10-K: Thryv Achieves Net Income, Accelerates SaaS Shift Amidst Legacy Exit

Thryv Holdings, Inc. reported a net income of $0.3 million for fiscal year 2025, driven by significant SaaS revenue growth and a strategic exit from its legacy Marketing Services segment by 2028.

Summary

• Net income for fiscal year 2025 was $0.3 million, a substantial improvement from a net loss of $74.2 million in fiscal year 2024.
• Total revenue decreased by 4.7% to $785.0 million in FY2025 from $824.2 million in FY2024.
• SaaS revenue increased by 34.2% to $461.0 million in FY2025, primarily due to the Keap acquisition ($56.2 million), client conversions ($20.4 million), and new sales/expansion ($48.0 million).
• Marketing Services revenue decreased by 32.6% to $324.0 million in FY2025, attributed to secular decline and strategic client conversions to SaaS.
• The company is strategically exiting its Marketing Services business entirely by the end of 2028, with the final publication of printed directories expected in December 2028.
• Total clients decreased by 22% to 231,000 as of December 31, 2025, reflecting the decline in Marketing Services clients and a shift in SaaS strategy.
• SaaS monthly Average Revenue Per Unit (ARPU) increased by 8% to $356 in FY2025, driven by additional offerings, new client spend, price increases, and the Keap acquisition.
• SaaS Seasoned Net Revenue Retention (NRR) decreased to 94% in FY2025 from 98% in FY2024, primarily due to downgrades and cancellations outpacing upsells.
• Adjusted EBITDA decreased by 6.5% to $151.8 million in FY2025.
• No goodwill impairment charges were recorded in FY2025; however, the company is evaluating an interim goodwill impairment assessment for the SaaS reporting unit in Q1 2026 due to a decline in stock price below book value.
• The company repurchased $5.0 million of common stock in FY2025 under a $40.0 million program authorized in April 2024.
• A subpoena was received from the SEC in October 2024 requesting documents related to the strategic conversion of clients from Digital marketing services to SaaS solutions.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive. While the company achieved net income and strong SaaS revenue growth, the decline in total clients and SaaS NRR, coupled with the potential for goodwill impairment in the SaaS segment, introduces caution. The strategic transition is progressing, but execution risks remain.

Positives

• Achieved net income of $0.3 million in FY2025, a significant turnaround from a net loss of $74.2 million in FY2024.
• SaaS revenue grew substantially by 34.2% ($117.6 million) in FY2025, demonstrating strong performance in the strategic growth segment.
• SaaS monthly ARPU increased by 8% to $356, indicating successful upselling and increased client spend.
• Successful integration of the Keap acquisition, contributing $56.2 million to SaaS revenue in FY2025.
• Strategic cost-saving initiatives led to a 12.1% decrease in Cost of Services and an 11.3% decrease in Sales and Marketing expenses.
• Gross margin improved to 67.9% in FY2025 from 65.2% in FY2024, with both SaaS and Marketing Services segments showing margin increases.
• Reduced interest expense by $12.0 million (25.7%) due to lower outstanding debt balances.
• Maintained compliance with all covenants under the Term Loan and ABL Facility as of December 31, 2025.
• Launched Thryv for HVAC in 2025, demonstrating a strategy for vertical-specific SaaS solutions.
• Strong human capital programs for inclusion, onboarding (Ready.Set.Thryv!), mentorship (Trailblazers), recognition (Accelerators), and talent development (Emerging Leaders, New Manager Training, Mindful Manager, CDEIP).

Negatives

• Total revenue decreased by 4.7% in FY2025, primarily due to the significant decline in the Marketing Services segment.
• Marketing Services revenue decreased by 32.6% ($156.7 million) in FY2025, reflecting the secular decline of print media and intense digital competition.
• Total clients decreased by 22% (65,000 clients) in FY2025, driven by the decline in Marketing Services and a shift in SaaS client acquisition strategy.
• SaaS Seasoned NRR decreased to 94% in FY2025 from 98% in FY2024, indicating higher churn and downgrades among established SaaS clients.
• Adjusted EBITDA decreased by 6.5% in FY2025, primarily due to the decline in the Marketing Services segment.
• The company is evaluating an interim goodwill impairment assessment for the SaaS reporting unit in Q1 2026 due to a decline in stock price below book value, which could lead to future impairment charges.
• Net periodic pension cost was $8.8 million in FY2025, a significant change from a benefit of $24.8 million in FY2024, due to a remeasurement loss and a settlement loss.
• Income tax expense increased by $8.5 million (103.7%) in FY2025.
• Cash flows from operating activities decreased by $26.3 million (29.2%) in FY2025, primarily due to changes in working capital and declining Marketing Services sales.
• The company's stock price performance has significantly underperformed the Nasdaq Composite and Russell 2000 indices from October 2020 to December 2025.

