Thryv(THRY)2024-11-09 14:48Financial Data and Key Metrics Changes - SaaS revenue for Q3 2024 was 19.6 million, representing an adjusted EBITDA margin of 11% [14] - Net debt position was 92.8 million, with a decline in billings of 35% year-over-year due to the transition of clients to the SaaS platform [13][14] - Marketing Services adjusted EBITDA margin was 10% for Q3 [13] Market Data and Key Metrics Changes - The company anticipates that the acquisition of Keap will generate approximately 12 million in revenue for Q4 2024 [17] - Keap's acquisition adds over 15,000 quality customers and is expected to enhance the company's market presence [9][25] Company Strategy and Development Direction - The company aims to transition fully to a SaaS model, with a goal of becoming a 100% Net Dollar Retention (NDR) company [7] - The acquisition of Keap is seen as a strategic move to enhance product offerings and expand into larger small businesses [21][25] - The company plans to integrate Keap's platform with its existing offerings to create a unified product experience [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term economics of the accelerated migration strategy, with expectations of 10% to 15% growth in spending from converted customers [7][12] - The management team highlighted the importance of building a strong subscription base and the potential for upselling existing customers [12][56] - Future guidance for Q4 includes raising SaaS revenue expectations to a range of 92 million [16] Other Important Information - The company generated 52.5 million in term loan amortization [16] - A noncash impairment charge of $83.1 million was recognized due to the ongoing structural decline of the marketing services business [15] Q&A Session Summary Question: Details on Keap automations and their benefits for SMB customers - Keap's automations help SMBs streamline operations, improve service consistency, and enhance marketing efforts, making them attractive for businesses with higher revenue [27][30] Question: Integration of Keap platform with Thryv - The company plans to fully integrate Keap's platform with its existing offerings, enhancing product interoperability and creating a unified platform [34][35] Question: Future conversions from marketing services to SaaS - The company has successfully accelerated the transition of marketing services clients to the SaaS platform, with expectations for continued growth in this area [39][41] Question: Go-to-market strategy post-acquisition - The acquisition will leverage Keap's partner ecosystem and Thryv's direct sales force to enhance distribution and drive growth [44][46] Question: Net dollar retention rate and future expectations - Management is confident that the net dollar retention rate will stabilize around 100%, with potential for slight increases as more customers adopt multiple products [51][56] Question: Annualized free cash flow post-Keap acquisition - The company is not yet prepared to guide for 2025 but will provide more information at the upcoming Analyst Day [62] Question: International growth opportunities with Keap - Keap's established international presence and reseller network provide a strategic entry point for expanding into new markets [64][65] Question: ARPU pressure and its contributors - ARPU is under pressure due to the transition of customers to lower commitment levels and the introduction of starter products to facilitate migration [66][71]