Core Insights - Thryv Holdings (NASDAQ: THRY) has shown strong business performance with an organic growth rate of 20% and improving margins in its SaaS business [1] Company Performance - The company is experiencing solid fundamentals and a positive outlook for its business [1] Investment Perspective - The analysis highlights the potential for asymmetric investment opportunities in undercovered companies, particularly in technology, software, electronics, and energy transition sectors [1]

Financial Data and Key Metrics Changes - For Q4 2024, total SaaS reported revenue was $104.3 million, reflecting a year-over-year growth of 41% and a sequential increase of 20% [24] - Full year SaaS reported revenue grew 30% year-over-year to $343.5 million [26] - SaaS adjusted gross margin increased to 76% for Q4, up 620 basis points year-over-year [27] - Total SaaS adjusted EBITDA for Q4 was $17.3 million, resulting in an adjusted EBITDA margin of 16.6% [28] - Net revenue retention was 98%, close to the long-term target of 100% [12][29] Business Line Data and Key Metrics Changes - Thryv SaaS revenue for Q4 was $90.9 million, growing 23% year-over-year [25] - The number of subscribers in Thryv SaaS grew 50% year-over-year to 99,000, reaching 114,000 when including Keap [10] - Marketing Services revenue for Q4 was $82.3 million, with a full year total of $480.7 million [31] - Marketing Services adjusted EBITDA for Q4 was $12.1 million, resulting in a margin of 15% [31] Market Data and Key Metrics Changes - Fourth quarter marketing services billings were $92 million, reflecting a 40% year-over-year decline [33] - The company is transitioning many legacy marketing services clients to its SaaS offering, impacting the rate of decline in marketing services billings [33] Company Strategy and Development Direction - The company plans to exit the marketing services business by 2028, with cash flows extending into 2030 [34] - The acquisition of Keap is expected to enhance SaaS adoption and create synergies, with $10 million of EBITDA synergies already identified [16] - The company aims to focus on building a profitable SaaS business, with expectations that the majority of EBITDA will come from SaaS by 2026 [41][92] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious sentiment among small businesses due to concerns about tariffs and inflation, but emphasized that execution remains key to results [65][66] - For 2025, total SaaS revenue is expected to be in the range of $464.5 million to $474 million, implying growth of 35% to 38% [38] - The company anticipates significant deleveraging in the latter half of 2025 [37] Other Important Information - The company achieved a milestone where total SaaS revenue now constitutes over 50% of total revenues [10] - The company is focused on integrating Keap and enhancing its product offerings, including the launch of new features like Reporting Center and AI review response [19][21] Q&A Session Summary Question: Early commentary on the cross-sell process with Keap customers - Management indicated that the cross-sell process is underway, with early sales already occurring and expectations of about $5 million in cross-sell revenue this year [53] Question: Changes in selling cycles for larger businesses - Management clarified that they are targeting slightly larger businesses, focusing on providing more powerful reporting tools to meet their needs [56][58] Question: Customer adds in the core SaaS business - Management acknowledged seasonality in Q4, noting that small businesses often slow down during the holidays, impacting customer adds [64] Question: Performance of the Keap acquisition - Management stated that the Keap acquisition outperformed expectations in Q4 due to conservative estimates, but they will maintain their fiscal 2025 contribution estimates [71] Question: Feedback from customers on cross-sell experiences - Management reported positive feedback from customers who have experienced cross-sell opportunities, highlighting the synergy between Thryv and Keap offerings [78] Question: Changes to the go-to-market strategy for overall business growth - Management emphasized that the acquisition of Keap significantly enhances their partner channel, which will contribute to sales efforts and international expansion [85] Question: Confidence in EBITDA growth and timing - Management anticipates that the majority of EBITDA will come from SaaS by 2026, with marketing services continuing to generate revenue but declining [92][93] Question: Launch cadence of additional centers - Management indicated that while they have plans for the Workforce Center, they will focus on integration and ensuring the platform works well together before promising additional centers [98] Question: ARPU progression for the core Thryv SaaS business - Management expects strong progress in ARPU growth for 2025, focusing on upselling existing customers and enhancing engagement with the product [106][108]

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Group 1 - Thryv Holdings, Inc. reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of a loss of $0.07 per share, representing an earnings surprise of 371.43% [1] - The company posted revenues of $186.6 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.68%, but down from $236.16 million year-over-year [2] - Thryv shares have increased approximately 25.7% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $179.38 million, and for the current fiscal year, it is $1.15 on revenues of $778.83 million [7] - The Zacks Industry Rank for Internet - Software is in the top 33% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Revenue Generation - Thryv's Marketing Services segment generated $480.7 million in revenue for the year ended December 31, 2024[17]. - Thryv's SaaS segment generated $343.5 million in revenue for the year ended December 31, 2024[22]. - 58.3% of the company's revenue in 2024 was derived from Marketing Services offerings, with a strategic decision to terminate these solutions by the end of 2028[77]. - The company generated a net loss of $74.2 million for the year ended December 31, 2024[89]. - Subscription renewals may decline, impacting future revenue and operating results, as clients can terminate agreements after the initial term[87]. Client Base and Transition - Approximately 300,000 SMB clients were served as of December 31, 2024, through Thryv SaaS and Thryv Marketing Services[15]. - The company converted approximately 46,000 clients from digital Marketing Services to the Thryv