Thryv Holdings, Inc. (THRY)

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” in our 2025 Form 10-K, elsewhere in this Quarterly Report on Form 10-Q, particularly Part II, Item 1A. "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 2026, SMB demand for integrated technology solutions continues to grow as SMBs adapt their business and service models to facilitate remote working and virtual interactions.

We serve approximately 215,000 SMB clients globally through two business segments: SaaS and Marketing Services.

SaaS

Our SaaS segment generated $114.5 million and $115.0 million of consolidated revenue for the three months ended June 30, 2026 and 2025, respectively, and $231.2 million and $226.1 million of consolidated revenue for the six months ended June 30, 2026 and 2025, 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 $36.2 million and $95.5 million of consolidated revenue for the three months ended June 30, 2026 and 2025, respectively, and $87.2 million and $165.7 million of consolidated revenue for the six months ended June 30, 2026 and 2025, respectively.

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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 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 optimization tools.

During the year ended December 31, 2024, we made a strategic decision to terminate our Marketing Services solutions by the end of 2028.

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 for customers to the Thryv Platform by initiating upgrades for clients outside of the sales process at no additional base cost to these clients at the time of upgrade. The cost of bringing these clients into SaaS products is generally lower than the cost of acquiring a new SaaS customer or selling a SaaS product to an existing Marketing Services customer because the Company does not pay commissions to sales personnel for upgrades that Thryv initiates for customers outside of the sales process.

During the twelve months ended June 30, 2026, we converted approximately 11,000 clients with Digital marketing services products to our Thryv Platform who were not already SaaS clients at the time of conversion. As of June 30, 2026, approximately 9,000 of these clients remained as SaaS clients. The conversion of these Marketing Services clients increased SaaS revenue by $5.0 million and $7.6 million during the three and six months ended June 30, 2026, respectively.

Additionally, during the twelve months ended June 30, 2026, we converted Digital marketing services products to our Thryv Platform for approximately 4,000 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 $1.8 million and $3.2 million during the three and six months ended June 30, 2026, respectively.

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 provide valuable upgrades from Digital marketing services to our Thryv Platform and that converted clients are likely to subscribe to 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 the six months ended June 30, 2026, 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.

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, 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.

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Our strategy is to expand the use of our SaaS solutions by introducing our SaaS solutions to new SMB clients and our current Marketing Services clients, as well as by offering additional SaaS solutions to our existing SaaS client base. This strategy includes capitalizing on the growing demand among SMBs for solutions that support a remote working environment and virtual interactions. This strategy will require substantial sales and marketing capital, and 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 exhibit higher churn rates.

Investment in Growth

We plan to continue to develop and grow a profitable SaaS segment to better help SMBs manage their businesses, while also maintaining strong profitability within our Marketing Services segment. As a result, our SaaS segment 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 lead to increased 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 cycle

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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 230,000 SMB clients globally through 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

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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 optimization tools.

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 million in 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.

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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

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