock
(in thousands, except share amounts)
SharesAmountAdditional Paid-in CapitalSharesAmountAccumulated Other Comprehensive LossAccumulated
(Deficit)		Total Stockholders'
Equity
Balance as of December 31, 2021
60,830,853 $608 $1,084,288 (26,685,542)$(468,879)$(8,047)$(293,255)$314,715 
Exercise of stock options290,205 3 4,336 — — — — 4,339 
Stock compensation expense— — 5,738 — — — — 5,738 
Cumulative translation adjustment— — — — — (4,691)— (4,691)
Net income — — — — — — 91,513 91,513 
Balance as of June 30, 2022
61,121,058 $611 $1,094,362 (26,685,542)$(468,879)$(12,738)$(201,742)$411,614 
Six Months Ended June 30, 2021
Common StockTreasury Stock
(in thousands, except share amounts)
SharesAmountAdditional Paid-in CapitalSharesAmountAccumulated Other Comprehensive LossAccumulated
(Deficit)		Total Stockholders'
Equity
Balance as of December 31, 2020
59,590,422 $596 $1,059,624 (26,678,410)$(468,613)$— $(394,832)$196,775 
Exercise of stock options239,275 2 (1,072)— — — — (1,070)
Exercise of stock warrants561,900 6 13,680 — — — — 13,686 
Stock compensation expense— — 3,892 — — — — 3,892 
Cumulative translation adjustment— — — — — (4,445)— (4,445)
Net income— — — — — — 60,865 60,865 
Balance as of June 30, 2021
60,391,597 $604 $1,076,124 (26,678,410)$(468,613)$(4,445)$(333,967)$269,703 

The accompanying notes are an integral part of the consolidated financial statements.
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Thryv Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
Six Months Ended June 30,
(in thousands)20222021
Cash Flows from Operating Activities(unaudited)(unaudited)
Net income$91,513 $60,865 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization42,561 49,626 
Amortization of debt issuance costs2,883 1,930 
Deferred income taxes(16,752)(51,439)
Provision for credit losses and service credits13,043 9,011 
Stock-based compensation expense5,738 3,892 
Other components of net periodic pension (benefit)(9,223)(725)
Impairment charges222 3,611 
(Gain) loss on foreign currency exchange rates(1,622)640 
Bargain purchase gain(7,005)— 
Other801 2,504 
Changes in working capital items, excluding acquisitions:
Accounts receivable(10,298)70,491 
Contract assets1,793 2,402 
Prepaid expenses and other assets7,922 (7,567)
Accounts payable and accrued liabilities(29,472)(47,875)
Other liabilities(35,201)(15,564)
Net cash provided by operating activities56,903 81,802 
Cash Flows from Investing Activities
Additions to fixed assets and capitalized software(9,648)(14,315)
Proceeds from the sale of fixed assets— 63 
Acquisition of a business, net of cash acquired(22,777)(174,190)
Net cash (used in) investing activities(32,425)(188,442)
Cash Flows from Financing Activities
Proceeds from Term Loan— 418,070 
Proceeds from Term Loan, related party— 260,930 
Payments of Term Loan(36,828)(62,089)
Payments of Term Loan, related party(5,672)(25,911)
Payments of Senior Term Loan— (335,821)
Payments of Senior Term Loan, related party— (113,789)
Proceeds from ABL Facility488,547 545,809 
Payments of ABL Facility(471,866)(567,025)
Proceeds from exercises of stock options and stock warrants4,338 17,265 
Other— (13,960)
Net cash (used in) provided by financing activities(21,481)123,479 
Effect of exchange rate changes on cash and cash equivalents(627)(819)
Increase in cash and cash equivalents and restricted cash2,370 16,020 
Cash and cash equivalents and restricted cash, beginning of period13,557 2,406 
Cash and cash equivalents and restricted cash, end of period$15,927 $18,426 
Supplemental Information
Cash paid for interest$24,915 $37,608 
Cash paid for income taxes, net$36,934 $38,411 

The accompanying notes are an integral part of the consolidated financial statements.
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Thryv Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)


Note 1     Description of Business and Summary of Significant Accounting Policies

General

Thryv Holdings, Inc. (“Thryv” or the “Company”) provides small-to-medium sized businesses (“SMBs”) with print and digital marketing services and Software as a Service (“SaaS”) business management tools. The Company owns and operates Print Yellow Pages (“PYP” or “Print”) and digital marketing services (“Digital”), which includes Internet Yellow Pages (“IYP”), search engine marketing (“SEM”), and other digital media services, including online display advertising, and search engine optimization (“SEO”) tools. In addition, through the Thryv® platform, the Company is a provider of SaaS business management tools designed for SMBs.

On January, 21, 2022, Thryv, Inc., the Company’s wholly-owned subsidiary, acquired Vivial Media Holdings, Inc. (“Vivial”), a marketing and advertising company with operations in the United States. Additionally, on March 1, 2021, the Company completed the acquisition of Sensis Holding Limited (“Thryv Australia”), a provider of marketing solutions serving SMBs in Australia.

During the second quarter of 2022, the Company reevaluated its segment reporting and determined that its Thryv International SaaS business should be reflected as a separate reportable segment. As such, beginning on April 1, 2022, the results of our international SaaS business are being presented separately from the results of our international marketing services business. Comparative prior periods have been recast to reflect the current presentation.

The Company reports its results based on four reportable segments (see Note 15, Segment Information):

•Thryv U.S. Marketing Services, which includes the Company's Print and Digital solutions business in the United States;
•Thryv U.S. SaaS, which includes the Company's flagship SMB end-to-end customer experience platform in the United States;
•Thryv International Marketing Services, which is comprised of Thryv's Print and Digital solutions business in Australia; and
•Thryv International SaaS, which includes the SaaS business management tools for SMBs in Australia.

Basis of Presentation

The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Accordingly, certain information and disclosures normally included in the complete financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. The consolidated financial statements include the financial statements of Thryv Holdings, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, the accompanying consolidated financial statements reflect all adjustments, consisting of only normal recurring items and accruals, necessary for the fair statement of the financial position, results of operations and cash flows of the Company for the periods presented. The consolidated financial statements as of and for the three and six months ended June 30, 2022 and 2021 have been prepared on the same basis as the audited annual financial statements. The consolidated balance sheet as of December 31, 2021 was derived from the audited annual financial statements. The consolidated results for interim periods are not necessarily indicative of results for the full year and should be read in conjunction with the Company’s audited financial statements and related footnotes for the year ended December 31, 2021.

Use of Estimates

The preparation of the Company’s consolidated financial statements requires management to make estimates and assumptions about future events that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. The Company bases its estimates on
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historical experience and on various other assumptions that are believed to be reasonable. The results of those estimates form the basis for making judgments about the carrying values of certain assets and liabilities.

Examples of reported amounts that rely on significant estimates include revenue recognition, allowance for credit losses, assets acquired and liabilities assumed in business combinations, capitalized costs to obtain a contract, certain amounts relating to the accounting for income taxes, including valuation allowance, indemnification asset, stock-based compensation expense, operating lease right-of-use assets and operating lease liabilities, accrued service credits, and pension obligations. Significant estimates are also used in determining the recoverability and fair value of fixed assets and capitalized software, operating lease right-of-use assets, goodwill and intangible assets.

Due to the novel strain of coronavirus, commonly referred to as COVID-19 (“COVID-19”) and the uncertainty of the extent of the impacts related thereto, certain estimates and assumptions may require increased judgment. As events continue to evolve and additional information becomes available, these estimates may change in future periods. It is difficult to predict what the ongoing impact of the pandemic will be on future periods.

Summary of Significant Accounting Policies

Except for the adoption of ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), as described below, there have been no changes to the Company’s significant accounting policies as of and for the three and six months ended June 30, 2022 as compared to the significant accounting policies included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”).

Restricted Cash

The following table presents a reconciliation of Cash and cash equivalents and Restricted cash reported within the Company's consolidated balance sheets to the amount shown in the Company's consolidated statements of cash flows for the six months ended June 30, 2022 and 2021:

(in thousands)June 30, 2022June 30, 2021December 31, 2021
Cash and cash equivalents$13,746 $15,785 $11,262 
Restricted cash, included in Other current assets2,181 2,641 2,295 
Total Cash and cash equivalents and restricted cash $15,927 $18,426 $13,557 

Foreign Currency

The functional currency of the Company’s foreign operating subsidiaries is the local currency. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rates in effect at the balance sheet dates, with the resulting translation adjustments directly recorded to a separate component of Accumulated other comprehensive income. Income and expense accounts are translated at the weighted-average exchange rates during the period.

Transaction gains or losses in currencies other than the functional currency are included as a component of Other income (expense), net in the Company's consolidated statements of operations and comprehensive income (loss).

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In October 2021, the FASB issued ASU 2021-08, which requires companies to recognize and measure contract assets and contract liabilities acquired in a business combination, in accordance with the revenue recognition guidance, as if the acquirer had entered into the original contract at the same time, and on the same terms, as the acquiree. Generally, this will result in the acquirer recognizing contract assets and liabilities at the same amounts recorded by the acquiree as of the acquisition date. Under the current standard, an acquirer generally recognizes such items at fair value on the acquisition date. The Company adopted ASU 2021-08 on January 1, 2022 and applied it to the contract assets and liabilities acquired from Vivial.

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Note 2      Acquisitions

Vivial Acquisition

On January 21, 2022 (the “Vivial Acquisition Date”), Thryv, Inc., the Company’s wholly-owned subsidiary, acquired Vivial, a marketing and advertising company, for $22.8 million in cash (net of $8.5 million of cash acquired), subject to certain adjustments (the “Vivial Acquisition”). The assets acquired as part of these transactions consisted primarily of $27.7 million in current assets and $9.8 million in fixed and intangible assets, consisting primarily of customer relationships and technology assets, $15.4 million in deferred tax assets, along with a $7.0 million bargain purchase gain. The Vivial Acquisition resulted in a bargain purchase gain in part because the seller was motivated to divest its marketing services business that was in secular decline. The Company also assumed liabilities of $25.2 million, consisting primarily of accounts payable and accrued liabilities. The assessment of fair value of assets acquired and liabilities assumed is preliminary and is based on information that was available to management at the time these consolidated financial statements were prepared. The finalization of the Company’s acquisition accounting assessment could result in changes in the valuation of assets acquired and liabilities assumed, which could be material.

The Company accounted for the Vivial Acquisition using the acquisition method of accounting in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”). This requires that the assets acquired and liabilities assumed are measured at fair value. With the assistance of a third-party valuation firm, the Company determined, using Level 3 inputs (see Note 4, Fair Value Measurements), the fair value of certain assets and liabilities, including fixed assets and intangible assets by applying the income approach and the cost approach. Specific to intangible assets, client relationships were valued using a combination of the income and excess earnings approach, whereas trade names were valued using a relief of royalty method and assumptions related to Vivial’s assets acquired and liabilities assumed. The preliminary purchase price allocation is expected to be finalized within 12 months after the Vivial Acquisition Date.

The fair values of fixed assets, intangible assets and other assets acquired and liabilities assumed have been prepared on a preliminary basis with information currently available and are subject to change. Management is still reviewing the characteristics and assumptions related to Vivial’s assets acquired and liabilities assumed.

The following table summarizes the assets acquired and liabilities assumed at the Vivial Acquisition Date:

(in thousands)
Current assets$27,705 
Fixed and intangible assets9,759 
Deferred tax assets15,447 
Other assets2,087 
Current liabilities(23,570)
Other liabilities(1,646)
Bargain purchase gain (7,005)
Fair value allocated to net assets acquired, net of bargain purchase gain$22,777 

The deferred tax asset primarily relates to excess carryover tax basis over book basis in intangibles as a result of the assessment of the fair value of the assets and liabilities assumed using the acquisition method of accounting.

The Vivial Acquisition has contributed $53.0 million in revenue since the Vivial Acquisition Date.

As of June 30, 2022, the Company increased the purchase price by $0.8 million as a result of customary working capital adjustments and reclassified the presentation of certain assets and liabilities. The effect of these measurement period adjustments resulted in a $0.3 million decrease in the bargain purchase gain for the three months ended June 30, 2022.

Thryv Australia Acquisition

On March 1, 2021 (the “Thryv Australia Acquisition Date”), Thryv Australia Holdings Pty Ltd (formerly Thryv Australia Pty Ltd) (“Buyer”), an Australian proprietary limited company and a direct wholly-owned subsidiary of Thryv International Holding LLC, a direct and wholly owned subsidiary of the Company, acquired all of the issued and outstanding equity
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interests of (i) Sunshine NewCo Pty Ltd, an Australian proprietary limited company, and its subsidiaries, and (ii) Thryv Australia, a private limited company incorporated under the laws of England and Wales, and its subsidiaries (collectively, the “Thryv Australia Acquisition”). The Thryv Australia Acquisition expanded the Company's market share with a broader geographical footprint. Additionally, the Thryv Australia Acquisition provided the Company with a significant increase in clients. Thryv Australia is a provider of marketing solutions serving SMBs in Australia. Control was obtained by means of acquiring all the voting interests.

In connection with the Thryv Australia Acquisition, the Company paid consideration of approximately $216.2 million in cash, subject to customary closing adjustments, financed by the Term Loan (as defined in Note 8, Debt Obligations) that was entered into on the Thryv Australia Acquisition Date. All acquisition-related costs, amounting to $8.7 million, were expensed as incurred by the Company and no portion of these costs are included in consideration transferred. These costs were presented within General and administrative expense in the Company's consolidated statement of operations and comprehensive income. Additionally, as part of the effort to fund the Thryv Australia Acquisition, the Company incurred debt issuance costs of $4.2 million related to the Term Loan, of which $2.5 million was capitalized and is being amortized using the effective interest method. See Note 8, Debt Obligations.

The Company accounted for the Thryv Australia Acquisition using the acquisition method of accounting in accordance with ASC 805. This requires that the assets acquired and liabilities assumed are measured at fair value. With the assistance of a third-party valuation firm, the Company determined, using Level 3 inputs (see Note 4, Fair Value Measurements), the fair value of certain assets and liabilities, including fixed assets, intangible assets, and contract liabilities, by applying a combination of the income approach and the cost approach. Specific to intangible assets, client relationships were valued using a combination of the income and excess earnings approach, whereas trade names were valued using a relief of royalty method.

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The following table summarizes the consideration transferred and the purchase price allocation of the fair values of the assets acquired and liabilities assumed at the Thryv Australia Acquisition Date:

(in thousands)
Total cash consideration$216,164 
Total purchase consideration, as allocated below:$216,164 
Cash and cash equivalents $40,794 
Accounts receivable and other current assets72,404 
Other assets34,962 
Fixed assets and capitalized software18,856 
Intangible assets:
Client relationships (estimated useful life of 3.5 years)
101,839 
Trademarks (estimated useful life of 3.5 years)
24,877 
Accounts payable(15,038)
Accrued liabilities(41,724)
Contract liabilities(27,075)
Other current liabilities(6,733)
Deferred tax liabilities(35,884)
Other liabilities(15,506)
Total identifiable net assets$151,772 
Goodwill64,392 
Total net assets acquired$216,164 

The excess of the purchase price over the fair value of the identifiable net assets acquired and the liabilities assumed was allocated to goodwill. The recognized goodwill of $64.4 million was primarily related to the benefits expected from the Thryv Australia Acquisition and was allocated to the Thryv International Marketing Services segment. The goodwill recognized is not deductible for income tax purposes.

