Thryv(THRY) - 2024 Q4 - Annual Results

Executive Summary 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 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][4] - SaaS now drives the majority of Thryv's revenue, reinforcing its transformation into a software company[3] - Total SaaS subscribers increased 73% year-over-year in Q4 2024, driven by Keap acquisition, client conversion, and new acquisitions[3] - Achieved Q4 SaaS Adjusted EBITDA Margin of 17%[4] Financial Highlights 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 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 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 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 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) 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 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 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] 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 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) 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 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 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 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) 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] 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 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 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 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][22] - Adjusted EBITDA excludes certain non-operating items not indicative of core operating results and is used for budgeting, forecasting, and performance measurement[22][23] - Non-GAAP financial information has limitations as an analytical tool and should not be considered a substitute for GAAP measures[24] Adjusted EBITDA Reconciliation 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 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 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 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] - Registration link for analysts and webcast link for public listening are provided. A replay will also be available[12][13] Forward-Looking Statements 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][37] - 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][36] - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[37] About Thryv 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] - The platform offers AI-supported marketing and business automations to help SMBs save time, compete, and grow efficiently[38] - More than 100,000 businesses globally use Thryv software[38]