Core Viewpoint - The S&P 500 is reaching new heights, prompting a recommendation to shift investment portfolios from expensive large-cap stocks to undervalued small- and mid-cap stocks, which are perceived as less susceptible to valuation pressures [1]. Group 1: Market Analysis - The current market environment suggests that large-cap stocks may be overvalued, making them a riskier investment choice [1]. - Small- and mid-cap stocks are highlighted as potentially more attractive due to their lower valuations and growth opportunities [1]. Group 2: Analyst Background - The analyst, Gary Alexander, has extensive experience in technology sectors, both on Wall Street and in Silicon Valley, providing insights into current industry trends [1]. - Alexander has been a contributor to Seeking Alpha since 2017 and has been featured in various publications, indicating a strong presence in the investment community [1].

Core Viewpoint - Thryv Holdings, Inc. is set to release its third quarter 2025 financial results on October 30, before market opening, followed by a conference call to discuss the results with investors [1] Financial Results Announcement - The financial results for Q3 2025 will be announced on October 30 [1] - A conference call is scheduled for 8:30 a.m. ET to discuss the results with the investment community [1]

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]