THRY 10-K & 10-Q changes, risk factors and insider trading

•our reliance on third-party service providers for many aspects of our business (including for AI solutions) and our potential inability to maintain our strategic relationships with such third-party service providers;

•adverse tax lawslaws, orregulations, regulationsaudit outcomes, or potential changes to existing tax laws or regulations;

•the potential restriction of our future operations by restrictive covenants in the agreements governing our SeniorTerm CreditLoan Facilitiesand ABL Facility (as defined below);

Our current and potential competitors may have significantly more financial, technical, marketing and other resources than we have, and they may be able to devote greater resources to the development, promotion, sale and support of their products and services. Additionally, they may have more extensive customer bases, broader customer relationships, and greater name recognition. As a result, these competitors may respond faster to new technologies and undertake more extensive marketing campaigns for their products. In a few cases, these competitors may also be able to offer marketing and sales software at little or no additional cost by bundling it with their existing suite of applications. To the extent that any of our competitors have existing relationships with potential clients for either business software or marketing solutions, those clients may be unwilling to purchase our platform because of their existing relationships with our competitor. If we are unable to compete effectively with such companies, the demand for our Marketing Services solutions and SaaS offerings could decline substantially.

We recognize revenue for print services at a point in time upon delivery of the published print directories containing customer advertisements to the intended market. Our print 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.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 print directories is therefore directly related to the number of print directories we deliver to the intended market each quarter, which can vary dramatically based on the timing of the publication cycles. The timing of our print publication cycles may result in increased variability in the amount of revenue recognized each quarter, which could have a material adverse effect on our results of operations.

Our success depends in part on our ability to help our IYPs and our clients’ websites and contact information get discovered more easily in unpaid internet search results on search engines, such as Google, Yahoo! and Bing, among others. Algorithms are used by these search engines to determine search result listings and the order of such listings displayed in response to specific searches. Accordingly, our SEO efforts help our IYPs and our clients’ websites to be discovered more easily in organic search engine results, making it more likely that search engine users will visit these websites. However, our SEO efforts on behalf of our IYPs or our clients’ websites may not succeed in improving the discoverability of this content. Google in particular is the most significant source of traffic to our IYPs and to our clients’ websites. Therefore, it is important for us to maintain an effective SEO strategy so that our IYPs, where our clients’ business profiles are found, and our SMB clients’ websites, maintain a prominent presence in results from Google search queries. If we fail to do so, our business, financial condition and results of operations may be materially adversely affected. AI usage by the primary search engines, and by consumers for basic queries, may decrease effectiveness of our existing SEO efforts for ourselves and our clients In addition, search engines frequently change the criteria that determine the order in which their search results are displayed, including now with the use of AI, and our SEO efforts on behalf of our own sites and our clients’ sites will be unsuccessful if we do not effectively respond to those changes on a timely basis, or if the algorithm changes made by Google and other search engines make it harder for our IYPs or our clients’ websites to rank, reducing traffic flow. Therefore, if we are unable to respond effectively to changes made by search engine providers in their algorithms and other processes, our clients may experience substantial decreases in traffic to their profile pages on our IYPs and to their own websites. This may lead to a decrease in the perceived value of our products, which could result in our inability to acquire new clients, the loss of existing clients, a decrease in revenues and a material adverse effect on our results of operations.clients.

Our reliance on, and extension of credit to, small and medium sizedmedium-sized local businesses could adversely affect our business.

Our ability to increase revenue will depend, in large part, on our ability to increase sales of our Thryv Platform products to existing clients, upgrade existing clients to Thryv Platform products and maintain their business, sell additional products and upgrades on the Thryv Platform to clients, and sell our existing platformThryv Platform into new domestic and international markets. The success of our Thryv Platform depends on several factors, including the introduction and market acceptance of our Thryv Platform, the ability to maintain and to develop relationships with third-party service providers, and the ability to attract, to retainretain, and to effectively train sales and marketing personnel. Any new solutions we develop or acquire may not be introduced in a timely or cost-effective manner and may not achieve the market acceptance necessary to generate significant revenue. Any new markets in which we attempt to sell our Thryv Platform and add-ons, including new countries or regions, may not be receptive. Additionally, any expansion into new markets will require commensurate ongoing expansion of our monitoring of local laws and regulations, which increases our costs as well as the risk of the product not incorporating in a timely fashion or all the necessary changes to enable a client to be compliant with such laws. Our ability to further penetrate our existing markets depends on the quality of our Thryv Platform and add-ons and our ability to design our solutions to meet consumer demand. Furthermore, our ability to increase sales from existing clients depends on our clients’ satisfaction with our services and our clients’ desire for additional solutions and to expand from single-point solutions to our comprehensive Thryv Platform. If we are unable to sell solutions into new markets or to further penetrate existing markets, or to increase sales from existing clients, our revenue may not grow as expected, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, the success of any geographic expansion depends on our ability to customize products to integrate with third-party applications in that region and other market specific customizations, translate products for non-English speaking markets and provide customer service and training in local languages, which we may be unable to do successfully.

We 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 adverse impact on these factors could materially adversely affect our operating results.

