Thryv(THRY) - 2025 Q2 - Quarterly Results

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