[Financial & Business Highlights](index=1&type=section&id=Financial%20%26%20Business%20Highlights) Thryv demonstrated strong Q2 2025 financial performance, driven by SaaS growth and operational improvements, while successfully reducing debt [Q2 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%20Financial%202025%20Highlights) In the second quarter of 2025, Thryv demonstrated strong performance in its SaaS segment, with revenue increasing by **48%** year-over-year to **$115.0 million**. While Marketing Services revenue declined, the company's consolidated net income more than doubled to **$13.9 million**. Thryv also successfully reduced its term debt by **$26 million** and raised its full-year **2025 Adjusted EBITDA guidance** Q2 2025 Key Financial Metrics (YoY) | Metric | Q2 2025 ($ million) | Q2 2024 ($ million) | Change | | :--- | :--- | :--- | :--- | | **SaaS Revenue** | $115.0 | $77.8 | +47.8% | | **Marketing Services Revenue** | $95.5 | $146.3 | -34.7% | | **Consolidated Total Revenue** | $210.5 | $224.1 | -6.0% | | **Consolidated Net Income** | $13.9 | $5.5 | +152.7% | | **Diluted EPS** | $0.31 | $0.15 | +106.7% | | **Consolidated Adjusted EBITDA** | $51.2 | $59.3 | -13.6% | | **SaaS Adjusted EBITDA** | $23.4 | $10.2 | +130.1% | - The company reduced its term debt by **$26 million**, which lowers the required amortization payments[3](index=3&type=chunk) - SaaS revenue, excluding the contribution from the Keap acquisition, grew **25%** year-over-year[3](index=3&type=chunk)[4](index=4&type=chunk) [Recent Business Highlights](index=2&type=section&id=Recent%20Business%20Highlights) The company exceeded its prior guidance, achieving its **highest SaaS Adjusted EBITDA margin** to date. Operationally, SaaS clients grew **25%** year-over-year to **106,000**, with strong Seasoned Net Revenue Retention of **103%**. The CEO stated that the company has successfully navigated the "pinch point" of its SaaS transformation, with **leverage expected to decline** and **free cash flow to ramp up** in the second half of the year - The CEO, Joe Walsh, highlighted that the company has passed the peak of its SaaS transformation ahead of schedule, with **leverage expected to decline** and **free cash flow to ramp up** in the second half of the year[6](index=6&type=chunk) Q2 2025 Key Operational Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | **SaaS Clients** | 106,000 | +25% | | **SaaS Clients (Ex-Keap)** | 92,000 | +8% | | **Seasoned Net Revenue Retention (Ex-Keap)** | 103% | +900 bps | | **SaaS Monthly ARPU** | $352 | N/A | | **ThryvPay Total Payment Volume** | $90M | +13% | [Financial Outlook](index=2&type=section&id=Outlook) Thryv provides Q3 and full-year 2025 guidance, anticipating continued SaaS growth and an increase in Adjusted EBITDA [Q3 and Full Year 2025 Guidance](index=2&type=section&id=Q3%20and%20Full%20Year%202025%20Guidance) Thryv has issued guidance for the third quarter and full year of 2025. The company anticipates continued strong growth in its SaaS segment, with full-year revenue projected between **$460.0** and **$465.0 million**. The decline in the Marketing Services segment is expected to continue as part of the ongoing business transformation. Notably, the company raised its **full-year 2025 Adjusted EBITDA guidance** - The company raised its **full-year 2025 Adjusted EBITDA guidance**[3](index=3&type=chunk) SaaS Segment Guidance (in millions) | Period | SaaS Revenue ($ million) | SaaS Adjusted EBITDA ($ million) | | :--- | :--- | :--- | | **Q3 2025** | $116.0 - $117.0 | $18.5 - $19.5 | | **Full Year 2025** | $460.0 - $465.0 | $70.5 - $73.5 | Marketing Services Segment Guidance (in millions) | Period | Marketing Services Revenue ($ million) | Marketing Services Adjusted EBITDA ($ million) | | :--- | :--- | :--- | | **Q3 2025** | $84.0 - $85.0 | $22.0 - $23.0 | | **Q4 2025** | $73.0 - $74.0 | $18.5 - $19.5 | | **Full Year 2025** | $323.0 - $325.0 | $78.5 - $80.5 | [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements reflect Q2 2025 revenue decline but improved net income, alongside a stable balance sheet and cash flow management [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For the second quarter of 2025, total revenue decreased by **6.1%** YoY to **$210.5 million**. Despite the revenue decline, operating income was relatively stable at **$29.5 million**. A significant reduction in interest expense contributed to a substantial increase in net income, which rose to **$13.9 million** from **$5.5 million** in