Pro Forma Results

The pro forma combined financial information presented below was derived from the historical financial records of Thryv and Thryv Australia and presents the operating results of the combined Company, as if the Thryv Australia Acquisition had occurred on January 1, 2020. The pro forma data gives effect to historical operating results with adjustments to interest expense, amortization and depreciation expense and related tax effects.

The pro forma financial information is not necessarily indicative of the consolidated results of operations that would have been realized had the Thryv Australia Acquisition been completed as of January 1, 2020, nor is it meant to be indicative of future results of operations that the combined entity will achieve:

Three Months Ended June 30,Six Months Ended June 30,
(in thousands)20212021
Revenue$321,162 $639,914 
Net income (loss)45,816 98,231 
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Note 3      Revenue Recognition

The Company has determined that each of its Print and Digital marketing services and SaaS business management tools services is distinct and represents a separate performance obligation. The client can benefit from each service on its own or together with other resources that are readily available to the client. Services are separately identifiable from other promises in the contract. Control over the Company’s Print services transfers to the client upon delivery of the published directories containing their advertisements to the intended market(s). Therefore, revenue associated with Print services is recognized at a point in time upon delivery to the intended market(s). The Company bills customers for Print advertising services monthly over the relative contract term. The difference between the timing of recognition of Print advertising revenue and monthly billing generates the Company’s unbilled receivables balance. The unbilled receivables balance is reclassified as billed accounts receivable through the passage of time as the customers are invoiced each month. SaaS and Digital marketing services are recognized using the series guidance. Under the series guidance, the Company's obligation to provide services is the same for each day under the contract, and therefore represents a single performance obligation. Revenue associated with SaaS and Digital marketing services is recognized over time using an output method to measure the progress toward satisfying a performance obligation.

Disaggregation of Revenue

The Company presents disaggregated revenue based on the type of service within its segment footnote. During the first quarter of 2022, the Company adjusted the disaggregated service revenue methodology it uses to manage the business. The six months ended June 30, 2022 and 2021 reflect the current methodology. See Note 15, Segment Information.

Contract Assets and Liabilities

The timing of revenue recognition may differ from the timing of billing to the Company’s clients. These timing differences result in receivables, contract assets, or contract liabilities (deferred revenue) as disclosed on the Company's consolidated balance sheets. Contract assets represent the Company's right to consideration when revenue recognized exceeds the receivable from the client because the consideration allocated to fulfilled performance obligations exceeds the Company’s right to payment, and the right to payment is subject to more than the passage of time. Contract liabilities consist of advance payments and revenue deferrals resulting from the allocation of the consideration to performance obligations. For the three and six months ended June 30, 2022, the Company recognized Revenue of $12.9 million and $25.9 million, respectively, that was recorded in Contract liabilities as of December 31, 2021. For the three and six months ended June 30, 2021, the Company recognized Revenue of $4.7 million and $9.5 million, respectively, that was recorded in Contract liabilities as of December 31, 2020.

Pandemic Credits

During the three and six months ended June 30, 2021, the Company recognized pandemic credits of $0.8 million and $3.0 million, respectively, provided to customers most impacted by COVID-19. The Company has reflected these price concessions as reduction to Revenue in the consolidated statements of operations and comprehensive income. During the three and six months ended June 30, 2022, the Company did not recognize any pandemic credits.


Note 4     Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Inputs, other than quoted prices in active markets, that are observable either directly or indirectly.
Level 3 — Unobservable inputs that reflect the Company's own assumptions incorporated into valuation techniques.
These valuations require significant judgment.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. When there is more than one input at different levels within the hierarchy, the fair value is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assessment of the significance of a particular input to the fair value measurement in its entirety requires substantial judgment and consideration of factors specific to the asset or
13

liability. Level 3 inputs are inherently difficult to estimate. Changes to these inputs can have a significant impact on fair value measurements. Assets and liabilities measured at fair value using Level 3 inputs are based on one or more of the following valuation techniques: market approach, income approach or cost approach.

The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels at the end of each reporting period. Other than the value of the indemnification asset described below, during the three and six months ended June 30, 2022 and 2021, there were no transfers between levels in the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The Company’s non-financial assets such as goodwill, intangible assets, fixed assets, capitalized software and operating lease right-of-use assets are adjusted to fair value when the net book values of the assets exceed their respective fair values, resulting in an impairment charge. Such fair value measurements are predominantly based on Level 3 inputs.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Indemnification Asset

On June 30, 2017, the Company completed the acquisition of YP Holdings, Inc. (the “YP Acquisition”). As further discussed in Note 13, Contingent Liabilities, as part of the YP Acquisition agreement, the Company is indemnified for an uncertain tax position for up to the fair value of 1,804,715 shares held in escrow, subject to certain contract limitations (the “indemnification asset”). Due to an increase in the Company’s common stock share price as of June 30, 2022, the number of shares expected to be returned to seller is 1,126,990, which represents the number of shares required to satisfy the uncertain tax position less $8.0 million.

As of June 30, 2022 and December 31, 2021, the fair value of the Company's Level 1 indemnification asset was $25.2 million and $24.3 million, respectively. A gain of $0.5 million and $0.9 million from the change in fair value of the Company’s Level 1 indemnification asset during the three and six months ended June 30, 2022, respectively, was recorded in General and administrative expense on the Company's consolidated statements of operations and comprehensive income.

Benefit Plan Assets

The fair value of benefit plan assets is measured and recorded on the Company's consolidated balance sheets using Level 2 inputs. See Note 9, Pensions.

Fair Value of Financial Instruments

The Company considers the carrying amounts of cash, trade receivables, and accounts payable to approximate fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment.

Additionally, the Company considers the carrying amounts of its ABL Facility (as defined in Note 8, Debt Obligations) and financing obligations to approximate their respective fair values due to their short-term nature and approximation of interest rates to market rates. These fair value measurements are considered Level 2. See Note 8, Debt Obligations.

The Term Loan (as defined in Note 8, Debt Obligations) is carried at amortized cost; however, the Company estimates the fair value of the Term Loan for disclosure purposes. The fair value of the Term Loan is determined based on quoted prices that are observable in the marketplace and are classified as Level 2 measurements. See Note 8, Debt Obligations.
The following table sets forth the carrying amount and fair value of the Term Loan:
June 30, 2022December 31, 2021
(in thousands)Carrying AmountFair ValueCarrying AmountFair Value
Term Loan, net$482,602 $482,602 $522,547 $533,651 

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Note 5     Goodwill and Intangible Assets

Goodwill

The following tables set forth the changes in the carrying amount of goodwill for the Company for six months ended June 30, 2022 and the year ended December 31, 2021:
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Balance as of December 31, 2020
$390,573 $218,884 $— $— $609,457 
Thryv Australia Acquisition— — 64,392 — 64,392 
Effects of foreign currency translation— — (1,963)— (1,963)
Balance as of December 31, 2021
$390,573 $218,884 $62,429 $— $671,886 
Effects of foreign currency translation— — (3,065)— (3,065)
Balance as of June 30, 2022
$390,573 $218,884 $59,364 $— $668,821 
Intangible Assets

The following tables set forth the details of the Company's intangible assets as of June 30, 2022 and December 31, 2021:

 As of June 30, 2022
(in thousands)GrossAccumulated
Amortization		NetWeighted
Average
Remaining
Amortization
Period in Years
Client relationships$797,484 $(758,636)$38,848 2.5
Trademarks and domain names223,517 (203,233)20,284 1.5
Patented technologies19,600 (19,600)— 0.0
Covenants not to compete4,455 (2,200)2,255 2.2
Total intangible assets$1,045,056 $(983,669)$61,387 2.0

 As of December 31, 2021
(in thousands)GrossAccumulated
Amortization		NetWeighted
Average
Remaining
Amortization
Period in Years
Client relationships$797,053 $(747,197)$49,856 2.7
Trademarks and domain names223,582 (193,772)29,810 1.9
Patented technologies19,600 (19,600)— 0.0
Covenants not to compete4,373 (1,462)2,911 2.6
Total intangible assets$1,044,608 $(962,031)$82,577 2.4

Amortization expense for intangible assets for the three and six months ended June 30, 2022 was $11.8 million and $25.0 million, respectively. Amortization expense for the three and six months ended June 30, 2021 was $21.0 million and $30.9 million, respectively.

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Estimated aggregate future amortization expense by fiscal year for the Company's intangible assets is as follows:
(in thousands)Estimated Future
Amortization Expense
2022$26,048 
202323,313 
202411,303 
2025723 
Total$61,387 


Note 6     Allowance for Credit Losses

The following table sets forth the Company's allowance for credit losses:
(in thousands)20222021
Balance as of January 1$17,475 $33,368 
Acquisitions— 2,733 
Additions (1)
7,880 292 
Deductions (2)
(9,228)(14,787)
Balance as of June 30 (3)
$16,127 $21,606 

(1)    For the six months ended June 30, 2022 and 2021, represents provision for bad debt expense of $7.9 million and $0.3 million, respectively, which is included in General and administrative expense. For the three months ended June 30, 2022 and 2021, the Company recorded a provision for bad debt expense of $4.6 million and a benefit for bad debt expense of $1.7 million, respectively, which is included in General and administrative expense.

(2)    For the six months ended June 30, 2022 and 2021, represents amounts written off as uncollectible, net of recoveries.

(3)    As of June 30, 2022, $16.1 million of the allowance is attributable to Accounts receivable and $0.1 million is attributable to Contract assets. As of June 30, 2021, $21.4 million of the allowance is attributable to Accounts receivable and $0.2 million is attributable to Contract assets.

The Company’s exposure to expected credit losses depends on the financial condition of its clients and other macroeconomic factors. The Company maintains an allowance for credit losses based upon its estimate of potential credit losses. This allowance is based upon historical and current client collection trends, any identified client-specific collection issues, and current as well as expected future economic conditions and market trends.

Note 7     Accrued Liabilities

The following table sets forth additional financial information related to the Company's accrued liabilities:
(in thousands)June 30, 2022December 31, 2021
Accrued salaries and related expenses$48,124 $58,440 
Accrued severance 651 1,720 
Accrued taxes 34,705 17,660 
Accrued expenses 57,388 51,224 
Accrued service credits2,691 2,769 
Accrued liabilities$143,559 $131,813 

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Note 8      Debt Obligations

The following table sets forth the Company's outstanding debt obligations as of June 30, 2022 and December 31, 2021:
(in thousands)MaturityInterest RateJune 30, 2022December 31, 2021
Term LoanMarch 1, 2026LIBOR +8.5%$499,500 $542,000 
ABL Facility (Fifth Amendment)March 1, 20263-month LIBOR +3.0%56,609 39,929 
Unamortized original issue discount and debt issuance costs(16,898)(19,453)
Total debt obligations$539,211 $562,476 
Current portion of Term Loan(70,000)(70,000)
Total long-term debt obligations$469,211 $492,476 
Term Loan

On March 1, 2021, the Company entered into a Term Loan credit agreement (the “Term Loan”). The proceeds of the Term Loan were used to finance the Thryv Australia Acquisition, refinance in full the Company's existing term loan facility (the “Senior Term Loan”), and pay fees and expenses related to the Thryv Australia Acquisition and related financing.

The Term Loan established a senior secured term loan facility (the “Term Loan Facility”) in an aggregate principal amount equal to $700.0 million, of which 38.4% was held by related parties who were equity holders of the Company, as of March 1, 2021. The Company defines a related party as any shareholder owning more than 5% of the Company's voting securities. As of June 30, 2022, 7.4% of the Term Loan was held by related parties who were equity holders of the Company, as of that date.

The Term Loan Facility matures on March 1, 2026 and borrowings under the Term Loan Facility bear interest at a fluctuating rate per annum equal to, at the Company’s option, LIBOR or a base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for LIBOR loans) and (ii) 7.50% (for base rate loans). The Term Loan Facility requires mandatory amortization payments equal to $17.5 million per fiscal quarter.

The net proceeds from the Term Loan of $674.9 million (net of original issue discount costs of $21.0 million and third-party fees of $4.1 million) were used to repay the remaining $449.6 million outstanding principal balance of the Senior Term Loan, accrued interest of $0.4 million, and third-party fees of $0.1 million. The Company accounted for this transaction with existing lenders as a modification. The transaction with other lenders party to only the Senior Term Loan was accounted for as an extinguishment.

Accordingly, total third-party fees paid were $4.2 million, of which $1.7 million was immediately charged to General and administrative expense on the Company's consolidated statement of operations and comprehensive income. The remaining third-party fees of $2.5 million were deferred as debt issuance costs and will be amortized to interest expense, over the term of the loan, using the effective interest method. Additionally, there were unamortized debt issuance costs of $0.4 million on the existing Senior Term Loan, of which $0.3 million was written off and recorded as a loss on early extinguishment of debt on the Company's consolidated statement of operations and comprehensive income. The remaining unamortized debt issuance costs of $0.1 million will be deferred as debt issuance costs and amortized to interest expense, over the term of the Term Loan, using the effective interest method. The Term Loan, which was incurred by Thryv, Inc., the Company’s operating subsidiary, is secured by all the assets of Thryv, Inc., certain of its subsidiaries and the Company, and is guaranteed by the Company and certain of its subsidiaries.

In accordance with the Term Loan and the Senior Term Loan, the Company recorded interest expense with related parties for the three months ended June 30, 2022 and 2021 of $0.9 million and $4.7 million, respectively, and for the six months ended June 30, 2022 and 2021 of $2.7 million and $8.7 million, respectively.

The Company has recorded accrued interest of $5.0 million and $3.4 million as of June 30, 2022 and December 31, 2021, respectively. Accrued interest is included in Other current liabilities on the Company's consolidated balance sheets.

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Term Loan Covenants

The Term Loan contains certain covenants that, subject to exceptions, limit or restrict the borrower's incurrence of additional indebtedness, liens, investments, loans, advances, guarantees, acquisitions, sales of assets, sale-leaseback transactions, swap agreements, payments of dividends or distributions, payments in respect of certain indebtedness, certain affiliate transactions, restrictive amendments to agreements, changes in business, amendments of certain material documents, capital expenditures, mergers, consolidations and liquidations, and use of the proceeds. Additionally, the Company is required to maintain compliance with a Total Net Leverage Ratio, calculated as Net Debt to Consolidated EBITDA, which shall not be greater than 3.0 to 1.0 as of the last day of each fiscal quarter. As of June 30, 2022, the Company was in compliance with its Term Loan covenants. The Company also expects to be in compliance with these covenants for the next twelve months.

ABL Facility

On March 1, 2021, the Company entered into an agreement to amend (the “ABL Amendment”) the June 30, 2017 ABL Facility (the “ABL Facility”). The ABL Amendment was entered into in order to permit the Senior Term Loan refinancing, the Thryv Australia Acquisition and make certain other changes to the ABL credit agreement, including, among others:

•revise the maximum revolver amount to $175.0 million;
•reduce the interest rate per annum to (i) 3-month LIBOR plus 3.00% for LIBOR loans and (ii) base rate plus 2.00% for base rate loans;
•reduce the commitment fee on undrawn amounts under the ABL Facility to 0.375%;
•extend the maturity date of the ABL Facility to the earlier of March 1, 2026 and 91 days prior to the stated maturity
date of the Term Loan Facility;
•add the Australian subsidiaries acquired pursuant to the Thryv Australia Acquisition as borrowers and guarantors, and establish an Australian borrowing base; and
•make certain other conforming changes consistent with the Term Loan agreement.