Our Thryv Platform clients have no obligation to renew their subscriptions for our platform after the expiration of their initial contractual subscription periods. Our agreements with our Thryv Platform clients are typically structured on an initial multi-month subscription basis with automatic monthly renewal thereafter; consequently, our clients may choose to terminate their agreements with us at any time after the expiration of the initial term by providing us with the amount of written notice stipulated in the contract. In addition, our clients may seek to renew for lower subscription amounts or for shorter contract lengths. Also, clients may choose not to renew their subscriptions for a variety of reasons. Our renewals may decline or fluctuate as a result of a number of factors, including limited client resources, pricing changes, the prices of services offered by our competitors, adoption and utilization of our platform and related add-ons by our clients, adoption of our new solutions, client satisfaction with our platform, mergers and acquisitions affecting our client base, reductions in our clients’ spending levels or declines in client activity as a result of economic downturns or uncertainty in financial markets. If our clients do not renew their subscriptions forto our platform or if they decrease the amount they spend with us, our revenue will decline and our business will suffer. In addition, a subscription model creates certain risks related to the timing of revenue recognition and potential reductions in cash flows.

We believe that our development of the Thryv brand and maintenance of our existing PYP and IYP brands, including The Real Yellow Pages and Yellowpages.com, is critical to achieving widespread awareness of our existing and future solutions and, as a result, is important to attracting new clients and maintaining existing clients. In the past, our efforts to build our brands have involved significant expenses, and we believe that this investment has resulted in relatively strong brand recognition in the SMB market. Successful promotion and maintenance of our brands will depend largely on the effectiveness of our marketing efforts and on our ability to provide a reliable and useful Thryv Platform at competitive prices. Brand promotion activities may not yield increased revenue, and even if they do, any increased revenue may not offset the expenses we incur in building our brand. If we fail to successfully promote and maintain our brand, our business could suffer.

During the year ended December 31, 2024,2025, we generated a net lossincome of $74.2$0.3 million. If we are unable to acquire new clients cost effectively, we may incur net losses in the future. Our expenses may increase in the future due to additional investment in product development or expenses related to acquisitions, which could impact our ability to sustain profitability in the future. Additionally, whileas the majority of our revenue incontinues fiscalto years 2024, 2023 and 2022 cameshift from advertisingour servicesMarketing providedServices insolutions localto classifiedour printThryv directoriesPlatform, andour digital marketing solutions, such as search, display and social media, future development of newnewer services may initially have a lower profit margin than our existinglegacy services,offerings. whichThis could have a material adverse effect on our business, financial condition and results of operations.operations, As a result, weand may notaffect beour ableability to maintain profitability in the future.

The 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.

Overall references to print directories, including our Print Yellow Pages, in the United States have been declining since the early 2000s. This decline is primarily attributable to increased use of internet search providers, as well as the proliferation of large retail stores for which consumers and businesses may not reference the print directories. While we expect the decline in usage will continue to negatively affect advertising sales associated with our traditional print business, a significant further decline in usage of our print directories could impair our ability to maintain or increase advertising prices, which may cause businesses to reduce or discontinue purchasing advertising in our print directories. Either or both of these factors could adversely affect our revenue and have a material adverse effect on our business, financial condition, results of operations and prospects. These trends have resulted in declining print advertising sales, and we expect these trends to continue in 20252026 anduntil beyond.our planned exit of the print business in 2028.

•unanticipated problemsproblems, issues, or legal liabilities; and

A failure to integrate acquisitions efficiently,efficiently may be disruptive to our operations and adversely impact our revenues or increase our expenses.

During the year ended December 31, 2024, the Companywe made the strategic decision to terminate itsour Marketing Services solutions by the end of 2028. This strategic decision adversely impacted certain assumptions used to estimate the discounted future cash flows of our Thryv Marketing Services reporting unit for purposes of performing our goodwill impairment test.test, Asresulting ain result, we recognized total non-cashan impairment chargescharge ofthat $83.1reduced millionthe remaining goodwill in the third quarter of 2024 to reduce goodwill for our Thryv Marketing Services segmentreporting unit to zero. No goodwill impairment charge was recorded for the year ended December 31, 2025. As of December 31, 2025, we had $253.8 million of goodwill remaining, all of which related to the SaaS reporting unit.

As of December 31, 2024, we had $253.3 million of goodwill, all of which related to the Thryv SaaS segment. Changes in valuation assumptions or other factors could result inAny impairment charges in the future, whichfuture could have a material adverse effect on our results of operations.operations and stock price.

We 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. Under the terms of the agreements with these search providers, we place our clients’ advertisements on major search engines and other third-party search and directory sites and print directories, which give us access to a higher volume of traffic than we could generate on our own, without relinquishing the client relationship. The search engines benefit from our outside and inside sales force and full-service capabilities for attracting and serving local advertisers that might not otherwise transact business with search engines. Other third-party directories and search sites benefit from our payment for traffic from their sites to our advertisers. The termination or material alteration of one or more of our agreements with major search engines or third-party providers could adversely affect our business.