the prior-year quarter Consolidated Statement of Operations Highlights (Three Months Ended June 30) | (in thousands) | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | **Revenue** | $210,470 | $224,084 | | **Gross Profit** | $146,620 | $148,588 | | **Operating Income** | $29,540 | $31,338 | | **Net Income** | $13,931 | $5,548 | | **Diluted EPS** | $0.31 | $0.15 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Thryv's balance sheet showed total assets of **$687.7 million** and total liabilities of **$472.8 million**. Compared to December 31, 2024, cash and cash equivalents decreased to **$10.8 million**, while total debt (current and long-term portions of Term Loan and ABL Facility) was reduced. Total stockholders' equity increased from **$196.9 million** to **$214.9 million** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 ($ thousands) | Dec 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $10,838 | $16,311 | | **Total current assets** | $189,067 | $210,720 | | **Total assets** | $687,704 | $712,165 | | **Total current liabilities** | $157,898 | $196,260 | | **Total liabilities** | $472,820 | $515,245 | | **Total stockholders' equity** | $214,884 | $196,920 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities was **$19.1 million**, down from **$27.7 million** in the prior-year period. Investing activities used **$15.0 million**, primarily for additions to fixed assets and software. Financing activities used **$10.1 million**, reflecting net debt repayments. This resulted in an overall decrease in cash of **$5.4 million** for the period Consolidated Cash Flow Summary (Six Months Ended June 30, in thousands) | Cash Flow Category | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $19,075 | $27,660 | | **Net cash used in investing activities** | ($14,998) | ($16,230) | | **Net cash used in financing activities** | ($10,060) | ($10,514) | | **(Decrease) increase in cash** | ($5,391) | $468 | [Segment Information](index=7&type=section&id=Segment%20Information) Segment results highlight the successful SaaS transformation, with significant growth in SaaS revenue and Adjusted EBITDA, contrasting with Marketing Services decline [Segment Performance](index=7&type=section&id=Segment%20Performance) The company's strategic shift to SaaS is evident in its segment results. For Q2 2025, the SaaS segment's revenue grew **47.8%** YoY to **$115.0 million**, with Adjusted EBITDA surging **130.1%** to **$23.4 million**. In contrast, the legacy Marketing Services segment saw revenue decline by **34.7%** to **$95.5 million** and Adjusted EBITDA fall by **43.4%** to **$27.8 million**, reflecting the planned transition of the business Q2 Segment Performance (Three Months Ended June 30, in thousands) | Segment | Metric | 2025 ($ thousands) | 2024 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | **SaaS** | Revenue | $115,005 | $77,794 | 47.8% | | | Adj. EBITDA | $23,393 | $10,165 | 130.1% | | **Marketing Services** | Revenue | $95,465 | $146,290 | (34.7)% | | | Adj. EBITDA | $27,839 | $49,149 | (43.4)% | YTD Segment Performance (Six Months Ended June 30, in thousands) | Segment | Metric | 2025 ($ thousands) | 2024 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | **SaaS** | Revenue | $226,134 | $152,116 | 48.7% | | | Adj. EBITDA | $34,208 | $13,600 | 151.5% | | **Marketing Services** | Revenue | $165,707 | $305,592 | (45.8)% | | | Adj. EBITDA | $37,925 | $99,828 | (62.0)% | [Reconciliation of SaaS Revenue](index=8&type=section&id=Reconciliation%20of%20SaaS%20Revenue) This section isolates the impact of the Keap acquisition on SaaS revenue. In Q2 2025, Keap contributed **$17.7 million** to the total SaaS revenue of **$115.0 million**. Excluding Keap, the organic SaaS revenue was **$97.3 million**, a **25%** increase from the **$77.8 million** reported in Q2 2024 SaaS Revenue Reconciliation (in thousands) | Description | Q2 2025 ($ thousands) | H1 2025 ($ thousands) | | :--- | :--- | :--- | | **Total SaaS Revenue** | $115,005 | $226,134 | | Less: Keap SaaS Revenue | $17,719 | $36,602 | | **SaaS Revenue (excluding Keap)** | $97,286 | $189,532 | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP measures like Adjusted EBITDA and Adjusted Gross Profit, providing alternative performance insights [Reconciliation of Adjusted EBITDA](index=8&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) The company provides a reconciliation from the GAAP measure, **Net Income**, to the non-GAAP measure, Adjusted EBITDA. For Q2 