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]

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]

| thryv | | --- | | Industry Leading Marketing | | and Sales Platform | | Supercharge your businesss growth with our award-winning | | small business soloware and Al t | | to stay sop or | You lack Insighes Inco | Voche unsure | | --- | --- | --- | | DOGERISOD | what your compedents | howalshors in | | s but don't know | we dollig online and how | your websice : | | 1492 | on speas now | so Improve | | ssoughts | From was to been your | Totamany sai | | on up on all the | for all brand presence, but | Jane ...

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]