Core Insights - Thryv Holdings, Inc. has appointed Sean Wechter as the new Chief Technology Officer, bringing extensive experience in leading high-growth SaaS organizations [1] - The company has evolved into a half-billion-dollar enterprise, with technology playing a crucial role in its development [1] Company Developments - Sean Wechter's appointment is part of Thryv's strategy to navigate periods of strategic change and enhance its technology leadership [1] - The focus on technology is expected to further drive Thryv's growth and market position in the small business marketing and sales software sector [1]

Group 1 - Thryv Holdings (NASDAQ: THRY) is identified as a growth business with a high-quality business model and a clear roadmap for growth [1] - The company is currently trading at an attractive price, making it an appealing investment opportunity [1] - The article expresses a positive outlook on Thryv Holdings, indicating a beneficial long position in its shares [1]

Core Viewpoint - Thryv Holdings, Inc. (THRY) has seen a 16% increase in share price over the past four weeks, closing at $13.8, with analysts suggesting a potential upside of 55.1% based on a mean price target of $21.4 [1] Price Targets and Analyst Consensus - The average price target for THRY is based on five short-term estimates, ranging from a low of $16.00 to a high of $26.00, with a standard deviation of $4.1, indicating variability among analysts [2] - The lowest estimate suggests a 15.9% increase from the current price, while the highest estimate indicates an 88.4% upside [2] - Analysts' price targets can often mislead investors, as empirical research shows that they rarely indicate the actual price direction of a stock [7][10] Earnings Estimates and Analyst Agreement - There is strong agreement among analysts regarding THRY's ability to report better earnings than previously predicted, which supports the potential for stock upside [4][11] - Over the last 30 days, one earnings estimate has increased, leading to a 27% rise in the Zacks Consensus Estimate for the current year [12] - THRY holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for near-term upside [13] Conclusion on Price Movement - While the consensus price target may not be a reliable indicator of the extent of THRY's potential gains, the implied direction of price movement appears to be a useful guide for investors [14]

Core Viewpoint - Thryv Holdings, Inc. (THRY) is positioned as a strong investment opportunity due to its improving earnings outlook and rising analyst estimates [1][2]. Earnings Estimate Revisions - Analysts have shown growing optimism regarding Thryv's earnings prospects, leading to a trend in estimate revisions that is expected to positively impact the stock price [2]. - The earnings estimate for the current quarter is $0.43 per share, reflecting a significant increase of +116.2% compared to the previous year [5]. - For the full year, the earnings estimate stands at $1.38 per share, indicating a remarkable change of +169.0% from the year-ago figure [6]. - Over the past month, the consensus estimate for the current year has increased by 26.98% due to one upward revision and no negative revisions [6][7]. Zacks Rank and Performance - Thryv currently holds a Zacks Rank 2 (Buy), which is indicative of promising estimate revisions and suggests potential for outperformance [8]. - Historically, stocks with a Zacks Rank 1 (Strong Buy) and 2 (Buy) have significantly outperformed the S&P 500 [8]. Stock Performance - The stock has gained 13.6% over the past four weeks, driven by solid estimate revisions and positive earnings growth prospects [9].

Core Viewpoint - Thryv Holdings, Inc. (THRY) shows significant upside potential with a mean price target of $21.4, indicating a 60.2% increase from the current price of $13.36 [1] Price Targets and Analyst Consensus - The average price target consists of five estimates ranging from a low of $16.00 to a high of $26.00, with a standard deviation of $4.1, suggesting variability in analyst predictions [2] - The lowest estimate indicates a potential increase of 19.8%, while the highest suggests a 94.6% upside [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown increasing optimism about THRY's earnings prospects, as evidenced by a strong consensus in revising EPS estimates higher [11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 27%, with no negative revisions [12] - THRY holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are a common tool for investors, they can often mislead, as empirical research shows they rarely indicate actual stock price movements [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

Group 1 - The individual investor focuses on undercovered companies, particularly in technology, software, electronics, and energy transition sectors [1] - The investor has over 7 years of personal capital investment experience across a broad range of global companies [1] - The investor holds a Master's degree in Electrical Engineering and works as an automotive battery R&D engineer in Sweden [1] Group 2 - The investor maintains a watchlist of up to 100 companies, aiming to identify asymmetric investment opportunities for market-beating returns [1] - The write-ups on Seeking Alpha serve as a platform for the investor to present investment theses and receive community feedback [1]