The Company accounted for this transaction as a modification of the ABL Facility. Accordingly, the existing unamortized debt issuance costs of $2.4 million, as well as additional third-party fees and lender fees of $0.9 million associated with the latest ABL Amendment, will be deferred and amortized over the new term of the ABL Facility.

As of June 30, 2022 and December 31, 2021, the Company had debt issuance costs with a remaining balance of $2.4 million and $2.7 million, respectively. These debt issuance costs are included in Other assets on the Company's consolidated balance sheets.

As of June 30, 2022, the Company had borrowing capacity of $76.2 million under the ABL Facility.

ABL Facility Covenants

The ABL Facility contains certain covenants that, subject to exceptions, limit or restrict the borrower's incurrence of additional indebtedness, liens, investments, loans, advances, guarantees, acquisitions, disposals of assets, payments of certain indebtedness, certain affiliate transactions, changes in fiscal year or accounting methods, issuance or sale of equity instruments, mergers, liquidations and consolidations, use of proceeds, maintenance of certain deposit accounts, compliance with certain ERISA requirements and compliance with certain Australian tax requirements. The Company is required to maintain compliance with a fixed charge coverage ratio that must exceed a ratio of 1.00. The fixed charge coverage ratio is defined as, with respect to any fiscal period determined on a consolidated basis in accordance with GAAP, the ratio of (a) Consolidated EBITDA as defined in the ABL credit agreement for such period minus capital expenditures incurred during such period, to (b) fixed charges. Fixed charges is defined as, with respect to any fiscal period determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) consolidated interest expense accrued (other than amortization of debt issuance costs, and other non-cash interest expense) during such period, (b) scheduled principal payments in respect of indebtedness paid during such period, (c) all federal, state, and local income taxes accrued during such period, (d) all management, consulting, monitoring, and advisory fees paid to certain individuals or their affiliates during such period, and (e) all restricted payments paid during such period (whether in cash or other property, other than common equity interest). The Company is also required to maintain excess availability of at least $14.0 million, and U.S. excess availability of $10.0 million, in each case, at all times. As of June 30, 2022, the Company was in compliance with its ABL Facility covenants. The Company also expects to be in compliance with these covenants for the next twelve months.

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Note 9     Pensions

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

The Company immediately recognizes actuarial gains and losses in its operating results in the period in which the gains and losses occur. The Company estimates the interest cost component of net periodic pension cost by utilizing a full yield curve approach and applying the specific spot rates along the yield curve used in the determination of the benefit obligations of the relevant projected cash flows. This method provides a more precise measurement of interest costs by improving the correlation between projected cash flows to the corresponding spot yield curve rates.

Net Periodic Pension Cost

The following table details the other components of net periodic pension cost for the Company's pension plans:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Interest cost$3,418 $2,618 $6,836 $5,234 
Expected return on assets(3,489)(2,890)(6,977)(5,780)
Settlement (gain)(390)— (390)(15)
Remeasurement (gain)(8,692)— (8,692)(164)
Net periodic pension (benefit) $(9,153)$(272)$(9,223)$(725)

Since all pension plans are frozen and no employees accrue future pension benefits under any of the pension plans, the rate of compensation increase assumption is no longer needed. The Company determines the weighted-average discount rate by applying a yield curve comprised of the yields on several hundred high-quality, fixed income corporate bonds available on the measurement date to expected future benefit cash flows.

During the three and six months ended June 30, 2022, the Company recognized a settlement gain of $0.4 million. In addition, during the three and six months ended June 30, 2022, as a result of an interim actuarial valuation due to the settlement of one of the Company's pension plans, the Company recognized a remeasurement gain of $8.7 million. During the six months ended June 30, 2021, the Company recognized a settlement gain of less than $0.1 million and a remeasurement gain of $0.2 million. During the three months ended June 30, 2021, the Company did not recognize a settlement gain or a remeasurement gain.

During the three and six months ended June 30, 2022, the Company made cash contributions of $7.5 million and $15.0 million, respectively, to the qualified plans and contributions and associated payments of $0.1 million and $0.3 million, respectively, to the non-qualified plans. During the three and six months ended June 30, 2021, the Company made cash contributions of $10.0 million and $15.0 million, respectively, to the qualified plans, and contributions and associated payments of $0.2 million and $0.9 million, respectively, to the non-qualified plans.

For the fiscal year 2022, the Company expects to contribute approximately $30.0 million to the qualified plans and approximately $0.6 million to the non-qualified plans.


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Note 10     Stock-Based Compensation and Stockholders' Equity

Stock-Based Compensation Expense

The following table sets forth stock-based compensation expense recognized by the Company in the following line items in the Company's consolidated statements of operations and comprehensive income during the periods presented:

 Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Cost of services$131 $83 $207 $164 
Sales and marketing1,833 794 2,602 1,626 
General and administrative1,846 1,044 2,929 2,102 
Stock-based compensation expense $3,810 $1,921 $5,738 $3,892 

The following table sets forth stock-based compensation expense by award type during the periods presented:

 Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Stock options$1,507 $1,557 $3,060 $3,241 
ESPP758 364 1,133 651 
RSUs792 — 792 — 
PSUs753 — 753 — 
Stock-based compensation expense $3,810 $1,921 $5,738 $3,892 

Restricted Stock Units

On May 3, 2022, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved a form of award agreement (the “RSU Award Agreement”) for grants of restricted stock units (“RSUs”) to the Company’s named executive officers under the Company’s 2020 Incentive Award Plan (the “2020 Plan”). Additionally, on June 17, 2022, the Compensation Committee approved a form of award agreement for grants of RSUs to the Company’s non-employee directors (the “Non-Employee Director RSU Award Agreement”) under the 2020 Plan. Pursuant to the RSU Award Agreement and the Non-Employee Director RSU Award Agreement, each RSU entitles the recipient to one share of the Company’s common stock, subject to time-based vesting conditions set forth in individual agreements.

The fair value of each RSU grant is determined based upon the market closing price of the Company’s common stock on the date of grant. The RSUs vest over the requisite service period, which ranges between eight months and three years from the date of grant, subject to the continued employment of the employees and services of the non-employee board members.

As of June 30, 2022, the unrecognized stock-based compensation expense related to the unvested portion of the Company's RSU awards was approximately $12.8 million and is expected to be recognized over a weighted average period of 2.42 years.

As of June 30, 2022, there were 525,735 RSUs expected to vest with a weighted average grant-date fair value of $25.93 per unit.

Performance-Based Restricted Stock Units

On May 3, 2022, the Compensation Committee of the Company’s Board of Directors approved a form of award agreement (the “PSU Award Agreement”) for grants of performance-based restricted stock units (“PSUs”), under the Company’s 2020 Plan. Pursuant to the PSU Award Agreement, each PSU entitles the recipient to one share of the Company’s common stock, subject to performance-based vesting conditions set forth in individual agreements.

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The PSUs will vest, if at all, following the achievement of certain performance measures over a three year performance period, relative to certain performance and market conditions. Grant date fair value of PSUs, that vest relative to a performance condition, is measured based upon the market closing price of the Company’s common stock on the date of grant and expensed on a straight-line basis when it becomes probable that the performance conditions will be satisfied, net of forfeitures, over the service period of the awards, which is generally the vesting term of three years. Grant date fair value of PSUs, that vest relative to a market condition, is measured using a Monte Carlo simulation model and expensed on a straight-line basis, net of forfeitures, over the service period of the awards, which is generally the vesting term of three years.

As of June 30, 2022, the unrecognized stock-based compensation expense related to the unvested portion of the Company's PSU awards was approximately $11.9 million and is expected to be recognized over a weighted average period of 2.51 years. As of June 30, 2022, there were 473,371 PSUs expected to vest with a weighted average grant-date fair value of $26.76 per unit.

Stock Options

During the six months ended June 30, 2022, the Company issued an aggregate of 134,719 shares of common stock to employees upon the exercise of options previously granted under the 2016 and 2020 Stock Incentive Plan(s) at exercise prices ranging from $3.68 to $13.82 per share.

During the six months ended June 30, 2021, the Company issued an aggregate of 239,275 shares of common stock to employees upon the exercise of options previously granted under the 2016 Stock Incentive Plan at exercise prices ranging from $3.68 to $13.82 per share.

Employee Stock Purchase Plan

During the six months ended June 30, 2022 and June 30, 2021, the Company issued 155,486 and 149,865 shares, respectively, through the Employee Stock Purchase Plan.

Stock Warrants

As of June 30, 2022 and December 31, 2021, the Company had 9,432,064 fully vested outstanding warrants. As of June 30, 2022 and December 31, 2021, the holders of such warrants were entitled to purchase, in the aggregate, up to 5,240,035 shares of common stock. Warrants can be exercised at a strike price of $24.39 per common share. The warrants were issued in 2016 upon the Company's emergence from its pre-packaged bankruptcy. These warrants expire on August 15, 2023.

No warrants were exercised during the three and six months ended June 30, 2022. During the three and six months ended June 30, 2021, 1,011,224 and 1,011,424 warrants, respectively, were exercised.


Note 11     Earnings per Share

The following table sets forth the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2022 and 2021:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands, except share and per share amounts)2022202120222021
Basic net income per share:
Net income$58,002 $24,359 $91,513 $60,865 
Weighted-average common shares outstanding during the period34,250,706 33,622,666 34,205,593 33,367,734 
Basic net income per share$1.69 $0.72 $2.68 $1.82 
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Three Months Ended June 30,Six Months Ended June 30,
(in thousands, except share and per share amounts)2022202120222021
Diluted net income per share:
Net income$58,002 $24,359 $91,513 $60,865 
Basic shares outstanding during the period34,250,706 33,622,666 34,205,593 33,367,734 
Plus: Common stock equivalents associated with stock option awards1,887,283 3,064,364 2,842,494 1,984,711 
Diluted shares outstanding36,137,989 36,687,030 37,048,087 35,352,445 
Diluted net income per share$1.61 $0.66 $2.47 $1.72 
The computation of diluted shares outstanding for the three months ended June 30, 2022 excluded 525,735 outstanding RSU's and 473,371 outstanding PSUs as their effect would have been anti-dilutive, while the computation of diluted shares outstanding for the six months ended June 30, 2022 excluded 262,868 outstanding RSUs, 236,686 outstanding PSUs, and 16,546 ESPP shares, as their effect would have been anti-dilutive. The computation of diluted shares outstanding for the three months ended June 30, 2021 did not exclude any shares whose effect would have been anti-dilutive, while the computation of diluted shares outstanding for the six months ended June 30, 2021 excluded 388,892 outstanding stock options, 36,940 ESPP shares, and 10,458,655 outstanding stock warrants, as their effect would have been anti-dilutive.


Note 12     Income Taxes

The Company’s effective tax rate (“ETR”) was 27.7% and 25.8% for the three and six months ended June 30, 2022, and 25.0% and 24.7% for the three and six months ended June 30, 2021. The Company's ETR differs from the 21.0% U.S. Federal statutory rate primarily due to our geographic mix of taxable income in various tax jurisdictions and permanent tax differences attributable to the net impact of non-U.S. taxing jurisdictions.

As of June 30, 2022 and December 31, 2021, the Company had $20.7 million and $20.8 million, respectively, of unrecognized tax benefits, excluding interest and penalties, that if recognized, would impact the effective tax rate. As of June 30, 2022 and December 31, 2021, the Company had $10.4 million and $9.6 million, respectively, recorded for interest on the consolidated balance sheets. The Company engages in continuous discussions and negotiations with tax authorities regarding tax matters in various jurisdictions. The Company expects to complete resolution of certain tax years with various tax authorities within the next 12 months. The Company believes it is reasonably possible that its existing gross unrecognized tax benefits may be reduced by up to $20.2 million within the next 12 months, affecting the Company’s effective tax rate if realized.


Note 13     Contingent Liabilities

Litigation

The Company is subject to various lawsuits and other claims in the normal course of business. In addition, from time to time, the Company receives communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdictions in which the Company operates.

The Company establishes reserves for the estimated losses on specific contingent liabilities for regulatory and legal actions where the Company deems a loss to be probable and the amount of the loss can be reasonably estimated. In other instances, losses are considered probable, but the Company is not able to make a reasonable estimate of the liability because of the uncertainties related to the outcome or the amount or range of potential loss. For these matters, disclosure is made, but no amount is reserved. The Company does not expect that the ultimate resolution of pending regulatory and legal matters in future periods will have a material adverse effect on the Company's consolidated statements of operations and comprehensive income, balance sheets or cash flows.

Section 199 and Research and Development Tax Case

Section 199 of the Internal Revenue Code of 1986, as amended (the “Tax Code”) provides for deductions for manufacturing performed in the U.S. The Internal Revenue Service (“IRS”) has taken the position that directory providers are not entitled to take advantage of the deductions because printing vendors are already taking deductions and only one taxpayer can claim the deduction. The Tax Code also grants tax credits related to research and development expenditures. The IRS
22


also takes the position that the expenditures have not been sufficiently documented to be eligible for the tax credit. The Company disagrees with these positions.

The IRS has challenged the Company's positions. With respect to the tax years 2012 through June 2015 for the YP LLC partnership, the IRS sent 90-day notices to DexYP on August 29, 2018. In response, the Company filed three petitions (in the names of various related partners) in U.S. Tax Court, and the IRS filed answers to those petitions. The three cases were consolidated by the court and were referred back to IRS Administrative Appeals for settlement negotiations, during which time the litigation was suspended. The appeals conference for YP occurred on May 9, 2022 and the Appeals Officer intends to conduct settlement negotiations in late August of 2022. In advance of the IRS Appeals conference, the parties reached an agreement regarding additional research and development tax credits for the tax years at issue whereby the IRS will allow more tax credits than were originally claimed on the tax returns. With respect to the tax year from July to December 2015 for the Print Media LLC partnership, the Company was recently unsuccessful in its attempt to negotiate a settlement with IRS Administrative Appeals, and the IRS issued a 90-day notice to the Company. The Company filed a petition in the U.S. Tax Court to challenge the IRS denial.

As of June 30, 2022 and December 31, 2021, the Company has reserved approximately $32.8 million and $31.9 million, respectively, in connection with the 199 disallowance and less than $0.1 million related to the research and development tax credit disallowance. Pursuant to the YP Acquisition agreement, the Company is entitled to (i) a dollar-for-dollar indemnification for the research and development tax liability, and (ii) a dollar-for-dollar indemnification for the 199-tax liability after the Company pays the first $8.0 million in liability. The indemnification asset, however, is subject to a provision in the YP Acquisition agreement that limits the seller’s liability. The balance of the indemnification asset is $25.2 million and $24.3 million at June 30, 2022 and December 31, 2021, respectively.

Other

New York Sales, Excise, and Use Tax Audit

On August 19, 2020, the New York State Department of Taxation and Finance issued a notice to the Company assigning a routine audit of the Company's sales, excise, and use tax account for the audit period covering March 1, 2017 through May 31, 2020. The Company has reserved $3.2 million for the total combined exposure for the period, which is accrued on the Company's consolidated balance sheet as of June 30, 2022.

Ohio Use Tax Audit

In November 2021, the Company received a notice from the Ohio Department of Taxation Audit Division requesting to schedule an audit of the Ohio use tax records for the period of October 1, 2015 through September 30, 2021. The Company has reserved $1.3 million for this period, which is accrued on the Company’s consolidated balance sheets as of June 30, 2022.