2025, **Net Income** of **$13.9 million** was adjusted for items including interest expense (**$9.0M**), depreciation and amortization (**$10.2M**), stock-based compensation (**$6.0M**), and restructuring expenses (**$5.5M**) to arrive at a Consolidated Adjusted EBITDA of **$51.2 million** - Adjusted EBITDA is defined as **Net income** plus adjustments for interest, taxes, depreciation, amortization, **stock-based compensation**, restructuring, and other non-operating or non-recurring items[20](index=20&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (Q2 2025, in thousands) | Description | Amount ($ thousands) | | :--- | :--- | | **Net income** | $13,931 | | Interest expense | $8,952 | | Depreciation and amortization expense | $10,191 | | Stock-based compensation expense | $6,008 | | Restructuring and integration expenses | $5,493 | | Income tax expense | $8,436 | | Other adjustments | ($1,779) | | **Adjusted EBITDA** | $51,232 | [Reconciliation of Adjusted Gross Profit](index=10&type=section&id=Reconciliation%20of%20Adjusted%20Gross%20Profit) This section reconciles GAAP **Gross Profit** to non-GAAP Adjusted Gross Profit by adding back **depreciation, amortization**, and **stock-based compensation expenses** allocated to cost of services. For Q2 2025, the total Adjusted Gross Profit was **$150.7 million**, resulting in an Adjusted Gross Margin of **71.6%**. The SaaS segment achieved a high Adjusted Gross Margin of **74.0%** - Adjusted Gross Profit is defined as **Gross profit** adjusted to exclude the impact of **Depreciation and amortization expense** and **Stock-based compensation expense**[20](index=20&type=chunk) Reconciliation of Gross Profit to Adjusted Gross Profit (Q2 2025, in thousands) | Segment | Gross Profit ($ thousands) | Adjustments ($ thousands) | Adjusted Gross Profit ($ thousands) | Adjusted Gross Margin | | :--- | :--- | :--- | :--- | :--- | | **SaaS** | $82,911 | $2,211 | $85,122 | 74.0% | | **Marketing Services** | $63,709 | $1,827 | $65,536 | 68.6% | | **Total** | $146,620 | $4,038 | $150,658 | 71.6% | [Other Information](index=2&type=section&id=Other%20Information) This section provides important disclaimers regarding forward-looking statements and details for accessing the earnings conference call [Forward-Looking Statements](index=12&type=section&id=Forward-Looking%20Statements) This section outlines the risks and uncertainties associated with the forward-looking statements in the report, such as financial guidance. Key risk factors mentioned include significant competition, the ability to manage growth and transition clients to the SaaS platform, successful integration of acquisitions like Keap, cybersecurity threats, reliance on third-party providers, and general macroeconomic conditions - The report contains forward-looking statements that are not guarantees of future performance and are subject to numerous risks and uncertainties[31](index=31&type=chunk) - Identified risks include competition, ability to transition Marketing Services clients to the Thryv platform, successful integration of acquisitions (including Keap), cybersecurity breaches, and macroeconomic conditions like inflation or recession[31](index=31&type=chunk)[32](index=32&type=chunk) [Conference Call Information](index=2&type=section&id=Earnings%20Conference%20Call%20Information) Thryv scheduled a conference call and webcast for **8:30 a.m. Eastern Time** on Wednesday, July 30, 2025, to discuss its second-quarter 2025 financial results. The announcement provides links for analysts to register and for the public to listen to the live webcast, with a replay to be made available afterward - A conference call to discuss Q2 2025 results was scheduled for Wednesday, July 30, 2025, at **8:30 a.m. (Eastern Time)**[8](index=8&type=chunk) - Access to the webcast and its replay is available through links provided in the report and on the company's Investor Relations website[11](index=11&type=chunk)[12](index=12&type=chunk)

Core Viewpoint - Thryv Holdings is undergoing a significant digital transformation, positioning itself as a modern player in the market despite its roots in the old economy [1]. Company Overview - Thryv Holdings is the successor to two of the largest phone directory companies, indicating a strong legacy in the industry [1]. Digital Transformation - The company is actively transitioning from traditional business models to digital solutions, which is essential for its growth and competitiveness in the current market landscape [1].

