Thryv(THRY)2025-05-01 13:32Financial Data and Key Metrics Changes - The company reported a 50% year-over-year revenue growth for Q1 2025, with a normalized growth of 24% excluding the Keep acquisition [6][19] - SaaS revenue reached $111.1 million, exceeding guidance, with an adjusted EBITDA margin of 10% [19][20] - The overall SaaS ARPU increased to $335, with Thrive's ARPU at $320 and Keep's ARPU at $428 [22][23] - The net debt position was $298 million, with a leverage ratio of 2.2 times net debt to EBITDA [27][28] Business Line Data and Key Metrics Changes - SaaS revenue now constitutes 61% of total revenue, marking a significant shift from marketing services to SaaS [7] - Marketing services revenue for Q1 was $70.2 million, reflecting a 42% year-over-year decline as the company transitions clients to SaaS offerings [25][26] - Subscriber growth for SaaS reached 37%, totaling 111,000 subscribers, including 15,000 from Keep [9][21] Market Data and Key Metrics Changes - The company is focusing on expanding its existing customer base, with 17.2% of SaaS subscribers using multiple paid products, up from previous periods [12][22] - Seasoned net revenue retention reached a record high of 103%, indicating strong customer satisfaction and loyalty [23] Company Strategy and Development Direction - The company is transitioning to a fully SaaS-focused model, planning to exit the marketing services business by 2028 [26][28] - The strategy emphasizes deepening relationships with existing customers to drive revenue growth through cross-selling and upselling [12][15] - The company is investing in product development and enhancing its partner channel to support growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of their customer base, which primarily addresses non-discretionary needs [30][32] - The company is taking a conservative approach to guidance amid economic uncertainty, despite strong performance indicators [34][75] - Management noted that small businesses are currently prioritizing marketing tools to ensure a full order book [33][40] Other Important Information - The company is experiencing increased traffic expenses due to heightened demand for its marketing center and related add-ons [43][44] - The integration of Keep is progressing well, with positive feedback from partners regarding the combined product offerings [52][54] Q&A Session Summary Question: Can you elaborate on the record high net retention rate and what customers are buying? - Management highlighted that customers are increasingly adopting additional products, contributing to the high net retention rate [37][38] Question: What are the reasons for the decrease in SaaS customer additions this quarter? - Management attributed the decrease to seasonal factors and a strategic focus on existing customer expansion rather than new customer acquisition [57][59] Question: How is the integration of Keep progressing? - Management reported strong integration progress, with partners excited about the combined capabilities of Thrive and Keep [50][52] Question: What is the outlook for the SaaS business in a challenging macro environment? - Management indicated that the current environment is prompting customers to prioritize marketing and sales tools, which could benefit the SaaS business [68][70] Question: Are there any differences in retention between Thrive and Keep customers? - Management noted that both customer bases are resilient, with no significant differences in churn rates observed [80][90]