Core Insights - Thryv reported stronger-than-expected GAAP revenue of $210.5 million and diluted earnings per share of $0.31 for Q2 2025, surpassing analyst estimates [1][10] - The company is transitioning from legacy Marketing Services to a Subscription-based SaaS model, which is driving growth in recurring revenue [3][4] Financial Performance - GAAP revenue decreased by 6.1% year-over-year from $224.1 million in Q2 2024 [2] - SaaS revenue increased by 47.8% year-over-year to $115.0 million, contributing to 54.6% of total revenue, up from 34.7% in Q2 2024 [2][5] - Marketing Services revenue fell by 34.7% year-over-year to $95.5 million [2][8] - Net income more than doubled to $13.9 million, resulting in a GAAP EPS of $0.31, compared to $0.15 in Q2 2024 [10] SaaS Transition and Growth - The SaaS segment's adjusted EBITDA reached $23.4 million with a margin of 20.3%, up from 13.1% the previous year [6] - The total SaaS client base grew to 106,000, with 92,000 clients excluding the Keap acquisition [5] - The integration of Keap contributed $17.7 million to SaaS revenue and enhanced international reach [7] Future Guidance - Thryv raised its full-year 2025 Adjusted EBITDA guidance to $70.5 million to $73.5 million, with SaaS revenue expected to be between $460.0 million and $465.0 million [12] - For Q3 2025, SaaS revenue is forecasted at $116.0 million to $117.0 million, while Marketing Services revenue is expected to decline further to between $84.0 million and $85.0 million [12] Strategic Focus - The company aims to completely exit the Marketing Services business by the end of 2028, focusing on SaaS growth [9][13] - Management is concentrating on improving customer retention and cross-selling opportunities to enhance revenue from existing clients [7][13]

Financial Data and Key Metrics Changes - SaaS reported revenue for Q2 2025 was $115 million, a 48% year-over-year increase, meeting the top end of guidance [12] - SaaS adjusted EBITDA increased to $23.4 million, resulting in a record adjusted EBITDA margin of 20% [13] - Net debt decreased by $24 million to $274 million, bringing the leverage ratio to 2.2 times, ahead of expectations [16] Business Line Data and Key Metrics Changes - SaaS business excluding Keep grew 25% year-over-year, while Keep contributed $17.7 million in Q2 [12] - Marketing Services revenue was $95.5 million, above guidance, with adjusted EBITDA of $27.8 million and a margin of 29% [15] - SaaS ARPU reached $352, with Thrive at $340 and Keep at $431, indicating a rise in customer spending [14] Market Data and Key Metrics Changes - The number of SaaS subscribers increased to 106,000, a 25% year-over-year growth [13] - Clients purchasing multiple products increased to 19%, with 17,000 clients using two or more Thrive SaaS products [14][15] Company Strategy and Development Direction - The company aims to deepen engagement by focusing on vertical markets, starting with the HVAC sector, and plans to roll out similar products for other verticals [22][42] - A new product, Workforce Center, was launched to help small businesses manage payroll and compliance, integrating seamlessly with the Thrive platform [28][92] - The company is transitioning to a pure play software business, with plans to exit marketing services by 2028 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's trajectory, noting that the pinch point has been overcome and free cash flow is expected to improve [7][20] - The company is focused on increasing spend per customer and driving adoption of more products, with expectations of ARPU growth from $4,000 to $8,000 over the next few years [9][64] - Management acknowledged the softness in the Keep business but remains optimistic about its long-term potential [20][60] Other Important Information - The company is classified incorrectly under advertising in the GICS, which affects visibility in software league tables [30] - The company has a share buyback authorization and is considering using free cash flow for stock repurchases [74] Q&A Session Summary Question: Impact of HVAC product on business - The HVAC product is expected to attract new customers and enhance ARPU through an upcharge for vertical capabilities, with plans for further verticalization [34][35] Question: Guidance and organic growth expectations - Management indicated that the guidance reflects a conservative outlook, with no significant concerns about demand [44][46] Question: Insights on Keep business and customer churn - The Keep software has potential, but management is cautious about investing in unprofitable sales; focus is on leveraging existing customer relationships [52][56] Question: Financial flexibility and cash flow generation - The company plans to allocate cash towards marketing, sales, and potential share buybacks now that financial flexibility has improved [71][74] Question: Early feedback on Workforce Center - Initial feedback on Workforce Center has been positive, with customers appreciating the convenience it offers for payroll management [91][92]