Risks

• Significant competition for Marketing Services solutions and SaaS offerings, including from companies using third-party components.
• Ability to transition Marketing Services clients to the Thryv Platform and retain them, or sell additional products.
• Variability in operating results due to print directory publication cycles.
• Ability to manage growth effectively, especially in the SaaS segment.
• Potential failure to successfully expand current offerings into new or existing markets.
• Small to medium-sized business (SMB) clients potentially opting not to renew their agreements or renewing at lower spend.
• Ability to maintain profitability.
• Potential failure to provide new or enhanced functionality and features, including robust artificial intelligence (AI) solutions.
• Challenges with properly managing artificial intelligence, which could result in reputational harm, competitive harm, and legal liability from deficient, inaccurate, or biased AI content, or cybersecurity incidents related to AI.
• Potential failure to identify and acquire suitable acquisition candidates or successfully integrate acquired businesses.
• Recognition of impairment losses, particularly for goodwill (SaaS unit currently under evaluation for Q1 2026).
• Internet search engines and portals potentially terminating or materially altering their agreements.
• Reliance on third-party service providers for many aspects of the business (including AI solutions) and potential inability to maintain strategic relationships.
• Inability to keep pace with rapid technological changes and evolving industry standards (for both the company and third-party providers).
• Inability to maintain compatibility of the Thryv Platform with third-party applications.
• Inability to recover should the company experience a disaster or other business-continuity problems.
• Potential loss of one or more key employees or inability to attract and retain highly skilled employees.
• Potential impact of future labor negotiations (5% of employees are unionized).
• Potential failure to comply with applicable privacy, security, and data laws, regulations, and standards (e.g., GDPR, CCPA, HIPAA, SHIELD Act).
• Potential system interruptions or failures, including cybersecurity breaches, identity theft, data loss, or unauthorized access to data.
• Potential failure to protect intellectual property rights, proprietary technology, information, processes, and know-how.
• Reduced demand for products due to epidemics or other public health emergencies.
• Litigation and regulatory investigations, including the subpoena from the Securities and Exchange Commission (SEC).
• Adverse tax laws, regulations, audit outcomes, or potential changes to existing tax laws or regulations (e.g., Pillar Two rules).
• Potential failure to meet service level commitments under client contracts.
• Potential failure to offer high-quality or technical support services.
• Aging software and hardware infrastructure leading to increased costs and disruptions.
• Failure of the Thryv Platform and add-ons to perform properly.
• Outstanding indebtedness and potential inability to generate sufficient cash flows to meet debt service obligations.
• Restriction of future operations by restrictive covenants in debt agreements.
• Volatility and weakness in bank and capital markets affecting credit availability.
• Potential volatility in the public price of common stock.
• Anti-takeover provisions in governing documents may prevent a change of control.
• Forecasts of market growth may prove inaccurate.
• Reliance on data provided by third parties, the loss of which could limit platform functionality.
• Laws and regulations directed at limiting or restricting the distribution of print directories or shifting waste management costs.
• Failure to maintain effective internal control over financial reporting.
• Potential inability to utilize a significant portion of net operating loss carryforwards.
• Changes in key assumptions could result in additional underfunded pension obligations.

Future Outlook

The company plans to fully transition into a SaaS-driven business model by the end of 2028, exiting the Marketing Services business entirely. It expects continued investment in SaaS product development and go-to-market execution, while limiting incremental investment in Marketing Services. The company anticipates a continued decline in print advertising sales in 2026 until the planned exit in 2028. It aims to increase lifetime customer value through expanded platform adoption, automation, and payments, and improve customer retention. International expansion through acquisitions or re-seller agreements is also a focus. The company will continue to explore specialized SaaS solutions for specific industry verticals, such as Thryv for HVAC. Total capital expenditures are expected to be approximately $30.0 million for FY2026. An interim goodwill impairment assessment for the SaaS reporting unit is underway for Q1 2026.