We rely on third-party service providers for many integral aspects of our business. A failure on the part of any of our third-party service providers to fulfill itstheir contracts with us could result in a material adverse effect on our business, financial condition or results of operations. We depend on our third parties for many services, including, but not limited to:

We utilize third-party service providers for a variety of components and feature sets and related intellectual property underlying or incorporated in the Thryv Platform.Platform, including AI capabilities. Additionally, we utilize third-party service providers for the development and maintenance of our Thryv Platform, as well as hosting the Thryv Platform itself through a third party’s relationship with a cloud services provider. We also rely on a third-party solution for order entry and monthly payment processing for Thryv orders. Any decline in the quality of, or delay in delivery of, modules or other software produced by such third-party service providers (including AI solutions and integrations) could result in reduced revenue, cause an increase in operational costs to switch providers, subject us to liability, or cause clients to fail or be unable to renew their subscriptions, any of which could materially adversely affect our business. Typically, our license agreements with third-party service providers are not exclusive and/or do not extend to all territories in which we may wish to do business in the future, and in certain cases, our third-party service providers have the right to distribute features developed for our Thryv Platform in their own software offerings, which could adversely impact select functionality of our platform as well as adversely affect our business, our ability to compete with our competitors, and our ability to generate revenue. If our agreements with our third-party service providers expire or are terminated, we may face loss of functionality or costs associated with replacing the relevant technology.technology, including AI capabilities. Such expiration or termination may also disrupt our business, leading to liability to customers or loss of business.

The success of our services depends on our ability to deliver data to both consumers and our clients, such as website searches, client leads and social media updates. Certain of this data is provided by unaffiliated third parties, such as business data aggregators (e.g. doctor, hotel or other data aggregators) and vertical industry organizations, to supplement our own business listings for our search sites. Data we provide our clients about their presence on other internet sites and social media is also provided by third parties. Some of this data is provided to us pursuant to third-party data-sharing policies and terms of use, under data-sharing agreements by third-party providers or by client consent. In the future, any of these third parties could change its data-sharing policies, including making them more restrictive, or alter itsthe algorithms that determine the placement, display and accessibility of search results and social media updates, any of which could result in the loss of, or significant impairment to, our ability to collect and provide useful data to our clients. These third parties could also interpret our or our third-party service providers’ data collection policies or practices as being inconsistent with their policies, which could result in the loss of our ability to collect this data for our clients. Any such changes could impair our ability to deliver data to our clients and could adversely impact select functionality of our platform, impairing the return on investment that our clients derive from using our solution, as well as adversely affecting our business and our ability to generate revenue.

Our business depends on the overall demand for marketing solutions, especially business management software by SMBs, and on the economic health of our current and prospective clients. Past financial recessions have resulted in a significant weakening of the economy in North America and globally, a reduction in employment levels, a reduction in prevailing interest rates, more limited availability of credit, a reduction in business confidence and activity and other difficulties. Such difficulties have affected, and any current or future adverse economic conditions may continue to affect, one or more of the industries to which we sell our offerings. In addition, there has been pressure to reduce government spending in the United States, and any tax increases and spending cuts at the federal level might reduce demand for our offerings from organizations that receive funding from the U.S. government and could negatively affect the U.S. economy, which could further reduce demand for our offerings. Any 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.

While we and our third-party providers host our Thryv Platform and serve most of our digital clients on cloud services, should we experience a local or regional disaster or other business continuity problem, such as an earthquake, hurricane, flood, terrorist attack, pandemic, security breach, cyber-attack, power loss, telecommunications failure or other natural or man-made disaster, our ability to continue to operate will depend, in part, on the availability of our personnel, our office facilities and the proper functioning of our computer, telecommunication and other related systems and operations. In such an event, we could experience operational challenges with regard to particular areas of our operations, such as key executive officers or personnel that could have a material adverse effect on our business.

The inability to negotiate acceptable terms with the unions could also result in increased operating costs from higher wages or benefits paid to union employees or replacement workers. A greater percentage of our work forceworkforce could also become represented by unions. If a union decides to strike and others choose to honor its picket line, it could have a material adverse effect on our business.

Our failure to comply with applicable laws, directives and regulations may result in enforcement action against us, including fines and imprisonment, or actions against our clients who may not fully understand the impact of these laws on their businesses and damage to our reputation, any of which may have an adverse effect on our business and operating results. The costs of compliance withwith, and other burdens imposed by, such laws and regulations that are applicable to us or to the businesses of our clients, may limit the use and adoption of our Thryv Platform and add-ons and reduce overall demand, or lead to significant fines, penalties, or liabilities for any non-compliance with such privacy laws. Furthermore, privacy concerns may cause our clients’ workers and our clients’ customers to resist providing PII necessary to allow our clients to use our Thryv Platform and add-ons effectively. Furthermore, if the processing of PII were to be curtailed in this manner, our solutions 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.