Q2 2025 Financial Performance - SaaS revenue increased to $115.005 million, a 47.8% year-over-year increase compared to $77.794 million in Q2 2024[37] - Marketing Services revenue decreased to $95.465 million, a 34.7% year-over-year decrease compared to $146.290 million in Q2 2024[37] - Consolidated revenue decreased to $210.470 million, a 6.1% year-over-year decrease compared to $224.084 million in Q2 2024[37] - Net income increased to $13.931 million, compared to $5.548 million in Q2 2024[37] - Total company billings decreased to $191.8 million, a 6% year-over-year decrease[55] Profitability Metrics - SaaS Adjusted EBITDA increased to $23.393 million with a margin of 20.3%[37] - Marketing Services Adjusted EBITDA was $27.839 million with a margin of 29.2%[37] - Consolidated Adjusted EBITDA was $51.232 million with a margin of 24.3%[37] SaaS Business Highlights - SaaS Adjusted Gross Margin increased to 74.0%, a 430 bps year-over-year increase[38] - Seasoned Net Revenue Retention (NRR) increased to 103%, a 900 bps year-over-year increase[38] - SaaS ARPU (Average Revenue Per Unit) reached $352[38] FY 2025 Outlook - The company expects FY 2025 SaaS revenue to increase by 34% to 35%, reaching $460.0 to $465.0 million[59] - The company expects FY 2025 Marketing Services revenue to decline by approximately 32% to 33%, landing between $323.0 to $325.0 million[59]

