Yellow Pages Limited (TSX: Y) (the "Company"), a leading Canadian digital media and marketing company, released its operating and financial results today for the quarter and year ended December 31, 2024.

"In the fourth quarter, we report continued progress toward revenue stability, along with good profitability and a healthy cash balance," said David A. Eckert, President and CEO of Yellow Pages Limited.

Eckert commented on the key developments:

Financial Highlights(In thousands of Canadian dollars, except percentage information and per share information)

Financial Results for the Fourth Quarter of 2024

Total revenues for the fourth quarter ended December 31, 2024 decreased by 8.1% year-over-year and amounted to $51.4 million as compared to $55.9 million for the same period last year. The decrease in revenues is mainly due to the decline of our higher margin digital media and print products and to a lesser extent to our lower margin digital services products, thereby creating pressure on our gross profit margins.

Total digital revenues decreased 7.2% year-over-year and amounted to $42.0 million during the fourth quarter of 2024 compared to $45.3 million for the same period last year. The revenue decline is mainly attributable to a decrease in digital customer count and to a lesser extent, a decrease in the average spend per customer.

Total print revenues decreased 11.5% year-over-year and amounted to $9.4 million during the fourth quarter of 2024 compared to $10.6 million in the fourth quarter of 2023. The revenue decline was mostly attributable to decreases in the number of print customers while the spend per customer has improved year-over-year driven by price increases.

The decline rate for total revenues, digital revenues and print revenues all improved during the quarter ended December 31, 2024, compared to the same period last year. The improvements were partly due to the deceleration of the customer count decline rate fueled by an increase in new customer acquisitions partially offset by an increase in churn. In addition, 2023 decline rates were negatively impacted by customer claim rates remaining stable in 2023, while 2022 benefited from a substantial improvement in customer claims.

Adjusted EBITDA1 decreased to $8.2 million or 16.0% of revenues in the fourth quarter ended December 31, 2024, relative to $16.2 million or 29.1% of revenues for the same period last year. The decrease in Adjusted EBITDA and Adjusted EBITDA margin1 for the three-month period ended December 31, 2024 is the result of revenue pressures, the ongoing investments in our tele-sales force capacity, higher bad debt expense, the impact of the Company's share price on cash settled stock-based compensation expense and the nature of Information Technology ("IT")  spend, whereby more of the expense was classified as operating rather than capital, partially offset by price increases, the efficiencies from optimization in cost of sales and reductions in other operating costs including reductions in our workforce and associated employee expenses. The revaluation of cash settled stock-based compensation liabilities resulted in a charge of $1.5 million for the three-month period ended December 31, 2024 compared to a recovery of $1.6 million for the same period last year. This was driven by the 23% increase in YP's share price during the fourth quarter of 2024 compared to a decline of 8% during the same quarter in 2023. Revenue pressures, coupled with continued investments in our tele-sales force capacity, partially offset by continued optimization, will continue to cause some pressure on margins in upcoming quarters.

Adjusted EBITDA less CAPEX decreased by $7.5 million to $7.8 million during the fourth quarter of 2024, compared to $15.3 million during the same period last year. The decrease in Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin for the three-month period ended December 31, 2024 is mainly due to lower Adjusted EBITDA partially offset by a decrease in CAPEX spend year-over-year, due in part, to the nature of IT spend, whereby more of the expense was classified as operating rather than capital.

Net income for the three-month period ended December 31, 2024 amounted to $2.7 million as compared to net income of $12.2 million for the same period last year. The decrease is explained principally by the decrease in Adjusted EBITDA and higher tax expense for the three-month period ended December 31, 2024.

Cash flows from operating activities increased by $1.6 million to $8.3 million for the three-month period ended December 31, 2024 from $6.7 million for the same period last year. The increase is mainly due to a decrease in funding of post-employment benefits plans of $11.8 million due to the funding pursuant to the 2023 Arrangement, lower restructuring and other charges paid of $0.3 million and lower income taxes paid of $0.3 million, partially offset by lower Adjusted EBITDA of $8.0 million, the increase in stock-based compensation cash payments of $1.6 million and a decrease of $1.2 million from changes in operating assets.

Financial Results for the Year Ended December 31 of 2024

Total revenues for the year ended December 31, 2024 decreased by 10.3% to $214.8 million, as compared to $239.4 million for the same period last year. The decrease in revenues is mainly due to the decline of our higher margin digital media and print products and to a lesser extent to our lower margin digital services products, thereby creating pressure on our gross profit margins.

Total digital revenues decreased 9.6% year-over-year and amounted to $172.1 million for the year ended December 31, 2024, as compared to $190.3 million for the same period last year. The revenue decline for the year ended December 31, 2024, was mainly attributable to a decrease in digital customer count and to a lesser extent, a decrease in the average spend per customer.

Total print revenues decreased 13.0% year-over-year and amounted to $42.7 million for year ended December 31, 2024. The revenue decline is mainly due to the decrease in the number of print customers while the spend per customer has improved year-over-year driven by price increases.

The decline rate of total revenues and print revenues improved year-over-year while the digital revenue rate of decline increased slightly. Total revenue decline of 10.3% for 2024 compares to 10.8% reported for 2023. The print revenue decline of 13.0% for 2024, compares to 17% for 2023. The digital revenue decline of 9.6% compares to a decline of 9.0% for the year-ended 2023.The improvement in the decline rate of total revenues was partly due to the deceleration of the customer count decline rate fueled by an increase in new customer acquisitions and price increases, partially offset by an increase in churn. In addition, 2023 decline rates were negatively impacted by customer claim rates remaining stable, while 2022 benefited from a substantial improvement in customer claims.

