Thryv Holdings, Inc. Q3 FY2025 earnings call

Grow Conference

• Partner conference in Arizona: Worked with partners to address their needs, delivering updates like partner portal improvements, rest API updates, and product enhancements. Small business conference had hundreds of attendees; Marketing Center is the fastest-selling product, using AI for social captioning, review response, service descriptions, website building, copywriting, and call analysis. AI used internally for productivity, software development, and QA.

Vertical Initiative

• HVAC vertical saw 10% lift in jobs booked, 25% revenue increase, 50+ qualified leads/month, 12% repeat business, and 45% social engagement boost. Rolling out broader home services vertical; CRM agnostic, Marketing Center fits with industry CRMs.

New CTO

• Sean Wechter focuses on AI integration, aiming to accelerate product development, improve engineering throughput, and enhance interoperability.

SaaS reported revenue was $115.9 million in the third quarter, a 33% year-over-year increase. Keap contributed $16.8 million. Excluding Keap, Thryv SaaS business grew 14% year-over-year. SaaS adjusted gross margin was 73%, up 80 basis points year-over-year. SaaS adjusted EBITDA was $19.6 million, with an adjusted EBITDA margin of 17%. Ended the third quarter with 103,000 SaaS subscribers, including 13,000 from Keap. Marketing Services revenue in the third quarter was $85.7 million, above guidance, with Marketing Services adjusted EBITDA of $21.2 million and a margin of 25%. Total company billings were $184.2 million, down 4% year-over-year. Generated free cash flow of $14.6 million in the third quarter, with year-to-date free cash flow at $18.8 million. Net debt was down $9 million to $265 million, with a leverage ratio of 1.9x.

Fourth Quarter 2025

• SaaS revenue expected $118 million to $121 million; SaaS adjusted EBITDA expected $19.2 million to $21.2 million.

Full Year 2025

• SaaS revenue updated to $460 million to $463 million; SaaS adjusted EBITDA raised to $73 million to $75 million. Marketing Services revenue expected $323 million to $325 million; Marketing Services adjusted EBITDA expected $76 million to $78 million.

Execution risks in transforming the business from legacy to SaaS; initial low partner satisfaction but improving; temporary noise in metrics during transition of legacy marketing services clients to SaaS platform.

Q: SaaS business growth missed guidance; explain execution issues.

A: Execution wasn't flawless in the quarter, but no macro issues; just needed better execution going forward.

Q: Partner results okay; how to improve partner opportunity?

A: Worked with partners to address needs, delivered updates, partner morale improving; reacceleration expected in 2026.

Q: Customer conference takeaways on purchasing decisions.

A: Customers are decent, not economically sensitive; market fine, not affecting Thryv's results.

Q: CTO Sean's early strategies for AI, efficiency, product acceleration.

A: Sean focuses on AI integration, accelerating product development, enhancing interoperability to improve operational efficiency.

Q: Answers-based engines visibility; Thryv's efforts.

A: Thryv's sites and websites are visible in answer engines, leveraging authoritative content and AEO to ensure visibility.

Q: Balancing ARPU expansion and customer base growth.

A: Focused on growing ARPU in existing base by selling more to larger businesses; not pushing hard for customer base growth in short term.

Q: Trends in quality SaaS client cohort.

A: Higher ARPU, lower churn, more willingness to buy more tools; virtuous circle with growth leading to more spending.

Q: Going to market with new tech for滞后 businesses.

A: Build on Marketing Center foundation, keep it simple, focus on measuring and optimizing advertising and leads, avoiding intimidation with jargon.