Even the perception of privacy concerns, whether or not valid, may inhibit market adoption of our Thryv Platform and add-ons in certain industries. Any failure or perceived failure by us to comply with U.S., Canada, New Zealand, Australia, E.U., or other foreign privacy or security laws, regulations, policies, industry standards, or legal obligations, or any security incident that results in the unauthorized access to, or acquisition, release, or transfer of, PII may result in governmental enforcement actions, litigation, fines and penalties, or adverse publicity and could cause our clients to lose trust in us, which could harm our reputation and have a material adverse effect on our business, financial condition and results of operations. If our service is perceived to cause, or is otherwise unfavorably associated with, violations of privacy or data security requirements, it may subject us or our clients to public criticism and potential legal liability. Public concerns regarding PII processing, privacy and security may cause some of our clients’ end-users to be less likely to visit their websites or otherwise interact with them. If enough end-users choose not to interact with our clients, our clients could stop using our platform. This, in turn, may reduce the value of our services and slow or eliminate the growth of our business. Existing and potential privacy laws and regulations concerning privacy and data security and increasing sensitivity of consumers to unauthorized processing of PII may create negative public reactions to technologies, products and services, such as ours.

Our business is dependent on our data processing systems and our data centers operated by third-party providers. We rely on these systems to process, on a daily and time sensitive basis, a large number of complicated transactions. We electronically receive, process, store and transmit data and PII about our clients and our employees, as well as our vendors and other business partners, including names, social security numbers, credit card numbers and financial account numbers. We keep this information confidential. However, our websites, networks, applications and technologies and other information systems have in the past, and willmay continue to be targeted for sabotage, disruption, or data misappropriation. The uninterrupted operation of our information systems and our ability to maintain the confidentiality of PII and other client and individual information that resides on our systems are critical to the successful operation of our business. While we have information security and business continuity programs, these plans may not be sufficient to ensure the uninterrupted operation of our systems or to prevent unauthorized access to the systems by unauthorized third parties. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and may not be recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. These concerns about information security increase with the mounting sophistication of social engineering.engineering as well as the use of AI technologies by bad actors. Additionally, as our market presence grows, we may face increased risks of cyberattacks or security threats, and as AI technologies, including generative AI models, develop rapidly, threat actors are using these technologies to create new sophisticated attack methods that are increasingly automated, targeted and coordinated and more difficult to defend against. Our network security hardening may be bypassed by phishing andphishing, other social engineering techniques or AI technologies that seek to use end-user behaviors to distribute computer viruses and malware into our systems, which might disrupt our delivery of services and make them unavailable and might also result in the disclosure or misappropriation of PII or other confidential or sensitive information. In addition, a significant cybersecurity breach could prevent or delay our ability to process payment transactions.

Any information security breach in our business processes or of our processing systems has the potential to impact our client information and our financial reporting capabilities, which could result in the potential loss of business and our ability to accurately report financial results. If any of these systems fail to operate properly or become disabled even for a brief period of time, we could potentially miss a critical filing period, resulting in potential fees and penalties, or lose control of client data, all of which could result in financial loss, a disruption of our businesses, liability to clients, regulatory intervention, or damage to our reputation. The continued occurrence of high-profile data breaches provides evidence of an external environment increasingly hostile to information security. If our security measures are breached as a result of third-party action, employee or subcontractor error, malfeasance or otherwise, and, as a result, someone obtains unauthorized access to client data, our reputation may be damaged, our business may suffer, and we could incur significant liability. We may also experience security breaches that may remain undetected for an extended period of time. Techniques used to obtain unauthorized access or to sabotage systems change frequently and are growing increasingly sophisticated. As a result, we may be unable to anticipate these techniques or to implement adequate preventative measures.

Various trademarks and other intellectual property rights are key to our business. We rely upon a combination of patent, trademark, copyright and trade secret laws as well as contractual arrangements, including confidentiality or license agreements, to protect our intellectual property rights. However, the steps we take to protect our intellectual property rights may be ineffective or inadequate. We may be required to bring lawsuits against third parties to protect our intellectual property rights. Similarly, we may be party to proceedings by third parties challenging our rights. Lawsuits brought by us may not be successful, or we may be found to infringe the intellectual property rights of others. As the commercial use of the internet further expands, it may be more difficult.

Recently,In October 2024, we received a subpoena from the Division of Enforcement of the SEC requesting documents and information related to the Company’s previously publicly announced strategic conversion of its clients from its digitalDigital marketing services solutions platform to its SaaS solutions platform (the “Subpoena”). A substantial liability arising from a regulatory investigation, including the Subpoena, a lawsuit judgment or settlement or a significant regulatory action against us or a disruption in our business arising from adverse adjudications in proceedings against our directors, officers, or employees could have a material adverse effect on our business, financial condition and results or operations. Moreover, even if we ultimately prevail in or settle any regulatory investigation, including the Subpoena, litigation, or regulatory action, we could incur material costs or suffer significant harm to our reputation, which could materially affect our ability to attract new clients, to retain current clients and to recruit and to retain employees, which could have a material adverse effect on our business, financial condition and results of operations.

