Thryv Holdings Inc.
02/26/2026 | Press release | Distributed by Public on 02/26/2026 06:33
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented and should be read in conjunction with our audited consolidated financial statements and the related notes thereto included elsewhere in this Annual Report. This discussion and analysis contains forward-looking statements, including statements regarding industry outlook, our expectations for the future of our business, and our liquidity and capital resources as well as other non-historical statements. These statements are based on current expectations and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements." Our actual results may differ materially from those contained in or implied by these forward-looking statements.
Overview
We are a software-led platform company focused on enabling small and medium-sized businesses ("SMBs") to run and grow their businesses more efficiently. Our strategy is centered on delivering a unified, extensible SaaS platform that supports customer acquisition, engagement, operations, and retention across the SMB lifecycle.
Our expertise in delivering solutions for our client base is rooted in our deep history of serving SMBs. In 2025, SMB demand for integrated technology solutions continues to grow as SMBs adapt their business and service model to facilitate remote working and virtual interactions.
We serve approximately 230,000SMB clients globallythrough two business segments: SaaS and Marketing Services.
SaaS
Our SaaS segment generated $461.0 million, $343.5 million, and $263.7 million of consolidated revenues for the years ended December 31, 2025, 2024, and 2023, respectively.
Core Platform Offerings. The core offerings of our Thryv Platform include Thryv Marketing Center and Keap®. Thryv Marketing Center contains everything an SMB owner needs to effectively market and grow their business, including easy to understand, artificial intelligence ("AI") driven analytics and lead attribution that help them understand which marketing efforts are delivering results. Keap® is our customer relationship management ("CRM") and automation engine that helps SMBs efficiently grow by automating repetitive tasks, campaigns, and processes, using automation tools and AI.
Extensions. The Thryv Platform supports extensions and integrations that allow customers to tailor the platform to their specific business needs. Our extension offerings include Thryv Leads®, growth packages, SEO tools, and website creation and management tools. These optional platform add-ons provide a seamless user experience for our end-users and drive higher engagement within the Thryv Platform while also producing incremental revenue growth.
Payment Solutions. ThryvPay® and KeapPay are our own branded payment solutions that allow users to get paid via credit card and ACH and are tailored to service-based businesses that want to provide consumers with safe, contactless, and fast online payment options.
Supporting Software Solutions. We offer supporting software solutions, including Thryv Business Center, that seamlessly integrate with our core platform offerings, providing customers with enhanced functionality and additional features.
Professional Services. We offer implementation, training, and consulting services to help customers maximize value from our platform, including onboarding and implementation, a year-one Customer Success Manager, and Thryv Success Services, which includes listing refresh services, strategic content creation, and ongoing strategic consulting.
Marketing Services
Our Marketing Services segment provides both print and digital solutions and generated $324.0 million, $480.7 million, and $653.2 million of consolidated revenues for the years ended December 31, 2025, 2024, and 2023, respectively.
Our Marketing Services offerings include our owned and operated Print Yellow Pages, which carry the "The Real Yellow Pages" tagline, our proprietary Internet Yellow Pages, known by the Yellowpages.com, Superpages.com, and Dexknows.com URLs. Our Search Engine Marketing ("SEM")solutions deliver business leads through increased traffic to clients' websites
from major engines and directories by increasing visibility and search engine results pages through paid advertising. Additionally, we offer other digital media solutions including online display and social advertising and search engine optimizationtools.
During the year ended December 31, 2024, we made a strategic decision to terminate our Marketing Services solutions by the end of 2028.
Acquisitions
On October 31, 2024, we acquired all of the outstanding capital stock of Infusion Software, Inc. d/b/a Keap ("Keap") for $77.0 millionin cash (net of $7.6 million of cash acquired). Keap was founded in 2001 and operates a SaaS email marketing and sales platform for small businesses, including products to enable customer relationship management, marketing and e-commerce. As of December 31, 2025, Keap's customer base consisted of approximately 12,000 subscribers. Keap results are included in the SaaS segment.
To finance the purchase price, we closed an underwritten public offering of 5,715,000 shares of common stock, generating proceeds of $76.8 million(after deducting underwriting discounts and commissions) and borrowed $5.5 million under our new ABL Facility. Additionally, on November 12, 2024, the underwriter of the offering exercised its option to purchase an additional 857,250 shares of common stock, generating additional proceeds of $11.5 million (after deducting underwriting discounts and commissions).
Additionally, our Marketing Services segment includes Thryv Australia Pty Ltd ("Thryv Australia"), which we acquired on March 1, 2021, and Yellow Holdings Limited ("Yellow"), a New Zealand marketing services company, which we acquired on April 3, 2023 for $8.9 million in cash (the "Yellow Acquisition"). Thryv Australia and Yellow serve approximately 65,000 and 11,000 SMBs, respectively.
Transition of Digital Marketing Services Clients to the Thryv Platform
During the fourth quarter of 2023, we made a strategic decision to accelerate the transition of clients with Digital marketing services solutions to our Thryv Platform by converting certain Marketing Services products to the Thryv Platform through upgrades initiated for clients by Thryv outside of the sales process at no additional base cost to these clients at the time of upgrade.
During the year ended December 31, 2025, we converted approximately 12,000 clients with Digital marketing services products to our Thryv Platform who were not already SaaS clients at the time of conversion. As of December 31, 2025, approximately 9,000 of these clients remained as SaaS clients. The conversion of these Marketing Services clients increased SaaS revenue by $9.4 million during the year ended December 31, 2025.
Additionally, during the year ended December 31, 2025, we converted Digital marketing services products to our Thryv Platform for approximately 10,000 clients who already had at least one SaaS product in our Thryv Platform at the time of conversion. The conversion of these Marketing Services clients increased SaaS revenue by $11.0 million during the year ended December 31, 2025.
The conversion of Marketing Services products for clients who were not already SaaS clients at the time of conversion decreases the number of clients in the Marketing Services segment and increases the number of clients in the SaaS segment. The conversion of products for Marketing Services clients (whether or not those clients had SaaS solutions prior to the conversion) decreases the revenue of the Marketing Services segment and increases the revenue of the SaaS segment. While we believe the conversions initiated for clients by Thryv provides valuable upgrades from Digital marketing services to our Thryv Platform and that converted clients will be more likely to subscribe for additional features of the Thryv Platform in the future, Thryv's conversion of products for these clients outside of the traditional sales process could result in these clients cancelling their services with us (known as "churn") at a materially higher rate than the other clients in our SaaS segment. During years ended December 31, 2025 and 2024, the churn of clients converted by Thryv from our Digital marketing services solutions to our Thryv Platform was in line with the churn from the other clients in our SaaS segment.
Impairment Charges
We recorded non-cash goodwill impairment charges of $83.1 million and $268.8 million during the years ended December 31, 2024 and 2023, respectively, related to our Marketing Services reporting unit, which no longer has goodwill remaining. No goodwill impairment charges were recorded during the year ended December 31, 2025.
