Thryv Holdings (THRY) risk factors, FY2024 10-K

Strategic, Market and Competition Risks

1. 01We face significant competition for our Marketing Services solutions and SaaS offerings, which may harm our ability to add new clients, retain existing clients and grow our business. Competitors include companies who use components of our SaaS offerings provided by third parties
2. 02We recognize revenue for our print services upon delivery of the print directories to the intended market, which can result in variability in the amount of revenue recognized each quarter due to the publication cycle of each print directory
3. 03If our SEO strategies fail to help our IYPs get discovered or our clients’ websites to get discovered in unpaid search results, our business could be adversely affected
4. 04We have recently experienced growth in our operations related to our SaaS segment. While we have been successful in transitioning Marketing Services clients to our SaaS product offerings in the past, this success may not continue
5. 05Our reliance on, and extension of credit to, small and medium sized local businesses could adversely affect our business
6. 06If we are unable to develop or to sell our Thryv Platform into new markets or to further penetrate existing markets, our revenue may not grow as expected
7. 07We are dependent upon client renewals, the addition of new clients, increased revenue from existing clients and the continued growth of the market for our Thryv Platform and any impact on these factors could materially adversely affect our operating results
8. 08Our subscription renewals may decrease, and any decrease in our number of clients could harm our future revenue and operating results
9. 09If we fail to further enhance our brand or maintain our existing strong brand awareness, our ability to expand our client base may be impaired and our financial condition may suffer
10. 10We may not be able to maintain profitability in the future, and our past performance may not be indicative of our future performance
11. 11The continuing decline in the use of print directories and in our ability to attain new or renewed print agreements continues to adversely affect our business
12. 12Providing technology-based marketing solutions to small businesses is an evolving market that may not grow as quickly as we anticipate, or at all
13. 13If we are not able to provide new or enhanced functionality and features, including robust artificial intelligence solutions, it could have a material adverse effect on our business, financial condition and results of operations
14. 14We use AI in our business, and challenges with properly managing its use could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations
15. 15We may be unsuccessful in identifying and acquiring suitable acquisition candidates or in integrating any businesses that are or have been acquired. This could have a material adverse effect on our business, financial condition and results of operations
16. 16A failure to integrate acquisitions efficiently, may be disruptive to our operations and adversely impact our revenues or increase our expenses
17. 17Expansion of our operations to, and offering our services in, markets outside of the U.S. subjects us to political, economic, legal, operational and other risks that could have a material adverse effect on our business, results of operations, financial condition, cash flows and reputation
18. 18Issues relating to the failure to comply with applicable non-U.S. laws, requirements or restrictions may also impact our domestic business and/or raise scrutiny on our domestic practices
19. 19We have recorded impairment charges in the past and may record impairment charges in the future
20. 20The Company’s strategic decision to transition clients from its digital Marketing Services solutions to its Thryv Platform products could result in higher levels of client churn and have an adverse effect on the Company’s results of operations and key business metrics

Risks Related to Strategic Relationships and Third Parties

1. 21We have agreements with several major internet search engines and search sites. The termination or material alteration of one or more of these agreements could adversely affect our business
2. 22We have agreements with several internet search engines and search or directory websites providers, which makes our content easier for search engines to access and provides a greater response for our clients to general searches on the internet
3. 23Our growth depends in part on the success of our strategic relationships with third parties
4. 24If we are unsuccessful in establishing or maintaining our relationships with third-party service providers, our ability to compete in the marketplace or to grow our revenues could be impaired, which could have a material adverse effect on our business, financial condition and results of operations
5. 25Development and delivery of Thryv modules
6. 26Monitoring of changes to applicable laws
7. 27If we, or our third-party providers, do not keep pace with rapid technological changes and evolving industry standards, we may not be able to remain competitive, and the demand for our services may decline
8. 28If we do not maintain the compatibility of our Thryv Platform with third-party applications that our clients use in their businesses, our revenue will decline
9. 29We rely on data provided by third parties, the loss of which could limit the functionality of our platform and disrupt our business

Risks Related to the Economy, Disasters, Epidemics, and Other External Factors

1. 30Adverse economic conditions may have a material adverse effect on our business, financial condition and results of operations
2. 31Any of these events could have a material adverse effect on our business, financial condition and results of operations, and spending levels for our offerings may not increase following any recovery
3. 32Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm, damaged client relationships or legal liability

Risks Related to Human Capital

1. 33We depend on our senior management team, and the loss of one or more key employees or an inability to attract and to retain highly skilled employees could have a material adverse effect on our business, financial condition and results of operations
2. 34A portion of our employees are represented by unions. Our business could be adversely affected by future labor negotiations and our ability to maintain good relations with our unionized employees