Note 14     Changes in Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss), which is reported as a component of stockholders' equity, for the six months ended June 30, 2022 and 2021:

Accumulated Foreign Currency Translation Adjustment
(in thousands)20222021
Beginning balance at January 1,$(8,047)$— 
Foreign currency translation adjustment, net of tax expense of $3.9 million and $1.5 million, respectively
(4,691)(4,445)
Ending balance at June 30,
$(12,738)$(4,445)


23



Note 15     Segment Information
During the second quarter of 2022, the Company revised its segment reporting, as discussed in Note 1. The Company determined that the Company manages its operations using four operating segments, which are also its reportable segments: (1) Thryv U.S. Marketing Services, (2) Thryv U.S. SaaS, (3) Thryv International Marketing Services, and (4) Thryv International SaaS. As of January 1, 2022, the Company's Chief Executive Officer, who is also the chief operating decision maker (“CODM”), began including gross profit by segment in the Company's reporting to assess segment performance and allocate resources. As such, gross profit by segment has been added to the current and comparative prior period.
The Company does not allocate assets to its segments and the CODM does not evaluate performance or allocate resources based on segment asset data, and, therefore, such information is not presented.

The following tables summarize the operating results of the Company's reportable segments:
Three Months Ended June 30, 2022
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Revenue$222,570 $51,167 $59,218 $1,040 $333,995 
Segment Gross Profit151,774 32,092 43,627 489 227,982 
Segment Adjusted EBITDA83,674 197 34,545 (2,416)116,000 
Three Months Ended June 30, 2021
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Revenue$202,795 $41,386 $46,857 $9 $291,047 
Segment Gross Profit136,831 25,314 16,290 5 178,440 
Segment Adjusted EBITDA82,684 (2,119)16,183 5 96,753 
Six Months Ended June 30, 2022
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Revenue$435,103 $98,510 $106,882 $1,875 $642,370 
Segment Gross Profit288,284 61,501 75,343 710 425,838 
Segment Adjusted EBITDA150,069 (4,167)58,642 (4,827)199,717 
Six Months Ended June 30, 2021
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Revenue$430,728 $78,637 $62,279 $9 $571,653 
Segment Gross Profit292,992 48,481 19,408 5 360,886 
Segment Adjusted EBITDA181,315 (1,803)22,169 5 201,686 

A reconciliation of the Company’s Income before income tax expense to total Segment Adjusted EBITDA is as follows:
24


Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Income before income tax expense$80,202 $32,471 $123,334 $80,786 
Interest expense14,652 19,170 29,519 34,842 
Depreciation and amortization20,592 29,908 42,561 49,626 
Other components of net periodic pension (benefit)(9,153)(272)(9,223)(725)
Loss on termination of leaseback obligations— 3,110 — 3,409 
Impairment charges222 3,611 222 3,611 
Restructuring and integration expenses4,822 3,489 10,649 12,723 
Transaction costs (1)
1,616 5,440 3,336 15,986 
Stock-based compensation expense3,810 1,921 5,738 3,892 
(Gain) from remeasurement of indemnification asset(487)(844)(887)(844)
Other(276)(1,251)(5,532)(1,620)
Total Segment Adjusted EBITDA$116,000 $96,753 $199,717 $201,686 
(1)Consists of Vivial Acquisition, Thryv Australia Acquisition and other transaction costs.
The following table sets forth the Company's disaggregation of Revenue based on services for the periods indicated:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Thryv U.S.
Print$104,264 $93,753 $202,170 $206,664 
Digital118,306 109,042 232,933 224,064 
Total Marketing Services222,570 202,795 435,103 430,728 
SaaS51,167 41,386 98,510 78,637 
Total Thryv U.S.$273,737 $244,181 $533,613 $509,365 
Thryv International
Print$34,907 $15,231 $56,407 $20,944 
Digital24,311 31,626 50,475 41,335 
Total Marketing Services59,218 46,857 106,882 62,279 
SaaS1,040 9 1,875 9 
Total Thryv International60,258 46,866 108,757 62,288 
Total Revenue$333,995 $291,047 $642,370 $571,653 
25


Item 2. 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 unaudited interim consolidated financial statements and the related notes thereto included elsewhere in this Quarterly 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 domestic providers of SaaS end-to-end customer experience tools and digital marketing solutions to small-to-medium sized businesses (“SMBs”). Our solutions enable our SMB clients to generate new business leads, manage their customer relationships and run their day-to-day business operations. We serve more than 400,000 SMB clients globally through four business segments: Thryv U.S. Marketing Services, Thryv U.S. SaaS, Thryv International Marketing Services and Thryv International SaaS.

Our Thryv U.S. Marketing Services segment provides both print and digital solutions and generated $222.6 million and $202.8 million of consolidated revenues for the three months ended June 30, 2022 and 2021, respectively, and $435.1 million and $430.7 million of consolidated revenues for the six months ended June 30, 2022 and 2021, respectively. Our Marketing Services offerings include our owned and operated Print Yellow Pages (“PYP” or “Print”), which carry the “The Real Yellow Pages” tagline, and other digital marketing services (“Digital”), which includes our proprietary Internet Yellow Pages (“IYP”), known by the Yellowpages.com, Superpages.com, and Dexknows.com URLs, search engine marketing (“SEM”) solutions and other digital media solutions, consisting of online display and social advertising, online presence, and video and search engine optimization (“SEO”) tools.

Our Thryv U.S. SaaS segment generated $51.2 million and $41.4 million of consolidated revenues for the three months ended June 30, 2022 and 2021, respectively, and $98.5 million and $78.6 million of consolidated revenues for the six months ended June 30, 2021 and 2021, respectively. Our Thryv Small Business Platform is a SaaS offering comprised of a multi-product, cloud-based business solution that enables small businesses to deliver an exceptional end-to-end client experience, while running an efficient and well-organized business. The Thryv Small Business Platform enables customers to achieve faster and more sustainable growth. SMB’s have the ability to customize the platform experience to match their individual business objectives and goals. At its core, the Thryv SaaS solution is a robust and customizable customer relationship management (“CRM”) tool. Supporting the entire CRM is a suite of robust functions including scheduling, document organization, social media management, online reputation tools, online presence tools, estimating, invoicing and payment solutions. Within the payment solution, Thryv integrates with a variety of other popular name-brand payment providers in addition to its proprietary processor – ThryvPay. ThryvPay is uniquely integrated within the Thryv Small Business Platform. It also includes an optional multi-location utility, Hub by Thryv, which enables multi-location businesses and emerging franchises the ability to centrally command and control many individual Thryv Small Business Platform licenses from a single admin panel.

Our Thryv International Marketing Services segment is comprised of Thryv Australia Pty Ltd (formerly Sensis Pty Ltd) (“Thryv Australia”), which the Company acquired on March 1, 2021 (the “Thryv Australia Acquisition”). Thryv Australia is Australia’s leading provider of marketing solutions serving SMBs. The Thryv Australia Acquisition brings under the Thryv banner more than 100,000 existing Thryv Australia clients, many of which we believe are ideal candidates for the Thryv platform. Our Thryv International Marketing Services segment generated $59.2 million and $46.9 million of consolidated revenues for the three months ended June 30, 2022 and 2021, respectively, and $106.9 million and $62.3 million of consolidated revenues for the six months ended June 30, 2022 and the four months ended June 30, 2021, respectively.

Our Thryv International SaaS segment generated $1.0 million and $0.01 million of consolidated revenues for the three months ended June 30, 2022 and 2021, respectively, and $1.9 million and $0.01 million of consolidated revenues for the six months ended June 30, 2022 and the four months ended June 30, 2021, respectively.

Our expertise in delivering solutions for our client base is rooted in our deep history of serving SMBs. In 2022, 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 have seen this trend accelerate following the outbreak of the COVID-19 pandemic.
26


On January 21, 2022 (the “Vivial Acquisition Date”), Thryv, Inc., the Company’s wholly-owned subsidiary, acquired Vivial Media Holdings, Inc. (“Vivial”), a marketing and advertising company, for $22.8 million in cash, subject to certain adjustments (the “Vivial Acquisition”).

The expanding global scope of our business and the heightened volatility of global markets, driven by factors, such as COVID-19 and inflation, expose us to the risk of rising interest rates, increased operating costs and fluctuations in foreign currency markets. Recently the United States Dollar has strengthened significantly against certain foreign currencies in the markets in which we operate, particularly against the Australian Dollar. We also expect further interest rate changes in the future. To date, these factors have not had a material impact on our operational performance, financial performance, or liquidity. However, further changes in global economic conditions may adversely impact our revenue, profit margins, cash flow and liquidity. See ‘Impact of Covid’ and ‘Item 3. Quantitative and Qualitative Disclosures About Market Risk’ for a description of interest rate and foreign exchange currency risk.

Impact of COVID-19

In March 2020, the World Health Organization categorized COVID-19 as a pandemic. The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, significantly disrupted the global economy, resulting in an adverse effect on the business operations of certain SMBs, especially during 2020 and to a lesser extent during 2021. However, many of our SMB clients operate service-based businesses that can easily operate remotely, or that have been designated as “essential” by state and local authorities administering shelter-in-place orders, and have continued to operate without significant interruption during the COVID-19 pandemic. Therefore, the impact of COVID-19 and the related regulatory and private sector response on our financial and operating results in the three and six months ended June 30, 2022 and 2021 was somewhat mitigated as many of our clients continued to operate.

In March 2020, we began offering certain pandemic credit incentives to select clients. These pandemic credit incentives resulted in a $0.8 million and $3.0 million reduction in revenue for the three and six months ended June 30, 2021, respectively. Requests for incentives continued to decline in 2021 as clients resumed normal contractual terms and pricing. As of April 1, 2021, we virtually discontinued providing pandemic credits and accepting client requests to pause search campaigns due to the COVID-19 pandemic. Effective April 1, 2021, all client requests for adjustments are now handled as part of normal business operations consistent with historical practices.

During the three and six months ended June 30, 2022, we have continued to see trends similar to those experienced during the year ended December 31, 2021, including an increase in demand for our SaaS solutions and a continuing decline in our Marketing Services business. The challenges we will face in the future related to COVID-19 will depend largely, we believe, on the impact that the continuing spread of the virus, including existing and new variants, and regulatory and private sector response has on our current and prospective clients, including their ability and willingness to purchase our solutions. To date, the COVID-19 pandemic has not had a material impact on our operational performance, financial performance, or liquidity. Looking ahead, we do not expect any material financial impact related to COVID-19, without a significant increase in cases resulting in another shut down of local businesses. However, it is difficult to predict what the ongoing impact of the pandemic will be on the economy, our clients and our business.

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 “Cautionary Note Regarding Forward-Looking Statements.”
Ability to Attract and Retain Clients
Our revenue growth is driven by our ability to attract and retain SMB clients. To do so, we must deliver solutions that address the challenges currently faced by SMBs at a value-based price point that an SMB can afford.

Our strategy is to expand the use of our solutions by introducing our SaaS solutions to new SMB clients, as well as our current Marketing Services and Thryv International clients. 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.
27

Investment in Growth
We intend to continue to invest in the growth of our SaaS segment. We have selectively utilized a portion of the cash generated from our Marketing Services and Thryv International segments to support initiatives in our evolving SaaS segment, which has represented an increasing percentage of consolidated revenue since launch. 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 Acquisition
Our growth prospects depend upon our ability to successfully develop new markets. We currently serve the United States and Australian SMB markets and plan to leverage strategic acquisitions 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 August 2020, we launched our first international SaaS reseller pilot, a joint initiative with the leading yellow pages player in the Caribbean, and we also signed a SaaS multi-location franchise client, a home services company with operations in the U.S. and Canada. On March 1, 2021, we completed the Thryv Australia Acquisition. On January 21, 2022, we completed the Vivial Acquisition. We believe that acquisitions of marketing services companies will expand our client base and provide additional opportunities to offer our SaaS solutions. Our success largely depends on our ability to identify and execute acquisition opportunities and our ability to establish relationships with new SMBs.
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.
 As of June 30,
(in thousands)20222021
Clients (1)
Marketing Services (2)
395 422 
SaaS (3)
50 45 
Total (4)
417 440 
(1)     Clients include total clients from all four of our business segments: Thryv U.S. Marketing Services, Thryv U.S. SaaS, Thryv International Marketing Services and Thryv International SaaS.
(2)     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.
(3)     Clients that purchase subscriptions to our SaaS offerings are included in this metric. These clients may or may not also purchase one or more of our Marketing Services solutions.
(4)     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 27 thousand as of June 30, 2022 as compared to June 30, 2021. The decrease in Marketing Services clients was related to a secular decline in the print media industry. The decline in the Digital portion of our Marketing Services business was due to significant competition in the consumer search and display spaces, particularly from large, well-capitalized businesses such as Google, Yelp and Facebook.
28

SaaS clients increased by five thousand as of June 30, 2022 as compared to June 30, 2021. This was the result of an increase in new clients and decreasing churn, and is consistent with our continuing strategy to target higher spend, higher retention clients in lieu of lower-spend, higher churn clients.
Total clients decreased by 23 thousand as of June 30, 2022 as compared to June 30, 2021. The primary driver of the decrease in total clients was the secular decline in the Print media business combined with increasing competition in the Digital media space.
Monthly ARPU
We define monthly average revenue per unit (“ARPU”) as our total client billings for a particular month divided by the number of revenue-generating units during the same month. For each reporting period, the weighted-average monthly ARPU from all the months in the period are reported. We define units as SMB accounts with one or more revenue-generating solutions in a particular month. Units are synonymous with clients. As monthly ARPU varies based on the amounts we charge for our services, we believe it can serve as a measure by which investors can evaluate trends in the types and levels of services across our client base. Our measurement of ARPU helps us understand the rate at which we are monetizing our client base.
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
ARPU (Monthly)
Marketing Services (1)
$183 $187 $184 $194 
SaaS (1)
358 323 355 314 
(1)     Marketing Services and SaaS ARPU include combined results from both our U.S. and Thryv International Marketing Services and SaaS businesses, respectively.

Monthly Marketing Services ARPU decreased by $4, or 2.1%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, and decreased by $10, or 5%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The overall trend has been a decrease in ARPU 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 less expensive Digital media. This decrease in ARPU was further driven by a 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. Periodic increases in quarterly ARPU are temporary and caused by timing of publishing our directories, which have variable lengths (usually 12 to 18 months).