While we believe we have made reasonable estimates and utilized reasonable assumptions to calculate the fair values of our reporting units, it is possible a material change could occur to the estimated fair value of these assets. If our actual results are not consistent with our estimates, we could be exposed to future impairment losses that could be material to our results of operations.
Our most recent quantitative goodwill impairment test, performed in the third quarter of 2024, indicated that the SaaS reporting unit's fair value exceeded its carrying value by more than 250%. As a result of this significant cushion, we performed a qualitative goodwill impairment assessment at our annual test date of October 1, 2025, which indicated that it was not more likely than not that the fair value of the SaaS reporting unit was less than its carrying value. Subsequent to December 31, 2025, the Company experienced continued declines in its stock price that resulted in the Company's market capitalization declining below the Company's book value. We are in the process of evaluating whether an interim goodwill impairment assessment is needed for the SaaS reporting unit in the first quarter of 2026. At this time, the likelihood of goodwill impairment and the potential amount of any related charge is unknown.
Factors Affecting Our Performance
Our operations can be impacted by, among other factors, general economic conditions and increased competition with the introduction of new technologies and market entrants. We believe that our performance and future success depend on several factors that present significant opportunities for us, but also pose risks and challenges, including those listed below and those discussed in the section titled "Risk Factors."
Ability to Attract and Retain Clients
Our revenue growth is driven by our ability to attract, retain and expand the spend of SMB clients. To do so, we must deliver solutions that address the challenges currently faced by SMBs at a value-based price point that SMBs can afford.
Our strategy is to expand the use of our SaaS solutions by introducing our SaaS solutions to new SMB clients, as well as our current Marketing Services clients and our existing SaaS client base, offering them additional SaaS solutions. This strategy includes capitalizing on the increased needs of SMBs for solutions that facilitate a remote working environment and virtual interactions. This strategy will require substantial sales and marketing capital. This strategy poses a risk if our Marketing Services clients do not fully embrace the transition to SaaS offerings by purchasing additional SaaS offerings or if they have higher churn rates.
Investment in Growth
We intend to continue to develop and grow a profitable SaaS segment to better help SMBs manage their businesses, while maintaining strong profitability within our Marketing Services segment, which we expect to continue to serve as an efficient customer acquisition channel for our SaaS platform until its termination in 2028. As a result, SaaS has been able to achieve profitable growth. We will continue to improve our SaaS solutions by analyzing user behavior, expanding features, improving usability, enhancing our onboarding services and customer support and making version updates available to SMBs. We believe these initiatives will ultimately drive revenue growth; however, such improvements will also increase our operating expenses.
Ability to Grow Through Expansion and Acquisition
Our growth prospects depend upon our ability to successfully develop new markets. We currently primarily serve the United States, Australia, New Zealand, Canada, and Europe SMB markets and plan to leverage strategic acquisitions or initiatives to expand our client base domestically and enter new markets internationally. Identifying proper targets and executing strategic acquisitions may take substantial time and capital. In July 2022, we began operations in Canada through our own sales force and a re-seller agreement. On April 3, 2023, we completed the acquisition of Yellow, a New Zealand marketing services company. Additionally, on October 31, 2024, we completed the acquisition of Keap, a prominent player in customer relationship management and marketing automation for SMBs. Keap primarily serves SMBs in North America,
Australia, New Zealand and Europe. We believe that strategic acquisitions of SaaS and marketing services companies globally will expand our client base and provide additional opportunities to offer our SaaS solutions.
Print Publication Cycle
We recognize revenue for print services at a point in time upon delivery of the published PYP directories containing customer advertisements to the intended market. Our PYP directories typically have 12-month publication cycles in Australia, 18-month publication cycles in New Zealand, and 18 to 24-month publication cycles in the U.S, with the majority on a 24-month publication cycle. As a result, we typically record revenue for each publication only once every 12 to 24 months, depending on the publication cycle of the directory. The amount of revenue we recognize each quarter from our PYP directories is therefore directly related to the number of PYP directories we deliver to the intended market each quarter, which can vary based on the timing of the publication cycles.
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 December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Clients | |||||||||||||||||
|
Marketing Services (1)
|
171 | 233 | 314 | ||||||||||||||
|
SaaS (2)
|
100 | 114 | 66 | ||||||||||||||
|
Total (3)
|
231 | 296 | 346 | ||||||||||||||
(1) Clients that purchase one or more of our Marketing Services solutions are included in this metric. These clients may or may not also purchase subscriptions to our SaaS offerings.
(2) Clients that purchase subscriptions to our SaaS offerings are included in this metric, as well as clients who are converted from our Digital marketing services solutions to our SaaS offerings. These clients may or may not also purchase one or more of our Marketing Services solutions.
(3) Total clients is less than the sum of the Marketing Services and SaaS, since clients that purchase both Marketing Services and SaaS products are counted in each category, but only counted once in the Total.
Marketing Services clients decreasedby 62 thousand, or 27%, as of December 31, 2025 as compared to December 31, 2024. Marketing Services clients decreasedby 81 thousand, or 26%, as of December 31, 2024 as compared to December 31, 2023. These decreases were related to the secular decline in the print media industry and significant competition in the digital media space, from focusing on offering our SaaS solutions to our current Marketing Services clients, and from our strategic decision to accelerate the conversionof clients from Digital marketing services solutions to SaaS offerings.
SaaS clients decreased by 14 thousand, or 12%, as of December 31, 2025 as compared to December 31, 2024 as the Company's sales strategy shifted to focus on growing the spend of existing clients with less emphasis on client acquisition. SaaS clients increased by 48 thousand, or 73%, as of December 31, 2024 as compared to December 31, 2023 due toourfocus in 2024 on new SaaS client acquisition through improved identification of prospects, improved selling methods, introduction of new product features, a growing international footprint, and the transition of clients from Digital marketing services
solutions to SaaS offerings. During the fourth quarter of 2024, we added 15 thousand clients from the Keap Acquisition, of which 12 thousand remain as of December 31, 2025.
Total clients decreased by 65 thousand, or 22%, as of December 31, 2025 as compared to December 31, 2024 and decreased by 50 thousand, or 14%, as of December 31, 2024 as compared to December 31, 2023. The primary drivers of these decreases were the secular decline in the print media business combined with increasing competition in the digital media and SaaS space and the more recent focus on growing SaaS client spend and reduced emphasis on client acquisition.
Monthly ARPU
We define monthly average revenue per unit ("ARPU") as our total client billings for a particular month divided by the number of clients that have one or more revenue-generating solutions in that same month. For each reporting period, the weighted-average monthly ARPU from all the months in the period are reported. ARPU varies based on product mix, product volumes, and the amounts we charge for our services. We believe that ARPU is an important measure of client spend and that growth in ARPU is an indicator of client satisfaction with our services.
| Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
|
ARPU (Monthly)
|
|||||||||||||||||
| Marketing Services | $ | 108 | $ | 133 | $ | 158 | |||||||||||
| SaaS | $ | 356 | $ | 330 | $ | 372 | |||||||||||
Monthly ARPU for Marketing Services decreased by $25, or 19%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, and $25, or 16%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in ARPU for these periods was related to reduced spend by clients on our print media offerings due to the secular decline of the industry, by the continuing shift of advertising spend to larger digital media audiences, and our strategic decision to accelerate the conversion of clients from Digital marketing services solutions to SaaS offerings.