Legal, Tax, Regulatory and Compliance Risks

1. 35solutions would be less effective, which may reduce demand for our Thryv Platform and add-ons, which could have a material adverse effect on our business, financial condition and results of operations
2. 36Industry-specific regulation and other requirements and standards are evolving and unfavorable industry-specific laws, regulations, interpretive positions or standards could harm our business
3. 37An information security breach of our systems or our data centers operated by third-party providers, the loss of, or unauthorized access to, client information, or a system disruption could have a material adverse effect on our business, market brand, financial condition and results of operations
4. 38Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand
5. 39Some of our solutions utilize open source software and any failure to comply with the terms of one or more of these open source licenses could have a material adverse effect on our business, financial condition and results of operations
6. 40Litigation and regulatory investigations, including the Subpoena, aimed at us or resulting from our actions or the actions of our predecessors may result in significant financial losses and harm to our reputation
7. 41be also subject to various regulatory investigations and inquiries, such as information requests and book and records examinations, from regulators and other authorities in the geographical markets in which we operate
8. 42We may be sued by third parties for alleged infringement of their proprietary rights
9. 43Laws and regulations directed at limiting or restricting the distribution of our print directories or shifting the costs and responsibilities of waste management related to our print directories could adversely affect our business
10. 44Our failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business, financial condition and results of operations
11. 45We may not be able to utilize a significant portion of our net operating loss carryforwards, which could have a material adverse effect on our financial condition and results of operations
12. 46which cannot be assured. These net operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could have a material adverse effect on our financial condition and results of operations

Risks Related to Taxes

1. 47The international tax landscape is highly uncertain and complex, and our international taxes might increase as a result of Pillar Two rules

Operational Risks

1. 48Cost reduction efforts may be time-consuming and the associated savings may not be realized
2. 49Any failure to offer high-quality or technical support services may adversely affect our relationships with our clients and could have a material adverse effect on our business, financial condition and results of operations
3. 50Aging software and hardware infrastructure may lead to increased costs and disruptions in operations that could adversely impact our financial results
4. 51If our Thryv Platform and add-ons fail to perform properly, our reputation could be adversely affected, our market share could decline, and we could be subject to liability claims, which could have a material adverse effect on our business, financial condition and results of operations
5. 52The occurrence of any of these issues could have a material adverse effect on our business, financial condition and results of operations. In addition, the costs incurred in correcting any material defects or errors might be substantial
6. 53Our results of operations may fluctuate significantly and may not fully reflect the underlying performance of our business

Risks Related to the Keap Acquisition

1. 54We may be unable to successfully integrate some or all of the Keap business into our business or achieve the anticipated benefits of the Keap Acquisition
2. 55The obligations and liabilities of the Keap business, some of which may be unanticipated or unknown, may be greater than we have anticipated, which could have a material adverse effect on our business
3. 56We are subject to business uncertainties as a result of the Keap Acquisition
4. 57We may be required to take write-downs or write-offs and impairment or other charges related to the Keap Acquisition that could have a significant negative effect on our financial condition, results of operations and stock price, which could materially and adversely affect our business
5. 58We have and will continue to incur significant transaction costs in connection with the Keap Acquisition
6. 59The Keap Acquisition may not be accretive and may cause dilution to our earnings per share, which may negatively affect the market price of our common stock
7. 60Historical performance of Keap may not be indicative of future performance

Risks Related to Our Indebtedness

1. 61Thryv Holdings, Inc. is a holding company and relies on transfers of funds and other payments from its subsidiaries to meet its obligations
2. 62Our outstanding indebtedness could have a material adverse effect on our financial condition and our ability to operate our business, and we may not be able to generate sufficient cash flows to meet our debt service obligations
3. 63Despite our substantial indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial leverage
4. 64Restrictive covenants in the agreements governing our Senior Credit Facilities may restrict our future operations, including our ability to pursue our business strategies or respond to changes
5. 65We may be unable to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness that may not be successful
6. 66Our debt may be downgraded, which could have a material adverse effect on our business, financial condition and results of operations
7. 67Volatility and weakness in bank and capital markets may adversely affect credit availability and related financing costs for us
8. 68Changes in key assumptions could result in additional underfunded pension obligations, resulting in the need for additional plan funding by us and increased pension expenses

Risks Related to Ownership of Our Common Stock

1. 69The market price of our shares of common stock may be volatile
2. 70Because we do not intend to pay cash dividends in the foreseeable future, you may not receive any return on investment unless you are able to sell your common stock for a price greater than your purchase price

Risks Related to Governance and Ownership Structure

1. 71Anti-takeover provisions in our fourth amended and restated certificate of incorporation and second amended and restated bylaws and certain provisions of Delaware law could delay or prevent a change of control that may be favored by some stockholders
2. 72of control provisions that limit the value of, or even terminate, the contract upon a change of control. The consent rights in these agreements might discourage, delay or prevent a transaction that a stockholder may consider favorable
3. 73Forecasts of market growth may prove to be inaccurate and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, if at all
4. 74If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our common stock and trading volume could decline