Financial Data and Key Metrics Changes - SaaS reported revenue for Q2 2025 was $115 million, a 48% year-over-year increase, meeting the top end of guidance [12] - SaaS adjusted EBITDA increased to $23.4 million, resulting in a record adjusted EBITDA margin of 20% [13] - Net debt decreased by $24 million to $274 million, bringing the leverage ratio to 2.2 times, ahead of expectations [16] Business Line Data and Key Metrics Changes - SaaS business excluding Keep grew 25% year-over-year, while Keep contributed $17.7 million in Q2 [12] - Marketing Services revenue was $95.5 million, above guidance, with adjusted EBITDA of $27.8 million and a margin of 29% [15] - SaaS ARPU reached $352, with Thrive at $340 and Keep at $431, indicating a rise in customer spending [14] Market Data and Key Metrics Changes - The number of SaaS subscribers increased to 106,000, a 25% year-over-year growth [13] - Clients purchasing multiple products increased to 19%, with 17,000 clients using two or more Thrive SaaS products [14][15] Company Strategy and Development Direction - The company aims to deepen engagement by focusing on vertical markets, starting with the HVAC sector, and plans to roll out similar products for other verticals [22][42] - A new product, Workforce Center, was launched to help small businesses manage payroll and compliance, integrating seamlessly with the Thrive platform [28][92] - The company is transitioning to a pure play software business, with plans to exit marketing services by 2028 [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's trajectory, noting that the pinch point has been overcome and free cash flow is expected to improve [7][20] - The company is focused on increasing spend per customer and driving adoption of more products, with expectations of ARPU growth from $4,000 to $8,000 over the next few years [9][64] - Management acknowledged the softness in the Keep business but remains optimistic about its long-term potential [20][60] Other Important Information - The company is classified incorrectly under advertising in the GICS, which affects visibility in software league tables [30] - The company has a share buyback authorization and is considering using free cash flow for stock repurchases [74] Q&A Session Summary Question: Impact of HVAC product on business - The HVAC product is expected to attract new customers and enhance ARPU through an upcharge for vertical capabilities, with plans for further verticalization [34][35] Question: Guidance and organic growth expectations - Management indicated that the guidance reflects a conservative outlook, with no significant concerns about demand [44][46] Question: Insights on Keep business and customer churn - The Keep software has potential, but management is cautious about investing in unprofitable sales; focus is on leveraging existing customer relationships [52][56] Question: Financial flexibility and cash flow generation - The company plans to allocate cash towards marketing, sales, and potential share buybacks now that financial flexibility has improved [71][74] Question: Early feedback on Workforce Center - Initial feedback on Workforce Center has been positive, with customers appreciating the convenience it offers for payroll management [91][92]