Monthly SaaS ARPU increased by $35, or 10.8%, during the three months ended June 30, 2022 compared to the three months ended June 30, 2021, and increased by $41, or 13.1%, during the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The increase in ARPU was driven by our strategic shift to selling to higher spend clients and, at the same time, discontinuing our sale of the lower-priced tiers of our Thryv platform. In addition, the sale of add-on features to our Thryv platform such as Thryv Leads and Thryv Pay contributed to ARPU growth.
Monthly Active Users - SaaS
We define a monthly active user for SaaS offerings as a client with one or more users who log into our SaaS solutions at least once during the calendar month. Individuals who register for, and use, multiple accounts across computer and mobile devices may be counted more than once and, as a result, may overstate the number of unique users who actively use our Thryv platform within a month. Additionally, some of our original SaaS clients exclusively use the website features of their Thryv platform which does not require a login and those users are not included in our active users count. For each reporting period, active users from the last month in the period are reported. We believe that monthly active users best reflects our ability to engage, retain, and monetize our users, and thereby drive increases in revenue. We view monthly active users as a key measure of user engagement for our Thryv platform.
 As of June 30,
(in thousands)20222021
Monthly Active Users - SaaS
38 30 

29

Monthly active users increased by 8 thousand, or 27%, during the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The number of monthly active users increased period-over-period as we undertook efforts such as enhancing the sales process, the client onboarding experience, and lifecycle management in order to increase engagement among our SaaS clients. The increase was also driven by the focus by our sales team on obtaining higher retention, higher spend clients as these clients are more engaged with our platform. Additionally, we experienced an increase in engagement from existing clients as SMBs increased virtual interactions with their customers in lieu of in-person interactions as a result of the COVID-19 pandemic.
Key Components of Our Results of Operations
Revenue
We generate Revenue from our four business segments: Thryv U.S. Marketing Services, Thryv U.S. SaaS, Thryv International Marketing Services and Thryv International SaaS. Our primary sources of Revenue in our Thryv U.S. Marketing Services and Thryv International Marketing Services segments are Print and Digital services. Our primary source of Revenue in our Thryv U.S. SaaS and Thryv International SaaS segments is our Thryv platform.
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 benefit, and other income (expense), which includes a bargain purchase gain as a result of the Vivial Acquisition, a (loss) resulting from the termination of leaseback obligations associated with land and a building in Tucker, Georgia, and foreign currency-related income and expense.
30


Results of Operations

Consolidated Results of Operations
The following table sets forth certain consolidated financial data for each of the periods indicated:
Three Months Ended June 30,
2022 (1)
2021 (2)
(unaudited)
(in thousands of $)Amount% of RevenueAmount% of Revenue
Revenue$333,995 100 %$291,047 100 %
Cost of services106,013 31.7 %112,607 38.7 %
Gross profit227,982 68.3 %178,440 61.3 %
 
Operating expenses:
Sales and marketing91,813 27.5 %87,394 30.0 %
General and administrative52,650 15.8 %33,100 11.4 %
Impairment charges222 0.1 %3,611 1.2 %
Total operating expenses144,685 43.3 %124,105 42.6 %
Operating income83,297 24.9 %54,335 18.7 %
Other income (expense):
Interest expense(14,652)4.4 %(19,170)6.6 %
Other components of net periodic pension benefit9,153 2.7 %272 0.1 %
Other income (expense)2,404 0.7 %(2,966)1.0 %
Income before income tax expense80,202 24.0 %32,471 11.2 %
Income tax expense(22,200)6.6 %(8,112)2.8 %
Net income$58,002 17.4 %$24,359 8.4 %
Other financial data:
Adjusted EBITDA(3)
$116,000 34.7 %$96,753 33.2 %
Adjusted Gross Profit(4)
$237,250 $195,340 
Adjusted Gross Margin(5)
71.0 %67.1 %

(1)    Consolidated results of operations includes Vivial's results of operations subsequent to the Vivial Acquisition.
(2)    Consolidated results of operations includes Thryv Australia's results of operations subsequent to the March 1, 2021 acquisition date.
(3)    See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net 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.








31


Comparison of the Three Months Ended June 30, 2022 to the Three Months Ended June 30, 2021

Revenue
The following table summarizes Revenue by business segment for the periods indicated:
Three Months Ended June 30,Change
2022 (1)
2021 (2)
Amount%
(in thousands of $)(unaudited)
Thryv U.S.
Marketing Services$222,570 $202,795 $19,775 9.8 %
SaaS51,167 41,386 9,781 23.6 %
Thryv International
Marketing Services59,218 46,857 12,361 26.4 %
SaaS1,040 9 1,031 NM
Total Revenue$333,995 $291,047 $42,948 14.8 %
(1)    Thryv U.S. Marketing Services includes Vivial revenue subsequent to the Vivial Acquisition.
(2)    Thryv International includes Thryv Australia revenue subsequent to the Thryv Australia Acquisition.
Total Revenue increased by $42.9 million, or 14.8%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase in total Revenue was driven by an increase in Thryv U.S. Marketing Services Revenue of $19.8 million, an increase in the Thryv U.S. SaaS Revenue of $9.8 million, and an increase in the Thryv International Marketing Services Revenue of $12.4 million.
Thryv U.S. Revenue
Marketing Services Revenue
Thryv U.S. Marketing Services revenue increased by $19.8 million, or 9.8%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021.
Print revenue increased by $10.5 million, or 11.2%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was primarily driven by the Vivial Acquisition and the result of increasing the terms of our new Print publications from 15 months to 18 months. The increase was partially offset by the secular decline in industry demand for Print services that resulted in a 10% decline in revenue compared to the three months ended June 30, 2021, net of the impact of publication timing differences caused by our Print agreements having greater than 12 month terms. Print revenue is recognized upon delivery of the published directories. Individual directory titles have different lifecycles, with a typical lifecycle of 15 months for books published during the three months ended June 30, 2021 and 18 months during the three months ended June 30, 2022. The titles published during the three months ended June 30, 2022 are therefore different, and have longer terms, than the titles published during the three months ended June 30, 2021 and represented more revenue than the titles published during the three months ended June 30, 2021.
Digital revenue increased by $9.3 million, or 8.5%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was partially driven by Digital revenue as a result of the Vivial Acquisition. The increase was partially offset by 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.
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SaaS Revenue
Thryv U.S. SaaS revenue increased by $9.8 million, or 23.6%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase was driven by increased demand for our Thryv SaaS product 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 spend and higher engaged clients. This increase was partially offset by a decline in our lower-spend and less-engaged legacy SaaS clients that tend to have a higher churn rate.
Thryv International Revenue
Marketing Services Revenue
Thryv International Marketing Services revenue increased by $12.4 million, or 26.4%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase was driven primarily by an adjustment recognized upon the Thryv Australia Acquisition to reduce the deferred revenue balance assumed, which negatively impacted revenue recognized in the three months ended June 30, 2021 by $27.8 million. The increase in revenue was partially offset by lower Print revenue resulting from the secular decline in industry demand for Print services in Australia.
SaaS Revenue
Thryv International SaaS revenue increased $1.0 million for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase was driven by increased demand for our Thryv platform as we continue to increase sales to SMBs in Australia.

Cost of Services

Cost of services decreased by $6.6 million, or 5.9%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The decrease was primarily attributable to lower depreciation and amortization expense of $7.7 million, due to the accelerated amortization method used by the Company, along with lower expenses resulting from the impact of strategic cost-saving initiatives. These decreases were partially offset by additional Cost of services incurred in the three months ended June 30, 2022 as a result of the Vivial Acquisition.

Gross Profit

Gross profit increased by $49.5 million, or 27.8%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase in Gross profit was primarily due to higher revenue recognized by Thryv Australia. The remaining increase was primarily driven by the impact of the Vivial Acquisition, the result of increasing the terms of our print publications from 15 months to 18 months in our Thryv US Marketing Services Segment and growth in our U.S. SaaS segment. Our gross margin increased by 700 basis points to 68.3% for the three months ended June 30, 2022 compared to 61.3% for the three months ended June 30, 2021.

Operating Expenses

Sales and Marketing

Sales and marketing expense increased by $4.4 million, or 5.1%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase was primarily attributable to an increase in employee-related costs of $3.3 million, partially driven by the Vivial Acquisition and an increase in sales commissions of $3.2 million. These increases were partially offset by a decrease of $2.3 million in contract services, due to strategic cost-saving initiatives.

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General and Administrative

General and administrative expense increased by $19.6 million, or 59.1%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. This increase was primarily attributable to an increase in bad debt expense of $6.4 million and employee-related costs of $3.7 million, driven primarily by the Vivial Acquisition. General and administrative expenses also increased as a result of higher software development costs and other expenses related to the Vivial Acquisition. These increases were partially offset by a $4.2 million decrease in transaction costs related to the Thryv Australia Acquisition, which occurred in the first quarter of 2021.

Impairment Charges

Impairment charges decreased by $3.4 million for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Impairment charges of $0.2 million were incurred during the three months ended June 30, 2022, while $3.6 million of impairment charges were recognized during the three months ended June 30, 2021.

Other Income (Expense)

Interest Expense

Interest expense decreased by $4.5 million, or 23.6%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, driven primarily by lower outstanding debt balances resulting from payments made on long-term debt.

Other Components of Net Periodic Pension Benefit

Other components of net periodic pension benefit increased by $8.9 million for the three months ended June 30, 2022. This increase was primarily due to a remeasurement gain of $8.7 million, triggered by settlements occurring during the three months ended June 30, 2022, while no remeasurement gain was recognized during the three months ended June 30, 2021.

Other Income (Expense)

During the three months ended June 30, 2022, the Company recognized other income, net, of $2.4 million, which primarily represents foreign currency-related gains. During the three months ended June 30, 2021, the Company incurred other expense, net, of $3.0 million, which included a loss of $3.1 million on the termination of leaseback obligations associated with land and a building in Tucker, Georgia, and foreign currency related income of $0.1 million.

Income Tax Expense
Income tax expense increased by $14.1 million, or 173.7%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The ETR was 27.7% and 25.0% for the three months ended June 30, 2022 and 2021, respectively. The ETR differs from the 21.0% U.S. Federal statutory rate primarily due to our geographic mix of taxable income in various tax jurisdictions and permanent tax differences attributable to the net impact of non-U.S. taxing jurisdictions.

Adjusted EBITDA

Adjusted EBITDA increased by $19.2 million, or 19.9%, for the three months ended June 30, 2022 compared to the three months ended June 30, 2021. The increase in Adjusted EBITDA was primarily driven by increased revenue in the Thryv International Marketing Services segment due to an adjustment recognized upon the Thryv Australia Acquisition to reduce the deferred revenue balance assumed, which negatively impacted revenue recognized in the three months ended June 30, 2021. The remaining increase was primarily driven by the impact of the Vivial Acquisition, the result of increasing the terms of our print publications from 15 months to 18 months in our Thryv US Marketing Services Segment and growth in our Thryv U.S. SaaS segment. These increases were partially offset by the secular decline in both our Thryv U.S. and International Marketing Services segments. See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net income, the most directly comparable measure presented in accordance with GAAP.


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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:
Six Months Ended June 30,
2022 (1)
2021 (2)
(unaudited)
(in thousands of $)Amount% of RevenueAmount% of Revenue
Revenue$642,370 100 %$571,653 100 %
Cost of services216,532 33.7 %210,767 36.9 %
Gross profit425,838 66.3 %360,886 63.1 %
 
Operating expenses:
Sales and marketing185,768 28.9 %163,934 28.7 %
General and administrative104,844 16.3 %74,379 13.0 %
Impairment charges222 — %3,611 0.6 %
Total operating expenses290,834 45.3 %241,924 42.3 %
Operating income135,004 21.0 %118,962 20.8 %
Other income (expense):
Interest expense(29,519)4.6 %(34,842)6.1 %
Other components of net periodic pension benefit9,223 1.4 %725 0.1 %
Other income (expense)8,626 1.3 %(4,059)0.7 %
Income before income tax expense123,334 19.2 %80,786 14.1 %
Income tax expense(31,821)5.0 %(19,921)3.5 %
Net income$91,513 14.2 %$60,865 10.6 %
Other financial data:
Adjusted EBITDA(3)
$199,717 31.1 %$201,686 35.3 %
Adjusted Gross Profit(4)
$444,998 $389,111 
Adjusted Gross Margin(5)
69.3 %68.1 %

(1)    Consolidated results of operations includes Vivial's results of operations subsequent to the Vivial Acquisition.
(2)    Consolidated results of operations includes Thryv Australia's results of operations subsequent to the Thryv Australia Acquisition.
(3)    See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net 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 Six Months Ended June 30, 2022 to the Six Months Ended June 30, 2021

Revenue
The following table summarizes revenue by business segment for the periods indicated:
Six Months Ended June 30,Change
2022 (1)
2021 (2)
Amount%
(in thousands of $)(unaudited)
Thryv U.S.
Marketing Services$435,103 $430,728 $4,375 1.0 %
SaaS98,510 78,637 19,873 25.3 %
Thryv International
Marketing Services106,882 62,279 44,603 71.6 %
SaaS1,875 9 1,866 NM
Total Revenue$642,370 $571,653 $70,717 12.4 %
(1)    Thryv U.S. Marketing Services includes Vivial revenue subsequent to the Vivial Acquisition.
(2)    Thryv International includes Thryv Australia revenue subsequent to the Thryv Australia Acquisition.
Total Revenue increased by $70.7 million, or 12.4%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The increase in total Revenue was driven by an increase in Thryv International Marketing Services Revenue of $44.6 million and Thryv U.S. SaaS Revenue of $19.9 million.
Thryv U.S. Revenue
Marketing Services Revenue
Thryv U.S. Marketing Services revenue increased by $4.4 million, or 1.0%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021.
Print revenue decreased by $4.5 million, or 2.2%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The decrease was primarily driven by the secular decline in industry demand for Print services that resulted in a 17% decline in revenue compared to the six months ended June 30, 2021, net of the impact of publication timing differences caused by our Print agreements having greater than 12 month terms and the extension of the terms of our Print agreements. Print revenue is recognized upon delivery of the published directories. Individual directory titles have different lifecycles, with a typical lifecycle of 15 months during the six months ended June 30, 2021. The typical life cycle was extended to 18 months for new directories published during the three months ended June 30, 2022. The titles published during the six months ended June 30, 2022 are therefore different, and the terms are longer, than the titles published during the six months ended June 30, 2021 and represented more revenue than the titles published during the six months ended June 30, 2021. This decrease was further offset by an increase in Print revenue as a result of the Vivial Acquisition.
Digital revenue increased by $8.9 million, or 4.0%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. This increase was primarily driven by Digital revenue as a result of the Vivial Acquisition. This increase was partially offset by 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.
SaaS Revenue

Thryv U.S. SaaS revenue increased by $19.9 million, or 25.3%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The increase was driven by increased demand for our Thryv SaaS product 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 spend and higher engaged clients. This increase was partially offset by a decline in our lower-spend and less-engaged legacy SaaS clients that tend to have a higher churn rate.
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Thryv International Revenue
Marketing Services Revenue
Thryv International Marketing Services revenue increased by $44.6 million, or 71.6%, for the six months ended June 30, 2022 compared to the four months ended June 30, 2021. As the Thryv Australia Acquisition was completed on March 1, 2021, no revenue was recognized for Thryv International during the two months ended February 28, 2021. In addition, upon the Thryv Australia Acquisition, an adjustment was recognized to reduce the deferred revenue balance assumed, which negatively impacted revenue recognized in the four months ended June 30, 2021 by $37.9 million. These increases in revenue were partially offset by lower Print revenue resulting from the secular decline in industry demand for Print services in Australia.
SaaS Revenue
Thryv International SaaS increased $1.9 million for the six months ended June 30, 2022 compared the four months ended June 30, 2021. The increase was driven by increased demand for our Thryv platform as we continue to increase sales to SMBs in Australia.

Cost of Services
Cost of services increased by $5.8 million, or 2.7%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The increase was primarily attributable to $11.9 million of printing, distribution and digital and fulfillment support costs, primarily related to the Vivial Acquisition. Contract Services also increased $9.5 million, primarily related to the Vivial Acquisition and continued investments in the Thryv platform. The increase was partially offset by a $9.1 million decrease in depreciation and amortization expense, driven by the accelerated amortization method used by the Company.
Gross Profit

Gross profit increased by $65.0 million, or 18.0%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The increase in Gross profit was primarily due to higher revenue from Thryv Australia and growth in our SaaS segments. Our gross margin increased by 320 basis points to 66.3% for the six months ended June 30, 2022 compared to 63.1% for the six months ended June 30, 2021.