Summary of Thryv (THRY) FY Conference Call - June 03, 2025 Company Overview - Thryv is transitioning from its legacy Yellow Pages business, established in 1886, to a small business SaaS (Software as a Service) model, leveraging its existing customer base and relationships [5][6] - The company currently has approximately 100,000 customers on its software platform, indicating strong engagement and growth [5] Core Business Insights - Thryv's software offerings focus on helping small businesses with marketing, sales, and customer relationship management [7] - The acquisition of Keep, a company with a history of $175 million in investment, has provided Thryv with a robust engineering team and valuable automation tools [8][9] - The product roadmap includes several enhancements, such as the Business Center, Marketing Center, and upcoming Workforce Center, which are designed to improve customer engagement and sales [11] Financial Performance - Thryv reported a 50% growth rate, with 59% subscription growth, largely attributed to the acquisition of Keep [19] - The average revenue per user (ARPU) is currently $4,000, with a target to increase it to $8,000 by the end of the decade [19] - Gross margin stands at 73%, and net revenue retention has improved to 103, up from the low 90s a year ago [19] Market Dynamics - The target market consists primarily of established service-based businesses, such as HVAC and plumbing, which have been long-time Yellow Pages customers [21][22] - Newer businesses, particularly those run by younger generations, are beginning to adopt cloud solutions, indicating a shift in market dynamics [25][28] Customer Acquisition and Sales Strategy - Thryv is focusing on referrals from existing customers as a low-cost acquisition strategy, with a significant number of new leads coming from this channel [60] - The company is not investing in marketing for 2025, aiming instead for efficient customer acquisition and upselling to existing customers [62][64] - Changes in the sales force compensation structure are designed to incentivize selling to larger businesses, which is expected to improve average order value [65][66] Legacy Business and Cash Flow - The legacy Yellow Pages business is projected to generate between $250 million and $300 million in cash flow through the end of the decade, which will help service the company's net debt of approximately $290 million [17][78] - The company has a predictable cash flow model due to 24-month contracts with customers, providing visibility into revenue collections [73] Future Outlook - Thryv anticipates that by 2026, more than half of its EBITDA will come from SaaS, with a goal of becoming a billion-dollar SaaS business [13][17] - The company is exploring options for capital allocation, including potential share buybacks and increased marketing investments as cash flow improves [80][82] Key Takeaways - Thryv is in a significant transition phase, moving from a traditional print business to a modern SaaS model, with strong growth potential in the small business sector [5][6] - The acquisition of Keep is seen as transformative, providing new capabilities and a partner ecosystem that enhances Thryv's market reach [10][45] - The company is strategically focusing on customer retention and upselling, while managing its legacy business to ensure cash flow stability [74][78]

Company Performance - Thryv Holdings, Inc. reported a quarterly loss of $0.22 per share, compared to the Zacks Consensus Estimate of $0.24, marking an earnings surprise of -191.67% [1] - The company posted revenues of $181.37 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 4.50%, but down from $233.62 million year-over-year [2] - Over the last four quarters, Thryv has surpassed consensus EPS estimates only once, while it has topped consensus revenue estimates three times [2] Stock Outlook - Thryv shares have declined approximately 7.4% since the beginning of the year, underperforming the S&P 500, which has seen a decline of -5.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.69 on revenues of $204.11 million, and for the current fiscal year, it is $2.20 on revenues of $776.08 million [7] Industry Context - The Internet - Software industry, to which Thryv belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Thryv's stock performance [5]