We are also exposed to potential future claims and litigation relating to our business, as well as methods of collection, processing and use of personal data. Our clients and users of client data collected and processed by us could also file claims against us if our data were found to be inaccurate, or if personal data stored by us were improperly accessed and disseminated by unauthorized persons. These potential future claims could have a material adverse effect on our consolidatedbusiness, statementsfinancial condition and results of operations and comprehensive (loss) income, consolidated balance sheets or consolidated statements of cash flows.operations.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), to provide a report by management on, among other things, the effectiveness of our internal control over financial reporting. In particular, Section 404 requires us to perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on, and our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting. Our compliance with applicable provisions of Section 404 requires that we incur substantial accounting expense and expend significant management time on compliance-related issues as we implement additional corporate governance practices and comply with reporting requirements. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Taxing authorities may successfully assert that we should have collected, or in the future should collect, sales and use, value-added or similar taxes, and we could be subject to liability with respect to past or future sales, which could adversely affect our operating results. The applicability of federal, state and local tax laws to services provided electronically requires significant judgment, and we do not presently collect sales and use tax in all of the tax jurisdictions in which we offer our products and services. If we are required to collect sales and use taxes in additional jurisdictions, we might be subject to tax liability for past and future sales, and our future sales may decrease. Adverse tax laws or regulations could be enacted or existing laws could be applied to us or our clients, which could increase the costs of our services and otherwise have a material adverse effect on our business, financial condition and results of operations.

For example, we might lose sales or incur significant expenses if states successfully impose broader guidelines on state sales and use taxes. A successful assertion by one or more states requiring us to collect sales or other taxes on the licensing of our software or provision of our services could result in substantial tax liabilities for past transactions and otherwise harm our business. Each state has different rules and regulations governing sales and use taxes, and these rules and regulations are subject to varying interpretations that change over time. We review these rules and regulations periodically and, when we believe we are subject to sales and use taxes in a particular state, we may voluntarily engage state tax authorities in order to determine how to comply with that state’s rules and regulations. In addition, we are subject on a current and ongoing basis to periodic audits and similar reviews by tax authorities which may result in determinations that we are subject to sales and use taxes, or similar taxes, in jurisdictions where we have not historically collected and paid such taxes. There is no guarantee that we will not be subject to sales and use taxes or related penalties for past sales in states where we currently believe no such taxes are required.

Vendors of services, like us, are typically held responsible by taxing authorities for the collection and payment of any applicable sales and similar taxes. If one or more taxing authorities determines that taxes should have, but have not, been paid with respect to our services, we might be liable for past taxes in addition to taxes going forward. Liability for past taxes might also include substantial interest and penalty charges. Our clients are typically wholly responsible for applicable sales and similar taxes. Nevertheless, clients might be reluctant to pay back taxes and might refuse responsibility for interest or penalties associated with those taxes. If we are required to collect and to pay back taxes and the associated interest and penalties, and if our clients fail or refuse to reimburse us for all or a portion of these amounts, we will incur unplanned expenses that may be substantial. Moreover, imposition of such taxes on us going forward will effectively increase the cost of our services to our clients and might adversely affect our ability to retain existing clients or to gain new clients in the areas in which such taxes are imposed.imposed, which could have a material adverse effect on our business, financial condition and results of operations.

The international tax environment remains highly uncertain and increasingly complex as evidenced by initiatives put forth by the Organization for Economic Co-operation and Development (“OECD”), which includes the introduction of a global minimum tax at a rate of 15% under the OECD’s Pillar Two rules. The OECD continues to release additional guidance on these rules, and many countries have enacted or are in the process of enacting Pillar Two enactment rules which took effect in jurisdictions relevant to Thryv beginning in 2024. In January 2026, the OECD released a "side-by-side" package introducing new safe harbors and providing an exemption for U.S.-based multinational companies from parts of the global minimum tax framework. This guidance is intended to simplify compliance with a permanent simplified Effective Tax Rate safe harbor, a one-year extension of the transitional Country-by-Country Reporting safe harbor and reinforce the role of Qualified Domestic Minimum Top-up Taxes (“QDMTT”). While we do not currently estimate a material impact to our consolidated financial statements, we continue to monitor these proposals closely and, if enacted by various countries in which we do business, they may increase our taxes in the applicable jurisdictions or cause us to change the way we operate our business and result in increased taxation of our international earnings.

We serve approximately 300,000230,000 SMB clients globally through two business segments: Thryv SaaS and Thryv Marketing Services.

Keap Acquisition. On October 31, 2024, we acquired all of the outstanding capital stock of Infusion Software, Inc. d/b/a Keap (“Keap”) for $76.9$77.0 million in cash (net of $7.6 million of cash acquired), subject to adjustment.. Keap was founded in 2001 and operates a SaaS e-mailemail marketing and sales platform for small businesses, including products to manage customers,enable customer relationship management, marketing and e-commerce. As of December 31, 2024,2025, Keap's customer base consisted of approximately 15,00012,000 subscribers. Keap results are included in the Thryv SaaS segment.

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 digitalDigital Marketingmarketing Servicesservices solutions to our Thryv Platform by converting clients with 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 2024, we converted approximately 46,000 clients from our digital Marketing Services to our Thryv Platform, generating a $37.1 million increase in SaaS revenue during 2024. As of December 31, 2024, approximately 38,000 of these clients remained as active SaaS clients.