Operating Expenses

Sales and Marketing

Sales and marketing expense increased by $21.8 million, or 13.3%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The increase was primarily attributable to $9.1 million of additional employee-related costs primarily related to the acquisitions of Thryv Australia and Vivial, an increase in commission expenses of $9.4 million as a result of the Vivial Acquisition and higher Thryv platform sales, and an increase in advertising and sales promotion expenses of $5.4 million, primarily driven by costs incurred to promote the Thryv platform.

General and Administrative

General and administrative expense increased by $30.5 million, or 41.0%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. This increase was primarily attributable to an increase in bad debt expense of $7.6 million, and higher employee-related costs, driven by the Vivial Acquisition of $12.7 million. General and administrative expenses also increased as a result of higher software development costs and other expenses related to the Vivial Acquisition. The increase was partially offset by a $12.7 million decrease in transaction costs related to the Thryv Australia Acquisition, which occurred in the first quarter of 2021.

Impairment Charges

Impairment charges decreased by $3.4 million for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. Impairment charges of $0.2 million were incurred during the six months ended June 30, 2022, while $3.6 million of impairment charges were recognized during the six months ended June 30, 2021.

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Other Income (Expense)

Interest Expense

Interest expense decreased by $5.3 million, or 15.3%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 driven primarily by lower outstanding debt balances resulting from payments made on long-term debt.

Other Components of Net Periodic Pension Benefit
Other components of net periodic pension benefit increased by $8.5 million for the six months ended June 30, 2022. The increase was primarily due to a remeasurement gain of $8.7 million recognized during the six months ended June 30, 2022, compared to a benefit of $0.2 million recognized during the six months ended June 30, 2021.

Other Income (Expense)
During the six months ended June 30, 2022, the Company incurred other income, net, of $8.6 million, which primarily represents the $7.0 million bargain purchase gain as a result of the Vivial Acquisition. During the six months ended June 30, 2021, the Company incurred other expense of $4.1 million, which included a loss of $3.1 million on the termination of leaseback obligations associated with land and a building in Tucker, Georgia.

Income Tax Expense
Income tax expense increased by $11.9 million, or 59.7%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The ETR was 25.8% and 24.7% for the six months ended June 30, 2022 and 2021, respectively. The ETR differs from the 21.0% U.S. Federal statutory rate primarily due to our geographic mix of taxable income in various tax jurisdictions and permanent tax differences attributable to the net impact of non-U.S. taxing jurisdictions.

Adjusted EBITDA

Adjusted EBITDA decreased by $2.0 million, or 1.0%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The decrease in in Adjusted EBITDA was primarily driven by the secular decline in both our Thryv U.S. and International Marketing Services segments. These decreases were partially offset by increased revenue in the Thryv International Marketing Services segment due to an adjustment recognized upon the Thryv Australia Acquisition to reduce the deferred revenue balance assumed, which negatively impacted revenue recognized in the six months ended June 30, 2021. These decreases were further offset by the impact of the Vivial Acquisition and the result of increasing the terms of our print publications from 15 months to 18 months in our Thryv U.S. Marketing Services Segment. See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net income, the most directly comparable measure presented in accordance with GAAP.
Non-GAAP Financial Measures

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States. We also present Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin, as defined below, as non-GAAP financial measures in this Quarterly 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 income plus Interest expense, Income tax expense, Depreciation and amortization expense, Loss on early extinguishment of debt, Restructuring and integration expenses, Transaction costs, Stock-based compensation expense, and non-operating expenses, such as, Other components of net periodic pension (benefit) cost, Non-cash (gain) loss from remeasurement of indemnification asset, and certain unusual and
38


non-recurring charges that might have been incurred. Adjusted EBITDA should not be considered as an alternative to Net 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 income:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Reconciliation of Adjusted EBITDA
Net income$58,002 $24,359 $91,513 $60,865 
Interest expense14,652 19,170 29,519 34,842 
Income tax expense22,200 8,112 31,821 19,921 
Depreciation and amortization expense20,592 29,908 42,561 49,626 
Loss on termination of leaseback obligations— 3,110 — 3,409 
Restructuring and integration expenses (1)
4,822 3,489 10,649 12,723 
Transaction costs (2)
1,616 5,440 3,336 15,986 
Stock-based compensation expense (3)
3,810 1,921 5,738 3,892 
Other components of net periodic pension (benefit) cost (4)
(9,153)(272)(9,223)(725)
Non-cash (gain) from remeasurement of indemnification asset (5)
(487)(844)(887)(844)
Impairment charges 222 3,611 222 3,611 
Other (6)
(276)(1,251)(5,532)(1,620)
Adjusted EBITDA$116,000 $96,753 $199,717 $201,686 
(1)For the three and six months ended June 30, 2022 and 2021, 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 Vivial Acquisition, Thryv Australia Acquisition and other transaction costs.
(3)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 4, Fair Value Measurements, to our consolidated financial statements included in Part I, Item 1 in this Quarterly Report for more information.
(4)Other components of net periodic pension (benefit) 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 (benefit) cost relates to the mark-to-market pension remeasurement.
(5)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.
(6)Other primarily includes expenses related to potential non-income-based tax liabilities and foreign exchange-related expense. Additionally, during the six months ended June 30, 2022, Other includes the bargain purchase gain as a result of the Vivial Acquisition.
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The following tables set forth reconciliations of Adjusted Gross Profit and Adjusted Gross Margin, to their most directly comparable GAAP measures, Gross profit and Gross margin:
Three Months Ended June 30, 2022
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Reconciliation of Adjusted Gross Profit
Gross profit$151,774 $32,092 $43,627 $489 $227,982 
Plus:
Depreciation and amortization expense4,393 1,012 3,666 66 9,137 
Stock-based compensation expense 105 26 — — 131 
Adjusted Gross Profit$156,272 $33,130 $47,293 $555 $237,250 
Gross Margin68.2 %62.7 %73.7 %47.0 %68.3 %
Adjusted Gross Margin70.2 %64.7 %79.9 %53.4 %71.0 %
Three Months Ended June 30, 2021
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Reconciliation of Adjusted Gross Profit
Gross profit$136,831 $25,314 $16,290 $5 $178,440 
Plus:
Depreciation and amortization expense4,424 901 11,489 3 16,817 
Stock-based compensation expense 68 15 — — 83 
Adjusted Gross Profit$141,323 $26,230 $27,779 $8 $195,340 
Gross Margin67.5 %61.2 %34.8 %55.6 %61.3 %
Adjusted Gross Margin69.7 %63.4 %59.3 %88.9 %67.1 %
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Six Months Ended June 30, 2022
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Reconciliation of Adjusted Gross Profit
Gross profit$288,284 $61,501 $75,343 $710 $425,838 
Plus:
Depreciation and amortization expense8,788 1,991 8,032 142 18,953 
Stock-based compensation expense 166 41 — — 207 
Adjusted Gross Profit$297,238 $63,533 $83,375 $852 $444,998 
Gross Margin66.3 %62.4 %70.5 %37.9 %66.3 %
Adjusted Gross Margin68.3 %64.5 %78.0 %45.4 %69.3 %
Six Months Ended June 30, 2021
Thryv U.S.Thryv International
(in thousands)Marketing ServicesSaaSMarketing ServicesSaaSTotal
Reconciliation of Adjusted Gross Profit
Gross profit$292,992 $48,481 $19,408 $5 $360,886 
Plus:
Depreciation and amortization expense9,043 1,656 17,359 3 28,061 
Stock-based compensation expense 138 26 — — 164 
Adjusted Gross Profit$302,173 $50,163 $36,767 $8 $389,111 
Gross Margin68.0 %61.7 %31.2 %55.6 %63.1 %
Adjusted Gross Margin70.2 %63.8 %59.0 %88.9 %68.1 %
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., who 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 Term Loan (as defined below) and funds available under the 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 ABL Facility will be sufficient to meet our liquidity requirements, such as working capital requirements for our operations, business development and investment activities, and payments for our debt 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. As a result of COVID-19, many SMBs may continue to experience a reduction in revenues and cash flows and may not have the ability to pay amounts owed to us. While COVID-19 has not had a material impact on our liquidity to date, we continue to assess our business operations and the impact that COVID-19 may have on our financial results and liquidity. We continue to monitor our capital requirements to ensure our needs are in line with available capital resources.

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In addition, our board of directors 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 13, Contingent Liabilities, to our consolidated financial statements included in Part I, Item 1 in this Quarterly 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:
Six Months Ended June 30,$
20222021Change
(in thousands)(unaudited)
Cash flows provided by (used in):
Operating activities$56,903 $81,802 $(24,899)
Investing activities(32,425)(188,442)156,017 
Financing activities(21,481)123,479 (144,960)
Effects of exchange rate changes on Cash and cash equivalents(627)(819)192 
Increase in Cash and cash equivalents$2,370 $16,020 $(13,650)

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by $24.9 million, or 30.4%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The decrease was primary due to changes in working capital. This was partially offset by lower restructuring and integration and transaction cost payments of $14.7 million, related to the Vivial Acquisition on January 1, 2022 compared to the Thryv Australia Acquisition on March 1, 2021, and lower interest payments of $12.7 million compared to the six months ended June 30, 2021.

Cash Flows from Investing Activities

Net cash used in investing activities decreased by $156.0 million, or 82.8%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The decrease was primarily due to the difference in the cash paid of $174.2 million in connection with the Thryv Australia Acquisition on March 1, 2021, compared to the cash paid of $22.8 million in connection with the Vivial Acquisition on January 21, 2022.

Cash Flows from Financing Activities

Net cash provided by financing activities decreased by $145.0 million, or 117.4%, for the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The decrease was primarily driven by net proceeds received from the Term Loan of $679.0 million and cash used to repay the remaining outstanding principal balance of the Senior Term Loan of $449.6 million, used to finance the Thryv Australia Acquisition and refinance the Senior Term Loan, during the six months ended June 30, 2021. This was partially offset by payments made on the Term Loan of $42.5 million during the six months ended June 30, 2022, compared to payments made on the Term Loan of $88.0 million during the six months ended June 30, 2021. The decrease was further offset by an increase in net proceeds from the ABL Facility of $37.9 million, as a result of lower proceeds of $57.3 million and lower payments of $95.2 million on the ABL Facility during the six months ended June 30, 2022.
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Debt

Term Loan

On March 1, 2021, the Company entered into a Term Loan credit agreement (the “Term Loan”). The proceeds of the Term Loan were used to finance the Thryv Australia Acquisition, refinance in full the Company's existing term loan facility (the “Senior Term Loan”) and pay fees and expenses related to the Thryv Australia Acquisition and related financing.

The Term Loan established a senior secured term loan facility (the “Term Loan Facility”) in an aggregate principal amount equal to $700.0 million, of which 38.4% was held by related parties who were equity holders of the Company as of March 1, 2021. The Term Loan Facility matures on March 1, 2026 and borrowings under the Term Loan Facility bear interest at a fluctuating rate per annum equal to, at the Company’s option, LIBOR or a base rate, in each case, plus an applicable margin per annum equal to (i) 8.50% (for LIBOR loans) and (ii) 7.50% (for base rate loans). The Term Loan Facility requires mandatory amortization payments equal to $17.5 million per fiscal quarter. As of June 30, 2022, 7.4% of the Term Loan was held by related parties who were equity holders of the Company on that date.
ABL Facility
On March 1, 2021, the Company entered into an agreement to amend (the “ABL Amendment”) the June 30, 2017 ABL Facility (the “ABL Facility”). The ABL Amendment was entered into in order to permit the Senior Term Loan refinancing, the Thryv Australia Acquisition and make certain other changes to the ABL credit agreement, including, among others:

•revise the maximum revolver amount to $175.0 million;
•reduce the interest rate per annum to (i) 3-month LIBOR plus 3.00% for LIBOR loans and (ii) base rate plus 2.00% for base rate loans;
•reduce the commitment fee on undrawn amounts under the ABL Facility to 0.375%;
•extend the maturity date of the ABL Facility to the earlier of March 1, 2026 and 91 days prior to the stated maturity
date of the Term Loan Facility;
•add the Australian subsidiaries acquired pursuant to the Thryv Australia Acquisition as borrowers and guarantors, and establish an Australian borrowing base; and
•make certain other conforming changes consistent with the Term Loan 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 Term Loan Facility, payments of the Term Loan balance are determined by the Company's Excess Cash Flow (as defined within the Term Loan Facility). We are in compliance with all covenants under the Term Loan and ABL Facility as of June 30, 2022. We had total recorded debt outstanding of $539.2 million (net of $16.9 million of unamortized original issue discount (“OID”) and debt issuance cost) at June 30, 2022, which was comprised of amounts outstanding under our Term Loan of $499.5 million and ABL Facility of $56.6 million.
As of June 30, 2022, we had borrowing capacity of $76.2 million under the ABL Facility.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates have not changed from those described in our 2021 Form 10-K, under “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates.”
Recent Accounting Pronouncements
For a description of accounting pronouncements recently adopted and issued, see “Part I, Item 1. Note 1, Description of Business and Summary of Significant Accounting Policies.”

43


Item 3.    Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

As of June 30, 2022, we had total debt outstanding of $539.2 million (net of $16.9 million of unamortized OID and debt issuance costs), which was comprised of amounts outstanding under our Term Loan of $499.5 million and ABL Facility of $56.6 million. Substantially all this debt bears interest at floating rates. Changes in interest rates affect the interest expense we pay on our floating rate debt. A hypothetical 100 basis point increase in interest rates would increase our interest expense by approximately $5.6 million annually, based on the debt outstanding at June 30, 2022.

Foreign Exchange Currency Risk

We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the Australian dollar. Since we translate foreign currencies into U.S. dollars for financial reporting purposes, currency fluctuations can have an impact on our financial results.

We have experienced and will continue to experience fluctuations in our Net income as a result of transaction gains or losses related to revaluing certain current asset and current liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. We recognized immaterial amounts of foreign currency gains and losses in each of the periods presented. We have not hedged our foreign currency transactions to date. We are evaluating the costs and benefits of initiating a hedging program and may in the future hedge selected significant transactions denominated in currencies other than the U.S. dollar as we expand our international operations and our risk grows.

Item 4.    Controls and Procedures

Acquisition

We are in the process of integrating Vivial, a marketing and advertising company that we acquired on January 21, 2022. Management’s assessment and conclusion on the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2022 excludes an assessment of the internal control over financial reporting related to the Vivial Acquisition. The Vivial Acquisition represented 9% and 8% of our consolidated revenue included in our consolidated financial statements for the three and six months ended June 30, 2022, respectively.

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2022.

Changes in Internal Control over Financial Reporting

We have completed one acquisition in the past 12 months. As part of our ongoing integration activities, we continue to implement our controls and procedures over the business we acquired and to augment our company-wide controls to reflect the risks inherent in our acquisition. Throughout the integration process, we monitor these efforts and take corrective action as needed to reinforce the application of our controls and procedures. Other than the foregoing, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended June 30, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.     OTHER INFORMATION

Item 1.    Legal Proceedings

Information in response to this item is provided in “Part I - Item 1. Note 13, Contingent Liabilities” and is incorporated by reference into Part II of this Quarterly Report on Form 10-Q.

44


Item 1A.    Risk Factors

There have been no material changes to our risk factors disclosed in our 2021 Form 10-K.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.    Defaults Upon Senior Securities

None.

Item 4.    Mine Safety Disclosures

Not Applicable.