Monthly ARPU for SaaS increased by $26, or 8%, during the year ended December 31, 2025 compared to the year ended December 31, 2024, driven bythe sale of additional SaaS offerings to existing SaaS clients, the growth of the average spend of new SaaS clients, price increases implemented in the third quarter of 2024 and the second quarter of 2025, and the Keap Acquisition during the fourth quarter of 2024 which added clients with a higher average ARPU. This was partially offset by Thryv's conversion of clients from lower ARPU Digital marketing services solutions to our SaaS offerings at no additional cost to the client at the time of upgrade. Monthly ARPU for SaaS decreased by $42, or 11%, during the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily resulting from our strategic decision to accelerate the conversion of clients from Digital marketing services solutions to our SaaS offerings at no additional base cost at the time of upgrade. The sale of our newer Marketing Center product to our SaaS clients offset a portion of the SaaS decline.
Seasoned Net Revenue Retention for SaaS
We believe that Seasoned Net Revenue Retention ("Seasoned NRR") is an indicator of our ability to retain and expand revenue for established clients. Seasoned NRR is calculated by dividing the revenue of all clients that have had one or more SaaS offerings for at least two years as of the last month of the year or quarter, as applicable, by the same clients' revenue one year ago. The Seasoned NRR calculation excludes clients acquired in the Keap Acquisition.
| As of December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Seasoned NRR | 94 | % | 98 | % | 96 | % | |||||||||||
Seasoned NRR decreased by 4% for the year ended December 31, 2025 compared to the year ended December 31, 2024, and increased by 2% during the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease in Seasoned NRR during the year ended December 31, 2025 resulted primarily from a decrease in revenue associated with downgrades and cancellations by clients of SaaS products held for at least two years outpacing the combination of Thryv up-selling clients who had a SaaS product for at least two years and Thryv's conversion of marketing services products for clients who, at the time of conversion, already had at least one SaaS product for at least two years. The increase in Seasoned NRR during the year ended December 31, 2024 resulted from selling other SaaS products to existing SaaS clients, a price increase for SaaS clients in the third quarter of 2024, and our strategic decision to accelerate the conversion of clients from Digital marketing services solutions to our SaaS offerings that included instances where Marketing Services clients already had at least one of our SaaS solutions for at least two years and SaaS revenue increased for those clients.
Key Components of Our Results of Operations
Revenue
We generate revenue from our two business segments: SaaS and Marketing Services. Our primary source of revenue in our SaaS segment is our SaaS solutions. Our primary sources of revenue in our Marketing Services segment are Print and Digital services.
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.
Research and Development
Research and development expense consists primarily of base salaries, stock-based compensation, and other expenses incurred by personnel within the product development and product management departments. Additionally, Research and development expense includes third-party contractor expenses and allocated overhead costs which includes depreciation of fixed assets and amortization associated with 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, net periodic pension (cost) benefit, and other income (expense), which includes foreign currency-related income and expense.
Results of Operations
Consolidated Results of Operations
The following table presents certain consolidated financial data for each of the periods indicated:
| Years Ended December 31, | |||||||||||||||||||||||
|
2025
|
2024 (1)
|
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| (dollars in thousands) | Amount | % of Revenue | Amount | % of Revenue | |||||||||||||||||||
| Revenue | $ | 785,015 | 100 | % | $ | 824,156 | 100 | % | |||||||||||||||
| Cost of services | 252,305 | 32.1 | % | 286,919 | 34.8 | % | |||||||||||||||||
| Gross profit | 532,710 | 67.9 | % | 537,237 | 65.2 | % | |||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Sales and marketing | 225,692 | 28.8 | % | 254,433 | 30.9 | % | |||||||||||||||||
|
Research and development
|
39,111 | 5.0 | % | 15,713 | 1.9 | % | |||||||||||||||||
| General and administrative | 211,198 | 26.9 | % | 217,296 | 26.4 | % | |||||||||||||||||
| Impairment charges | - | - | % | 83,094 | 10.1 | % | |||||||||||||||||
| Total operating expenses | 476,001 | 60.6 | % | 570,536 | 69.2 | % | |||||||||||||||||
| Operating income (loss) | 56,709 | 7.2 | % | (33,299) | 4.0 | % | |||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense | (34,758) | 4.4 | % | (46,771) | 5.7 | % | |||||||||||||||||
| Net periodic pension (cost) benefit | (8,817) | 1.1 | % | 24,806 | 3.0 | % | |||||||||||||||||
| Other income (expense) | 3,909 | 0.5 | % | (10,734) | 0.5 | % | |||||||||||||||||
| Income (loss) before income tax expense | 17,043 | 2.2 | % | (65,998) | 8.0 | % | |||||||||||||||||
| Income tax expense | (16,736) | 2.1 | % | (8,218) | 1.0 | % | |||||||||||||||||
| Net income (loss) | $ | 307 | 0.0 | % | $ | (74,216) | 9.0 | % | |||||||||||||||
| Other financial data: | |||||||||||||||||||||||
|
Adjusted EBITDA (2)
|
$ | 151,846 | 19.3 | % | $ | 162,431 | 19.7 | % | |||||||||||||||
|
Adjusted Gross Profit (3)
|
$ | 548,231 | $ | 558,906 | |||||||||||||||||||
|
Adjusted Gross Margin (4)
|
69.8 | % | 67.8 | % | |||||||||||||||||||
(1)Consolidated results of operations include Keap's results of operations subsequent to the October 31, 2024 acquisition date.
(2)See "Non-GAAP Financial Measures" for a definition of Adjusted EBITDA and a reconciliation to Net income (loss), the most directly comparable measure presented in accordance with GAAP.
(3)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.
(4)See "Non-GAAP Financial Measures" for a definition of Adjusted Gross Margin.
Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024
Revenue
The following table summarizes revenue by business segment for the periods indicated:
| Years Ended December 31, | Change | ||||||||||||||||||||||
|
(Dollars in thousands)
|
2025
|
2024
|
Amount | % | |||||||||||||||||||
| SaaS | $ | 461,027 | $ | 343,476 | $ | 117,551 | 34.2 | % | |||||||||||||||
| Marketing Services | 323,988 | 480,680 | (156,692) | (32.6) | % | ||||||||||||||||||
| Total Revenue | $ | 785,015 | $ | 824,156 | $ | (39,141) | (4.7) | % | |||||||||||||||
Total Revenue decreasedby $39.1 million, or 4.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decreasein total Revenue was driven primarily by a decrease in Marketing Services Revenue of $156.7 million, partially offset by an increasein SaaS Revenue of $117.6 million.
