Thryv(US:THRY)2021-05-13 15:24Financial Data and Key Metrics Changes - The company reported a 17% year-over-year revenue growth in Q1 2021, driven by increased demand for cloud adoption among small businesses [5][27] - SaaS revenue reached $37.3 million, a 70% increase year-over-year, while SaaS billings were $40.3 million, up 22% year-over-year [27] - The average revenue per user (ARPU) increased to $304 from $240 in Q1 2020, reflecting a strategic move upmarket [27][73] - Churn rate improved to 2.5% from 3.4% in Q1 2020, indicating better customer retention [27] Business Line Data and Key Metrics Changes - The marketing services segment saw a revenue decline of 21% year-over-year, with Q1 revenue at $227.9 million and billings down 22% to $216.2 million [28] - The adjusted gross margin for the consolidated business was 69%, a 50 basis point increase from the previous year [29] - The adjusted EBITDA for Q1 was $104.9 million, resulting in an adjusted EBITDA margin of 37% [29] Market Data and Key Metrics Changes - The company is expanding its presence in the Australian market through the acquisition of Sensis, which is expected to contribute to revenue in the future [23][31] - The new segment, Thryv International, is projected to generate revenues between AUD 180 million to AUD 200 million for 2021 [31] Company Strategy and Development Direction - The company is focusing on enhancing its SaaS offerings and expanding its sales channels, including inbound and reseller channels, to drive growth [6][40] - The launch of ThryvPay as a standalone app aims to attract new small business clients and increase engagement [14][19] - The company is committed to verticalizing its product offerings to better serve specific industries, particularly in home services [59][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transition of small businesses to cloud solutions, indicating a strong market opportunity [5][10] - The company anticipates continued growth in its SaaS business, with an upward revision of revenue guidance for 2021 to $151 million to $153 million [30][34] - Management acknowledged the need for investments in product development and marketing to sustain growth, which may lead to slight margin compression [30][55] Other Important Information - The company has seen significant engagement from its existing clients, with daily and weekly active usage metrics improving [12][13] - The integration with QuickBooks and MYOB accounting software is expected to simplify operations for small business owners [20] Q&A Session Summary Question: Changes in customer acquisition and SaaS product value proposition - Management noted that the pandemic has shifted customer perceptions, leading to increased demand for comprehensive cloud solutions rather than narrow point solutions [37][39] Question: Benefits of ThryvPay compared to competitors - ThryvPay offers lower transaction fees and features tailored for service-based businesses, which has led to customer switches from competitors like Stripe [43][45] Question: Impact of Sensis acquisition on guidance - Management indicated that there is minimal contribution from Sensis to current revenue guidance, with significant impacts expected in 2022 and 2023 [46][51] Question: Expectations for ThryvPay app attachment rates - Management believes the free ThryvPay app will drive brand awareness and potentially convert users to full SaaS solutions, but specific projections are not yet available [52][53] Question: SaaS segment margins outlook - Management expects some margin compression due to increased investments in growth, but the SaaS business will remain profitable [54][55] Question: Rollout of Thryv for home services - The company is preparing to launch a verticalized product for home services, leveraging feedback from existing clients to enhance functionality [59][62]