The conversion of theseMarketing Services products for clients who were not already SaaS clients at the time of conversion decreases the number of clients in and the revenue of the Thryv Marketing Services segment and increases the number of clients in andthe 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 ThryvMarketing Services segment and increases the revenue of the SaaS segment. While we believe thesethe conversions initiated for clients areby receivingThryv aprovides valuable upgradeupgrades 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, theThryv'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 digitalDigital Marketingmarketing Servicesservices solutions to our Thryv Platform was in line with the churn from the other clients in our SaaS segment. The conversion of clients to our Thryv Platform at no additional base cost resulted in a decrease to our SaaS monthly ARPU.

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 Thryv 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.

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.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.

SaaS clients decreased by 14 thousand, or 12%, as of December 31, 2025 as compared to December 31, 2024 as the Company's sales strategy shifted to focus on growing the spend of existing clients with less emphasis on client acquisition. SaaS clients increased by 48 thousand, or 73%, as of December 31, 2024 as compared to December 31, 2023, primarily due to the conversion of clients from digital Marketing Services solutions to the Thryv Platform during 2024. In addition, during the fourth quarter of 2024, we added 15 thousand clients from the Keap Acquisition. SaaS clients increased by 14 thousand, or 27%, as of December 31, 2023 as compared to December 31, 2022 due to our continuingfocus focusin 2024 on new SaaS client acquisition through improved identification of prospects, improved selling methods, introduction of new product features, a growing international footprint, and the transition of clients from digitalDigital Marketingmarketing Servicesservices solutions to SaaS offerings. During the fourth quarter of 2024, we added 15 thousand clients from the Keap Acquisition, of which 12 thousand remain as of December 31, 2025.

Total clients decreased by 65 thousand, or 22%, as of December 31, 2025 as compared to December 31, 2024 and decreased by 50 thousand, or 14%, as of December 31, 2024 as compared to December 31, 2023. Total clients decreased by 41 thousand, or 11%, as of December 31, 2023 as compared to December 31, 2022. The primary driverdrivers of these decreases waswere the secular decline in the print media business combined with increasing competition in the digital media and SaaS space,space partiallyand offsetthe bymore anrecent increasefocus inon growing SaaS clients.client spend and reduced emphasis on client acquisition.

Monthly ARPU for Marketing Services decreased by $25, or 19%, for the year ended December 31, 2025 compared to the year ended December 31, 2024, and $25, or 16%, for the year ended December 31, 2024 compared to the year ended December 31, 2023, and $20, or 11%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.2023. The decrease in ARPU for these periods was related to reduced spend by clients on our print media offerings due to the secular decline of the industry, caused by the continuing shift of advertising spend to larger digital media audiences, and our strategic decision to accelerate the conversion of clients from digitalDigital Marketingmarketing Servicesservices solutions to SaaS offerings.

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 atwo year. Seasoned NRR is calculated by dividing the recurring revenue of all SaaS clientsyears as of the last month of the year or quarter, as applicable, (net of expansions, downsell, and churns) by the same client's recurringclients' revenue one year ago,ago. removingThe clientsSeasoned acquiredNRR overcalculation the last 12 months, includingexcludes clients acquired in the Keap Acquisition.

Seasoned NRR decreased by 4% for the year ended December 31, 2025 compared to the year ended December 31, 2024, and increased by 2% forduring the year ended December 31, 2024 compared to the year ended December 31, 2023,2023. andThe increaseddecrease byin 5%Seasoned NRR during the year ended December 31, 20232025 comparedresulted toprimarily from a decrease in revenue associated with downgrades and cancellations by clients of SaaS products held for at least two years outpacing the yearcombination endedof DecemberThryv 31,up-selling 2022.clients who had a SaaS product for at least two years and Thryv's conversion of marketing services products for clients who, at the time of conversion, already had at least one SaaS product for at least two years. The increase in Seasoned NRR during the year ended December 31, 2024 resulted from selling other SaaS products to existing SaaS clients, a price increase for SaaS clients in the third quarter of 2024, and our strategic decision to accelerate the conversion of clients from digitalDigital Marketingmarketing Servicesservices solutions to our SaaS offerings that included instances where Marketing Services clients already had at least one of our SaaS solutions and SaaS revenue increased for those clients. The increase in Seasoned NRR during the year ended December 31, 2023 resulted from selling other SaaS products to existing SaaS clients, a price increase for SaaS clients in the third quarter of 2023, and our strategic decision to accelerate the conversion of clients from digital Marketing Services solutions to our SaaS offerings that included instances where Marketing Services clients already had at least onetwo of our SaaS solutionsyears and SaaS revenue increased for those clients.

We generate revenue from our two business segments: ThryvSaaS and Marketing ServicesServices. andOur Thryvprimary SaaS.source of revenue in our SaaS segment is our SaaS solutions. Our primary sources of revenue in our Thryv Marketing Services segment are Print and Digital services. Our primary source of revenue in our Thryv SaaS segment is our SaaS solutions.