Financial Data and Key Metrics Changes - The company reported a 50% year-over-year revenue growth for Q1 2025, with a normalized growth of 24% excluding the Keep acquisition [6][19] - SaaS revenue reached $111.1 million, exceeding guidance, with an adjusted EBITDA margin of 10% [19][20] - The overall SaaS ARPU increased to $335, with Thrive's ARPU at $320 and Keep's ARPU at $428 [22][23] - The net debt position was $298 million, with a leverage ratio of 2.2 times net debt to EBITDA [27][28] Business Line Data and Key Metrics Changes - SaaS revenue now constitutes 61% of total revenue, marking a significant shift from marketing services to SaaS [7] - Marketing services revenue for Q1 was $70.2 million, reflecting a 42% year-over-year decline as the company transitions clients to SaaS offerings [25][26] - Subscriber growth for SaaS reached 37%, totaling 111,000 subscribers, including 15,000 from Keep [9][21] Market Data and Key Metrics Changes - The company is focusing on expanding its existing customer base, with 17.2% of SaaS subscribers using multiple paid products, up from previous periods [12][22] - Seasoned net revenue retention reached a record high of 103%, indicating strong customer satisfaction and loyalty [23] Company Strategy and Development Direction - The company is transitioning to a fully SaaS-focused model, planning to exit the marketing services business by 2028 [26][28] - The strategy emphasizes deepening relationships with existing customers to drive revenue growth through cross-selling and upselling [12][15] - The company is investing in product development and enhancing its partner channel to support growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their customer base, which primarily addresses non-discretionary needs [30][32] - The company is taking a conservative approach to guidance amid economic uncertainty, despite strong performance indicators [34][75] - Management noted that small businesses are currently prioritizing marketing tools to ensure a full order book [33][40] Other Important Information - The company is experiencing increased traffic expenses due to heightened demand for its marketing center and related add-ons [43][44] - The integration of Keep is progressing well, with positive feedback from partners regarding the combined product offerings [52][54] Q&A Session Summary Question: Can you elaborate on the record high net retention rate and what customers are buying? - Management highlighted that customers are increasingly adopting additional products, contributing to the high net retention rate [37][38] Question: What are the reasons for the decrease in SaaS customer additions this quarter? - Management attributed the decrease to seasonal factors and a strategic focus on existing customer expansion rather than new customer acquisition [57][59] Question: How is the integration of Keep progressing? - Management reported strong integration progress, with partners excited about the combined capabilities of Thrive and Keep [50][52] Question: What is the outlook for the SaaS business in a challenging macro environment? - Management indicated that the current environment is prompting customers to prioritize marketing and sales tools, which could benefit the SaaS business [68][70] Question: Are there any differences in retention between Thrive and Keep customers? - Management noted that both customer bases are resilient, with no significant differences in churn rates observed [80][90]

Financial Data and Key Metrics Changes - The company reported a 50% year-over-year revenue growth for Q1 2025, with a normalized growth of 24% excluding the Keep acquisition [6][19] - SaaS revenue reached $111.1 million, exceeding guidance, with an adjusted EBITDA margin of 10% [19][20] - The overall SaaS ARPU increased to $335, with Thrive contributing $320 and Keep at $428 [22][23] - The net debt position was $298 million, with a leverage ratio of 2.2 times net debt to EBITDA [27][28] Business Line Data and Key Metrics Changes - SaaS revenue now constitutes 61% of total revenue, marking a significant shift from marketing services to SaaS [7] - Subscriber growth was 37%, totaling 96,000 Thrive subscribers and 111,000 including Keep [9][21] - Marketing services revenue was $70.2 million, reflecting a 42% year-over-year decline as the company transitions to SaaS [24][26] Market Data and Key Metrics Changes - The company is focusing on expanding its existing customer base, with 17.2% of SaaS subscribers using multiple paid products, up from previous periods [11][22] - Seasoned net revenue retention reached 103%, indicating strong customer satisfaction and loyalty [23] Company Strategy and Development Direction - The company is transitioning to a fully SaaS-focused model, planning to exit the marketing services business by 2028 [26][28] - The strategy emphasizes deepening relationships with existing customers to drive