DALLAS--(BUSINESS WIRE)--With AI at the forefront of most current business innovations, small business experts from Thryv, Inc. (NASDAQ:THRY) share their predictions for those trends poised to transform how SMBs compete and succeed in 2026. AI Rapidly Accelerates Small Business Digital Transformation Small business productivity will skyrocket as business owners use AI-enhanced automations for everything from marketing to invoicing and scheduling, to customer communications. Beyond that, the insights these a ...

Core Viewpoint - Thryv Holdings Inc. (NASDAQ:THRY) is currently experiencing a price of $6.01, reflecting a 0.84% increase, but has seen a decline of 4.30% over the past month and a significant drop of 62.99% over the past year, raising questions about its valuation despite current performance [1]. Group 1: P/E Ratio Analysis - The P/E ratio is a critical metric for assessing a company's market performance, comparing the current share price to its earnings per share (EPS) [3]. - Thryv Holdings has a P/E ratio of 11.92, which is significantly lower than the Media industry average of 48.66, suggesting that the stock may be undervalued or could perform worse than its peers [4]. - A lower P/E ratio can indicate undervaluation but may also imply that shareholders do not expect future growth, highlighting the need for a comprehensive analysis beyond just the P/E ratio [7][8].

Group 1 - The analyst remains bullish on Thryv Holdings, Inc. (THRY) stock, recognizing improving fundamentals in the business post-Q2 earnings [1] - The analyst focuses on undercovered companies, maintaining a watchlist of up to 100 companies across technology, software, electronics, and energy transition sectors [1] - The analyst has over 7 years of personal investment experience and emphasizes the importance of identifying asymmetric investment opportunities for achieving market-beating returns [1] Group 2 - The analyst holds a beneficial long position in THRY shares through stock ownership, options, or other derivatives [2] - The article expresses the analyst's own opinions without receiving compensation from any company mentioned [2]

Group 1 - The analyst remains bullish on Thryv Holdings, Inc. (THRY) stock, recognizing improving fundamentals in the business post-Q2 earnings [1] - The analyst focuses on undercovered companies, maintaining a watchlist of up to 100 companies across technology, software, electronics, and energy transition sectors [1] - The analyst has over 7 years of personal investment experience and aims to identify asymmetric investment opportunities for market-beating returns [1] Group 2 - The analyst holds a beneficial long position in THRY shares through stock ownership, options, or other derivatives [2] - The article expresses the analyst's own opinions without compensation from any company mentioned [2]

Group 1 - William Blair analyst Arjun Bhatia downgraded Thryv Holdings (THRY) to Market Perform from Outperform without a price target [1] - The downgrade is attributed to "challenging growth dynamics" in the company's software-as-a-service business that emerged last quarter [1] - Thryv is entering a transition period for the next several quarters as it builds its self-serve customer acquisition motion [1] Group 2 - Limited near-term visibility into the company's growth dynamics is now observed by the analyst [1]

