Thryv Holdings Inc.

08/04/2026 | Press release | Distributed by Public on 08/04/2026 05:32

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

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.
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.
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 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 June 30,
(in thousands) 2026 2025
Clients
Marketing Services (1)
159 199
SaaS (2)
95 106
Total (3)
215 261
(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 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 decreased by 40 thousand, or 20%, as of June 30, 2026 as compared to June 30, 2025. This decrease was related to the secular decline in the print media industry and significant competition in the digital media space, and from focusing on offering our SaaS solutions to our current Marketing Services clients, including by initiating conversions of our Digital marketing services products to SaaS products for clients.
SaaS clients decreased by 11 thousand, or 10%, as of June 30, 2026 as compared to June 30, 2025, due to the Company's sales strategy shifting to focus on growing the spend of existing clients with less emphasis on new SaaS client acquisition.
Total clients decreased by 46 thousand, or 18%, as of June 30, 2026 as compared to June 30, 2025. The primary driver of this decrease was 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 new SaaS 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 growth in ARPU is an indicator of client satisfaction with our services.
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
ARPU (Monthly)
Marketing Services $ 100 $ 111 $ 101 $ 111
SaaS $ 394 $ 352 $ 389 $ 343
Monthly ARPU for Marketing Services decreased by $11, or 10%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, and decreased by $10, or 9%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. 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 $42, or 12%, during the three months ended June 30, 2026 compared to the three months ended June 30, 2025, and increased by $46, or 13%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in ARPU for these periods was driven by the sale of additional SaaS offerings to existing SaaS clients, the growth of the average spend of new SaaS clients, and price increases implemented in the second quarter of 2026. This was partially offset by the 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.
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 by the same clients' revenue one year ago. For each reporting quarter, the weighted-average monthly NRR from all the months in the quarter are reported. The Seasoned NRR calculation excludes clients acquired in the acquisition of Keap.
Three Months Ended June 30,
2026 2025
Seasoned NRR 90 % 102 %
Seasoned NRR decreased from 102% for the three months ended June 30, 2025 to 90% for the three months ended June 30, 2026. The decrease in Seasoned NRR 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.
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 (expense) income, 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:
Three Months Ended June 30,
2026
2025
(unaudited)
(dollars in thousands) Amount % of Revenue Amount % of Revenue
Revenue $ 150,728 100 % $ 210,470 100 %
Cost of services 56,168 37.3 % 63,850 30.3 %
Gross profit 94,560 62.7 % 146,620 69.7 %
Operating expenses:
Sales and marketing 47,038 31.2 % 56,063 26.6 %
Research and development 7,509 5.0 % 8,661 4.1 %
General and administrative 41,156 27.3 % 52,356 24.9 %
Total operating expenses 95,703 63.5 % 117,080 55.6 %
Operating (loss) income (1,143) 0.8 % 29,540 14.0 %
Other income (expense):
Interest expense (7,518) 5.0 % (8,952) 4.3 %
Net periodic pension cost (357) 0.2 % (778) 0.4 %
Other (expense) income (446) 0.3 % 2,557 1.2 %
(Loss) income before income tax expense (9,464) 6.3 % 22,367 10.6 %
Income tax expense (7,196) 4.8 % (8,436) 4.0 %
Net (loss) income $ (16,660) 11.1 % $ 13,931 6.6 %
Other financial data:
Adjusted EBITDA (1)
$ 20,825 13.8 % $ 51,232 24.3 %
Adjusted Gross Profit (2)
$ 99,177 $ 150,658
Adjusted Gross Margin (3)
65.8 % 71.6 %
(1) See "Non-GAAP Financial Measures" for a definition of Adjusted EBITDA and a reconciliation to Net (loss) income, the most directly comparable measure presented in accordance with GAAP.
(2) 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.
(3) See "Non-GAAP Financial Measures" for a definition of Adjusted Gross Margin.
Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025
Revenue
The following table summarizes Revenue by business segment for the periods indicated:
Three Months Ended June 30, Change
2026
2025
Amount %
(dollars in thousands) (unaudited)
SaaS $ 114,480 $ 115,005 $ (525) (0.5) %
Marketing Services 36,248 95,465 (59,217) (62.0) %
Revenue $ 150,728 $ 210,470 $ (59,742) (28.4) %
Revenue decreased by $59.7 million, or 28.4%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was driven by a decrease in Marketing Services revenue of $59.2 million and a decrease in SaaS revenue of $0.5 million.
SaaS Revenue
SaaS revenue decreased by $0.5 million, or 0.5%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily attributable to clients downgrading or cancelling their SaaS solutions, partially offset by new sales, client expansion, and the Company's conversion of Digital marketing services solutions for clients to its SaaS offerings. SaaS revenue decreased $12.9 million due to net revenue changes associated with products sold or converted prior to January 1, 2026. The Company's conversion of Digital marketing services solutions for clients to SaaS offerings during the first six months of 2026 increased SaaS revenue by $4.0 million, and new sales and client expansion during the first six months of 2026 increased SaaS revenue by $8.4 million.
Marketing Services Revenue
Marketing Services revenue decreased by $59.2 million, or 62.0%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Print revenue decreased by $42.1 million, or 62.8%, to $24.9 million for the three months ended June 30, 2026 compared to $67.0 million for the three months ended June 30, 2025. The decrease in Print revenue was primarily driven by the continued secular decline in U.S. and international industry demand for Print services, partially offset by the impact of publication timing differences of our U.S. directories as a result of our Print agreements having greater than 12-month terms.
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 2026. 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. Due to publication timing differences, the Company recognized revenue for fewer published directories during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
During the fourth quarter of 2024, we began to transition our U.S. directories from 18-month publication cycles to 24-month 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 10% per directory published during the three months ended June 30, 2026 compared to the last time the directory was published. However, when adjusting the published directory's revenue on a monthly basis, that is the published directory's revenue divided by the number of months of the published lifecycle, the average revenue per published directory decreased by 26% 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 three months ended June 30, 2026. This net decline per directory was the result of the secular decline in industry demand for Print services.
Digital marketing services revenue decreased by $17.1 million, or 60.2%, to $11.3 million for the three months ended June 30, 2026 compared to $28.5 million for the three months ended June 30, 2025. The decrease was driven in large part by the Company's strategic decision during the fourth quarter of 2023 to accelerate the conversion of Digital marketing services products for clients to SaaS offerings. For the three months ended June 30, 2026, Thryv's conversion of Digital marketing services products for clients to SaaS offerings prior to January 1, 2026 reduced Marketing Services revenue by $2.8 million, and Thryv's conversion of Digital marketing services products to SaaS products since January 1, 2026 reduced Marketing Services revenues by an additional $4.0 million. Digital marketing services revenue has further 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 three months ended June 30, 2026, this continued trending decline and significant competition resulted in an additional $10.3 million decrease in Digital marketing services revenue.
Cost of Services
Cost of services decreased by $7.7 million, or 12.0%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily driven by a corresponding decline in revenue and by strategic cost saving initiatives. Specifically, printing and distribution costs decreased by $6.6 million as a result of lower Print revenue, contract services expense decreased by $3.7 million, and employee-related expenses decreased by $1.5 million. These decreases were partially offset by an increase in traffic expenses of $3.2 million.
Gross Profit
Gross profit decreased by $52.1 million, or 35.5%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in Gross profit was primarily due to decreases in SaaS and Marketing Services revenue, partially offset by a decrease in Cost of services as a result of a decline in total revenue and strategic cost saving initiatives.
Our gross margin decreased to 62.7% for the three months ended June 30, 2026 compared to 69.7% for the three months ended June 30, 2025. Gross margin from our SaaS segment decreased to 63.5% for the three months ended June 30, 2026, compared to 72.1% for the three months ended June 30, 2025. Gross margin from our Marketing Services segment decreased to 60.2% for the three months ended June 30, 2026, compared to 66.7% for the three months ended June 30, 2025. The decrease in SaaS gross margin was primarily due to the conversion of Digital marketing services solutions to our Thryv Platform throughout 2025 and 2026 that carry lower margins than our existing SaaS products and were converted by Thryv at no additional base cost at the time of conversion. Marketing Services gross margin decreased as a result of decreased demand for our Marketing Services solutions.