Platform in 2024[34]. - The churn rate for clients converted from digital Marketing Services was in line with the churn from other SaaS clients[35]. - The company plans to accelerate the conversion of Marketing Services clients to the Thryv Platform, but faces risks of losing clients if the transition is unsuccessful[78]. - The strategic decision to transition clients from digital Marketing Services to the Thryv Platform could lead to higher client churn and negatively impact key business metrics[115]. Business Model and Strategy - The company made a strategic decision to terminate its Marketing Services solutions by the end of 2028[17]. - The company plans to fully transition into a SaaS-driven business model by the end of 2028, exiting the Marketing Services business entirely[42]. - The company is focused on enhancing the Thryv Platform through continuous product and engineering improvements, which contribute to annual recurring revenue growth[45]. - The company has implemented a cost management strategy for its Marketing Services offerings to maximize profitability until the end of 2028[47]. - The company leverages one of the largest SMB-focused sales forces in the country to expand its SaaS solutions[46]. Acquisitions and Growth - Thryv's acquisition of Keap on October 31, 2024, enhances its sales and marketing automation capabilities[16]. - The recent acquisition of Keap in Q4 2024 is expected to drive international growth and provide cost synergies[49][50]. - The integration of the Keap business may face challenges, affecting anticipated benefits and requiring significant time and resources[194]. - Unanticipated obligations and liabilities from the Keap business could adversely affect financial condition and operations[197]. - The Keap Acquisition may not be accretive and could dilute earnings per share, negatively impacting stock market performance[203]. Financial Management and Risks - The company generated significant cash flow and aims to reduce debt while pursuing acquisitions to create value for stockholders[48]. - Outstanding indebtedness may limit operational flexibility and increase vulnerability to economic changes, impacting cash flow availability[206]. - The company may incur additional indebtedness or face restrictions on business opportunities due to existing debt agreements[211]. - The company's financial condition and results of operations could be materially adversely affected if it cannot generate sufficient cash to service its indebtedness[212]. - The risk of volatile credit markets could hinder the company's ability to secure necessary funding from lenders[214]. Market and Competitive Environment - Significant competition exists in the Marketing Services and SaaS markets, which may hinder the company's ability to attract and retain clients[71]. - The market for small business management solutions is evolving, and competitive dynamics may force the company to reduce prices for its Thryv Platform[86]. - Adverse economic conditions, such as financial recessions, could significantly weaken demand for marketing solutions, impacting the company's financial performance[132]. - Public health epidemics may lead to reduced spending by clients on marketing services, which could materially affect the company's financial results[134]. - The decline in print directory usage continues to negatively affect advertising sales, with expectations of continued decline in 2025 and beyond[90]. Compliance and Regulatory Risks - Compliance with evolving government regulations is a risk factor that could impact the company's operations and financial performance[67]. - The company is subject to various U.S. and international laws regarding privacy and data protection, and non-compliance could result in significant penalties and impact business operations[142]. - Future laws and regulations regarding data protection may limit the company's ability to collect and use information, potentially impairing revenue growth[145]. - The evolving regulatory environment for AI may increase compliance costs and impact the company's ability to operate effectively[97]. - The company faces risks related to compliance with non-U.S. laws, which may also affect domestic business practices[108]. Operational Challenges - The company has experienced growth in its SaaS segment, but must effectively manage this growth to maintain service quality and client retention[82]. - The company must continue to invest in infrastructure and support for its SaaS solutions to sustain growth and profitability[83]. - The complexity of the Thryv Platform may lead to defects or errors, which could harm reputation and market share, resulting in substantial correction costs[189]. - Data management risks include potential hardware failures or system errors that could lead to data loss or inaccuracies, impacting client trust[190]. - The company faces challenges in maintaining high-quality technical support services, which could adversely affect client relationships and revenue[185]. Human Capital and Workforce - The company has a workforce of 3,016 employees, with approximately 99% being full-time[55]. - The company is committed to diversity and inclusion, with initiatives such as the Diversity Council and various employee development programs[56]. - As of December 31, 2024, 217 employees, or 7% of the workforce, are represented by unions, which could lead to increased operating costs and disruptions if labor negotiations are unfavorable[139]. - The company does not maintain key man insurance for its executive officers, increasing the risk associated with the loss of key personnel[137]. - The company faces risks related to human capital, as the loss of key employees could have a material adverse effect on its operations and financial condition[137]. Cybersecurity and Data Privacy - The company is actively monitoring cybersecurity risks and implementing controls, but vulnerabilities may still exist[158]. - Security breaches could result in unauthorized access to client information, impacting financial reporting and business continuity[154]. - The company faces risks related to identity theft and misuse of personally identifiable information (PII), which could lead to legal liabilities[160]. - Generative AI technologies used by employees are subject to privacy laws, and non-compliance could result in additional costs and regulatory actions[157]. - The company may incur significant costs related to compliance with privacy laws and regulations, impacting overall financial performance[152].

