Thryv Holdings, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing, not a standalone Q4 report. Thryv provides marketing services and SaaS business-management tools to small and medium-sized businesses (SMBs), serving more than 400,000 clients across Marketing Services, SaaS and Thryv International.
Financial performance
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Revenue | $1,113.4 million | $1,109.4 million | Up 0.4% |
| Gross profit / margin | $705.3 million / 63.4% | $669.7 million / 60.4% | Margin up 3.0 percentage points |
| Operating income / margin | $190.0 million / 17.1% | $152.0 million / 13.7% | Income up 25.0% |
| Net income | $101.6 million | $149.2 million | Down 31.9% |
| Adjusted EBITDA (non-GAAP) | $350.5 million / 31.5% of revenue | $371.8 million / 33.5% | Down 5.7% |
| Cash from operating activities | $170.6 million | $232.8 million | Down $62.2 million |
| Cash and cash equivalents at year-end | $11.3 million | $2.4 million | Up $8.9 million |
FY2021 revenue by segment: Marketing Services $797.5 million, SaaS $170.5 million, and Thryv International $145.4 million. International revenue reflects the acquisition of Sensis/Thryv Australia on March 1, 2021; it contributed $145.4 million of revenue and a $27.3 million net loss after acquisition.
Reported debt at year-end was $562.5 million, net of unamortized discount and issuance costs, including $542.0 million under the New Term Loan and $39.9 million under the ABL Facility. The ABL had $104.0 million of available borrowing capacity. The term loan matures in 2026 and bears floating-rate interest; the company estimates a 100-basis-point rate increase would add about $5.8 million in annual interest expense.
Material changes versus the prior year
- Total revenue was nearly flat, as SaaS growth and the newly acquired Australian business offset continued contraction in Marketing Services.
- Marketing Services revenue fell 18.6%, including declines in print revenue of 17.4% and digital services revenue of 19.5%. Management cited secular print decline and strong digital competition.
- SaaS revenue grew 31.3%. SaaS monthly ARPU rose 29% to $331, and monthly active users increased 7% to 30,000. Management attributed growth to targeting higher-spend, more-engaged clients and add-on sales.
- Gross and operating margins improved, aided by cost reductions, lower depreciation and amortization, and the addition of Thryv International. Adjusted EBITDA nevertheless declined.
- Operating cash flow decreased 26.7%, mainly due to higher income-tax payments and acquisition-related transaction payments. Investing cash use increased, including $175.4 million paid for the Australia acquisition.
- Net income declined despite higher operating income, partly because FY2020 included a $108.0 million income-tax benefit, while FY2021 recorded $32.7 million of tax expense. Pension accounting also shifted from a $42.2 million expense in FY2020 to a $14.8 million benefit in FY2021.
Outlook, commentary and key risks
Management expects Marketing Services revenue to remain pressured by longer-term declines in print and competition in digital advertising. Its strategy is to grow SaaS, cross-sell to legacy marketing clients, focus on higher-value clients, maintain cost discipline, and pursue selective acquisitions and international expansion. The filing does not provide a clear numeric revenue, earnings or cash-flow forecast.
Management stated that operating cash flows, available cash and ABL capacity should meet liquidity needs for the next 12 months, while cautioning that projections are uncertain. The company reported compliance with debt covenants at year-end and expected continued compliance over the following 12 months. A $21.0 million cash acquisition of Vivial closed on January 21, 2022.
- Leverage and rates: substantial floating-rate debt, mandatory term-loan amortization, restrictive covenants and dependence on sufficient cash generation create refinancing and debt-service risks.
- Business transition: Marketing Services remains the majority of revenue and is declining; results depend on whether SaaS growth and client conversions can offset that decline.
- Competition and retention: large digital platforms and lower-cost SaaS alternatives could pressure pricing, client renewals and growth.
- Acquisition and integration: Australia expanded the business but involved significant purchase-price estimates; Vivial’s acquisition accounting was incomplete when the filing was issued.
- Other exposures: SMB credit losses, cybersecurity and privacy compliance, third-party technology and search-provider relationships, foreign exchange, and pension funding. The frozen pension plans had a $141.3 million deficit; management expected approximately $26.1 million of contributions in 2022.
Unusual items included $3.2 million of COVID-related customer credits in 2021, $4.7 million of severance expense, $3.6 million of impairment charges, and a $3.4 million loss primarily from terminating leaseback obligations. The company disclosed tax disputes and state indirect-tax audits; it had reserved $31.9 million for the Section 199 dispute and $3.1 million and $1.2 million for New York and Ohio sales/use tax matters, respectively. Management did not expect pending legal matters, in the aggregate, to have a material adverse effect.
The auditor gave an unqualified opinion on the financial statements and internal controls. The internal-control assessment excluded Thryv Australia, which represented 6% of consolidated assets and 13% of FY2021 revenue.
Important facts for investors to verify
- Whether SaaS growth, higher ARPU and improved engagement can continue at a pace sufficient to offset Marketing Services declines.
- Debt balances, floating-rate exposure, covenant headroom, required principal payments and actual liquidity after the Vivial acquisition.
- Cash conversion and working-capital trends, particularly receivables and collections from SMB clients.
- Australia and Vivial integration progress, acquisition accounting and expected synergies or costs.
- Developments in the pension deficit, planned contributions, tax disputes and indirect-tax reserves.