Item 5.    Other Information

On June 17, 2022, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) approved a form of award agreement (the “RSU Award Agreement for Non-Employee Directors”) for grants of restricted stock units (“RSUs”) to non-employee directors under the Company’s 2020 Incentive Award Plan (the “2020 Plan”). Pursuant to the RSU Award Agreement for Non-Employee Directors, each RSU will entitle the recipient to one share of the Company’s common stock, subject to time-based vesting conditions that will be set forth in individual agreements.

The foregoing description of the RSU Award Agreement for Non-Employee Directors does not purport to be complete and are qualified in their entirety by reference to the full text of each agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

On June 17, 2022, the Compensation Committee approved grants of RSU awards under the 2020 Plan to the Company’s non-employee directors, as set forth in the table below.

Name and Principal PositionNumber of RSU Awards
Amer Akhter, Director5,392 
Bonnie Kintzer, Director5,392 
Ryan O'Hara, Director5,392 
John Slater, Lead Independent Director5,392 
Lauren Vaccarello, Director5,392 
Heather Zynczak, Director
5,392 

The RSU awards were granted pursuant to award agreements that are materially consistent with the form of RSU Award Agreement for Non-Employee Directors. The RSUs will vest in June 2023, subject to the recipient’s continued service as a director through such dates.
45


Item 6.     Exhibits

The following documents are filed as an exhibit to this Quarterly Report on Form 10-Q:

Exhibit No.Description
2.1
3.1
3.2
10.1+*
31.1*
31.2*
32.1**
32.2**
101.INS*Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*Inline XBRL Taxonomy Extension Schema Document.
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document
104
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, formatted in Inline XBRL (included in Exhibits 101).

*Filed herewith
**    Furnished herewith
+    Management contract of compensatory plan or arrangement
46



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THRYV HOLDINGS, INC.
August 4, 2022By:/s/ Joseph A. Walsh
Joseph A. Walsh
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
August 4, 2022By:/s/ Paul D. Rouse
Paul D. Rouse
Chief Financial Officer, Executive Vice President and Treasurer
(Principal Financial Officer)





47
2200 W. Airfield Drive - DFW Airport, TX 75261 Exhibit 10.1 THRYV HOLDINGS, INC. 2020 INCENTIVE AWARD PLAN RESTRICTED STOCK UNIT AWARD AGREEMENT NON-EMPLOYEE DIRECTOR This Restricted Stock Unit Award Agreement (this “Award Agreement”), dated as of the Grant Date set forth below, sets forth the terms and conditions of the grant by Thryv Holdings, Inc., a Delaware corporation (the “Company”) to the Participant (as set forth below) of a number of Restricted Stock Units (the “RSUs”) as set forth below (the “Award”) pursuant to the Company’s 2020 Incentive Award Plan, as may be amended from time to time (the “Plan”). The Award is subject to all of the terms and conditions set forth in this Award Agreement as well as in the Plan (the terms of which are incorporated herein by reference). Capitalized terms used in this Award Agreement and not defined herein have the meanings ascribed to them in the Plan. Name of Participant: #ParticipantName# Grant Date: #GrantDate# Total Number of RSUs: #QuantityGranted# Vesting Schedule: Except as otherwise provided in the Award Agreement, the Award shall vest according to the following schedule: 100% of the RSUs will vest on the first anniversary of the Grant Date (the “Vesting Date”), subject to the Participant’s Continuous Service on the Vesting Date. 1. Grant of RSU Award. (a) Grant. Pursuant to this Award Agreement, the Company hereby grants to the Participant an Award under the Plan of the total number of RSUs indicated above. The Award is being granted pursuant to the terms of the Plan. (b) Consideration; Subject to Plan. The grant of the Award is made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms and conditions of the Plan. 2. Vesting Schedule; Termination of Continuous Service. Except as otherwise provided in this Section 2, the RSUs will become vested in such amounts and at such times as set forth above. (a) Termination by the Company without Cause (no Change in Control) or due to Disability. In the event the Participant’s Continuous Service is terminated by the Company without

 
2200 W. Airfield Drive - DFW Airport, TX 75261 Cause and such termination does not occur within the period starting six months prior to a Change in Control and ending 12 months following a Change in Control (the “Change in Control Period”) or due to the Participant’s Disability, a pro rata portion of the unvested RSUs that otherwise would have vested on the Vesting Date will become immediately vested and settled in accordance with Section 3(a). Such pro rata portion shall be determined based on a fraction, (i) the numerator of which equals the number of days elapsed from the Grant Date through the date of such termination and (ii) the denominator of which equals 365. Except as provided in the preceding sentence, any RSUs that are unvested as of the date of termination shall be forfeited and canceled for no consideration. (b) Termination by the Company without Cause During the Change in Control Period. In the event the Participant’s Continuous Service is terminated by the Company without Cause during the Change in Control Period, all unvested RSUs will become vested as of the later of the date of such termination or the date of the Change in Control. (c) Termination due to Death. In the event the Participant’s Continuous Service is terminated as a result of the Participant’s death, a pro rata portion of the unvested RSUs that otherwise would have vested on the Vesting Date will become immediately vested and settled in accordance with Section 3(b). Such pro rata portion shall be determined based on a fraction, (i) the numerator of which equals the number of days elapsed from the Grant Date through the date of such termination and (ii) the denominator of which equals 365. Except as provided in the preceding sentence, any RSUs that are unvested as of the date of termination shall be forfeited and canceled for no consideration. (d) Termination by Participant. In the event the Participant’s Continuous Service is terminated by the Participant for any reason, or for no reason, all RSUs that are unvested as of the date of termination shall be forfeited and canceled for no consideration. Except as set forth in Section 9, any vested RSUs that have not been settled will be settled in accordance with Section 3(a) and the Participant will be eligible to retain all shares of Stock issued on settlement of RSUs under this Award. (e) Termination by the Company for Cause. In the event the Participant’s Continuous Service is terminated by the Company for Cause (which includes, for the avoidance of doubt, the removal of Participant from the Board for Cause), all RSUs, including any RSUs that have vested but have not been settled, shall be forfeited and canceled for no consideration upon notification to the Participant of termination of the Participant’s Continuous Service for Cause, and any shares of Stock received upon settlement of any RSUs under this Award Agreement will be subject to claw-back by the Company. If the Participant is under investigation for a potential “for Cause” termination, all of the Participant’s rights under the Award, including the right to vesting or settlement of any RSUs, shall be suspended during the investigation period and the Participant shall not be permitted to receive treatment consistent with another type of termination of Continuous Service prior to the conclusion of the investigation. Accordingly, the forfeiture and claw-back provisions above will remain in force until such time as the Committee determines whether to terminate the Participant’s Continuous Service for Cause and cause any unvested RSUs to be forfeited and any shares of Stock received upon settlement of any RSUs under this Award Agreement that previously vested to be subject to claw-back.

 
2200 W. Airfield Drive - DFW Airport, TX 75261 (f) Accelerated Vesting on Change in Control if Award not Assumed or Substituted. In the event there is a Change in Control and the surviving, successor or transferee corporation fails to either assume the Award or provide for substitution of a comparable award, then all unvested RSUs shall become vested immediately prior to the Change in Control. (g) Committee Determinations. The Committee shall have absolute discretion to determine the date and circumstances of termination of the Participant’s Continuous Service for purposes of the Award, and its determination shall be final, conclusive and binding upon the Participant and all other persons. 3. Settlement. (a) In General. Subject to the terms of this Award Agreement and except as provided in Section 3(b), upon vesting of any of the RSUs the Company shall deliver to the Participant one share of Stock for each such vested RSU as soon as reasonably practicable after the Vesting Date, and in any event no later than the 30th day after the Vesting Date. Upon delivery, such shares of Stock shall be fully assignable, saleable and transferable by the Participant, provided that any such assignment, sale, transfer or other alienation with respect to such shares of Stock shall be in accordance with applicable securities laws and Company policies. (b) Upon Termination due to Participant’s Death. Notwithstanding anything in this Award Agreement to the contrary, upon vesting of any of the RSUs under Section 2(b) as a result of the Participant’s death, the Company shall deliver to the Participant’s Beneficiary for each such vested RSU, as determined by the Committee in its sole discretion, one share of Stock, or the Fair Market Value thereof, as soon as reasonably practicable, and in any event no later than the 90th day after the Participant’s date of death. Any shares of Stock so delivered shall be fully assignable, saleable and transferable by the Participant’s Beneficiary, provided that any such assignment, sale, transfer or other alienation with respect to such shares of Stock shall be in accordance with applicable securities laws and Company policies. 4. Stock Ownership and Retention Guidelines. If the Participant is subject to Section 16 of the Exchange Act at the time of settlement of any RSUs under this Award, any shares of Stock issued in respect of such RSUs pursuant to the Award shall be subject to the stock ownership and retention guidelines set forth in Exhibit A, which shall be considered a part of this Award Agreement. 5. Securities Law Compliance. The grant of this Award and the issuance and transfer of shares of Stock underlying the RSUs on settlement thereof shall be subject to compliance by the Company and the Participant with all applicable requirements of securities laws and with all applicable requirements of any stock exchange on which the Stock may be listed at the time of such issuance or transfer. In no event may shares of Stock be issued or transferred on settlement of RSUs unless the shares of Stock to be issued are then registered under the Securities Act or, if not registered, the Company has determined that the issuance of the shares of Stock would be exempt from the registration requirements of the Securities Act.

 
2200 W. Airfield Drive - DFW Airport, TX 75261 6. Stop Transfer Instructions. To ensure compliance with the restrictions imposed by this Award Agreement, the Company may issue appropriate “stop-transfer” instructions to its transfer agent, if any, and if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. 7. Taxes. The Participant is ultimately liable and responsible for all taxes owed in connection with this Award, regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with this Award. 8. Restrictions. Except to the extent otherwise permitted and approved by the Committee (after taking into account applicable securities laws), the RSUs may not be assigned, alienated, pledged, attached, sold or otherwise transferred by the Participant, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall result in such RSUs being automatically cancelled by the Company. In such case, all of the Participant’s rights to the RSUs shall immediately terminate. 9. Restrictive Covenants. (a) Without limiting any other non-competition, non-solicitation, non-disparagement or non-disclosure or other similar agreement to which the Participant may be a party, as an inducement to the Company to enter into this Award Agreement, the Participant represents to, and covenants with or in favor of, the Company that the Participant will comply with all of the restrictive covenants set out in the Addendum to this Award Agreement (the “Restrictive Covenants”), which shall be considered a part of this Award Agreement, as a condition to the Company’s obligation to provide the RSUs to the Participant under the Award or to settle the RSUs. (b) In the event the Participant violates any of the Restrictive Covenants, in addition to any other remedy that may be available at law or in equity, all RSUs, including any RSUs that have vested but have not been settled, shall be forfeited and canceled for no consideration as of the date on which such violation first occurs, and any shares of Stock received upon settlement of RSUs under the Award will be subject to claw-back by the Company. The foregoing rights and remedies are in addition to any other rights and remedies that may be available to the Company and shall not prevent (and the Participant shall not assert that they shall prevent) the Company from bringing one or more actions in any applicable jurisdiction to recover damages as a result of the Participant’s breach of any of the Restrictive Covenants. 10. Adjustment in Certain Events. The RSUs, and the shares of Stock underlying the RSUs, may be adjusted or terminated in any manner as contemplated by Section 9(d) of the Plan. 11. No Guarantee of Continued Service. The grant of this Award does not constitute an assurance of continued service for any period or in any way interfere with the Company’s right to

 
2200 W. Airfield Drive - DFW Airport, TX 75261 terminate the Participant’s Continuous Service or to change the terms and conditions of the Participant’s Continuous Service. 12. Notices. Any notice to be given under the terms of this Award Agreement shall be in writing and addressed to the Company at its principal office (currently 2200 West Airfield Drive, P.O. Box 619810, DFW Airport, TX 75261; Attention: Jennifer Sloan, Director, Total Rewards) with a copy emailed to the attention of Jennifer Sloan, Director, Total Rewards (Jennifer.sloan@thryv.com), and to the Participant at the address reflected or last reflected on the records of the Company. Any notice shall be enclosed in a properly sealed and addressed envelope, registered or certified, and deposited (postage and registry or certification fee prepaid) in a government post office of mailbox or sent by nationally recognized overnight courier, and a copy of such notice shall be emailed. Any such notice shall be given only when received, but if the Participant is no longer providing services to the Company, the notice shall be deemed to have been duly given five business days after the date mailed in accordance with this Section 12 (or, if sent for overnight delivery by a nationally recognized overnight courier, on the next business day). 13. Plan. The Award and all of the Participant’s rights under this Award Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference. The Participant agrees to be bound by the terms of the Plan and this Award Agreement. The Participant acknowledges having read the Plan and this Award Agreement. If any of the terms of this Award Agreement conflict with the terms of the Plan, the terms of the Plan shall be controlling. 14. Administration. The Committee has the sole power to interpret the Plan and this Award Agreement and to act upon all matters relating to Awards granted under the Plan. Any decision, determination, interpretation, or other action taken pursuant to the provisions of the Plan by the Committee shall be final, binding, and conclusive. 15. Section 409A. This Award Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Award Agreement comply with Section 409A of the Code and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code. 16. Entire Agreement; Amendment. (a) This Award Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof. (b) The Committee may from time to time amend the terms of this Award Agreement or the rules and regulations governing this Award Agreement in accordance with the terms of the Plan in

 
2200 W. Airfield Drive - DFW Airport, TX 75261 effect at the time of such amendment, but no amendment which is unfavorable to the Participant can be made without the Participant’s written consent. The Plan is of unlimited duration, but may be amended, terminated or discontinued by the Board at any time. However, no amendment, termination or discontinuance of the Plan will unfavorably affect this Award. 17. Effect of this Award Agreement. This Award Agreement shall be assumed by, be binding upon and inure to the benefit of any successor or successors to the Company. 18. Governing Law; Arbitration; Severability; Miscellaneous. (a) Governing Law. Except as and to the extent otherwise provided in the Addendum, this Award Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to conflict of law principles thereof that would give effect to the law of another state. (b) Construction. The language of all parts of the Plan and the Award Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against either of the parties. There are no other representations, agreements, arrangements or understandings, oral or written, between and among the parties hereto relating to this Award which are not fully expressed herein. If a court of competent jurisdiction determines that any provision of this Award Agreement, including the Restrictive Covenants, is unenforceable or overbroad, the parties agree that they shall ask the court to modify, or “blue pencil,” such provision to allow for enforcement to the fullest extent permitted by law. (c) Limited Rights. The Participant shall have no rights as a stockholder of the Company with respect to the RSUs and no entitlement to the privileges of ownership in respect of shares of Stock underlying the RSUs until such shares have been delivered to the Participant. The Participant’s rights with respect to the shares of Stock delivered upon settlement of the Award after the date of such issuance are subject to the terms and conditions set forth herein. (d) Severability. If it is determined that any portion of this Award Agreement, including the Restrictive Covenants, or the Plan is in violation of any statute or public policy, then only the portions of the Award Agreement or the Plan, as applicable, that violate such statute or public policy shall be stricken, and all portions of the Award Agreement and the Plan that do not violate any statute or public policy shall continue in full force act. Furthermore, it is the parties’ intent that any court order striking any portion of the Award Agreement or the Plan should modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties hereunder. (e) Counterparts. This Award Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 
2200 W. Airfield Drive - DFW Airport, TX 75261 (f) Section Headings. The section headings of this Award Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof. (g) Death or Disability. References herein to obligations applicable to the Participant (excluding, for purposes of clarity, the requirement that all services that are a precondition to vesting of the Award be performed by the Participant) shall include references to the Participant’s Beneficiary or personal representative if the Participant dies or becomes incapacitated. (h) Further Assurances. Each of the parties hereto shall use its reasonable and diligent best efforts to proceed promptly with the transactions contemplated herein, to fulfill the conditions precedent for such party’s benefit or to cause the same to be fulfilled and to execute such further documents and other papers and perform such further acts as may be reasonably required or desirable to carry out the provisions hereof and the transactions contemplated herein. (i) Data Privacy. The Participant expressly consent to the collection, use and transfer, in electronic or other form, of the Participant’s Data by and among the Company, its Subsidiaries and Affiliates, and any broker or third party assisting the Company in administering the Plan or providing recordkeeping services for the Plan, for the purpose of implementing, administering and managing participation in the Plan, as further described in Section 9(u) of the Plan. Through acceptance of the Award, the Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or any of its Affiliates and Subsidiaries or the Participant may elect to deposit any shares of Stock. The Company may cancel the Participant’s ability to participate in the Plan and, in the Committee’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws his or her consents as described herein. If the Participant is a citizen or resident of Australia, the Participant consent to the disclosure of the Participant’s Data under this Section 18(i) includes disclosure to overseas recipients (including persons located in the United States of America and elsewhere). The Participant acknowledges that, by consenting to such disclosures, Australian Privacy Principle 8.1 will not apply to the disclosure and as a result the Company or any of its Subsidiaries or Affiliates (as applicable) will not be accountable under the Privacy Act 1988 (Commonwealth) (the “Australian Privacy Act”) and the Participant may not be able to seek redress under the Australian Privacy Act in respect of this Data. 19. Insider Trading Policy. As a reminder you are required to comply with our Insider Trading Policy. This includes not trading in Thryv securities if you are aware of any material nonpublic information related to Thryv. If you are deemed as a “Covered Person” you must also always obtain pre- clearance from Lesley Bolger, Chief Legal Officer & HR. [Signature page follows]