SaaS Revenue
SaaS revenue increased by $117.6 million, or 34.2%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily attributable tothe acquisition of Keap, new sales, client expansion, and the Company's strategic decision during the fourth quarter of 2023 to accelerate the conversion of clients from its Digital marketing services solutions to its SaaS offerings. Of the $117.6 million SaaS revenue increase, (i) revenue from Keap contributed $56.2 million, (ii) the conversion of Digital marketing services products for clients to SaaS products during 2025contributed $20.4 million, and (iii) new sales and client expansion during 2025 contributed $48.0 million. Finally, SaaS revenue decreased $7.0 million due to net revenue changes associated with products sold or converted prior to January 1, 2025.
Marketing Services Revenue
Marketing Services revenue decreased by $156.7 million, or 32.6%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Print revenue decreased by $30.4 million, or 12.0%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease in Print revenue was primarily driven by the impact of publication timing differences, as a result of our Print agreements having greater than 12-month terms, as well as the continued secular decline in U.S. and international industry demand for Print services.
Print revenue is recognized upon delivery of the published directories. Individual published directories have different publication cycles, with a typical lifecycle of 24 months for U.S. directories in 2025. During the fourth quarter of 2024, we began to transition from 18-month publication cycles to 24-month publication cycles for U.S. directories. As a result of recognizing revenue upon delivery, we typically record revenue for each published U.S. directory only once every 24 months, which does not make comparing revenue year-over-year fully representative of actual demand trends due to timing of publication cycles. The Company recognized revenue for approximately the same number of published directories during the year ended December 31, 2025 compared to the year ended December 31, 2024 as a result of publication cycles.
On a publication-by-publication basis, the increase in average publication cycles from 18 months to 24 months results in an average revenue increase of 17% per published directory compared to the last time the directory was published. However, when adjusting the published directory's revenue on a monthly basis, which is the published directory's revenue divided by the number of months of the published lifecycle, the average revenue per published directory decreased by 33% compared to the last time the directory was published. The net impact on revenue per published directory was a 16% decline for the directories published during the year ended December 31, 2025. This net decline per directory was the result of the secular decline in industry demand for Print services.
Digital revenue decreased by $126.3 million, or 55.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. Digital revenue primarily decreased due to a continued trending decline in the Company's Marketing Services client base and significant competition in the consumer search and display space, particularly from large, well-capitalized businesses such as Google, Yelp, and Facebook. For the year ended December 31, 2025, the continued
trending decline and significant competition resulted in a $94.1 million decrease in digital revenue. In addition, the decrease was driven in part by the Company's strategic decision during the fourth quarter of 2023 to accelerate the conversion of clients from its Digital marketing services solutions to SaaS offerings. For the year ended December 31, 2025, Thryv's conversion of Digital marketing services products for clients to SaaS offerings prior to January 1, 2025 reduced Marketing Services revenue by $11.8 million, and Thryv's conversion of Digital marketing services products for clients to SaaS products since January 1, 2025 reduced Marketing Services revenue by an additional $20.4 million.
Cost of Services
Cost of services decreased by $34.6 million, or 12.1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily driven by the corresponding decline in revenue and strategic cost saving initiatives. Specifically, we reduced printing, distribution and digital fulfillment support costs by $18.2 million, contract services by $4.8 million, and employee-related expenses by $5.4 million. Additionally, depreciation and amortization expense decreased by $6.1 million due to the accelerated amortization method used by the Company.
Gross Profit
Gross profit decreased by $4.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease in Gross profit was primarily due to a decrease in Marketing Services revenue, partially offset by an increase in SaaS revenue and a decrease in Cost of services as a result of a decline in total revenue and strategic cost saving initiatives.
Gross margin increased by 270 basis points to 67.9% for the year ended December 31, 2025 compared to 65.2% for the year ended December 31, 2024. Gross margin from our SaaS and Marketing Services segments increased to 70.7% and 63.9%, respectively, for the year ended December 31, 2025, compared to 69.4% and 62.2%, respectively, for the year ended December 31, 2024. SaaS gross margin increased as a result of an increase in revenue and strategic cost savings initiatives. Marketing Services gross margin increased as a result of cost savings initiatives offsetting decreases in revenue.
Operating Expenses
Sales and Marketing
Sales and marketing expense decreased by $28.7 million, or 11.3%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to a decrease in sales commissions of $13.8 million due to new sales commissions plans and revised targets, a decrease in employee-related expenses of $10.8 million, a decrease in stock-based compensation of $2.0 million, and a decrease in depreciation and amortization of $5.7 million due to the accelerated amortization method used by the Company. These decreases were partially offset by an increase in advertising and marketing expenses of $3.7 million.
Research and Development
Research and development expense increased by $23.4 million, or 148.9%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to an increase in employee-related expenses of $17.7 million as a result of employees retained following the Keap Acquisition who were focused on integration and product development for Keap products, an increase in stock-based compensation of $1.8 million as a result of forfeitures during the year ended December 31, 2024, and an increase in depreciation and amortization expense of $1.5 million.
General and Administrative
General and administrative expense decreased by $6.1 million, or 2.8%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily attributable to a decrease in non-recurring restructuring and integration expenses of $4.5 million, primarily due to $4.2 million of accelerated lease amortization expenses that were incurred during the year ended December 31, 2024 related to the acquired Keap headquarters, a decrease in bad debt expense of $1.9 million, a decrease in employee-related expenses of $1.5 million, and a decrease in depreciation and amortization expense of $3.0 million as a result of the accelerated amortization method used by the Company. These decreases were partially offset by the absence of a $3.1 million gain on disposal of certain intangible assets that was recorded during year ended December 31, 2024.
Impairment Charges
Impairment charges decreased by $83.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. No impairmentcharges were recognized during the year ended December 31, 2025, while impairment charges of $83.1 millionwere recognized during the year ended December 31, 2024 as a result of impairment in our Marketing Services reporting unit.
Other Income (Expense)
Interest Expense
Interest expense decreased by $12.0 million, or 25.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, driven primarily by lower outstanding debt balances.
Net Periodic Pension (Cost) Benefit
Net periodic pension cost was $8.8 million for the year ended December 31, 2025 compared to net periodic pension benefit of $24.8 million for the year ended December 31, 2024. This change was primarily due to a remeasurement loss of $2.1 million recorded during the year ended December 31, 2025, compared to a remeasurement gain of $31.1 million recorded during the year ended December 31, 2024. The remeasurement loss during the year ended December 31, 2025 was the result of decreasing discount rates due to changes in corporate bond markets, life expectancy updates, actuarial assumption updates to reflect current market conditions, and plan experience differing from expectations, partially offset by gains attributable to asset performance exceeding expectations. Additionally, during the year ended December 31, 2025, the Company recorded a settlement loss of $3.7 million due to the settlement of the YP Holdings LLC Pension Plan.