revenue growth through cross-selling and upselling [12][14] - The integration of Keep is seen as a strategic advantage, enhancing the product offering and partner network [17][52] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their customer base, which primarily addresses non-discretionary needs [31][32] - The company is taking a cautious approach to guidance due to economic uncertainties, despite strong performance in Q1 [34][73] - Management noted that small businesses are currently prioritizing marketing tools to ensure a full order book [33][70] Other Important Information - The company is experiencing increased traffic expenses due to heightened demand for its marketing center [42][44] - The first quarter included a temporary headwind of $2-3 million related to shared cost allocations, which is expected to normalize in subsequent quarters [20][21] Q&A Session Summary Question: Can you elaborate on the net retention rate and what customers are buying? - Management highlighted that the net retention rate of 103% reflects successful cross-selling and expansion efforts, with customers increasingly adopting additional products [37][38] Question: What were the takeaways from the Keap Partner Conference? - Partners expressed excitement about the integration of Thrive's capabilities with Keep's automation tools, enhancing their service offerings [50][52] Question: Why was there a decline in SaaS customer additions this quarter? - Management attributed the decline to seasonal factors and a strategic focus on existing customer expansion rather than new customer acquisition [58][60] Question: How is the company addressing potential macroeconomic challenges? - Management noted that the current environment is prompting small businesses to invest in marketing tools, which is beneficial for the company's growth [70][73] Question: What is the outlook for the SaaS business and customer retention? - Management remains optimistic about customer retention and expansion, with a long-term goal of increasing average revenue per customer significantly [85][96]

Financial Data and Key Metrics Changes - The company reported a 50% year-over-year revenue growth for Q1 2025, with normalized growth of 24% excluding the Keep acquisition [5][18] - SaaS revenue reached $111.1 million, exceeding guidance, with a sequential increase of 7% [18] - The adjusted EBITDA margin for SaaS improved to 10%, with total adjusted EBITDA of $20.9 million for the quarter [19][25] - The net debt position was $298 million, with a leverage ratio of 2.2 times net debt to EBITDA [26] Business Line Data and Key Metrics Changes - SaaS revenue now constitutes 61% of total revenue, marking a significant transition from marketing services to SaaS [6] - Subscriber growth for Thrive was 37%, totaling 96,000, and including Keep subscribers, the total reached 111,000 [8][20] - Marketing services revenue was $70.2 million, reflecting a 42% year-over-year decline as the company transitions clients to SaaS offerings [24] Market Data and Key Metrics Changes - The company noted a 103% seasoned net revenue retention rate, indicating strong customer loyalty and satisfaction [22] - The average revenue per user (ARPU) for SaaS reached $335, with Thrive's ARPU at $320 and Keep's at $428 [21][22] Company Strategy and Development Direction - The company is focused on expanding its SaaS offerings and deepening relationships with existing customers to drive revenue growth [12][14] - A strategic shift has been made to prioritize monthly recurring revenue (MRR) over new account acquisition, enhancing productivity and efficiency [13][14] - The company plans to exit the marketing services business by 2028, with cash flows extending into 2030 to support the transition [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their customer base, which primarily addresses non-discretionary needs [30][31] - The company has adopted a conservative outlook for the year, reflecting broader economic uncertainties while maintaining confidence in current performance [33][75] - Management highlighted the importance of referrals in driving new customer acquisition, which remains strong despite seasonal fluctuations [64] Other Important Information - The company is actively working on integrating Keep's automation capabilities and expanding its product offerings to partners [52][54] - The first PartnerCon conference was well-received, indicating strong partner engagement and excitement about the combined product offerings [56] Q&A Session Summary Question: Can you elaborate on the net retention rate and what customers are buying? - Management