Other income (expense) consists of interest expense, other components of net periodic pension (cost) benefit, and other income (expense), which includes a loss on early extinguishment of debt during the year ended December 31, 2024, a bargain purchase gain as a result of the Vivial Acquisition during the year ended December 31, 2022, and foreign currency-related income and expense.

The following table sets forthpresents certain consolidated financial data for each of the periods indicated:

(1)Consolidated results of operations includesinclude Keap's results of operations subsequent to the October 31, 2024 acquisition date.

(32)See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net income (loss) income,, the most directly comparable measure presented in accordance with GAAP.

Total Revenue decreased by $92.8$39.1 million, or 10.1%,4.7%, for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The decrease in total Revenue was driven primarily by a decrease in Thryv Marketing Services Revenue of $172.6$156.7 million, partially offset by an increase in Thryv SaaS Revenue of $79.8$117.6 million.

Thryv SaaS Revenue

Thryv SaaS revenue increased by $79.8$117.6 million, or 30.2%,34.2%, for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increase was primarily attributable to the acquisition of Keap, new sales, client expansion, and the Company’s strategic decision during the fourth quarter of 2023 to accelerate the conversion of clients from its digitalDigital Marketingmarketing Servicesservices solutions to its SaaS offerings. ClientsOf convertedthe from digital Marketing Services solutions resulted in a $37.1$117.6 million increase in SaaS revenue forincrease, (i) revenue from Keap contributed $56.2 million, (ii) the yearconversion endedof DecemberDigital 31,marketing 2024.services products for clients to SaaS products during 2025 contributed $20.4 million, and (iii) new sales and client expansion during 2025 contributed $48.0 million. Finally, SaaS revenue alsodecreased increased $29.3$7.0 million as a result of increased demand for our Thryv SaaS solutions as SMBs accelerate their move away from manual processes and towards cloud platformsdue to morenet efficientlyrevenue managechanges andassociated growwith theirproducts businesses,sold andor byconverted our success in re-focusing our go-to-market and onboarding strategyprior to targetJanuary higher1, value clients. Finally, Keap contributed $13.4 million of SaaS revenue since the acquisition closed on October 31, 2024.2025.

Except as set forth below, thereThere have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025.2025, as supplemented by the disclosure in Part II, Item 1A. in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

Our SaaS segment generated $116.7$114.5 million and $111.1$115.0 million of consolidated revenuesrevenue for the three months ended MarchJune 31,30, 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.

Our Marketing Services segment provides both print and digital solutions and generated $50.9$36.2 million and $70.2$95.5 million of consolidated revenuesrevenue for the three months ended MarchJune 31,30, 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.

During the twelve months ended MarchJune 31,30, 2026, we converted approximately 8,00011,000 clients with Digital marketing services products to our Thryv Platform who were not already SaaS clients at the time of conversion. As of MarchJune 31,30, 2026, approximately 6,0009,000 of these clients remained as SaaS clients. The conversion of these Marketing Services clients increased SaaS revenue by $3.3$5.0 million and $7.6 million during the three and six months ended MarchJune 31,30, 2026.2026, respectively.

Additionally, during the twelve months ended MarchJune 31,30, 2026, we converted Digital marketing services products to our Thryv Platform for approximately 10,0004,000 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 $2.8$1.8 million and $3.2 million during the three and six months ended MarchJune 31,30, 2026.2026, 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 threesix months ended MarchJune 31,30, 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.

Our strategy is to expand the use of our SaaS solutions by introducing our SaaS solutions to new SMB clients,clients as well asand our current Marketing Services clientsclients, andas well as by offering additional SaaS solutions to our existing SaaS client base, offering them additional SaaS solutions.base. This strategy includes capitalizing on the increasedgrowing needsdemand ofamong SMBs for solutions that facilitatesupport a remote working environment and virtual interactions. This strategy will require substantial sales and marketing capital.capital, This strategyand 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 haveexhibit higher churn rates.

We intendplan 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 increaselead ourto increased operating expenses.

Marketing Services clients decreased by 5840 thousand, or 26%,20%, as of MarchJune 31,30, 2026 as compared to MarchJune 31,30, 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 1511 thousand, or 14%,10%, as of MarchJune 31,30, 2026 as compared to MarchJune 31,30, 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 6146 thousand, or 22%,18%, as of MarchJune 31,30, 2026 as compared to MarchJune 31,30, 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 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 threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 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 $43,$42, or 13%,12%, during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 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 2025.2026. 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 NRR decreased from 99%102% for the three months ended MarchJune 31,30, 2025 to 93%90% for the three months ended MarchJune 31,30, 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 yearsyears, and Thryv's conversion of marketingMarketing servicesServices products for clients who, at the time of conversion, already had at least one SaaS product for at least two years.

Other income (expense) consists of interest expense, net periodic pension (cost) benefit, and other (expense) income, which includes foreign currency-related income and expense.

(1) See “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and a reconciliation to Net income (loss), income, the most directly comparable measure presented in accordance with GAAP.