Other Income (Expense)
Other income was $3.9 million for the year ended December 31, 2025, compared to Other expense of $10.7 million during the year ended December 31, 2024. The net increase of $14.6 million was primarily the result of a foreign-currency related gain of $3.5 million during the year ended December 31, 2025, compared to a foreign-currency related loss of $4.1 million during the year ended December 31, 2024. Additionally, the Company recorded a loss on extinguishment of debt of $6.6 million during the year ended December 31, 2024.
Income Tax Expense
Income tax expense increased by $8.5 million, or 103.7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The effective tax rate was 98.2% and (12.4)% for the years ended December 31, 2025and 2024, respectively. The effective tax rate differs from the 21.0% U.S. Federal statutory rate in the current year primarily due to the impact of non-deductible officer compensation, state income taxes, cross-border tax laws, and changes in unrecognized tax benefits.
Adjusted EBITDA
Adjusted EBITDA decreasedby $10.6 million, or 6.5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decreasein Adjusted EBITDA was primarily driven by the secular decline in our Marketing Services segment. The decrease was partially offset by the growth in our SaaS segment. See "Non-GAAP Financial Measures" for a definition of Adjusted EBITDA and a reconciliation to Net income (loss), the most directly comparable measure presented in accordance with GAAP.
Years Ended December 31, 2024 and 2023
For a discussion of the year ended December 31, 2024compared to the year ended December 31, 2023, refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations"in our Annual Report on Form 10-K for the year ended December 31, 2024.
Non-GAAP Financial Measures
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States ("GAAP"). We also present Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin, as defined below, as non-GAAP financial measures in this Annual Report.
We have included Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin in this report because management believes they provide useful information to investors in gaining an overall understanding of our current financial performance and provide consistency and comparability with past financial performance. Specifically, we believe Adjusted EBITDA provides useful information to management and investors by excluding certain non-operating items that we believe are not indicative of our core operating results. In addition, Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin are used by management for budgeting and forecasting as well as measuring the Company's performance. We believe Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin provide investors with the financial measures that closely align with our internal processes.
We define Adjusted EBITDA ("Adjusted EBITDA") as Net income (loss) plus Interest expense, Income tax expense (benefit), Depreciation and amortization expense, Restructuring and integration expenses, Loss on early extinguishment of debt, Stock-based compensation expense, Impairment charges, and other non-operating expenses, such as Net periodic pension cost (benefit), Non-cash loss from remeasurement of indemnification asset, and certain unusual and non-recurring charges that might have been incurred. Adjusted EBITDA should not be considered as an alternative to Net income (loss) 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 (loss):
| Years Ended December 31, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Reconciliation of Adjusted EBITDA | |||||||||||||||||
| Net income (loss) | $ | 307 | $ | (74,216) | $ | (259,295) | |||||||||||
| Impairment charges | - | 83,094 | 268,846 | ||||||||||||||
| Depreciation and amortization expense | 39,459 | 52,789 | 63,251 | ||||||||||||||
| Interest expense | 34,758 | 46,771 | 61,728 | ||||||||||||||
| Stock-based compensation expense | 25,250 | 24,118 | 22,201 | ||||||||||||||
|
Restructuring and integration expenses (1)
|
28,180 | 32,697 | 14,612 | ||||||||||||||
|
Loss on early extinguishment of debt (2)
|
- | 6,638 | - | ||||||||||||||
|
Non-cash loss from remeasurement of indemnification asset (3)
|
- | - | 10,734 | ||||||||||||||
|
Transaction costs (4)
|
- | 5,145 | 373 | ||||||||||||||
| Income tax expense (benefit) | 16,736 | 8,218 | (1,249) | ||||||||||||||
|
Net periodic pension cost (benefit) (5)
|
8,817 | (24,806) | (2,719) | ||||||||||||||
|
Other (6)
|
(1,661) | 1,983 | 9,033 | ||||||||||||||
| Adjusted EBITDA | $ | 151,846 | $ | 162,431 | $ | 187,515 | |||||||||||
(1)See the table below for detail of Restructuring and integration expenses for the years ended December 31, 2025, 2024, and 2023.
(2)In connection with the debt refinancing completed on May 1, 2024, the Company recorded a Loss on early extinguishment of debt related to the write-off of certain unamortized debt issuance costs on the Company's Prior Term Loan and Prior ABL Facility. See Note 10, Debt Obligations, to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information.
(3)In connection with the YP Acquisition, the seller indemnified the Company for future potential losses associated with certain federal and state tax positions taken in tax returns filed by the seller prior to the acquisition date. See Note 4, Fair Value Measurements, to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information.
(4)Expenses related to the Keap Acquisition, Yellow Acquisition, and other transaction costs.
(5)Net periodic pension cost (benefit) is primarily from our non-contributory defined benefit pension plans that are currently frozen and incur no additional service costs. See Note 11, Pensions, to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information.
(6)During the year ended December 31, 2025, Other primarily included foreign exchange-related income and a sales tax assessment expense. During the year ended December 31, 2024, Other primarily included foreign exchange-related expense. During the year ended December 31, 2023, Other expenses related to the valuation of certain assets as a result of the acquisition of Thryv Australia and foreign exchange-related expense.
The following is a reconciliation of Restructuring and integration expenses that are included in the Adjusted EBITDA to Net income (loss) reconciliation above:
| (in thousands) | Years Ended December 31, | ||||||||||||||||
| Reconciliation of Restructuring and integration expenses | 2025 | 2024 | 2023 | ||||||||||||||
|
Abandoned facility costs (a)
|
$ | 5,068 | $ | 8,303 | $ | 3,999 | |||||||||||
|
Severance charges (b)
|
13,334 | 12,668 | 5,834 | ||||||||||||||
|
Post-acquisition and integration expenses (c)
|
5,775 | 5,902 | 3,995 | ||||||||||||||
|
Tax, accounting, and legal fees (d)
|
4,003 | 5,824 | 784 | ||||||||||||||
| Total Restructuring and integration expenses | $ | 28,180 | $ | 32,697 | $ | 14,612 | |||||||||||
(a)Represents expenses related to maintenance, utilities, and general upkeep at the Company's leased buildings. During the COVID-19 pandemic, the Company decided to operate in a remote-first working environment. Because we did not terminate existing lease agreements at any of our facilities, we continue to incur these costs until the lease agreements end. The most significant lease agreement during the periods presented was for our former corporate headquarters, which ended on December 31, 2025 and was not renewed, and for the former Keap headquarters, which ends on December 31, 2026 and will not be renewed. Costs for the years ended December 31, 2025 and 2024 also include $0.1 million and $4.2 million of accelerated amortization expense, respectively, for the Keap headquarters.