Operating Expenses
Sales and Marketing
Sales and marketing expense decreased by $9.0 million, or 16.1%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily attributable to a decrease in employee-related expenses of $4.6 million as a result of lower sales headcount, a decrease in sales commissions of $3.2 million, and a decrease in stock-based compensation expense of $1.0 million.
Research and Development
Research and development expense decreased by $1.2 million, or 13.4%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily attributable to a decrease in employee-related costs of $1.0 million.
General and Administrative
General and administrative expense decreased by $11.2 million, or 21.4%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily attributable to a decrease in contract services of $6.3 million, a decrease in employee-related expenses of $3.3 million, a decrease in bad debt expense of $1.6 million, and a decrease in stock-based compensation expense of $2.3 million. These decreases were partially offset by an increase in severance expenses of $3.1 million.
Other Income (Expense)
Interest Expense
Interest expense decreased by $1.4 million, or 16.0%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, driven primarily by lower outstanding debt balances.
Net Periodic Pension Cost
Net periodic pension cost decreased by $0.4 million for the three months ended June 30, 2026. This decrease was primarily due to decrease in interest cost of $1.0 million, partially offset by a decrease in expected return on plan assets of $0.6 million.
Other (Expense) Income
Other expense for the three months ended June 30, 2026 was $0.4 million, compared to Other income of $2.6 million during the three months ended June 30, 2025. This net change of $3.0 million was primarily the result of a foreign-currency related loss of $0.4 million during the three months ended June 30, 2026, compared to a foreign-currency related gain of $2.6 million during the three months ended June 30, 2025.
Income Tax Expense
The Company's effective tax rate ("ETR") was (76.0%) and 37.7% for the three months ended June 30, 2026 and 2025, respectively. The Company's ETR differs from the U.S. Federal statutory rate of 21% primarily due to permanent differences, including state taxes, non-deductible executive compensation, non-U.S. taxing jurisdictions, tax credits, minimum taxes, changes in valuation allowance due to expiring net operating losses, and the discrete impact of interest accrual on uncertain tax positions.
Adjusted EBITDA
Adjusted EBITDA decreased by $30.4 million, or 59.4%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease in Adjusted EBITDA was primarily attributable to our Marketing Services segment as a result of lower Print revenue, with the decline in revenue outpacing associated cost reductions. Additionally, Adjusted EBITDA in our SaaS segment decreased as a result of the conversion of lower margin Digital marketing services products to SaaS.
See "Non-GAAP Financial Measures" for a definition of Adjusted EBITDA and a reconciliation to Net (loss) income, the most directly comparable measure presented in accordance with GAAP.
Results of Operations
Consolidated Results of Operations
The following table presents certain consolidated financial data for each of the periods indicated:
Six Months Ended June 30,
2026
2025
(unaudited)
(dollars in thousands) Amount % of Revenue Amount % of Revenue
Revenue $ 318,412 100 % $ 391,841 100 %
Cost of services 114,596 36.0 % 125,933 32.1 %
Gross profit 203,816 64.0 % 265,908 67.9 %
Operating expenses:
Sales and marketing 94,986 29.8 % 115,905 29.6 %
Research and development 18,940 5.9 % 18,870 4.8 %
General and administrative 86,975 27.3 % 104,627 26.7 %
Total operating expenses 200,901 63.1 % 239,402 61.1 %
Operating (loss) income 2,915 0.9 % 26,506 6.8 %
Other income (expense):
Interest expense (14,125) 4.4 % (18,025) 4.6 %
Net periodic pension cost (702) 0.2 % (1,546) 0.4 %
Other income 987 0.3 % 2,949 0.8 %
(Loss) income before income tax expense (10,925) 3.4 % 9,884 2.5 %
Income tax expense (1,193) 0.4 % (5,571) 1.4 %
Net (loss) income $ (12,118) 3.8 % $ 4,313 1.1 %
Other financial data:
Adjusted EBITDA (1)
$ 44,889 14.1 % $ 72,133 18.4 %
Adjusted Gross Profit (2)
$ 212,085 $ 274,324
Adjusted Gross Margin (3)
66.6 % 70.0 %
(1) See "Non-GAAP Financial Measures" for a definition of Adjusted EBITDA and a reconciliation to Net (loss) income, the most directly comparable measure presented in accordance with GAAP.