noted that the net retention rate of 103% reflects successful cross-selling and expansion efforts, with customers increasingly adopting additional products [36][38] Question: What is driving the increased traffic expense? - The increased traffic expense is attributed to higher demand for the marketing center and additional tools that help optimize customer visibility online [43][44] Question: What were the takeaways from the Keap Partner Conference? - Partners expressed excitement about the integration of Thrive's capabilities with Keep's automation tools, enhancing their service offerings [50][52] Question: Why was there a decline in SaaS customer additions this quarter? - The decline was attributed to seasonal factors, particularly during the holiday period, which affects small business engagement [57][60] Question: How is the company managing the transition from marketing services to SaaS? - Management confirmed that the transition is on track, with a focus on maintaining customer satisfaction and reducing churn rates among migrated clients [80][82]

Q1 2025 Financial Performance - SaaS revenue increased to $111.129 million, a 49.5% year-over-year increase compared to $74.322 million in Q1 2024 [34] - Marketing Services revenue decreased to $70.242 million, a (55.9)% year-over-year decrease compared to $159.302 million in Q1 2024 [34] - Consolidated revenue decreased to $181.371 million, a (22.4)% year-over-year decrease compared to $233.624 million in Q1 2024 [34] - The company reported a net loss of $9.618 million, compared to a net income of $8.424 million in Q1 2024 [34] Profitability Metrics - SaaS Adjusted EBITDA increased to $10.815 million, compared to $3.435 million in Q1 2024 [34] - SaaS Adjusted EBITDA Margin increased to 9.7%, compared to 4.6% in Q1 2024 [34] - Marketing Services Adjusted EBITDA decreased to $10.086 million, compared to $50.679 million in Q1 2024 [34] - Marketing Services Adjusted EBITDA Margin decreased to 14.4%, compared to 31.8% in Q1 2024 [34] - Consolidated Adjusted EBITDA decreased to $20.901 million, compared to $54.114 million in Q1 2024 [34] - Consolidated Adjusted EBITDA Margin decreased to 11.5%, compared to 23.2% in Q1 2024 [34] Future Outlook - The company expects SaaS revenue between $113.0 million and $115.0 million for Q2 2025 and between $460.5 million and $471.0 million for FY 2025 [55] - The company expects Marketing Services revenue between $90.0 million and $91.0 million for Q2 2025 and between $310.0 million and $314.0 million for FY 2025 [55]

Financial Performance - Revenue for Q1 2025 was $181.371 million, a decrease of 22.3% compared to $233.624 million in Q1 2024[11] - Gross profit for Q1 2025 was $119.288 million, down from $153.641 million in Q1 2024, reflecting a decline of 22.3%[11] - Operating loss for Q1 2025 was $(3.034) million, compared to an operating income of $31.134 million in Q1 2024[11] - Net loss for Q1 2025 was $(9.618) million, contrasting with a net income of $8.424 million in Q1 2024[11] - For the three months ended March 31, 2025, the net loss was $9,618,000 compared to a net income of $8,424,000 for the same period in 2024, representing a significant decline[17] - Total Segment Adjusted EBITDA for Q1 2025 was $20.901 million, a decline of 61.4% compared to $54.114 million in Q1 2024[111] - The company reported a loss before income tax benefit of $12.483 million for Q1 2025, compared to an income of $13.821 million in Q1 2024[111] Assets and Liabilities - Total current assets decreased to $202.687 million as of March 31, 2025, from $210.720 million at the end of 2024[13] - Total assets decreased to $703.734 million as of March 31, 2025, down from $712.165 million at the end of 2024[13] - Total liabilities increased to $510.503 million as of March 31, 2025, compared to $509.245 million at the end of 2024[13] - Cash and cash equivalents decreased to $10.993 million as of March 31, 2025, from $16.311 million at the end of 2024[13] - Total debt obligations as of March 31, 2025, were $298,987 thousand, an increase from $284,337 thousand as of December 31, 2024[60] Cash Flow and Expenses - Operating cash flow for the three months ended March 31, 2025, was a net cash used of $10,481,000, compared to a net cash provided of $5,438,000 in the same period of 2024[17] - Cash paid for interest in the three months ended March 31, 2025, was $8,256,000, compared to $11,911,000 in the same period of 2024, indicating a reduction in interest expenses[17] - The net periodic pension cost for the three months ended March 31, 2025, was $768 thousand, a decrease from $1,581 thousand in