(b)We incur severance charges related to certain reduction in force actions taken by our management which are designed to streamline the Company's operations and drive lower operating expenses as we continue to shift from our Marketing Services activities and drive continued focus on our SaaS business. Specifically, we incurred severance charges of $13.3 million, $10.9 million and $5.4 million in the years ended December 31, 2025, 2024, and 2023, respectively, primarily related to our legacy Marketing Services employees and our shift from Marketing Services activities. Additionally, certain severance charges resulted from strategic integration activities to right-size our workforce following acquisitions. Specifically, we incurred severance charges of $1.8 million and $0.4 million in the years ended December 31, 2024 and 2023, respectively, resulting from the acquisitions of Keap in 2024 and Yellow in 2023.
(c)We incur professional services, system integration costs and other fees related to each of our acquisitions. Such costs vary in nature and amount due to factors specific to each acquisition and create a lack of comparability between periods.
(d)These costs consist of legal expenses related to legal cases inherited from acquisitions and accounting fees related to acquisitions.
The following is a reconciliation of Adjusted Gross Profit and Adjusted Gross Margin to their most directly comparable GAAP measures, Gross profit and Gross margin:
| Year Ended December 31, 2025 | |||||||||||||||||
| (in thousands) | SaaS |
Marketing Services
|
Total | ||||||||||||||
| Reconciliation of Adjusted Gross Profit | |||||||||||||||||
| Gross profit | $ | 325,824 | $ | 206,886 | $ | 532,710 | |||||||||||
| Plus: | |||||||||||||||||
| Depreciation and amortization expense | 8,785 | 6,133 | 14,918 | ||||||||||||||
| Stock-based compensation expense | 352 | 251 | 603 | ||||||||||||||
| Adjusted Gross Profit | $ | 334,961 | $ | 213,270 | $ | 548,231 | |||||||||||
| Gross Margin | 70.7 | % | 63.9 | % | 67.9 | % | |||||||||||
| Adjusted Gross Margin | 72.7 | % | 65.8 | % | 69.8 | % | |||||||||||
| Year Ended December 31, 2024 | |||||||||||||||||
| (in thousands) | SaaS |
Marketing Services
|
Total | ||||||||||||||
| Reconciliation of Adjusted Gross Profit | |||||||||||||||||
| Gross profit | $ | 238,222 | $ | 299,015 | $ | 537,237 | |||||||||||
| Plus: | |||||||||||||||||
| Depreciation and amortization expense | 8,600 | 12,406 | 21,006 | ||||||||||||||
| Stock-based compensation expense | 336 | 327 | 663 | ||||||||||||||
| Adjusted Gross Profit | $ | 247,158 | $ | 311,748 | $ | 558,906 | |||||||||||
| Gross Margin | 69.4 | % | 62.2 | % | 65.2 | % | |||||||||||
| Adjusted Gross Margin | 72.0 | % | 64.9 | % | 67.8 | % | |||||||||||
| Year Ended December 31, 2023 | |||||||||||||||||
| (in thousands) | SaaS |
Marketing Services
|
Total | ||||||||||||||
| Reconciliation of Adjusted Gross Profit | |||||||||||||||||
| Gross profit | $ | 169,190 | $ | 409,057 | $ | 578,247 | |||||||||||
| Plus: | |||||||||||||||||
| Depreciation and amortization expense | 6,178 | 20,811 | 26,989 | ||||||||||||||
| Stock-based compensation expense | 214 | 399 | 613 | ||||||||||||||
| Adjusted Gross Profit | $ | 175,582 | $ | 430,267 | $ | 605,849 | |||||||||||
| Gross Margin | 64.2 | % | 62.6 | % | 63.1 | % | |||||||||||
| Adjusted Gross Margin | 66.6 | % | 65.9 | % | 66.1 | % | |||||||||||
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., which in turn generates cash flow from its own operations and operations of its subsidiaries, and has cash and cash equivalents on hand, funds provided under the new Term Loan (as defined below) and funds available under the new ABL Facility (as defined below). The agreements governing our debt may restrict the ability of our subsidiaries to make loans or otherwise transfer assets to us. Further, our subsidiaries are permitted under the terms of our senior credit facilities and other indebtedness to incur additional indebtedness that may restrict or prohibit the making of distributions or the making of loans by such subsidiaries to us. Our and our subsidiaries' ability to meet our debt service requirements is dependent on our ability to generate sufficient cash flows from operations.
We believe that expected cash flows from operations, available cash and cash equivalents, and funds available under our new ABL Facility will be sufficient to meet our liquidity requirements, such as working capital requirements for our
operations, business development and investment activities, and debt payment obligations, for the following 12 months. Any projections of future earnings and cash flows are subject to substantial uncertainty. Our future success and capital adequacy will depend on, among other things, our ability to achieve anticipated levels of revenues and cash flows from operations and our ability to address our annual cash obligations and reduce our outstanding debt, all of which are subject to general economic, financial, competitive, and other factors beyond our control. We continue to monitor our capital requirements to ensure our needs are in line with available capital resources.
For a discussion on contingent obligations, see Note 15, Contingent Liabilities, to our audited consolidated financial statements included in Part II, Item 8 in this Annual Report.
Material Cash Requirements
We have various payment obligations as part of our ordinary course of business. Our material cash requirements include: (1) operating lease obligations (see Note 9, Leases,to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information); (2) debt repayments (see Note 10, Debt Obligations,to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information); and (3) employee wages, benefits, and incentives. The expected timing of payments is estimated based on current information. In addition, we may be subject to additional material cash requirements that are contingent upon the occurrence of certain events, e.g., legal contingencies, uncertain tax positions (see Note 14,Income Taxes,to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information), pensions (see Note 11, Pensions,to our consolidated financial statements included in Part II, Item 8 in this Annual Report for more information) and other matters.
For the year ending December 31, 2026, we expect total capital expenditures to be approximately $30.0 million. Our capital expenditure budget is an estimate and is subject to change.
Sources and Uses of Cash
The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated:
| Years Ended December 31, | $ | ||||||||||||||||
| (in thousands) | 2025 | 2024 | Change | ||||||||||||||
| Cash flows provided by (used in): | |||||||||||||||||
| Operating activities | $ | 63,528 | $ | 89,783 | $ | (26,255) | |||||||||||
| Investing activities | (32,533) | (110,424) | 77,891 | ||||||||||||||
| Financing activities | (38,474) | 19,216 | (57,690) | ||||||||||||||
| Effects of exchange rate changes on cash, cash equivalents and restricted cash | 587 | (1,344) | 1,931 | ||||||||||||||
| Decrease in cash, cash equivalents and restricted cash | $ | (6,892) | $ | (2,769) | $ | (4,123) | |||||||||||
Cash Flows from Operating Activities
Net cash provided by operating activities decreased by $26.3 million, or 29.2%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. This decrease was primarily due to changes in working capital, particularly accounts receivable, which was primarily impacted by the timing of collections and an overall decline in our Marketing Services sales. The decrease was partially offset by lower interest payments of $12.4 million, lower income tax payments of $10.2 million and lower pension funding payments of $3.9 million.