 
2200 W. Airfield Drive - DFW Airport, TX 75261 IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Unit Award Agreement as of the date first set forth above. THRYV HOLDINGS, INC. Name: Paul Rouse Title: Chief Financial Officer & Treasurer PARTICIPANT Signature: #Signature# Name: #ParticipantName# Date: #Date#

 
2200 W. Airfield Drive - DFW Airport, TX 75261 Addendum to Award Agreement (Non-Employee Director) RESTRICTIVE COVENANTS This Addendum is considered a part of the Award Agreement to which it is attached or otherwise accompanying. Terms not otherwise defined in this Addendum or elsewhere in the Award Agreement shall have the meaning ascribed thereto in the Plan. 1. Confidential information. (a) The Participant acknowledges that through his or her service with the Group the Participant has acquired and had access to the Confidential Information (as defined below) of the Group, and that he or she will continue to acquire and have access to such Confidential Information. The Participant further acknowledge that such Confidential Information, including trade secrets and other business processes, are utilized by the Group throughout the entire United States and in other locations in which it conducts business. The Participant agrees that the Group may prevent the use or disclosure of its Confidential Information through use of an injunction or other means and acknowledge that the Group has taken all reasonable steps necessary to protect the secrecy of the Confidential Information. The Participant agrees that he or she has not used or disclosed any Confidential Information to any third party without authorization, and will not do so in the future, and further agrees to return all documents or any other item or source containing Confidential Information or any other property of the Group, to the Group immediately upon termination of service with the Group for any reason. The Participant’s confidentiality obligation shall remain in effect, both during and after service with the Group, for as long as the information or materials in question retain their status as Confidential Information. The Participant also agrees to respond to requests by the Group for information pertaining or relating to the Group which may be within the Participant’s knowledge. This Award Agreement is not intended to, and does not, alter either the Group’s rights or the Participant’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. (b) For Participants who are citizens or residents of the United States, nothing in this Award Agreement is intended to interfere with the Participant’s right to report possible violations of law or regulation to, or to cooperate in an investigation conducted by, any governmental agency or entity, including the Securities and Exchange Commission. Pursuant to 18 U.S.C. § 1833(b), nothing in this Award Agreement shall be interpreted to expose the Participant to criminal or civil liability under Federal or state trade secret law for disclosure, in confidence, of trade secrets (i) to Federal, state, and local government officials, directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law, or (ii) in a complaint or other document filed in a lawsuit or other proceeding, provided the filing is made under seal and otherwise protected from disclosure except pursuant to court order. If the Participant files a lawsuit for retaliation for reporting a suspected violation of law, he or she may disclose trade

 
2200 W. Airfield Drive - DFW Airport, TX 75261 secrets to his or her attorney and use the trade secret information in a court proceeding, provided that the Participant files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order. (c) For purposes of the restrictive covenants set forth in this Addendum to the Award Agreement (the “Restrictive Covenants”), “Confidential Information” means all data, information, ideas, concepts, discoveries, trade secrets, inventions (whether or not patentable or reduced to practice), innovations, improvements, know-how, developments, techniques, methods, processes, treatments, drawings, sketches, specifications, designs, plans, patterns, models, plans and strategies, and all other confidential or proprietary information or trade secrets in any form or medium (whether merely remembered or embodied in a tangible or intangible form or medium) whether now or hereafter existing, relating to or arising from the past, current or potential business, activities and/or operations of the Group, including, without limitation, any such information relating to or concerning finances, sales, marketing, advertising, transition, promotions, pricing, personnel, customers, suppliers, vendors, raw partners and/or competitors. Confidential Information does not include information that (i) was known to the public prior to its disclosure to the Participant; (ii) becomes generally known to the public subsequent to disclosure to the Participant through no wrongful act of the Participant or any representative of the Participant; (iii) was known to the Participant prior to his or her service with the Group (the Company acknowledging that the Participant has had extensive experience in the Group’s industry). 2. Non-Competition. The Participant acknowledges and agrees that (i) the Participant performs services of a unique nature for the Group that are irreplaceable, and that the Participant’s performance of such services in violation of this provision to a competing business will result in irreparable harm to the Group; (ii) the Participant has had and will continue to have access to Confidential Information which, if disclosed, would unfairly and inappropriately assist in competition against the Company and its Subsidiaries and Affiliates; (iii) the Company and its Subsidiaries and Affiliates have substantial relationships with their customers and the Participant has had and will continue to have access to these customers; and (iv) the Participant has generated and will continue to generate goodwill for the Company and its Subsidiaries and Affiliates in the course of the Participant’s service. Accordingly, the Participant agrees that, during the Participant’s service with the Group and for a period of 12 months thereafter (the “Restricted Period”), the Participant will not, directly or indirectly, own, manage, operate, control, be employed or engaged by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to any person, firm, corporation or other entity, in whatever form, engaged in competition with the Company or any of its Subsidiaries or Affiliates or in any other material business in which the Company or any of its Subsidiaries or Affiliates is engaged on the date of termination or in which they have planned, on or prior to such date, to be engaged in on or after such date, in any locale of any country in which the Group conducts business or otherwise engage in conduct that interferes or conflicts with the Participant’s duties to the Group or creates a potential business or fiduciary conflict. Notwithstanding the foregoing, nothing herein shall prohibit the Participant from being a passive owner of not more than 3% of the equity securities or public debt

 
2200 W. Airfield Drive - DFW Airport, TX 75261 of a publicly traded corporation engaged in a business that is in competition with the Company or any of its Subsidiaries or Affiliates or through a private equity, venture capital or other commingled fund, so long as the Participant has no active participation in the business of such corporation. In addition, the provisions of this Section 2 of the Addendum shall not be violated by the Participant commencing employment or engagement with a subsidiary, division or unit of any entity that engages in a business in competition with the Company or any of its Subsidiaries or Affiliates so long as the Participant and such subsidiary, division or unit does not engage in a business in competition with the Company or any of its Subsidiaries or Affiliates. 3. Non-Solicitation of Employees, Non-Interference. The Participant acknowledges that through his or her service with the Group the Participant has acquired and had access to, and will continue to acquire and have access to, Confidential Information concerning the performance and qualifications of Group employees. Accordingly, the Participant agrees that during the Participant’s service with any member of the Group and for a period of 12 months thereafter, the Participant will not, except in the furtherance of the Participant’s duties to any member of the Group, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity: (A) solicit, aid or induce any employee, contractor, representative or agent of the Company or any of its Subsidiaries or Affiliates to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Group or hire or retain any such employee, contractor, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent; or (B) interfere, or aid or induce any other person or entity in interfering, with the relationship between the Company or any of its Subsidiaries or Affiliates, on the one hand, and any of their respective stockholders, partners, principals, owners, officers, directors, employees, contractors, consultants, customers, vendors, joint venturers, licensors or other business relations on the other hand. An employee, contractor, representative or agent shall be deemed covered by this Section 3 of the Addendum while so employed or retained and for a period of 12 months thereafter. The foregoing shall not be violated by general advertising not targeted at the Group’s employees, contractors, representatives or agents, serving as a reference upon request, or utilizing representatives or agents that serve multiple entities (provided that such utilization does not interfere with the Group’s relationships). 4. Reasonableness and Limits of Restrictions. The Participant agrees and acknowledges that the covenants in this Addendum (i) are reasonable, appropriate, necessary, and narrowly tailored to protect the legitimate business interests of the Company and its Subsidiaries and Affiliates, including but not limited to its legitimate interest in protecting valuable Group Confidential Information, trade secrets, customer goodwill, and specialized training provided to the Participant; (ii) are reasonable in terms of time, geographic scope, and activities restricted and are intended to operate to their maximum extent; (iii) are designed to prevent unfair competition and not to stifle the Participant’s inherent skill and experience; (iv) will not interfere with the Participant’s ability to earn a livelihood; and (v) do not confer a benefit upon the Company that is disproportionate to the detriment to the Participant. The Participant further acknowledges that he or she had a full and free choice as to whether to accept the terms of this Award Agreement, including the terms of this Addendum, and

 
2200 W. Airfield Drive - DFW Airport, TX 75261 that by accepting the Award, the Participant consents to be bound by all terms of this Award Agreement. If the Participant is last employed by a Group member in California, Colorado, Illinois, North Dakota, Oklahoma, Oregon, Washington D.C., or any other state or jurisdiction that prohibits or restricts the enforcement of agreements relating to post-service non-competition or non- solicitation of employees, then Sections 2 and 3 of this Addendum will not apply to the Participant following the termination of the Participant’s service if enforcement of such Section or Sections would be prohibited by applicable law. If the Participant is a practicing attorney, the Restrictive Covenants in Section 2 of this Addendum shall not apply to the Participant in a way that would restrict his or her ability to practice law or otherwise violate applicable rules of professional conduct. 5. Remedies for Breach of Award Agreement and Termination for Cause; Repayment of Proceeds; Claw-back Policy. The Company’s obligations to the Participant under this Award Agreement are expressly contingent upon the Participant’s performance of his or her obligations under this Award Agreement, including but not limited to those contained in this Addendum. The Participant agrees that any breach by the Participant of this Award Agreement will result in the immediate forfeiture and cancellation of the Award and will entitle the Company to all its remedies allowed in law or equity, including but not limited to the return of any shares of Stock and the proceeds received by the Participant from the sale of any shares of Stock issued on settlement of the Award. If the Participant violates this Award Agreement, including this Addendum, the Participant’s service is terminated for Cause, or the Company discovers after the termination of the Participant’s service that grounds existed for Cause at the time of such termination, then, in addition to any other remedy available (on a non-exclusive basis), the Participant shall pay to the Company, within 30 days of the Company’s request, an amount, specified by the Company, up to the sum of the then-current market value of the shares of Stock held by the Participant that were issued on settlement of the Award and the aggregate after-tax proceeds received by the Participant upon the sale or other disposition of any shares of Stock issued on settlement of the Award. The Participant and the Company agree that injury caused by the Participant’s breach may be difficult or impossible to accurately estimate, that the parties intend for the amounts discussed in the preceding sentences to provide for damages rather than a penalty, and that the sum is a reasonable estimate of the Company’s probable loss. The Participant further agrees that any breach by the Participant of the Restrictive Covenants set forth in this Addendum will cause the Company irreparable harm and shall entitle the Company to an injunction to prevent a further breach of these Restrictive Covenants by the Participant, in addition to any and all remedies available to the Company. The Participant acknowledges and agrees that quantifying the damages suffered by the Company for his or her breach of the Restrictive Covenants might not be possible or feasible, or provide adequate compensation to the Company at law and that the balance of the hardships tips in favor of enforcing this Award Agreement. Accordingly, the Participant agrees that the Company shall be entitled, if any such breach shall occur or be either threatened or attempted, if it so elects, to seek from a court a temporary, preliminary, and permanent injunction, without being required to post a bond, enjoining and restraining such breach or threatened or attempted breach. The Participant also agrees the then-current market value of any remaining shares of the Stock that the Participant holds that were issued on settlement of the Award, and any after-tax proceeds the Participant received from the sale of any shares of Stock that were issued on settlement of the Award, to the extent the

 
2200 W. Airfield Drive - DFW Airport, TX 75261 Participant has not already remitted such amounts to the Company pursuant to the terms of this Addendum, shall be a fair and reasonable measure of the Company’s damages for the Participant’s breach and does not constitute a penalty. In addition to any other remedies available to the Company in the event the Participant breaches any portion of these Restrictive Covenants, the Company shall be entitled to recover its reasonable attorney fees if it succeeds in obtaining an injunction against the Participant for breach or threatened breach of this Addendum or otherwise proving in court that the Participant violated any provision of these Restrictive Covenants. Should legal proceedings be initiated by the Company to enforce the Restrictive Covenants, the commencement of the Restricted Period will begin on the date of the entry of an order granting the Company injunctive, monetary or other relief from the Participant’s actual or threatened breach of the Restrictive Covenants; provided that if the Participant is employed by a Group member in Australia, the forgoing shall be subject to any order to the contrary by a court of applicable jurisdiction. The Participant acknowledges that the purpose and effect of the Restrictive Covenants would be frustrated by measuring the duration of the Restricted Period from the termination of the Participant’s service where the Participant fails to honor his or her obligations until directed to do so by court order. The Participant further agrees to waive and not assert any claim for advancement of legal fees, costs, or expenses pursuant to the Company’s by-laws or based on other authority in the event the Company initiates a legal action against the Participant for violation of the Restrictive Covenants. 6. Governing Law. Notwithstanding anything in the Award Agreement to the contrary, this Addendum shall be governed by and construed in accordance with the laws of the State of Texas without giving effect to any otherwise governing principles of conflicts of law; provided that, if the Participant is a resident of Australia, this Addendum shall be governed by and construed in accordance with the laws of New South Wales without giving effect to any otherwise governing principles of conflicts of law.

 

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Joseph A. Walsh, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Thryv Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 4, 2022
By: /s/ Joseph A. Walsh

Joseph A. Walsh
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)


Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Paul D. Rouse, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Thryv Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 4, 2022
By: /s/ Paul D. Rouse
Paul D. Rouse
Chief Financial Officer
(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Thryv Holdings, Inc. (the “Company”) for the period ending June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph A. Walsh, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities
Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.


Date: August 4, 2022
By: /s/ Joseph A. Walsh

Joseph A. Walsh
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Thryv Holdings, Inc. (the “Company”) for the period ending June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul D. Rouse, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities
Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.


Date: August 4, 2022
By: /s/ Paul D. Rouse
Paul D. Rouse
Chief Financial Officer
(Principal Financial Officer)