(2) 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.
(3) See "Non-GAAP Financial Measures" for a definition of Adjusted Gross Margin.
Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025
Revenue
The following table summarizes Revenue by business segment for the periods indicated:
Six Months Ended June 30, Change
2026
2025
Amount %
(dollars in thousands) (unaudited)
SaaS $ 231,218 $ 226,134 $ 5,084 2.2 %
Marketing Services 87,194 165,707 (78,513) (47.4) %
Revenue $ 318,412 $ 391,841 $ (73,429) (18.7) %
Revenue decreased by $73.4 million, or 18.7%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was driven by a decrease in Marketing Services revenue of $78.5 million partially offset by an increase in SaaS revenue of $5.1 million.
SaaS Revenue
SaaS revenue increased by $5.1 million, or 2.2%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily attributable to new sales, client expansion, and the Company's conversion of Digital marketing services solutions for clients to its SaaS offerings. Of the $5.1 million SaaS revenue increase, the Company's conversion of Digital marketing services solutions for clients to SaaS offerings during the first six months of 2026 contributed $4.5 million, and new sales and client expansion during the first six months of 2026 contributed $11.3 million. These increases were partially offset by decreases of $10.7 million due to net revenue changes associated with products sold or converted prior to January 1, 2026.
Marketing Services Revenue
Marketing Services revenue decreased by $78.5 million, or 47.4%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Print revenue decreased by $46.2 million, or 44.1%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. 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 2026. 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. Due to publication timing differences, the Company recognized revenue for fewer published directories during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
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 18% per published directory compared to the last time the directory was published. However, when adjusting the published directory's revenue on a monthly basis, that is the published directory's revenue divided by the number of months of the published lifecycle, the average revenue per published directory decreased by 32% compared to the last time the directory was published. The net impact on revenue per published directory was a 14% decline for the directories published during the six months ended June 30, 2026. This net decline per directory was the result of the secular decline in industry demand for Print services.
Digital marketing services revenue decreased by $32.3 million, or 53.0%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was driven in large part by the Company's strategic decision during the fourth quarter of 2023 to accelerate the conversion of Digital marketing services products for its clients to SaaS offerings. For the six months ended June 30, 2026, Thryv's conversion of Digital marketing services products for clients to SaaS offerings prior to January 1, 2026 reduced Marketing Services revenue by $6.4 million, and Thryv's conversion of Digital marketing services products for clients to SaaS products since January 1, 2026 reduced Marketing Services revenue by an additional $4.5 million. Digital marketing services revenue has further 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 six months ended June 30, 2026, this continued trending decline and significant competition resulted in an additional $21.4 million decrease in Digital marketing services revenue.
Cost of Services
Cost of services decreased by $11.3 million, or 9.0%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily driven by the corresponding decline in revenue and by strategic cost saving initiatives. Specifically, we reduced printing and distribution costs by $7.4 million, employee-related expenses by $3.1 million and contract services expense by $7.6 million. These decreases were partially offset by an increase in traffic expenses of $6.1 million.
Gross Profit
Gross profit decreased by $62.1 million, or 23.4%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. 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 decreased by 390 basis points to 64.0% for the six months ended June 30, 2026 compared to 67.9% for the six months ended June 30, 2025. Gross margin from our SaaS segment decreased to 64.2% for the six months ended June 30, 2026 compared to 71.5% for the six months ended June 30, 2025. Gross margin from our Marketing Services segment increased to 63.6% for the six months ended June 30, 2026 compared to 62.9% for the six months ended June 30, 2025. The decrease in SaaS gross margin and increase in Marketing Services gross margin was primarily due to the conversion of Digital marketing services solutions to our Thryv Platform throughout 2025 and 2026 that carry lower margins than our existing SaaS products and were converted by Thryv at no additional base cost to the customer at the time of conversion.