Cash Flows from Investing Activities
Net cash used in investing activities decreased by $77.9 million, or 70.5%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to $76.9 million of cash paid in connection with the Keap Acquisition during the year ended December 31, 2024. Additionally, capital expenditures were $1.1 million lower during the year ended December 31, 2025 compared to the year ended December 31, 2024.
Cash Flows from Financing Activities
Net cash used in financing activities was $38.5 million for the year ended December 31, 2025 compared to net cash provided by financing activities of $19.2 million for the year ended December 31, 2024. This change of $57.7 million was primarily due to net proceeds of $87.4 million received from our common stock offering during the year ended December 31, 2024, while there was no common stock offering during the year ended December 31, 2025. The increase in cash resulting from the common stock offering in 2024 was partially offset by net payments of $44.4 million made on the Company's Term Loan and $25.0 million made on the Company's ABL Facility during the year ended December 31, 2024, compared to payments of $35.0 million made on the Term Loan and net payments of $1.2 million made on the ABL Facility during the year ended December 31, 2025. Additionally, the Company paid debt issuance costs of $5.5 million during the year ended December 31, 2024 related to the Term Loan, while no payments were made for debt issuance costs during the year ended December 31, 2025. The Company repurchased $5.0 million of common stock during the year ended December 31, 2025 compared to $0.5 million during the year ended December 31, 2024. Additionally, during the year ended December 31, 2024, the Company received proceeds of $7.2 million from exercises of stock options, net of amounts withheld for taxes, compared to $1.2 million of net proceeds received during the year ended December 31, 2025. The Company also made payments of $0.9 million on finance lease obligations during the year ended December 31, 2025, while no payments were made on finance lease obligations during the year ended December 31, 2024.
Debt
Term Loan
On May 1, 2024, the Company entered into a new Term Loan Credit Agreement (the "Term Loan"), the proceeds of which were used to refinance and pay off in full the Company's previous term loan facility (the "Prior Term Loan") and to pay fees and expenses related to the refinancing.
The Term Loan established a senior secured term loan facility (the "Term Loan Facility") in an aggregate principal amount equal to $350.0 million, of which 40.0% was held by a related party who was an equity holder of the Company as of May 1, 2024. Solely for this purpose, the Company defines a related party as any shareholder owning more than 5% of the Company's voting securities.As of December 31, 2025, 40.0% of the Term Loan was held by a related party who was an equity holder of the Company as of that date.
The Term Loan Facility matures on May 1, 2029 and borrowings under the Term Loan Facility bear interest at a fluctuating rate per annum equal to, at the Company's option, the secured overnight financing rate ("SOFR") or base rate, in each case, plus an applicable margin per annum equal to (i) 6.75% (for SOFR loans) and (ii) 5.75% (for base rate loans). The Term Loan Facility requires mandatory amortization payments, paid quarterly commencing June 30, 2024, equal to (i) $52.5 million per year for the first two years following the closing date of the Term Loan, and (ii) $35.0 million per year thereafter.
ABL Facility
On May 1, 2024, the Company entered into a new Credit Agreement (the "ABL Credit Agreement"), which established a new asset-based revolving loan facility (the "ABL Facility"). The ABL Facility refinanced the Company's previous asset-based revolving loan facility (the "Prior ABL Facility"). Proceeds of the ABL Facility may be used by the Company for ongoing general corporate purposes and working capital.
The ABL Facility matures on May 1, 2028 and borrowings under the ABL Facility bear interest at a fluctuating rate per annum equal to, at the Company's option, SOFR or base rate, in each case, plus an applicable margin per annum, depending on the average excess availability under the ABL Facility, equal to (i) 2.50% to 2.75% (for SOFR loans) and (ii) 1.50% to 1.75% (for base rate loans). The fee for undrawn commitments under the ABL Facility is equal to 0.375% per annum.
As of December 31, 2025, the Company's borrowing base availability, determined primarily based on accounts receivable and credit card receivables less certain reserves, was $28.2 million. As a resultof certain additional restrictions in the Company's debt agreements, as of December 31, 2025, approximately $19.7 million was available to be drawn upon under the ABL Facility.
We maintain debt levels that we consider appropriate after evaluating a number of factors, including cash requirements for ongoing operations, investment and financing plans (including acquisitions and share repurchase activities), and overall cost of capital.Per the terms of the Term Loan Facility, payments of the Term Loan balance are determined by the Company's Excess Cash Flow (as defined in the Term Loan Facility). We are in compliance with all covenants under the Term Loan and ABL Facility as of December 31, 2025. We had total recorded debt outstanding of $253.5 million (net of $7.9 million of unamortized original issue discount and debt issuance cost) at December 31, 2025, which was comprised of amounts outstanding under the Term Loan of $236.3 million and ABL Facility of $25.1 million.
Share Repurchase Program
On April 30, 2024, the Board authorized a new share repurchase program (the "Share Repurchase Program"), under which the Company may repurchase up to $40.0 million in shares of common stock through April 30, 2029. The repurchase program is subject to market conditions, the periodic capital needs of the Company's operating activities, and the continued satisfaction of all covenants under the Company's Term Loan and ABL Credit Agreement. The Share Repurchase Program does not obligate the Company to repurchase shares and may be suspended, terminated, or modified at any time.
The Company repurchased 378,000 shares and 26,495 shares of its outstanding common stock during the years ended December 31, 2025, and 2024, respectively. The total purchase price of these transactions was approximately $5.0 million and $0.5 million, respectively. The acquired shares were recorded as Treasury stock upon repurchase.
As of December 31, 2025, the Company had repurchased approximately $5.5 million, or 404,495 shares, of the Company's outstanding common stock under the Share Repurchase Program and $34.5 millionremains available for share repurchases. The Company's ability to repurchase shares in the future is limited by certain conditions set forth in the ABL Credit Agreement.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of financial condition and results of operations is based on our audited consolidated financial statements, which have been prepared in accordance with GAAP. In preparing our financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our reported revenues, results of operations and net income or loss, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods. These estimates, assumptions, and judgments are necessary because future events and their effects on our results and the value of our assets cannot be determined with certainty and are made based on our historical experience and other assumptions that we believe to be reasonable under the circumstances. These estimates may change as new events occur or additional information is obtained, and we may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates.
We believe that the assumptions and estimates associated with revenue recognition, business combinations, goodwill, pension obligations, and income taxes have the greatest potential impact on our audited consolidated financial statements. Therefore, we consider these to be our critical accounting estimates. See Note 1, Description of Business and Summary of Significant Accounting Policies,to our audited consolidated financial statements included in Part II, Item 8 in this Annual Report for further information on these and our other significant accounting policies and estimates as well as our disclosures on recent accounting pronouncements. Our most critical accounting estimates are summarized below.