[Executive Summary](index=1&type=section&id=Executive%20Summary) Thryv reported strong Q4 2024 SaaS revenue growth and record SaaS margins, with SaaS now the primary revenue driver and subscriber base expanding [Q4 2024 Performance Overview](index=1&type=section&id=Q4%202024%20Performance%20Overview) Thryv achieved strong Q4 2024 performance with significant SaaS revenue growth and record SaaS margins, marking SaaS as the majority revenue driver - Total SaaS revenue increased **41%** year-over-year in Q4 2024[2](index=2&type=chunk)[4](index=4&type=chunk) - SaaS now drives the majority of Thryv's revenue, reinforcing its transformation into a software company[3](index=3&type=chunk) - Total SaaS subscribers increased **73%** year-over-year in Q4 2024, driven by Keap acquisition, client conversion, and new acquisitions[3](index=3&type=chunk) - Achieved Q4 SaaS Adjusted EBITDA Margin of **17%**[4](index=4&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) Thryv's Q4 and full-year 2024 results show robust SaaS revenue growth and profitability, with reduced net loss, despite declines in Marketing Services revenue [Fourth Quarter 2024 Financial Highlights](index=2&type=section&id=Fourth%20Quarter%202024%20Financial%20Highlights) Thryv's Q4 2024 showed robust SaaS revenue growth and profitability, offsetting Marketing Services decline, leading to improved net income despite lower consolidated revenue Fourth Quarter 2024 Key Financials | Metric | Q4 2024 (in millions) | Q4 2023 (in millions) | YoY Change | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Total SaaS Revenue | $104.3 | $74.0 | +41% | | Thryv SaaS Revenue (excl. Keap) | $90.9 | $74.0 | +23% | | Total Marketing Services Revenue | $82.3 | $162.2 | -49% | | Consolidated Total Revenue | $186.6 | $236.2 | -21% | | Consolidated Net Income (Loss) | $7.9 | $(257.5) | N/A | | Consolidated Adjusted EBITDA | $29.4 | $52.3 | -43.8% | | Total SaaS Adjusted EBITDA | $17.3 | $6.5 | +165.7% | | Total Marketing Services Adjusted EBITDA | $12.1 | $45.8 | -73.6% | | SaaS Gross Margin | 73.1% | 67.5% | +5.6 pp | | SaaS Adjusted Gross Margin | 75.9% | 69.7% | +6.2 pp | [Full-Year 2024 Financial Highlights](index=2&type=section&id=Full-Year%202024%20Financial%20Highlights) Thryv's full-year 2024 saw strong SaaS revenue growth and profitability, with reduced net loss and pension obligations, despite a consolidated revenue decrease from Marketing Services Full-Year 2024 Key Financials | Metric | FY 2024 (in millions) | FY 2023 (in millions) | YoY Change | | :-------------------------------- | :-------------------- | :-------------------- | :--------- | | Total SaaS Revenue | $343.5 | $263.7 | +30% | | Thryv SaaS Revenue (excl. Keap) | $330.1 | $263.7 | +25% | | Total Marketing Services Revenue | $480.7 | $653.2 | -26% | | Consolidated Total Revenue | $824.2 | $917.0 | -10% | | Consolidated Net Loss | $(74.2) | $(259.3) | N/A | | Consolidated Adjusted EBITDA | $162.4 | $187.5 | -13.4% | | Total SaaS Adjusted EBITDA | $41.2 | $12.0 | +242.5% | | Total Marketing Services Adjusted EBITDA | $121.2 | $175.5 | -30.9% | | SaaS Gross Margin | 69.4% | 64.2% | +5.2 pp | | SaaS Adjusted Gross Margin | 72.0% | 66.6% | +5.4 pp | | Operating Cash Flow | $89.8 | $148.2 | -39.4% | | Free Cash Flow | $56.2 | $114.8 | -51.0% | | Pension Obligations, net | $38.0 | $69.4 | -45% | [SaaS Business Metrics](index=3&type=section&id=SaaS%20Metrics) Thryv's SaaS segment demonstrated strong operational growth in Q4 2024, marked by increased clients, improved retention, and significant revenue contribution from the Keap acquisition [Key SaaS Operating Metrics](index=3&type=section&id=Key%20SaaS%20Operating%20Metrics) Thryv's SaaS segment showed strong Q4 2024 operational growth, with significant increases in total clients, improved net revenue retention, and healthy average revenue per unit Q4 2024 Key SaaS Operating Metrics | Metric | Q4 2024 | YoY Change | | :-------------------------------- | :-------- | :--------- | | Total SaaS Clients | 114 thousand | +73% | | Thryv SaaS Clients | 99 thousand | +50% | | Seasoned Net Revenue Retention (excl. Keap) | 98% | +200 bps | | SaaS Monthly Average Revenue per Unit (ARPU) | $324 | N/A | | ThryvPay Total Payment Volume | $79 million | +33% | [SaaS Revenue Reconciliation (Thryv vs. Keap)](index=9&type=section&id=SaaS%20Revenue%20Reconciliation%20%28Thryv%20vs.