Thryv Holdings, Inc. ((THRY)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Thryv Holdings, Inc. recently held its third-quarter earnings call, revealing a mixed sentiment among stakeholders. The company showcased impressive growth in its SaaS segment and innovative AI integrations, yet faced challenges in subscriber growth and partner performance. Thryv is strategically shifting its focus towards long-term transformation, aiming to navigate these hurdles effectively.
SaaS Revenue Growth
Thryv reported a significant increase in its SaaS revenue, reaching $115.9 million in the third quarter, which marks a 33% rise year-over-year. This growth underscores the company’s successful expansion in the SaaS market, highlighting its potential for sustained revenue increases.
AI Integration and Innovation
The company is enhancing its offerings with AI-driven features, such as social captioning, review response suggestions, and AI-powered website building. These innovations are designed to improve both internal processes and customer experiences, positioning Thryv as a forward-thinking player in the tech industry.
Vertical Market Success
Thryv’s initiative in the HVAC vertical market has yielded positive results, with a 10% increase in jobs booked and a 25% rise in total revenue for pilot customers. This success demonstrates the company’s ability to capitalize on niche markets and drive growth.
Strong Adjusted EBITDA
The company’s SaaS adjusted EBITDA rose to $19.6 million, with a margin of 17%. This strong performance reflects Thryv’s effective cost management and operational efficiency, contributing to its overall financial health.
Free Cash Flow Improvement
Thryv generated $14.6 million in free cash flow during the third quarter, bringing the year-to-date total to $18.8 million. This improvement in cash flow is a positive indicator of the company’s financial stability and ability to invest in future growth.
Subscriber and NRR Declines
Despite the growth in revenue, Thryv faced challenges with subscriber growth, reporting only a 7% increase year-over-year. Additionally, the seasoned NRR declined to 94%, indicating potential retention issues that the company needs to address.
Challenges with Partner Channel
Thryv encountered difficulties with its partner channel, particularly with the Keap acquisition, which did not meet performance expectations. This challenge highlights the need for strategic adjustments to optimize partner contributions.
Marketing Services Revenue Decline
The company’s Marketing Services revenue declined by 33% year-over-year, totaling $70.6 million. This decrease is attributed to strategic shifts, reflecting Thryv’s focus on transforming its business model.
Forward-Looking Guidance
Looking ahead, Thryv projects SaaS revenue to reach between $118 million and $121 million in the fourth quarter, with full-year expectations set between $460 million and $463 million. The adjusted EBITDA guidance has been raised to $73 million to $75 million, indicating confidence in continued growth. Marketing Services revenue for the full year is anticipated to be between $323 million and $325 million.
In summary, Thryv Holdings, Inc.’s earnings call painted a picture of a company in transition, with strong SaaS growth and innovative AI developments leading the way. However, challenges in subscriber growth and partner performance remain areas of concern. As Thryv continues its strategic shift towards long-term transformation, stakeholders will be keenly watching its ability to navigate these challenges and capitalize on growth opportunities.