Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Thryv Holdings Inc (NASDAQ:THRY) reported a 50% year-over-year revenue growth, with a 24% growth when normalized for the Keep acquisition.
• The company achieved a significant milestone with SaaS revenue now accounting for 61% of total revenue, marking a successful transition from marketing services to a SaaS-focused model.
• Subscriber growth was strong at 37%, bringing the total to 96,000, or 111,000 when including Keep subscribers.
• Net revenue retention reached 103%, indicating strong customer satisfaction and effective cross-selling strategies.
• The company has successfully integrated Keep's partner channel, enhancing its market reach and product offerings.

Negative Points

• Marketing services revenue saw a 42% year-over-year decline as the company transitions away from this segment.
• The company faces temporary headwinds due to shared cost allocations, impacting the SaaS segment's operating expenses.
• There is a cautious outlook for the year due to economic uncertainties, leading to conservative guidance.
• Customer additions were down by 3,000 in the quarter, attributed to seasonal factors and a focus on existing customer expansion.
• The company is still in the process of fully integrating Keep's back-office systems, which may delay some partner activities.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with THRY.

Q: Joe, one of the things that stood out this quarter was the net retention rate at 103%, a record high. Can you elaborate on what customers are buying in addition to their core Thryv SaaS implementations? A: Joe Walsh, CEO: We've been investing in developing new software centers and enhancing our go-to-market strategy. Customers are adding additional centers like business or marketing centers and using add-ons to boost their market presence. Despite economic concerns, our customers are doing well, focusing on ensuring their order books are full.

Q: You mentioned increased traffic expenses due to elevated demand for the marketing center. Can you explain what's contributing to this incremental traffic expense? A: Joe Walsh, CEO: We've added tools to the marketing center that help optimize website positioning and drive search traffic into businesses. This product has exceeded expectations, indicating strong demand from small businesses looking to maintain full order books.

Q: Joe, what were your takeaways from the Keep partner conference, and how do partners view the combination with Thryv? A: Joe Walsh, CEO: Partners are thrilled with Keep's automation capabilities and are excited about Thryv's ability to help build customer lists. The combination completes the marketing funnel, allowing partners to offer a full suite of solutions. We've worked hard to integrate and improve the partner experience, and morale is high.

Q: Your customer additions were down this quarter. Can you explain why, and how does this align with your focus on expansion activities? A: Joe Walsh, CEO: The holiday season is typically a softer period for us, affecting customer additions. We've also focused on running plays into our existing base, which has taken up sales time. Despite this, our referral flow remains strong, and we're focusing on expanding customer spend rather than just new acquisitions.

Q: As you shift focus to recurring revenue and increasing average spend per account, would you consider raising your net revenue retention goal? A: Joe Walsh, CEO: While we aim for around 100% net revenue retention, there will be ebbs and flows in focus. Our current focus is on expanding spend within our existing base, which is more efficient than prospecting. We may consider raising the goal if we consistently exceed it in future quarters.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.