%20Keap%29) The Keap acquisition significantly boosted Thryv's total SaaS revenue in Q4 and full-year 2024, with Thryv SaaS (excluding Keap) also showing strong independent growth SaaS Revenue Breakdown (Q4 2024) | Metric | Q4 2024 (in thousands) | Q4 2023 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | | SaaS Revenue | $104,305 | $73,970 | | Less: Keap SaaS Revenue | $13,419 | $0 | | Thryv SaaS Revenue (without Keap) | $90,886 | $73,970 | SaaS Revenue Breakdown (Full Year 2024) | Metric | FY 2024 (in thousands) | FY 2023 (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | | SaaS Revenue | $343,476 | $263,717 | | Less: Keap SaaS Revenue | $13,419 | $0 | | Thryv SaaS Revenue (without Keap) | $330,057 | $263,717 | [Outlook](index=3&type=section&id=Outlook) Thryv's Q1 and full-year 2025 guidance projects continued SaaS revenue and Adjusted EBITDA growth, with Keap as a key contributor, and stable Marketing Services revenue [Q1 2025 and Full Year 2025 Guidance](index=3&type=section&id=Q1%202025%20and%20Full%20Year%202025%20Guidance) Thryv's Q1 and full-year 2025 guidance projects continued SaaS revenue and Adjusted EBITDA growth, with Keap as a key contributor, and stable Marketing Services revenue Q1 2025 and Full Year 2025 SaaS Guidance | Metric | Q1 2025 (in millions) | Full Year 2025 (in millions) | | :------------------ | :-------------------- | :--------------------------- | | SaaS Revenue | $107.5 - $110.0 | $464.5 - $474.0 | | SaaS Adjusted EBITDA | $9.0 - $9.5 | $69.5 - $71.0 | - Keap is expected to contribute **$75 million to $78 million** of revenue for the full year 2025[9](index=9&type=chunk) Q1 2025 and Full Year 2025 Marketing Services Guidance | Metric | Q1 2025 (in millions) | Q2 2025 (in millions) | Q3 2025 (in millions) | Q4 2025 (in millions) | Full Year 2025 (in millions) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | :--------------------------- | | Marketing Services Revenue | $65.0 - $66.0 | $90.0 - $91.0 | $83.0 - $84.0 | $72.0 - $73.0 | $310.0 - $314.0 | | Marketing Services Adjusted EBITDA | $9.0 - $10.0 | N/A | N/A | N/A | $77.5 - $78.5 | [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show a significant reduction in net loss for 2024, with decreased operating cash flow, increased investing activities, and a shift to net cash provided by financing [Consolidated Statements of Operations and Comprehensive (Loss)](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20%28Loss%29) Consolidated statements of operations reveal a significant reduction in net loss for Q4 and full-year 2024, driven by improved operating performance and lower impairment charges Consolidated Statements of Operations and Comprehensive (Loss) | (in thousands, except share and per share data) | Three Months Ended Dec 31, 2024 | Three Months Ended Dec 31, 2023 | Years Ended Dec 31, 2024 | Years Ended Dec 31, 2023 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------- | :----------------------- | | Revenue | $186,596 | $236,163 | $824,156 | $916,961 | | Cost of services | 63,569 | 76,453 | 286,919 | 338,714 | | Gross profit | 123,027 | 159,710 | 537,237 | 578,247 | | Sales and marketing | 68,162 | 73,757 | 270,146 | 300,538 | | General and administrative | 62,067 | 59,238 | 217,296 | 208,880 | | Impairment charges | — | 268,846 | 83,094 | 268,846 | | Total operating expenses | 130,229 | 401,841 | 570,536 | 778,264 | | Operating (loss) | (7,202) | (242,131) | (33,299) | (200,017) | | Interest expense | (4,940) | (13,817) | (36,494) | (61,728) | | Interest expense, related party | (4,783) | — | (10,277) | — | | Other components of net periodic pension benefit | 29,549 | 6,607 | 24,806 | 2,719 | | Other expense | (3,163) | (276) | (10,734) | (1,518) | | Income (loss) before income tax (expense) benefit | 9,461 | (249,617) | (65,998) | (260,544) | | Income tax (expense) benefit | (1,578) | (7,924) | (8,218) | 1,249 | | Net income (loss) | $7,883 | $(257,541) | $(74,216) | $(259,295) | | Basic Net income (loss) per common share | $0.19 | $(7.39) | $(2.00) | $(7.47) | | Diluted Net income (loss) per common share | $0.19 | $(7.39) | $(2.00) | $(7.47) | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show a decrease in total assets and liabilities from 2023 to 2024, with increased stockholders' equity, reflecting changes in current assets, long-term debt, and acquisitions Consolidated Balance Sheets | (in thousands, except share data) | December 31, 2024 | December 31, 2023 | | :-------------------------------- | :---------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $16,311 | $18,216 | | Accounts receivable, net | 161,620 | 205,503 | | Total current assets | 210,720 | 266,868 | | Fixed assets and capitalized software, net | 44,478 | 38,599 | | Goodwill | 253,318 | 302,400 | | Intangible assets, net | 34,259 | 18,788 | | Deferred tax assets | 143,495 | 128,051 | | Total assets | $712,165 | $783,170 | | **Liabilities and Stockholders' Equity** | | | | Accounts payable | $13,011 | $10,348 | | Accrued liabilities | 95,462 | 105,903 | | Current portion of Term Loan | 7,875 | 70,000 | | Current portion of Term Loan, related party | 5,250 | — | | Total current liabilities | 196,260 | 263,190 | | Term Loan, net | 146,885 | 230,052 | | Term Loan, net, related party | 100,436 | — | | ABL Facility | 23,891 | 48,845 | | Pension obligations, net | 38,014 | 69,388 | | Total long-term liabilities | 318,985 | 367,280 | | Total stockholders' equity | 196,920 | 152,700 | | Total liabilities and stockholders' equity | $712,165 | $783,170 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated cash flows show decreased operating cash in 2024, increased investing cash use due to acquisitions, and a shift to net cash provided by financing from new term loans and stock offering Consolidated Statements of Cash Flows | (in thousands) | Years Ended December 31, 2024 | Years Ended December 31, 2023 | | :---------------------------------------------- | :---------------------------- | :---------------------------- | | Net (loss) | $(74,216) | $(259,295) | | Net cash provided by operating activities | 89,783 | 148,226 | | Net cash used in investing activities | (110,424) | (42,516) | | Net cash provided by (used in) financing activities | 19,216 | (103,493) | | (Decrease) increase in cash, cash equivalents and restricted cash | (2,769) | 2,350 | | Cash, cash equivalents and restricted cash, end of period | $17,761 | $20,530 | | Cash paid for interest | $44,018 | $57,027 | | Cash paid for income taxes, net | $15,413 | $9,313 | [Segment Information](index=8&type=section&id=Segment%20Information) Segment reporting highlights a significant shift towards SaaS, with substantial revenue and Adjusted EBITDA growth, while Marketing Services experienced declines in both metrics and faces margin pressures [Segment Operating Results (Revenue and Adjusted EBITDA)](index=8&type=section&id=Segment%20Operating%20Results) Thryv's recast segment reporting in Q1 2024 shows a significant shift to SaaS, with substantial revenue and Adjusted EBITDA growth, while Marketing Services declined in both metrics - Company changed segment reporting in Q1 2024, consolidating U.S. and International Marketing Services into one segment, and U.S. and International SaaS into another[18](index=18&type=chunk) Q4 Segment Operating Results | (in thousands) | Q4 2024 | Q4 2023 | Amount Change | % Change | | :-------------------- | :------ | :------ | :------------ | :------- | | **Revenue** | | | | | | Marketing Services | $82,291 | $162,193 | $(79,902) | (49.3)% | | SaaS | $104,305 | $73,970 | $30,335 | 41.0% | | Total Revenue | $186,596 | $236,163 | $(49,567) | (21.0)% | | **Adjusted EBITDA** | | | | | | Marketing Services | $12,104 | $45,773 | $(33,669) | (73.6)% | | SaaS | $17,276 | $6,503 | $10,773 | 165.7% | | Consolidated Adjusted EBITDA | $29,380 | $52,276 | $(22,896) | (43.8)% | Full Year Segment Operating Results | (in thousands) | FY 2024 | FY 2023 | Amount Change | % Change | | :-------------------- | :------ | :------ | :------------ | :------- | | **Revenue** | | | | | | Marketing Services | $480,680 | $653,244 | $(172,564) | (26.4)% | | SaaS | $343,476 | $263,717 | $79,759 | 30.2% | | Total Revenue | $824,156 | $916,961 | $(92,805) | (10.1)% | | **Adjusted EBITDA** | | | | | | Marketing Services | $121,241 | $175,490 | $(54,249) | (30.9)% | | SaaS | $41,190 | $12,025 | $29,165 | 242.5% | | Consolidated Adjusted EBITDA | $162,431 | $187,515 | $(25,084) | (13.4)% | [Supplemental Segment Financial Information](index=12&type=section&id=Supplemental%20Segment%20Financial%20Information) Supplemental segment financials offer a granular view of performance, reinforcing SaaS growth and profitability trends while highlighting revenue and margin pressures in Marketing Services Q4 2024 Supplemental Segment Financials | (in thousands) | Marketing Services | SaaS | Total | | :-------------------- | :----------------- | :----- | :------ | | Revenue | $82,291 | $104,305 | $186,596 | | Net Income (Loss) | N/A | N/A | $7,883 | | Net Income (Loss) Margin | N/A | N/A | 4.2% | | Adjusted EBITDA | $12,104 | $17,276 | $29,380 | | Adjusted EBITDA Margin | 14.7% | 16.6% | 15.7% | Q4 2023 Supplemental Segment Financials | (in thousands) | Marketing Services | SaaS | Total | | :-------------------- | :----------------- | :----- | :------ | | Revenue | $162,193 | $73,970 | $236,163 | | Net Income (Loss) | N/A | N/A | $(257,541) | | Net Income (Loss) Margin | N/A | N/A | (109.1)% | | Adjusted EBITDA | $45,773 | $6,503 | $52,276 | | Adjusted EBITDA Margin | 28.2% | 8.8% | 22.1% | Full Year 2024 Supplemental Segment Financials | (in thousands) | Marketing Services | SaaS | Total | | :-------------------- | :----------------- | :----- | :------ | | Revenue | $480,680 | $343,476 | $824,156 | | Net Income (Loss) | N/A | N/A | $(74,216) | | Net Income (Loss) Margin | N/A | N/A | (9.0)% | | Adjusted EBITDA | $121,241 | $41,190 | $162,431 | | Adjusted EBITDA Margin | 25.2% | 12.0% | 19.7% | Full Year 2023 Supplemental Segment Financials | (in thousands) | Marketing Services | SaaS | Total | | :-------------------- | :----------------- | :----- | :------ | | Revenue | $653,244 | $263,717 | $916,961 | | Net Income (Loss) | N/A | N/A | $(259,295) | | Net Income (Loss) Margin | N/A | N/A | (28.3)% | | Adjusted EBITDA | $175,490 | $12,025 | $187,515 | | Adjusted EBITDA Margin | 26.9% | 4.6% | 20.4% | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Measures) This section defines Thryv's non-GAAP financial measures, including Adjusted EBITDA and Adjusted Gross Profit, and provides detailed reconciliations to GAAP measures for performance assessment [Non-GAAP Definitions and Rationale](index=9&type=section&id=Non-GAAP%20Definitions%20and%20Rationale) This section defines Thryv's non-GAAP financial measures, including Adjusted EBITDA and Free Cash Flow, explaining management's rationale for their use in assessing performance and comparability - Non-GAAP measures (Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Free Cash Flow) are used to provide useful information for understanding current financial performance and comparability[21](index=21&type=chunk)[22](index=22&type=chunk) - Adjusted EBITDA excludes certain non-operating items not indicative of core operating results and is used for budgeting, forecasting, and performance measurement[22](index=22&type=chunk)[23](index=23&type=chunk) - Non-GAAP financial information has limitations as an analytical tool and should not be considered a substitute for GAAP measures[24](index=24&type=chunk) [Adjusted EBITDA Reconciliation](index=10&type=section&id=Adjusted%20EBITDA%20Reconciliation) The reconciliation details adjustments from Net income (loss) to Adjusted EBITDA for quarterly and annual periods, highlighting the impact of interest, depreciation, stock-based compensation, and impairment charges Reconciliation of Adjusted EBITDA | (in thousands) | Three Months Ended Dec 31, 2024 | Three Months Ended Dec 31, 2023 | Years Ended Dec 31, 2024 | Years Ended Dec 31, 2023 | | :---------------------------------------------- | :------------------------------ | :------------------------------ | :----------------------- | :----------------------- | | Net income (loss) | $7,883 | $(257,541) | $(74,216) | $(259,295) | | Interest expense | 9,723 | 13,817 | 46,771 | 61,728 | | Depreciation and amortization expense | 11,645 | 16,311 | 52,789 | 63,251 | | Stock-based compensation expense | 6,465 | 5,548 | 24,118 | 22,201 | | Restructuring and integration expenses | 15,018 | 1,767 | 32,697 | 14,612 | | Income tax expense (benefit) | 1,578 | 7,924 | 8,218 | (1,249) | | Transaction costs | 3,439 | — | 5,145 | 373 | | Other components of net periodic pension benefit | (29,549) | (6,607) | (24,806) | (2,719) | | Loss on early extinguishment of debt | — | — | 6,638 | — | | Non-cash loss from remeasurement of indemnification asset | — | — | — | 10,734 | | Impairment charges | — | 268,846 | 83,094 | 268,846 | | Other | 3,178 | 2,211 | 1,983 | 9,033 | | Adjusted EBITDA | $29,380 | $52,276 | $162,431 | $187,515 | [Adjusted Gross Profit Reconciliation](index=11&type=section&id=Adjusted%20Gross%20Profit%20Reconciliation) This section reconciles Gross profit to Adjusted Gross Profit for Marketing Services and SaaS segments, for quarterly and annual periods, by adding back depreciation, amortization, and stock-based compensation Reconciliation of Adjusted Gross Profit (Q4 2024) | (in thousands) | Marketing Services | SaaS | Total | | :-------------------------------- | :----------------- | :----- | :------ | | Gross profit | $46,796 | $76,231 | $123,027 | | Plus: Depreciation and amortization expense | 1,837 | 2,830 | 4,667 | | Plus: Stock-based compensation expense | 47 | 108 | 155 | | Adjusted Gross Profit | $48,680 | $79,169 | $127,849 | | Gross Margin | 56.9% | 73.1% | 65.9% | | Adjusted Gross Margin | 59.2% | 75.9% | 