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Core Insights - Thryv Holdings, Inc. reported quarterly earnings of $0.23 per share, missing the Zacks Consensus Estimate of $0.43 per share, but showing improvement from a loss of $2.65 per share a year ago, resulting in an earnings surprise of -46.51% [1] - The company achieved revenues of $201.56 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.41% and increasing from $179.85 million year-over-year [2] - Thryv shares have declined approximately 21% year-to-date, contrasting with the S&P 500's gain of 17.2% [3] Earnings Outlook - The future performance of Thryv's stock will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $192.33 million, and for the current fiscal year, it is $1.38 on revenues of $784.94 million [7] Industry Context - The Internet - Software industry, to which Thryv belongs, is currently ranked in the top 30% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked using tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - SaaS reported revenue was $115.9 million in Q3 2025, representing a 33% year-over-year increase [41] - SaaS adjusted gross margin increased by 80 basis points year-over-year, reaching 73% [41] - SaaS adjusted EBITDA increased to $19.6 million, resulting in an adjusted EBITDA margin of 17% [41] - Free cash flow for Q3 was $14.6 million, bringing year-to-date free cash flow to $18.8 million [44] - Net debt decreased by $9 million to $265 million, with a leverage ratio of 1.9 times [45] Business Line Data and Key Metrics Changes - SaaS business excluding Keap grew 14% year-over-year, with Keap contributing $16.8 million in Q3 [41] - Marketing Services revenue was $85.7 million, above guidance, with adjusted EBITDA of $21.2 million and a margin of 25% [43] - Marketing Services billings totaled $70.6 million, down 33% year-over-year due to a strategic shift towards SaaS [44] Market Data and Key Metrics Changes - Seasoned Net Revenue Retention (NRR) declined to 94%, primarily due to the transition of legacy clients to the new SaaS platform [42] - Clients with two or more SaaS products grew to 17,000, or 20% of the base, compared to 15,000, or 16%, a year ago [41] Company Strategy and Development Direction - The company is focused on increasing spend per customer by driving adoption of more products, especially among high-value clients [41] - A vertical initiative has been launched, starting with HVAC, showing promising results such as a 10% lift in jobs booked and a 25% increase in total revenue for pilot customers [46][48] - The company aims to exit Marketing Services by 2028, ensuring strong liquidity through 2030 [44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that execution was slightly below expectations but emphasized that external macroeconomic factors were not to blame [60] - The market remains stable, with customers in essential services less affected by economic fluctuations [71] - The company expects SaaS revenue for Q4 2025 to be in the range of $118 million to $121 million, with full-year guidance updated to $460 million to $463 million [45] Other Important Information - The company is integrating AI across its software offerings, enhancing productivity and customer engagement [34][85] - The new Chief Technology Officer is expected to accelerate product development and AI integration [85][88] Q&A Session Summary Question: SaaS business growth and guidance - Management noted that execution was slightly shy of expectations but emphasized that the market conditions were stable and not a factor in the results [60] Question: Partner performance and Keap ecosystem - Management acknowledged past neglect of partners and highlighted efforts to improve relationships and deliver on partner needs, expecting a re-acceleration in 2026 [64][65] Question: Customer purchasing decisions and market tone - Management indicated that customers are generally stable, with essential services less sensitive to economic changes [71] Question: Vertical sales emphasis and its impact - Management expects gradual improvements in NRR and ARPU as the vertical strategy targets larger, more stable businesses [77][81] Question: AI integration and operational efficiency - The new CTO is focused on enhancing AI capabilities and ensuring software interoperability, which is crucial for larger clients [85][88] Question: Visibility in answer-based engines - Management expressed confidence in the company's ability to optimize customer visibility in answer engines, leveraging historical strengths in online directories [101][102] Question: Balancing ARPU expansion with customer growth - Management indicated a focus on increasing ARPU in the short term while engaging existing customers, with plans for future customer growth [110][112]

Q3 2025 Financial Performance - SaaS revenue increased to $115.903 million, a 33.1% year-over-year increase compared to $87.055 million in 2024[35] - Marketing Services revenue decreased to $85.652 million, a 7.7% year-over-year decrease compared to $92.797 million in 2024[35] - Consolidated revenue increased to $201.555 million, a 12.1% year-over-year increase compared to $179.852 million in 2024[35] - Net income was $5.654 million, compared to a net loss of $96.071 million in 2024[35] Profitability Metrics - SaaS Adjusted EBITDA was $19.591 million with a margin of 16.9%[35] - Marketing Services Adjusted EBITDA was $21.242 million with a margin of 24.8%[35] - Consolidated Adjusted EBITDA was $40.833 million with a margin of 20.3%[35] Billings - Total Company billings were $184.2 million, a 4% year-over-year decrease[59] - SaaS billings were $113.6 million, a 32% year-over-year increase[59] - Marketing Services billings were $70.6 million, a 33% year-over-year decrease[59] FY 2025 Outlook - The company expects SaaS revenue between $460.0 million and $463.0 million, representing a 34% to 35% increase[63] - The company expects Marketing Services revenue between $323.0 million and $325.0 million, representing a ~32% to ~33% decline[63] - The company expects total revenue between $783.0 million and $788.0 million, representing a ~4% to ~5% decline[63]

Core Insights - Laughing Water Capital reported a decline of approximately -1% in Q3 2025, resulting in year-to-date returns of approximately -2.7%, while the SP500TR and R2000 indices returned 12.4% and 8.1% respectively for the quarter [1] - The fund highlighted Thryv Holdings, Inc. (NASDAQ:THRY) as a key stock, which has experienced a one-month return of -1.02% and a 52-week loss of 18.64%, closing at $11.70 per share with a market capitalization of $514.055 million [2] Company Analysis - Thryv Holdings, Inc. is positioned as a software provider for small and medium businesses, with a thesis suggesting that its declining business has been overshadowing growth in its software segment [3] - The company operates in a market with millions of small businesses in the U.S. that are transitioning from traditional methods to software solutions, driven by a new generation of business owners [3] - Thryv's SaaS business demonstrates strong metrics, including 25% organic year-over-year revenue growth and a 20% adjusted EBITDA margin, with a net revenue retention rate of approximately 100% [3] - The company has been actively paying down debt, allowing for greater flexibility in capital allocation moving forward [3] - Insider buying activity indicates confidence in the company's future, with four insiders purchasing shares in the open market this year, alongside a recent guidance raise [3]