the same period of 2024[79] Stock and Equity - The company reported a basic net loss per share of $(0.22) for Q1 2025, compared to a basic net income per share of $0.24 in Q1 2024[11] - The company’s total stockholders' equity as of March 31, 2025, was $193,231,000, a slight decrease from $167,066,000 as of March 31, 2024[15] - Stock-based compensation expense for the three months ended March 31, 2025, was $7.737 million, an increase of 46.3% from $5.289 million in the same period of 2024[82] - The Company had repurchased approximately $0.5 million, or 26,495 shares, of its outstanding common stock under the Share Repurchase Program, with $39.5 million remaining available for repurchases[94] Acquisitions and Investments - The company completed the acquisition of Infusion Software, Inc. (Keap) on October 31, 2024, enhancing its SaaS offerings for small businesses[21] - Thryv, Inc. acquired Keap for $77.0 million in cash, with the acquisition including $3.0 million in current assets and $34.9 million in goodwill[34][38] - The goodwill recognized from the Keap acquisition was primarily due to expected synergies within the SaaS segment[37] - The preliminary purchase price allocation for the Keap acquisition included $27.3 million in client relationships and $5.7 million in trademarks and domain names[38] Segment Performance - Thryv SaaS segment revenue increased to $111.129 million in Q1 2025, up 49.5% from $74.322 million in Q1 2024[110] - Thryv Marketing Services segment revenue decreased to $70.242 million in Q1 2025, down 56.0% from $159.302 million in Q1 2024[110] Tax and Compliance - The Company's effective tax rate for the three months ended March 31, 2025, was 23.0%, down from 39.0% in the same period of 2024[96] - As of March 31, 2025, the amount of unrecognized tax benefits was $18.8 million, which could impact the effective tax rate if recognized[97] - The Company expects to remain in compliance with its Term Loan and ABL Facility covenants for the next twelve months[70][76] Other Financial Metrics - The company recognized $30.3 million in revenue from contract liabilities during the three months ended March 31, 2025, compared to $28.5 million for the same period in 2024[45] - The allowance for credit losses as of March 31, 2025, was $13,177 thousand, down from $17,868 thousand as of March 31, 2024[57] - The Company recorded a provision for credit losses of $3.8 million for the three months ended March 31, 2025, compared to $6.0 million for the same period in 2024[57]

Revenue Performance - SaaS revenue increased by 50% year-over-year to $111.1 million in Q1 2025, with SaaS revenue excluding Keap growing by 24% to $92.2 million[2][9] - SaaS revenue accounted for over 60% of total revenue in Q1 2025, highlighting the company's strategic transformation[3][4] - Consolidated total revenue decreased by 22% year-over-year to $181.4 million, with a consolidated net loss of $9.6 million compared to a net income of $8.4 million in Q1 2024[9][13] - Total Marketing Services revenue was $70.2 million, reflecting a 56% decrease year-over-year[9] - SaaS revenue for Q1 2025 was $111,129,000, a 49.5% increase from $74,322,000 in Q1 2024[16] - Marketing Services revenue decreased by 55.9%, from $159,302,000 in Q1 2024 to $70,242,000 in Q1 2025[16] - Total revenue for Q1 2025 was $181,371,000, down 22.4% from $233,624,000 in Q1 2024[16] Client Growth and Retention - Seasoned Net Revenue Retention (NRR) reached a record 103% in Q1 2025, an increase of 900 basis points year-over-year[4][9] - SaaS clients increased by 59% year-over-year to 111,000, while SaaS clients excluding Keap grew by 37% to 96,000[9] Profitability Metrics - SaaS Adjusted EBITDA was $10.8 million, representing an Adjusted EBITDA margin of 9.7%[9] - Adjusted EBITDA for Q1 2025 was $20,901,000, a 61.4% decrease from $54,114,000 in Q1 2024[16] - Adjusted EBITDA margin for SaaS was 9.7% in Q1 2025, compared to 4.6% in Q1 2024[26] - Adjusted Gross Profit for SaaS in Q1 2025 was $81,452,000, up from $50,859,000 in Q1 2024[22] - Adjusted Gross Margin for SaaS improved to 73.3% in Q1 2025 from 68.4% in Q1 2024[22] Future Guidance - The company expects Q2 2025 SaaS revenue guidance of $113.0 - $115.0 million and full-year 2025 guidance of $460.5 - $471.0 million[7] Operational Focus - The company aims to enhance efficiencies and reduce costs through restructuring and integration efforts[23] - The company is focused on expanding its operations and offerings into new markets, including internationally[28] Payment Volume - ThryvPay total payment volume increased by 13% year-over-year to $71 million[9]