Revenue Recognition
We recognize revenue based on the revenue recognition standard, Revenue from Contracts with Customers (Topic 606), ("ASC 606"). The Company determines the amount of revenue to be recognized through application of thefive-step model as described in Note 1, Description of Business and Summary of Significant Accounting Policies, to our audited consolidated financial statements included in Part II, Item 8 in this Annual Report.
We derive revenue from our two business segments: Marketing Services and SaaS. The Company has determined that each of its services is distinct and represents a separate performance obligation because the SMB can benefit from each service on its own or together with other resources that are readily available to the SMB, and services are separately identifiable from other promises in the contract. Revenue for all services is recognized when control transfers to the SMB. For print solutions, control transfers upon delivery of the published directories. Control over SaaS and digital services transfers to the SMB evenly over the service period.
The transaction price of a contract primarily consists of fixed consideration components pursuant to the applicable contractual terms and may involve the use of estimates. These judgments involve consideration of historical and expected experience with the customer and other similar customers. The Company's contracts with customers may include multiple performance obligations. For such arrangements, the Company allocates the transaction price to each performance obligation based on its relative standalone selling price. Standalone selling price is the price at which the Company would sell a promised service separately to a client. Judgment is required to determine the standalone selling price for each distinct performance obligation. Often, the Company does not have sufficient standalone sales information, as contracts with customers generally include multiple performance obligations. When standalone sales information is not available, the Company estimates the standalone selling price using information that may include market conditions, entity-specific factors such as pricing and discounting strategies, and other inputs.
Business Combinations
We have completed several acquisitions of other businesses in the past, including the Keap Acquisition on October 31, 2024, and the Yellow Acquisition on April 3, 2023. In an acquisition, we first review if substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If such concentration exists, the transaction is considered an asset acquisition rather than a business combination.
The results of businesses acquired in a business combination are included in our audited consolidated financial statements from the date of acquisition. We allocate the purchase price, which is the sum of the consideration paid and may consist of cash, equity, or a combination of the two, to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and assumed liabilities requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, and discount rates.
We use all available information to estimate fair values. We typically engage outside appraisal firms to assist in determining the fair value of tangible and identifiable intangible assets such as client relationships, trademarks, and any other significant assets or liabilities. During the measurement period of up to one year after the acquisition date, we may adjust the values attributed to the assets acquired and assumed liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date.
Our purchase price allocation methodology contains uncertainties because it requires assumptions and management's judgment to estimate the fair value of assets acquired and assumed liabilities at the acquisition date. Key judgments used to estimate the fair value of intangible assets include projected revenue growth and operating margins, discount rates, client attrition rates, as well as the estimated economic life of intangible assets. Management estimates the fair value of assets and liabilities based upon quoted market prices, the carrying value of the acquired assets, and widely accepted valuation techniques, including discounted cash flows. Our estimates are inherently uncertain and subject to refinement. Unanticipated events or circumstances may occur which could affect the accuracy of our fair value estimates, including assumptions regarding industry economic factors and business strategies.
Goodwill
Goodwill represents the excess of the purchase price of an acquired business over the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is tested annually for impairment as of October 1st and at any time upon the occurrence of certain triggering events or changes in circumstances. The Company performs its goodwill impairment test at the reporting unit level. In assessing goodwill for impairment, an entity has the option to assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Performing a qualitative impairment assessment requires an examination of relevant events and circumstances that could have a negative impact on the carrying value of our Company, such as macroeconomic conditions, industry and market conditions, earnings and cash flows, overall financial performance, and other relevant entity-specific events. If the Company concludes an impairment is more likely than not through its qualitative assessment, then it is required to perform a quantitative assessment for impairment. The quantitative estimates of the fair value of the Company's reporting units are primarily determined using an income approach based on discounted cash flows. The discounted cash flow methodology requires significant judgment, including estimation of future cash flows, which is dependent on internal forecasts, current and anticipated economic conditions and trends, the estimation of the long-term growth rate of the Company's business, and the determination of the Company's weighted-average cost of capital. Changes in the estimates and assumptions incorporated in our impairment assessment could materially affect the determination of fair value and the
associated impairment charge. Factors such as a sustained decline in our stock price or negative macroeconomic or industry trends could result in additional goodwill impairment charges in future periods.
During the years ended December 31, 2024 and 2023, the Company recognized goodwill impairment charges of $83.1 million and $268.8 million, respectively, which were recorded to the Marketing Services reporting unit. As a result of the impairment charge recorded during the year ended December 31, 2024, the goodwill in the Marketing Services reporting unit was reduced to zero, and only the SaaS reporting unit had goodwill remaining.
As part of the annual impairment test at October 1, 2025, the Company performed a qualitative assessment of the SaaS reporting unit. The qualitative evaluation is an assessment of factors, including recent and projected financial performance of the reporting unit, as well as macroeconomic, industry, and market conditions, to determine whether it is more likely than not (more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. The results of the qualitative assessment indicated that it was not more likely than not that the fair value of the SaaS reporting unit was less than its carrying value. As a result, no goodwill impairment charge was recorded for the year ended December 31, 2025.
As of December 31, 2025, goodwill was $253.8 million. For additional information related to goodwill, see Note 5, Goodwill and Intangible Assetsto our consolidated financial statements included in Part II, Item 8 in this Annual Report.
Pension Obligations
The Company maintains pension obligations associated with non-contributory defined benefit pension plans that are currently frozen and incur no additional service costs.
Although the plans are frozen, the Company continues to incur interest costs as well as gains or losses associated with changes in fair value of plan assets, all of which are referred to as net periodic pension cost. In determining the pension obligations at each reporting period, management makes certain actuarial assumptions, including discount rates and mortality rates. For these assumptions, management consults with actuaries, monitors plan provisions and demographics, and reviews public market data and general economic information. Changes in these assumptions can have a significant impact on the projected pension obligations, funding requirement, and net periodic pension cost. The Company immediately recognizes actuarial gains and losses in its operating results in the year in which the gains and losses occur.
Income Taxes
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weight of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character, for example, ordinary income or capital gain within the carryback or carryforward periods available under the applicable tax law. We regularly review the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, and tax planning strategies. Should there be a change in the ability to recover deferred tax assets, our income tax provision would increase or decrease in the period in which the assessment is changed.
The Company's policy is to recognize interest and penalties related to unrecognized tax benefits in income tax expense. The amount of income taxes we pay is subject to ongoing audits by federal and state tax authorities, which often result in proposed assessments. Significant judgment is required in determining income tax provisions and evaluating tax positions. We establish reserves for open tax years for uncertain tax positions that may be subject to challenge by various tax authorities. The consolidated tax provision and related accruals include the impact of such reasonably estimable losses and related interest and penalties as deemed appropriate. Tax benefits recognized in the financial statements from uncertain tax positions are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.
Recent Accounting Pronouncements
See Note 1, Description of Business and Summary of Significant Accounting Policies, to our audited consolidated financial statements as of and for the years ended December 31, 2025, 2024, and 2023, included in Part II, Item 8 in this Annual Report, for a discussion of recent accounting pronouncements.
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