Comparison of the Three Months Ended MarchJune 31,30, 2026 to the Three Months Ended MarchJune 31,30, 2025

Revenue decreased by $13.7$59.7 million, or 7.5%,28.4%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The decrease was driven by a decrease in Marketing Services revenue of $19.3$59.2 million,million partiallyand offseta by an increasedecrease in SaaS revenue of $5.6$0.5 million.

SaaS revenue increaseddecreased by $5.6$0.5 million, or 5.0%,0.5%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily attributable to clients downgrading or cancelling their SaaS solutions, partially offset by new sales, client expansion, and the Company’s conversion of clients from its Digital marketing services solutions to its SaaS offerings. Of the $5.6 million SaaS revenue increase, theCompany's conversion of Digital marketing services productssolutions for clients to its SaaS products during the first three months of 2026 contributed $0.3 million and new sales and client expansion during the first three months of 2026 contributed $3.2 million. Finally,offerings. SaaS revenue increaseddecreased $2.1$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 decreased by $19.3$59.2 million, or 27.5%,62.0%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.

Print revenue decreased by $4.1$42.1 million, or 10.9%,62.8%, to $33.6$24.9 million for the three months ended MarchJune 31,30, 2026 compared to $37.7$67.0 million for the three months ended MarchJune 31,30, 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,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 MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 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 22%10% per directory published during the three months ended MarchJune 31,30, 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 35%26% compared to the last time the directory was published. The net impact on revenue per published directory was a 13%16% decline for the directories published during the three months ended MarchJune 31,30, 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 $15.2$17.1 million, or 46.6%,60.2%, to $17.4$11.3 million for the three months ended MarchJune 31,30, 2026 compared to $32.5$28.5 million for the three months ended MarchJune 31,30, 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 MarchJune 31,30, 2026, Thryv's conversion of Digital marketing services products for clients to SaaS offerings prior to January 1, 2026 reduced Marketing Services revenue by $5.8$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 $0.3$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 MarchJune 31,30, 2026, thethis continued trending decline and significant competition resulted in aan $9.1additional $10.3 million decrease in Digital marketing services revenue.

Cost of services decreased by $3.7$7.7 million, or 5.9%,12.0%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. This decrease was primarily driven by a corresponding decline in revenue and by strategic cost saving initiatives. Specifically, we reduced contract services expense by $3.9 million, employee-related expenses by $1.6 million, and printing and distribution costs decreased by $0.8$6.6 million.million Additionally,as depreciationa andresult amortizationof lower Print revenue, contract services expense decreased by $0.6$3.7 millionmillion, dueand toemployee-related theexpenses accelerated amortization method useddecreased by the$1.5 Company.million. These decreases were partially offset by an increase in traffic expenses of $2.9$3.2 million.

Gross profit decreased by $10.0$52.1 million, or 8.4%,35.5%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The decrease in Gross profit was primarily due to a decreasedecreases in SaaS and 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.

Our gross margin decreased to 65.2%62.7% for the three months ended MarchJune 31,30, 2026 compared to 65.8%69.7% for the three months ended MarchJune 31,30, 2025. Gross margin from our SaaS segment decreased to 64.8%63.5% for the three months ended MarchJune 31,30, 2026, compared to 70.9%72.1% for the three months ended MarchJune 31,30, 2025. Gross margin from our Marketing Services segment increaseddecreased to 66.0%60.2% for the three months ended MarchJune 31,30, 2026, compared to 57.7%66.7% for the three months ended MarchJune 31,30, 2025. The decrease in SaaS gross margin and the 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 at the time of conversion. Marketing Services gross margin decreased as a result of decreased demand for our Marketing Services solutions.

Sales and marketing expense decreased by $11.9$9.0 million, or 19.9%,16.1%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The decrease was primarily dueattributable to a decrease in employee-related expenses of $4.6 million as a result of lower sales headcount, a decrease in sales commissions of $4.3 million, a decrease in employee-related expenses of $3.2 million, a decrease in marketing and advertising expenses of $1.5 million, a decrease in stock-based compensation expense of $1.2$1.0 million, and a decrease in depreciation and amortization expense of $0.9 million due to the accelerated amortization method used by the Company.million.

Research and development expense increaseddecreased by $1.2 million, or 11.9%,13.4%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. TheThis increasedecrease was primarily dueattributable to ana increasedecrease in contractemployee-related services expensecosts of $1.1$1.0 million.

General and administrative expense decreased by $6.5$11.2 million, or 12.3%,21.4%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. TheThis decrease was primarily attributable to a decrease in contract services of $6.3 million, a decrease in employee-related expenses of $2.2$3.3 million, a decrease in bad debt expense of $1.6 million, and a decrease in stock-based compensation expense of $1.9$2.3 million, a decrease in software expense of $1.1 million, and a decrease in depreciation and amortization expense of $0.5 million due to the accelerated amortization method used by the Company.million. These decreases were partially offset by an increase in restructuring and integrationseverance expenses of $1.4 million, primarily driven by an increase in post-acquisition and integration expenses of $1.0$3.1 million.

Interest expense decreased by $2.5$1.4 million, or 27.2%,16.0%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, driven primarily by lower outstanding debt balances.

Net periodic pension cost decreased by $0.4 million for the three months ended MarchJune 31,30, 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.