For the year ended December 31, 2024 Adjusted EBITDA decreased by $26.0 million or 33.9% to $50.8 million, compared to $76.9 million for the same period last year. The adjusted EBITDA margin decreased during the year ended December 31, 2024 to 23.7%, compared to 32.1% for the same period last year. The decrease in Adjusted EBITDA1 and Adjusted EBITDA margin1 for the year ended December 31, 2024 is the result of revenue pressures and the ongoing investments in our tele-sales force capacity, increase in bad debt expense, and the impact of the Company's share price on cash settled stock-based compensation expense, partially offset by optimizations in cost of sales and reductions in other operating costs including reductions in our workforce and associated employee expenses. The revaluation of the cash settled stock-based compensation liabilities based on the change in the Company's share price resulted in a recovery of $1.7 million for the year ended December 31, 2024, compared to a recovery of $4.4 million for the same period last year. Revenue pressures from product mix and investments in our tele-sales force capacity, partially offset by continued optimizations and cost reductions, will continue to cause pressure on margins in upcoming quarters.

For the year ended December 31, 2024 Adjusted EBITDA less CAPEX1 decreased by $24.5 million or 33.7% to $48.4 million, compared to $72.9 million for the same period last year. The adjusted EBITDA less CAPEX margin1 decreased during the year ended December 31, 2024 to 22.5%, compared to 30.4% for the same period last year. The decrease in Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin for the year ended December 31, 2024 is driven by the decrease in Adjusted EBITDA, partially offset by the decrease in CAPEX spend year-over-year, due in part, to the nature of IT spend, whereby more of the expense was classified as operating rather than capital. 

Net income decreased to $25.0 million for the year ended December 31, 2024 compared to net income of $47.4 million for the same period last year. The decrease in net income for the year ended December 31, 2024 is mainly due to lower Adjusted EBITDA, partially offset by the decrease in income taxes.

Cash flows from operating activities decreased by $7.7 million to $39.0 million for the year ended December 31, 2024 from $46.8 million for the same period last year. The decrease is mainly due to lower Adjusted EBITDA of $26.0 million, partially offset by a decrease in funding of post-employment benefit plans of $11.9 million due to the funding pursuant to the 2023 Arrangement, the decrease in stock-based compensation cash payments of $3.1 million, lower income taxes paid of $2.3 million and an increase of $0.7 million from changes in operating assets and liabilities.

Conference Call & Webcast

Yellow Pages Limited will hold an analyst and media call and simultaneous webcast at 8:30 a.m. (Eastern Time) on February 13, 2025 to discuss fourth quarter 2024 results. The call may be accessed by dialing 416-695-6725 within the Toronto area, or 1-866-696-5910 outside of Toronto, Passcode 7057902#. Please be prepared to join the conference at least 5 minutes prior to the conference start time.

The call will be simultaneously webcast on the Company's website at:

https://corporate.yp.ca/en/investors/financial-reports. 

The conference call will be archived in the Investors section of the site at:

https://corporate.yp.ca/en/investors/financial-events-presentations. 

About Yellow Pages Limited

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements about the objectives, strategies, financial conditions and results of operations and businesses of YP (including, without limitation, payment of a cash dividend per share per quarter to its common shareholders). These statements are forward-looking as they are based on our current expectations, as at February 12, 2025, about our business and the markets we operate in, and on various estimates and assumptions. Our actual results could materially differ from our expectations if known or unknown risks affect our business, or if our estimates or assumptions turn out to be inaccurate. As a result, there is no assurance that any forward-looking statements will materialize. Risks that could cause our results to differ materially from our current expectations are discussed in section 5 of our February 12, 2025 Management's Discussion and Analysis. We disclaim any intention or obligation to update any forward-looking statements, except as required by law, even if new information becomes available, as a result of future events or for any other reason.

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA margin

In order to provide a better understanding of the results, the Company uses the terms Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA is equal to Income from operations before depreciation and amortization and restructuring and other charges (defined herein as Adjusted EBITDA), as shown in Yellow Pages Limited's consolidated statements of income. Adjusted EBITDA margin is defined as the percentage of Adjusted EBITDA to revenues. Adjusted EBITDA and Adjusted EBITDA margin are not performance measures defined under IFRS Accounting Standards and are not considered an alternative to income from operations or net income in the context of measuring Yellow Pages performance. Adjusted EBITDA and Adjusted EBITDA margin do not have a standardized meaning under IFRS Accounting Standards and are therefore not likely to be comparable to similar measures used by other publicly traded companies. Adjusted EBITDA and Adjusted EBITDA margin should not be used as exclusive measures of cash flow since they do not account for the impact of working capital changes, income taxes, interest payments, pension funding, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed on page 19 of our February 12, 2025 MD&A. Management uses Adjusted EBITDA and Adjusted EBITDA margin to evaluate the performance of its business as it reflects its ongoing profitability. Management believes that certain investors and analysts use Adjusted EBITDA and Adjusted EBITDA margin to measure a company's ability to service debt and to meet other payment obligations or as common measurement to value companies in the media and marketing solutions industry as well as to evaluate the performance of a business.

Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin

Adjusted EBITDA less CAPEX(In thousands of Canadian dollars, except percentage information)

 

SOURCE Yellow Pages Limited

SOURCE: Yellow Pages Limited

Investors & Media, Franco Sciannamblo, Senior Vice-President and Chief Financial
Officer, investors@yp.ca, communications@yp.ca

COMTEX_462746710/2197/2025-02-13T07:30:00