Operating Expenses
Sales and Marketing
Sales and marketing expense decreased by $20.9 million, or 18.0%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily attributable to a decrease in employee-related expenses of $7.8 million as a result of lower sales headcount, a decrease in sales commissions of $7.6 million, and a decrease in stock-based compensation of $2.2 million.
Research and Development
Research and development expense increased by $0.1 million, or 0.4%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
General and Administrative
General and administrative expense decreased by $17.7 million, or 16.9%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily due to a decrease in contract services of $6.1 million, a decrease in employee-related expenses of $5.5 million, a decrease in bad debt expense of $2.0 million, a decrease in software expense of $1.7 million, and a decrease in stock-based compensation expense of $4.2 million. These decreases were partially offset by an increase in severance expense of $3.5 million.
Other Income (Expense)
Interest Expense
Interest expense decreased by $3.9 million, or 21.6%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, driven primarily by lower outstanding debt balances.
Net Periodic Pension Cost
Net periodic pension cost decreased by $0.8 million for the six months ended June 30, 2026. This decrease was primarily due to a decrease in interest cost of $2.0 million, partially offset by a lower return on plan assets of $1.2 million.
Other Income
Other income decreased by $2.0 million for the six months ended June 30, 2026, driven primarily due to lower foreign-currency related gains.
Income Tax Expense
The Company's ETR was (10.9%) and 56.4% for the six months ended June 30, 2026 and 2025, respectively. The Company's ETR differs from the U.S. Federal statutory rate of 21% primarily due to permanent differences, including state taxes, non-deductible executive compensation, non-U.S. taxing jurisdictions, tax credits, minimum taxes, change in valuation allowance due to expiring net operating losses, and the discrete impact of interest accrual on uncertain tax positions.
Adjusted EBITDA
Adjusted EBITDA decreased by $27.2 million, or 37.8%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease in Adjusted EBITDA was primarily attributable to our Marketing Services segment as a result of lower Print revenue. Additionally, Adjusted EBITDA in our SaaS segment decreased as a result of the conversion of lower margin Digital marketing services products to SaaS products.
See "Non-GAAP Financial Measures" for a definition of Adjusted EBITDA and a reconciliation to Net (loss) income, the most directly comparable measure presented in accordance with GAAP.
Non-GAAP Financial Measures
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States ("GAAP"). We also present Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin, as defined below, as non-GAAP financial measures in this Quarterly Report.
We have included Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin in this report because management believes they provide useful information to investors in gaining an overall understanding of our current financial performance and provide consistency and comparability with past financial performance. Specifically, we believe Adjusted EBITDA provides useful information to management and investors by excluding certain non-operating items that we believe are not indicative of our core operating results. In addition, Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin are used by management for budgeting and forecasting as well as measuring the Company's performance. We believe Adjusted EBITDA, Adjusted Gross Profit, and Adjusted Gross Margin provide investors with the financial measures that closely align with our internal processes.
We define Adjusted EBITDA ("Adjusted EBITDA") as Net income (loss) plus Interest expense, Income tax expense (benefit), Depreciation and amortization expense, Restructuring and integration expenses, Stock-based compensation expense, and non-operating expenses, such as Net periodic pension cost 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 (loss) income:
Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2026 2025 2026 2025
Reconciliation of Adjusted EBITDA
Net (loss) income
$ (16,660) $ 13,931 $ (12,118) $ 4,313
Interest expense 7,518 8,952 14,125 18,025
Depreciation and amortization expense 10,894 10,191 20,060 21,707
Stock-based compensation expense 2,787 6,008 7,537 13,745
Restructuring and integration expenses (1)
8,288 5,493 14,378 10,175
Income tax expense 7,196 8,436 1,193 5,571
Net periodic pension cost (2)
357 778 702 1,546
Other (3)
445 (2,557) (988) (2,949)
Adjusted EBITDA $ 20,825 $ 51,232 $ 44,889 $ 72,133
(1)See the table below for detail of Restructuring and integration expenses for the three and six months ended June 30, 2026 and 2025.
(2)Net periodic pension cost is from our non-contributory defined benefit pension plans that are currently frozen and incur no additional service costs.
(3)Other primarily includes foreign exchange-related expense (income).
