Thryv(US:THRY)2021-11-11 21:50Financial Data and Key Metrics Changes - SaaS revenue for Q3 2021 was $44.8 million, representing a 41% year-over-year increase, driven by a steady increase in clients and a rise in average revenue per unit (ARPU) [29][30] - SaaS ARPU increased to $340, up 31% year-over-year, attributed to a shift in subscription mix and upselling to higher-priced tiers [30] - Third quarter adjusted gross margin was 70%, with an adjusted EBITDA margin of 34.4% [35][36] - SaaS churn improved to 1.7%, a 90 basis point improvement year-over-year [31] Business Line Data and Key Metrics Changes - U.S. marketing services revenue for Q3 was $213.2 million, a 2.3% increase year-over-year, driven by a strong print publication schedule [32] - Marketing services billings decreased by 21% year-over-year, consistent with previous quarters, indicating a steady decline in this segment [33] - Thryv International revenue was 53.3 million Australian dollars, ahead of guidance, with a reporting basis of $39.3 million [34] Market Data and Key Metrics Changes - New acquisition channels now represent 22% of overall sales, doubling from the previous year [11] - Daily active users increased over 30% year-over-year, with significant engagement in platform features [12] Company Strategy and Development Direction - The company is focused on building a SaaS business and is actively pursuing SaaS acquisitions to enhance growth and capabilities [39][40] - The Sensis acquisition in Australia has shown promising early results, with strong customer engagement and a media campaign driving traffic [22][23] - The introduction of a centralized inbox feature aims to streamline communication for small businesses, enhancing user experience [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the small business market's transition to cloud solutions, indicating a significant growth opportunity [70] - The company is confident in its ability to penetrate the Australian market and expects to ramp up sales efforts in 2022 [82] - Management acknowledged mixed confidence among small businesses due to inflation concerns but remains bullish on future growth [70] Other Important Information - The company received an APPEALIE award for customer success, highlighting the quality of its software [38] - The company is planning an Investor Day in March to unveil its strategy in detail [41] Q&A Session Summary Question: Thoughts on medium and long-term targets given current growth - Management noted a shift to a growth-oriented stance, allowing for increased investment in product development and engineering talent, which has contributed to current growth rates [47][48] Question: Balance between expanding existing customers and new customer acquisition - Management indicated there is pricing power in the offering, with existing customers increasingly purchasing more features and services [51][53] Question: SaaS M&A strategy and potential acquisition sizes - Management stated that while larger acquisitions are challenging due to current valuations, smaller tuck-in acquisitions are more feasible at this time [55][57] Question: Uptake of new verticalized functionality and demand from specific verticals - Management reported that financial improvements from verticalized functionality are expected to materialize in 2022, with traction seen in service-oriented verticals [62] Question: Dynamics of marketing services business and billings - Management explained that the lumpiness of the marketing services schedule leads to variability in billings, with strong quarters driven by print publication schedules [73][75]