THRY — Thryv Holdings, Inc.

Summary of Thryv Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• SaaS Revenue: Reported at $116.7 million, a 5% year-over-year increase, exceeding guidance.
• Adjusted EBITDA: Total company adjusted EBITDA was below guidance due to gross margin compression, primarily from upgrading low-margin clients to SaaS.
• SaaS Adjusted Gross Margin: 67%, with adjusted EBITDA margin at 9%.
• Average Revenue Per User (ARPU): Increased to $378 per month, up 13% year-over-year.
• Customer Metrics: Total SaaS subscribers reached 96,000, with a seasoned Net Revenue Retention (NRR) of 93%. Quality customers now represent 70% of revenue, up from 62% a year ago.

2. Strategic Updates and Business Highlights

• Thryv is transitioning from a marketing services model to a SaaS-centric business, with SaaS now constituting 70% of total revenue.
• The Marketing Center product saw a 30% year-over-year growth, indicating strong demand from small businesses for online visibility and lead generation.
• The company is successfully moving upmarket, targeting larger small businesses, which has positively impacted ARPU and client retention.
• AI initiatives are gaining traction, with strong early adoption of new features like AI image generation and lead scoring, enhancing product stickiness.

3. Forward Guidance and Outlook

• Q2 SaaS Revenue Guidance: Expected in the range of $114 million to $115 million.
• Full-Year SaaS Revenue Guidance: Raised to a range of $463 million to $471 million.
• Full-Year Marketing Services Revenue Guidance: Adjusted to a range of $157 million to $163 million.
• The company anticipates returning to overall top-line growth by 2027, as it continues to transition away from legacy marketing services.

4. Bad News, Challenges, or Points of Concern

• Adjusted EBITDA was below guidance due to strategic upgrades of low-margin clients, indicating short-term financial pressure.
• Marketing Services revenue is declining, with billings down 33% year-over-year, reflecting the intentional shift towards SaaS and the planned exit from marketing services by 2028.
• There is ongoing noise in customer numbers due to the transition of legacy clients, which may affect perceptions of growth stability.

5. Notable Q&A Insights

• Management emphasized the importance of moving upmarket, with a focus on larger clients who tend to have higher retention and spending capabilities.
• AI functionalities are expected to enhance customer experience and retention, with potential monetization opportunities in the future, though the current focus is on improving core product value.
• The sales strategy is now more targeted towards larger businesses, moving away from smaller, less stable clients, which may lead to fluctuations in customer counts but is expected to stabilize over time as the quality of clients improves.
• Overall churn is trending positively among high-value clients, which bodes well for long-term business health.

This call reflects a pivotal moment for Thryv as it continues its transformation into a SaaS-focused company while navigating the challenges of transitioning from its legacy marketing services business.