The following is a reconciliation of Restructuring and integration expenses that are included in the Adjusted EBITDA to Net (loss) income reconciliation above:
(in thousands) Three Months Ended June 30, Six Months Ended June 30,
Reconciliation of Restructuring and integration expenses 2026 2025 2026 2025
Abandoned facility costs (a)
$ 377 $ 1,128 $ 761 $ 2,264
Severance charges (b)
4,533 1,431 6,809 3,335
Post-acquisition and integration expenses (c)
2,377 1,458 4,393 2,494
Tax, accounting, and legal fees (d)
1,001 1,476 2,415 2,082
Total Restructuring and integration expenses $ 8,288 $ 5,493 $ 14,378 $ 10,175
(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 agreements during the periods presented were for our prior corporate headquarters, which ended on December 31, 2025 and was not renewed, and the Keap headquarters, which ends on December 31, 2026 and will not be renewed.
(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. The severance charges incurred during the three and six months ended June 30, 2026 and 2025 were related to our legacy Marketing Services employees as a result of our shift from Marketing Services activities, as well as activities to right-size our workforce following the acquisition of Keap. Additionally, the three and six months ended June 30, 2026 includes severance related to our restructuring initiative as described in Note 11, Restructuring, to our consolidated financial statements included in Part I, Item 1 in this Quarterly Report.
(c)We incur professional services, system integration, and other fees related to each of our acquisitions and other potential transactions. Such costs vary in nature and amount due to factors specific to each transaction and may create a lack of comparability between periods.
(d)These costs consist of legal expenses related to legal cases inherited from acquisitions or resulting from integration efforts, as well as accounting and tax 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:
Three Months Ended June 30, 2026
(in thousands) SaaS Marketing Services Total
Reconciliation of Adjusted Gross Profit
Gross profit $ 72,745 $ 21,815 $ 94,560
Plus:
Depreciation and amortization expense 3,449 1,099 4,548
Stock-based compensation expense 51 18 69
Adjusted Gross Profit
$ 76,245 $ 22,932 $ 99,177
Gross margin
63.5 % 60.2 % 62.7 %
Adjusted Gross Margin
66.6 % 63.3 % 65.8 %
Three Months Ended June 30, 2025
(in thousands) SaaS Marketing Services Total
Reconciliation of Adjusted Gross Profit
Gross profit $ 82,911 $ 63,709 $ 146,620
Plus:
Depreciation and amortization expense 2,118 1,754 3,872
Stock-based compensation expense 93 73 166
Adjusted Gross Profit
$ 85,122 $ 65,536 $ 150,658
Gross margin
72.1 % 66.7 % 69.7 %
Adjusted Gross Margin
74.0 % 68.6 % 71.6 %
Six Months Ended June 30, 2026
(in thousands) SaaS Marketing Services Total
Reconciliation of Adjusted Gross Profit
Gross profit $ 148,377 $ 55,439 $ 203,816
Plus:
Depreciation and amortization expense 5,946 2,186 8,132
Stock-based compensation expense 98 39 137
Adjusted Gross Profit
$ 154,421 $ 57,664 $ 212,085
Gross margin
64.2 % 63.6 % 64.0 %
Adjusted Gross Margin
66.8 % 66.1 % 66.6 %
Six Months Ended June 30, 2025
(in thousands) SaaS Marketing Services Total
Reconciliation of Adjusted Gross Profit
Gross profit $ 161,681 $ 104,227 $ 265,908
Plus:
Depreciation and amortization expense 4,716 3,381 8,097
Stock-based compensation expense 177 142 319
Adjusted Gross Profit
$ 166,574 $ 107,750 $ 274,324
Gross margin
71.5 % 62.9 % 67.9 %
Adjusted Gross Margin
73.7 % 65.0 % 70.0 %
Liquidity and Capital Resources
Thryv Holdings, Inc. is a holding company that does not conduct any business operations of its own. We derive cash flows from cash transfers and other distributions from our operating subsidiary, Thryv, Inc., who in turn generates cash flows from its own operations and operations of its subsidiaries, and has cash and cash equivalents on hand, funds provided under the Term Loan (as defined below) and funds available under the ABL Facility (as defined below). The agreements governing our debt may restrict the ability of our subsidiaries to make loans or otherwise transfer assets to us. Further, our subsidiaries are permitted under the terms of our senior credit facilities and other indebtedness to incur additional indebtedness that may restrict or prohibit the making of distributions or the making of loans by such subsidiaries to us. Our and our subsidiaries' ability to meet our debt service requirements is dependent on our ability to generate sufficient cash flows from operations.