68.5% | Reconciliation of Adjusted Gross Profit (Q4 2023) | (in thousands) | Marketing Services | SaaS | Total | | :-------------------------------- | :----------------- | :----- | :------ | | Gross profit | $109,752 | $49,958 | $159,710 | | Plus: Depreciation and amortization expense | 4,021 | 1,575 | 5,596 | | Plus: Stock-based compensation expense | 74 | 43 | 117 | | Adjusted Gross Profit | $113,847 | $51,576 | $165,423 | | Gross Margin | 67.7% | 67.5% | 67.6% | | Adjusted Gross Margin | 70.2% | 69.7% | 70.0% | Reconciliation of Adjusted Gross Profit (Full Year 2024) | (in thousands) | Marketing Services | SaaS | Total | | :-------------------------------- | :----------------- | :----- | :------ | | Gross profit | $299,015 | $238,222 | $537,237 | | Plus: Depreciation and amortization expense | 12,406 | 8,600 | 21,006 | | Plus: Stock-based compensation expense | 327 | 336 | 663 | | Adjusted Gross Profit | $311,748 | $247,158 | $558,906 | | Gross Margin | 62.2% | 69.4% | 65.2% | | Adjusted Gross Margin | 64.9% | 72.0% | 67.8% | Reconciliation of Adjusted Gross Profit (Full Year 2023) | (in thousands) | Marketing Services | SaaS | Total | | :-------------------------------- | :----------------- | :----- | :------ | | Gross profit | $409,057 | $169,190 | $578,247 | | Plus: Depreciation and amortization expense | 20,811 | 6,178 | 26,989 | | Plus: Stock-based compensation expense | 399 | 214 | 613 | | Adjusted Gross Profit | $430,267 | $175,582 | $605,849 | | Gross Margin | 62.6% | 64.2% | 63.1% | | Adjusted Gross Margin | 65.9% | 66.6% | 66.1% | [Additional Information](index=3&type=section&id=Additional%20Information) This section provides details on the Q4 2024 earnings conference call, important forward-looking statements and risk factors, and an overview of Thryv's business as a leading SMB software provider [Earnings Conference Call Details](index=3&type=section&id=Earnings%20Conference%20Call%20Details) Thryv will host a conference call on February 27, 2025, to discuss Q4 2024 results, with registration and webcast details available for analysts and the public - Thryv will host a conference call on Thursday, February 27, 2025, at 8:30 a.m. (Eastern Time) to discuss Q4 2024 results[11](index=11&type=chunk) - Registration link for analysts and webcast link for public listening are provided. A replay will also be available[12](index=12&type=chunk)[13](index=13&type=chunk) [Forward-Looking Statements](index=13&type=section&id=Forward-Looking%20Statements) This section provides a standard disclaimer on forward-looking statements, outlining risks and uncertainties that could cause actual results to differ from projections - Statements are forward-looking and involve risks and uncertainties that could cause actual results to differ materially from expectations[35](index=35&type=chunk)[37](index=37&type=chunk) - Key risks include significant competition, ability to maintain profitability and manage growth, client retention, technological changes, successful integration of acquisitions (like Keap), cybersecurity, and general macroeconomic conditions[35](index=35&type=chunk)[36](index=36&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[37](index=37&type=chunk) [About Thryv](index=14&type=section&id=About%20Thryv) Thryv Holdings, Inc. is a leading provider of AI-supported sales and marketing software, empowering over 100,000 small businesses globally to manage operations and grow efficiently - Thryv Holdings, Inc. (NASDAQ:THRY) provides a leading sales and marketing platform for small businesses[38](index=38&type=chunk) - The platform offers AI-supported marketing and business automations to help SMBs save time, compete, and grow efficiently[38](index=38&type=chunk) - More than **100,000** businesses globally use Thryv software[38](index=38&type=chunk)

Group 1 - Thryv Holdings is undergoing a significant transformation from its declining phone book publishing business to a new business model [1] - The transformation process has been ongoing for several years, indicating a prolonged effort to pivot the company's focus [1]

