Thryv(US: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 contributing $320 and Keep 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] - Subscriber growth was 37%, totaling 96,000 Thrive subscribers and 111,000 including Keep [9][21] - Marketing services revenue was $70.2 million, reflecting a 42% year-over-year decline as the company transitions to SaaS [24][26] 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 [11][22] - Seasoned net revenue retention reached 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][14] - The integration of Keep is seen as a strategic advantage, enhancing the product offering and partner network [17][52] 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 [31][32] - The company is taking a cautious approach to guidance due to economic uncertainties, despite strong performance in Q1 [34][73] - Management noted that small businesses are currently prioritizing marketing tools to ensure a full order book [33][70] Other Important Information - The company is experiencing increased traffic expenses due to heightened demand for its marketing center [42][44] - The first quarter included a temporary headwind of $2-3 million related to shared cost allocations, which is expected to normalize in subsequent quarters [20][21] Q&A Session Summary Question: Can you elaborate on the net retention rate and what customers are buying? - Management highlighted that the net retention rate of 103% reflects successful cross-selling and expansion efforts, with customers increasingly adopting additional products [37][38] Question: What were the takeaways from the Keap Partner Conference? - Partners expressed excitement about the integration of Thrive's capabilities with Keep's automation tools, enhancing their service offerings [50][52] Question: Why was there a decline in SaaS customer additions this quarter? - Management attributed the decline to seasonal factors and a strategic focus on existing customer expansion rather than new customer acquisition [58][60] Question: How is the company addressing potential macroeconomic challenges? - Management noted that the current environment is prompting small businesses to invest in marketing tools, which is beneficial for the company's growth [70][73] Question: What is the outlook for the SaaS business and customer retention? - Management remains optimistic about customer retention and expansion, with a long-term goal of increasing average revenue per customer significantly [85][96]