We believe that expected cash flows from operations, available cash and cash equivalents, and funds available under our ABL Facility will be sufficient to meet our liquidity requirements, such as working capital requirements for our operations, business development and investment activities, and debt payment obligations, for at least the next 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 13, Contingent Liabilities, to our consolidated financial statements included in Part I, Item 1 in this Quarterly Report.
Material Cash Requirements
We have various payment obligations as part of our ordinary course of business. Our material cash requirements include: (1) lease obligations; (2) debt repayments (see Note 7, Debt Obligations); (3) employee wages, benefits, and incentives; (4) cash severance payments (see Note 11, Restructuring); and (5) taxes due to governmental authorities (see Note 12, Income Taxes). 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 13, Contingent Liabilities), pensions (see Note 8, Pensions) and other matters.
For the remainder of the year ending December 31, 2026, we expect total capital expenditures to be approximately $18.0 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:
Six Months Ended June 30,
2026 2025 Change
(in thousands) (unaudited)
Cash flows provided by (used in):
Operating activities $ 27,354 $ 19,075 $ 8,279
Investing activities (16,121) (14,998) (1,123)
Financing activities (12,984) (10,060) (2,924)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 61 592 (531)
Decrease in cash, cash equivalents and restricted cash $ (1,690) $ (5,391) $ 3,701
Cash Flows from Operating Activities
Net cash from operating activities increased by $8.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by positive working capital movements, most notably in accounts receivable, prepaid expenses and other assets, and other liabilities. Additionally, the Company received a $4.0 million income tax refund during the six months ended June 30, 2026, compared to a $3.4 million income tax payment during the six months ended June 30, 2025, representing a $7.3 million favorable change in cash taxes. Additionally, cash paid for interest decreased from $16.5 million in 2025 to $13.4 million in 2026, a $3.0 million reduction driven by lower outstanding debt balances.
Cash Flows from Investing Activities
Net cash used in investing activities increased by $1.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 as a result of more additions to fixed assets and capitalized software.
Cash Flows from Financing Activities
Net cash used in financing activities increased by $2.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. During the six months ended June 30, 2026, the Company made net payments on the ABL Facility of $11.1 million, compared to net proceeds generated by the ABL Facility of $16.0 million during the six months ended June 30, 2025, resulting in a $27.1 million net increase in financing outflows. Additionally, the Company made $0.4 million in principal payments on finance lease obligations during the six months ended June 30, 2026, while no comparable payments were made during the six months ended June 30, 2025. These increases in net cash outflows were partially offset by the reduction in cash outflows related to the Term Loan, as the Company made no payments on the Term Loan during the six months ended June 30, 2026, compared to $26.3 million in Term Loan payments during the six months ended June 30, 2025.
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. The Company defines a related party as any shareholder owning more than 5% of the Company's voting securities. As of June 30, 2026, 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, 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. The Company's mandatory amortization payments for the next 12 months total $35.0 million.
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.
The amount of borrowings permitted at any time under the ABL Facility is limited to a periodic borrowing base valuation of, among other things, our accounts receivables. In addition, we are required to maintain a minimum "Excess Availability" (as defined in the ABL Credit Agreement) of at least $8.5 million at all times. As of June 30, 2026, the Company had Excess Availability under its borrowing base of $23.0 million. After the minimum Excess Availability requirement, the Company had available borrowing capacity of approximately $14.5 million.
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 June 30, 2026. We had total recorded debt outstanding of $243.7 million (net of $6.6 million of unamortized original issue discount ("OID") and debt issuance costs) at June 30, 2026, which was comprised of amounts outstanding under the Term Loan of $236.3 million and ABL Facility of $14.1 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.
As of June 30, 2026, 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 million remains 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 critical accounting policies and estimates have not changed from those described in our 2025 Form 10-K, under "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates."
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