Yellow Pages (Y) Q2 2024 earnings summary

Executive summary

• Achieved improved revenue trend for the second consecutive quarter, with the rate of revenue decline better than the previous quarter despite ongoing economic headwinds.

• Progressed on revenue initiatives, including a 17% sequential increase in new account gains and stable customer churn.

• Maintained strong profitability and a healthy cash balance, with Adjusted EBITDA margin at 26.5% and cash on hand at approximately $34 million at the end of July 2024.

• Continued investments in sales force expansion and IT, supporting confidence in medium- and long-term outlook.

• Declared a quarterly dividend of $0.25 per share, payable September 16, 2024.

Financial highlights

• Q2 2024 revenues were $55.8 million, down 11.0% year-over-year, with the rate of decline improving from the previous quarter.

• Digital revenues declined 10.2% year-over-year to $43.8 million, while print revenues fell 13.6% to $12.1 million, with higher spend per customer from price increases.

• Adjusted EBITDA was $14.8 million (26.5% margin), down from $21.9 million (35.0% margin) in Q2 2023.

• Net income for Q2 2024 was $7.6 million, or $0.55 diluted EPS, compared to $12.7 million, or $0.69 diluted EPS, in Q2 2023.

• Adjusted EBITDA less CapEx for Q2 was $14.1 million (25.2% margin), down $6.5 million year-over-year.

Outlook and guidance

• Management expects continued revenue and margin pressure due to economic headwinds and customer spending optimization, partially offset by new account growth and pricing increases.

• Ongoing investments in sales force and IT are anticipated to impact margins in upcoming quarters.