Yellow Pages Limited

Thank you, Paul. Good morning, everyone.

Welcome to our second quarter 2025 analyst call. We really appreciate your interest today.

Today, I'm joined by Assunta Tortis, our Chief Financial Officer. I will begin with some overview comments, and then Assunta will provide more details on our financials.

We will both be available to answer any questions you have at the end of the call. We are quite pleased with our results reported today for our second quarter in 2025, particularly for the sixth consecutive quarter, we report favorable progress in revenue stability as our rate of change in revenue was better than the rate of change reported for the previous quarter, and this is key to our success.

We are encouraged by the continued momentum in our core metrics driving our revenue performance. These metrics include continued deceleration of our customer count decline rate, supported by new customer acquisition, stable renewal rates and strong average spend per customer.

We believe these fundamentals position us well for continued success in the medium and long term. We also report solid earnings.

Our adjusted EBITDA for the quarter was 20.1% of revenue, even with our continued investments in our revenue initiatives. We have a cash balance of approximately $49 million at the end of July.

As previously announced on May 21 in 2025, we completed the purchase of a group annuity contract for $210 million from BMO Life Assurance Company. This transaction aligns with the plan to derisk our defined benefit pension plan as we annuitize approximately 50% of the pension liability.

The company intends to voluntarily contribute an additional $4 million to the defined pension plan by the end of June 2026. Yesterday, the Board approved $2 million of this announced voluntary cash contribution to be completed by the end of 2025.

Also, our Board has declared a dividend of $0.25 per common share to be paid on September 15, 2025, to shareholders of record on August 25, 2025. Those are my comments for today, and I will pass it along to Assunta to provide some additional details on our numbers.

Thanks, S.K. Good morning, everyone.

Let me take you through our financial results for the second quarter ended June 30, 2025. Our total revenues decreased by $4.2 million or 7.4% year-over-year and amounted to $51.7 million for the second quarter, an improvement from the decrease of 7.6% reported last quarter.

The year-over-year 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. Digital revenues decreased 6.4% year-over-year and amounted to $41 million for the 3-month period ended June 30, 2025, an improvement from the decrease of 6.8% reported last quarter.

The year-over-year decline was mainly attributable to a decrease in digital customer count, partially offset by an increase in average spend per customer. Print revenues decreased 11.2% year-over-year and amounted to $10.7 million for the 3-month period ended June 30.

The decline in print revenue was mainly attributable 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 revenues improved during the quarter ended June 30, 2025, compared to the same period last year.

The improvements were mainly due to the deceleration of the customer count decline rate fueled by an increase in the new customer acquisitions, while renewal rates remained relatively stable and an increase in average spend per customer due in part to price increases. Adjusted EBITDA for the second quarter was impacted by pressures from lower revenue, change in product mix, continued investments in our sales force capacity and the impact of the company's share price on cash settled stock-based compensation expense, partially offset by price increases, the efficiencies from optimization in cost of sales and reduction in the operating costs, including reduction in our workforce and associated employee expenses.

As a result, adjusted EBITDA decreased year-over-year by $4.1 million or 27.7% to $10.7 million for the quarter. Adjusted EBITDA margin decreased to 20.7% compared to 26.5% for the same period last year.

The revaluation of cash settled stock-based compensation liabilities resulted in a charge of $0.6 million for the 3-month period ended June 30, 2025, compared to a recovery of $1.2 million for the same period last year. Revenue pressures and continued investments in our sales force capacity, partially offset by continued optimizations will continue to cause pressure on margins in the upcoming quarters.

Adjusted EBITDA less CapEx for the second quarter decreased by $3.7 million year-over-year to $10.4 million, mainly due to the decrease in adjusted EBITDA, partially offset by the decrease in CapEx spend year- over-year. As S.K.

mentioned, on May 21, 2025, the company announced the purchase of the group annuity contracts of $209.9 million from BMO Life Assurance Company. The defined benefit pension plan obligations for the group that are settled via the annuity purchase are $205.9 million on an accounting basis.

As a result, a noncash settlement loss of $4 million was recognized during the second quarter of 2025. As also announced, the company intends to voluntarily contribute an additional $4 million to the remaining defined benefit pension plan by the end of June 2026, subject to Board approval.

On August 5, 2025, our Board approved that $2 million of the announced voluntary cash contributions to be completed by the end of 2025. Net income for the quarter decreased to $1.5 million compared to $7.6 million for the same period last year due to lower adjusted EBITDA, the settlement loss on the annuity purchase and the increase in restructuring and other charges, partially offset by the decrease in depreciation and amortization and income tax.

As at June 30, 2025, our total workforce decreased to 566 employees compared to 603 at the same date last year, a decrease of 6.1%. As Sherilyn mentioned, our cash on hand at July -- at the end of July stood at approximately $49 million.

The Board has also declared a cash dividend of $0.25 per common share payable on September 15 to shareholders of record as at August 25, 2025. This concludes our formal remarks.

Thank you for taking the time to join us this morning. We will now take your questions.

Thank you, Paul. And I'd just like to thank everyone for your interest in joining our call today, and we look forward to speaking with you again in November.

Thanks, everyone, and have a great day.