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Provides unaudited consolidated financial statements for Q2 2025 and 2024, highlighting key financial performance and position | Financial Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenue (in thousands)** | $210,470 | $224,084 | $391,841 | $457,708 | | **Gross Profit (in thousands)** | $146,620 | $148,588 | $265,908 | $302,229 | | **Operating Income (in thousands)** | $29,540 | $31,338 | $26,506 | $62,472 | | **Net Income (in thousands)** | $13,931 | $5,548 | $4,313 | $13,972 | | **Diluted EPS** | $0.31 | $0.15 | $0.10 | $0.37 | | Balance Sheet Item | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets (in thousands)** | $189,067 | $210,720 | | **Total Assets (in thousands)** | $687,704 | $712,165 | | **Total Current Liabilities (in thousands)** | $157,898 | $196,260 | | **Total Liabilities (in thousands)** | $472,820 | $515,245 | | **Total Stockholders' Equity (in thousands)** | $214,884 | $196,920 | | Cash Flow Item (Six Months Ended June 30) | 2025 (unaudited) | 2024 (unaudited) | | :--- | :--- | :--- | | **Net cash provided by operating activities (in thousands)** | $19,075 | $27,660 | | **Net cash used in investing activities (in thousands)** | ($14,998) | ($16,230) | | **Net cash used in financing activities (in thousands)** | ($10,060) | ($10,514) | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Details accounting policies, segment performance, debt obligations, and the Keap acquisition, alongside an SEC inquiry - The company operates through two reportable segments: SaaS, which includes its all-in-one small business management software platform, and Marketing Services, which includes Print and Digital solutions[27](index=27&type=chunk)[22](index=22&type=chunk) - On October 31, 2024, the company acquired Keap for **$77.0 million** in net cash, adding **$34.9 million** in goodwill to the SaaS segment, financed by a public stock offering and ABL Facility borrowing[36](index=36&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk) - In May 2024, the company refinanced its debt by entering into a new **$350.0 million** Term Loan and an **$85.0 million** ABL Facility[65](index=65&type=chunk)[75](index=75&type=chunk) - In October 2024, the company received a subpoena from the SEC's Division of Enforcement regarding its strategy of converting clients from Marketing Services to its SaaS platform, with the company cooperating with the inquiry[107](index=107&type=chunk) | Segment Revenue (in thousands) | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | SaaS | $115,005 | $77,794 | +47.8% | | Marketing Services | $95,465 | $146,290 | -34.7% | | **Total** | **$210,470** | **$224,084** | **-6.1%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, strategic shift to SaaS, key business metrics, and liquidity [Overview and Key Business Metrics](index=27&type=section&id=Overview%20and%20Key%20Business%20Metrics) Focuses on the strategic shift to SaaS, client conversion initiatives, and key performance indicators - The company made a strategic decision to terminate its Marketing Services solutions by the end of 2028, focusing on transitioning these clients to its SaaS platform[123](index=123&type=chunk) - Over the twelve months ended June 30, 2025, Thryv converted approximately **29,000** Marketing Services clients to its SaaS platform, increasing SaaS revenue by **$9.1 million** in Q2 2025[128](index=128&type=chunk) | Client Count (in thousands) | As of June 30, 2025 | As of June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Marketing Services | 199 | 271 | -26.6% | | SaaS | 106 | 85 | +24.7% | | **Total** | **261** | **307** | **-15.0%** | - SaaS Seasoned Net Revenue Retention (NRR) increased to **103%** as of June 30, 2025, up from **94%** a year prior, driven by additional product sales, price increases, and client conversions[148](index=148&type=chunk)[147](index=147&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Compares financial performance for Q2 and six months ended June 30, 2025, versus 2024, detailing revenue and EBITDA changes | Revenue Change (Q2 2025 vs Q2 2024) | Amount (in thousands) | % Change | | :--- | :--- | :--- | | SaaS Revenue | $37,211 | 47.8% | | Marketing Services Revenue | ($50,825) | -34.7% | | **Total Revenue** | **($13,614)** | **-6.1%** | - The **$37.2 million** increase in Q2 SaaS revenue was primarily driven by the Keap acquisition (**$17.7 million**), conversion of Marketing Services clients (**$4.6 million**), new sales and price increases (**$9.5 million**), and net expansion from previously converted clients (**$5.4 million**)[157](index=157&type=chunk) - The **$50.8 million** decrease in Q2 Marketing Services revenue was driven by a **$15.6 million** decline in Print revenue due to publication timing and secular decline, and a **$35.2 million** decline in Digital revenue due to client conversions and competition[159](index=159&type=chunk)[160](index=160&type=chunk)[163](index=163&type=chunk) - Adjusted EBITDA decreased by **$8.1 million** (**13.6%**) to **$51.2 million** for Q2 2025, compared to **$59.3 million** in Q2 2024, mainly due to the decline in Marketing Services sales[173](index=173&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet short-term and long-term obligations, including cash flow, debt, and share repurchase program - Net cash from operating activities decreased by **$8.6 million** to **$19.1 million** for the six months ended June 30, 2025, compared to the prior year, mainly due to lower sales and working capital changes[207](index=207&type=chunk)[208](index=208&type=chunk) - As of June 30, 2025, total debt outstanding was **$275.6 million** (net), comprised of a **$245.0 million** Term Loan and **$39.9 million** drawn on the ABL Facility[218](index=218&type=chunk)[221](index=221&type=chunk) - The company has a **$40 million** share repurchase program authorized through April 2029, with **$39.5 million** remaining available as of June 30, 2025[219](index=219&type=chunk)[220](index=220&type=chunk) - As of June 30, 2025, the company had approximately **$14.0 million** available to be drawn upon under its ABL Facility[217](index=217&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Identifies primary market risks as interest rate and foreign exchange currency risk, and their potential financial impact - The company is exposed to interest rate risk as substantially all of its **$275.6 million** in debt has floating rates, where a hypothetical **100 basis point** increase would raise annual interest expense by approximately **$2.8 million**[221](index=221&type=chunk) - The company has foreign currency risk related to revenue and expenses denominated in Australian and New Zealand dollars but does not currently use hedging instruments for this risk[222](index=222&type=chunk)[223](index=223&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with ongoing integration of controls for the Keap acquisition - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective as of June 30, 2025[224](index=224&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter, other than the ongoing integration of controls for the acquired Keap business[225](index=225&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 13 for details on legal proceedings, including an SEC inquiry and a settled tax case - Information on legal proceedings is incorporated by reference from Note 13, Contingent Liabilities[226](index=226&type=chunk) - Key matters disclosed in Note 13 include an ongoing SEC inquiry related to client conversion strategy and a tax case with the IRS that has been largely settled[107](index=107&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) States that there have been no material changes to previously disclosed risk factors from the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors set forth in the company's 2024 Annual Report on Form 10-K[227](index=227&type=chunk) [Other Information (Items 2-6)](index=49&type=section&id=Other%20Information%20(Items%202-6)) Covers standard disclosures including no unregistered equity sales, no defaults on senior securities, and no 10b5-1 trading arrangement changes - Item 2: The company reported no unregistered sales of equity securities[228](index=228&type=chunk) - Item 3: The company reported no defaults upon senior securities[229](index=229&type=chunk) - Item 5: No officers or directors adopted or terminated a non-Rule 10b5-1 trading arrangement during the second quarter of 2025[231](index=231&type=chunk)