Financial Data and Key Metrics Changes - SaaS revenue for Q3 2024 was $87.1 million, a 29% year-over-year increase and a 12% sequential increase, exceeding guidance [9][10] - SaaS adjusted gross margin increased by 560 basis points year-over-year and 250 basis points quarter-over-quarter to 72.2% [10] - Consolidated adjusted EBITDA for Q3 was $19.6 million, representing an adjusted EBITDA margin of 11% [14] - Net debt position was $307 million with a leverage ratio of 1.66x net debt to EBITDA, well below the covenant of 3x [15] Business Line Data and Key Metrics Changes - SaaS subscriber growth reached 96,000, up from 70,000 in the prior quarter, reflecting a 45% year-over-year increase [11] - Marketing Services revenue for Q3 was $92.8 million, with a decline in billings of 35% year-over-year due to the transition of clients to the SaaS platform [13][14] - Marketing Services adjusted EBITDA margin was 10% for Q3 [13] Market Data and Key Metrics Changes - The company anticipates that the acquisition of Keap will generate approximately $11 million to $12 million in revenue for Q4 2024 [17] - Keap's acquisition adds over 15,000 quality customers and is expected to enhance the company's market presence [9][25] Company Strategy and Development Direction - The company aims to transition fully to a SaaS model, with a goal of becoming a 100% Net Dollar Retention (NDR) company [7] - The acquisition of Keap is seen as a strategic move to enhance product offerings and expand into larger small businesses [21][25] - The company plans to integrate Keap's platform with its existing offerings to create a unified product experience [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term economics of the accelerated migration strategy, with expectations of 10% to 15% growth in spending from converted customers [7][12] - The management team highlighted the importance of building a strong subscription base and the potential for upselling existing customers [12][56] - Future guidance for Q4 includes raising SaaS revenue expectations to a range of $90 million to $92 million [16] Other Important Information - The company generated $27.5 million in free cash flow, which was used to prepay $52.5 million in term loan amortization [16] - A noncash impairment charge of $83.1 million was recognized due to the ongoing structural decline of the marketing services business [15] Q&A Session Summary Question: Details on Keap automations and their benefits for SMB customers - Keap's automations help SMBs streamline operations, improve service consistency, and enhance marketing efforts, making them attractive for businesses with higher revenue [27][30] Question: Integration of Keap platform with Thryv - The company plans to fully integrate Keap's platform with its existing offerings, enhancing product interoperability and creating a unified platform [34][35] Question: Future conversions from marketing services to SaaS - The company has successfully accelerated the transition of marketing services clients to the SaaS platform, with expectations for continued growth in this area [39][41] Question: Go-to-market strategy post-acquisition - The acquisition will leverage Keap's partner ecosystem and Thryv's direct sales force to enhance distribution and drive growth [44][46] Question: Net dollar retention rate and future expectations - Management is confident that the net dollar retention rate will stabilize around 100%, with potential for slight increases as more customers adopt multiple products [51][56] Question: Annualized free cash flow post-Keap acquisition - The company is not yet prepared to guide for 2025 but will provide more information at the upcoming Analyst Day [62] Question: International growth opportunities with Keap - Keap's established international presence and reseller network provide a strategic entry point for expanding into new markets [64][65] Question: ARPU pressure and its contributors - ARPU is under pressure due to the transition of customers to lower commitment levels and the introduction of starter products to facilitate migration [66][71]

Thryv Holdings, Inc. (THRY) came out with a quarterly loss of $2.65 per share versus the Zacks Consensus Estimate of a loss of $2.53. This compares to loss of $0.78 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -4.74%. A quarter ago, it was expected that this company would post earnings of $0.41 per share when it actually produced earnings of $0.33, delivering a surprise of -19.51%.Over the last four quarters, the company ha ...

Thryv (NASDAQ: THRY ) reported strong preliminary results for Q3 , which were much better than my expectations, which I had outlined in my previous write-up on the company. The SaaS business is showing an acceleration inAn individual investor primarily focused on undercovered companies, with more than 50 companies on my watchlist. My areas include technology, software, electronics and the energy transition. I have been investing my personal capital for over 7 years in a broad range of companies globally. Th ...