Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Yellow Pages Ltd (YLWDF, Financial) reported a favorable bending of the revenue curve for the fourth consecutive quarter, indicating improved revenue trends.
- The company achieved a 6% increase in new customer acquisitions compared to the same quarter last year, and a 28% increase for the year overall.
- Adjusted EBITDA for the full year was 23.7% of revenue, demonstrating solid earnings performance despite significant investments.
- The company completed its voluntary payments into the pension plan, reaching a wind-up ratio of over 95%, which de-risks the pension plan.
- A dividend of $0.25 per common share was declared, reflecting confidence in the company's financial health.
Negative Points
- Revenues decreased by $4.5 million or 8.1% year-over-year, primarily due to declines in digital media and print products.
- Adjusted EBITDA decreased by 49.3% to $8.2 million for the fourth quarter, with margins dropping to 16% from 29.1% the previous year.
- The company faced increased pressure on gross profit margins due to a decline in higher-margin products.
- There was an increase in bad debt expense and a negative impact from the share price on cash-settled stock-based compensation expense.
- The workforce decreased by 10% year-over-year, despite increases in telesales force capacity, indicating potential operational challenges.
Q & A Highlights
Q: Can you provide an overview of Yellow Pages' financial performance for the fourth quarter of 2024?
A: David Eckert, President and CEO, highlighted that Yellow Pages reported a favorable bending of the revenue curve for the fourth consecutive quarter. The company saw an increase in new customer acquisitions by 6% compared to the same quarter last year and 28% for the year overall. Adjusted EBITDA for the quarter was 16.0% of revenue, and for the full year, it was 23.7%. The company also completed its voluntary pension plan payments, reaching a wind-up ratio of over 95%.
Q: What were the main factors affecting revenue and EBITDA in the fourth quarter?
A: Franco Sciannamblo, CFO, explained that revenues decreased by $4.5 million or 8.1% year-over-year, mainly due to declines in digital media and print products. Adjusted EBITDA decreased by $8 million or 49.3% due to lower revenue, investments in telesales capacity, and increased bad debt expenses. The share price increase also impacted cash-settled stock-based compensation expenses.
Q: How did the digital and print revenues perform in the fourth quarter?
A: Digital revenues decreased by 7.2% year-over-year to $42 million, while print revenues decreased by 11.5% to $9.4 million. The decline in digital revenues was due to a decrease in digital customer count and average spend per customer. The print revenue decline was mainly due to a decrease in the number of print customers, although spend per customer improved due to price increases.
Q: What is the status of Yellow Pages' pension plan contributions?
A: The company completed its voluntary pension plan contributions as part of the deficit reduction plan announced in May 2021. A final $1.5 million was paid in the fourth quarter of 2024, totaling $6 million for the year. The wind-up ratio of the defined benefit pension plan reached over 95%, and the Board approved a plan to de-risk the pension plan.
Q: What are the future expectations for Yellow Pages' financial performance?
A: David Eckert expressed optimism about the company's medium and long-term future, citing continued progress in revenue generation metrics and a healthy cash balance of approximately $49 million. The Board declared a dividend of $0.25 per common share, reflecting confidence in the company's ongoing financial health.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