Management Comments

• Our strategy is centered on delivering a unified, extensible SaaS platform that supports customer acquisition, engagement, operations, and retention across the SMB lifecycle.
• SaaS represents the strategic growth engine of the Company. Marketing Services is our legacy segment that we are actively managing and exiting as part of a multi-year transition to a pure SaaS business model.
• We made the strategic decision to exit the Marketing Services business entirely by the end of 2028. This decision aligns with our long-term vision to fully transition into a SaaS-driven business model.
• We believe that our cash flow generation and strategic capital allocation will enable us to continue to reduce debt and pursue acquisitions to create value for our stockholders.
• We believe that industry specific solutions can help continue to position our products as industry-leading, providing specially tailored solutions to SMBs within a vertical.
• We believe we compete favorably with respect to all these factors and that we are well-positioned as a leading provider of marketing solutions and cloud-based end-to-end customer experience tools to SMBs across the United States.
• We continue to monitor our capital requirements to ensure our needs are in line with available capital resources.

Industry Context

StockSavvy.ai notes that Thryv's strategic pivot towards a pure SaaS model by 2028 aligns with broader industry trends of digital transformation and the increasing demand for integrated cloud-based solutions among SMBs. The decline in traditional print media is a secular trend impacting legacy businesses, making the SaaS transition critical for long-term viability. The acquisition of Keap and the development of vertical-specific solutions like Thryv for HVAC demonstrate a focus on expanding market share and offering tailored, comprehensive solutions in a highly fragmented and competitive SMB SaaS landscape, where point solution providers and larger enterprise suites are also vying for market share. The emphasis on AI integration is also a key industry trend for enhancing platform capabilities and user experience.

Comparison to Industry Standards

• The filing mentions competition from 'Point Solution Providers,' 'Vertical Solutions' (e.g., Home Services, Health & Wellness), and 'All-In-One Competitors' (some priced above Thryv or targeting larger companies).
• Specific competitors mentioned for Marketing Services include 'Google, Yelp, and Facebook' for consumer search and display.
• The company claims to be 'the only provider to offer this broad network of online directory sites with a single purchase' for its Extended Search Solutions (ESS).
• The filing states that 'many of these solutions lack a comprehensive set of features and offer less onboarding and customer support' compared to Thryv's offerings.
• StockSavvy.ai notes that Thryv's 94% SaaS Seasoned NRR for FY2025 is below the typical 100-120%+ NRR seen in high-growth SaaS companies, suggesting potential challenges in retaining and expanding revenue from existing clients compared to industry leaders. The 8% increase in SaaS ARPU is positive, but the overall client decline and NRR dip indicate that client acquisition and retention strategies need careful monitoring against industry benchmarks.

Corporate Governance

Legal Proceedings

• Subpoena from the Division of Enforcement of the SEC in October 2024, requesting documents and information related to the company's previously publicly announced strategic conversion of clients from its Digital marketing services solutions platform to its SaaS solutions platform. The company is cooperating fully.
• Ongoing litigation regarding Section 199 deduction and research and development tax credits for the YP LLC partnership (final decision entered October 22, 2024) and the Print Media LLC partnership (Proposed Stipulated Decision filed March 10, 2025, awaiting final court decision).
• Currently under examination by the Illinois Department of Revenue for tax years 2022 and 2023 and by the Wisconsin Department of Revenue for tax years 2021 through 2023.

Related Party Transactions

• As of December 31, 2025, 40.0% of the Term Loan was held by a related party (a shareholder owning more than 5% of the company's voting securities) who was an equity holder of the company as of May 1, 2024.
• Interest expense, related party, was $(11.3) million for FY2025 and $(10.3) million for FY2024.

Stakeholder Impact

• Shareholders: Potential for stock price volatility due to market conditions, operating performance, analyst coverage, and sales of common stock. Dilution from equity issuances for acquisitions (Keap). Share repurchase program could benefit shareholders. Anti-takeover provisions may limit change of control. Potential goodwill impairment could negatively impact stock price.
• Employees: Impacted by strategic shift from Marketing Services (severance charges of $13.3 million in FY2025 related to legacy Marketing Services employees). Human capital programs aim to attract, develop, and retain talent. Unionized employees (5% of workforce) are subject to labor negotiations.
• Customers (SMBs): Transition to SaaS platform aims to provide more efficient tools. Potential for churn during transition from Marketing Services. Dependence on high-quality support and platform functionality.
• Creditors: Debt levels and restrictive covenants in Term Loan and ABL Facility impact financial flexibility. Ability to generate sufficient cash flow to meet debt service obligations is critical.
• Suppliers/Partners: Reliance on third-party service providers for various aspects, including AI solutions, printing, and distribution. Strategic relationships are important for growth.

Next Steps

• Fully transition into a SaaS-driven business model by the end of 2028.
• Final publication of printed directories in December 2028, with billing and collection extending beyond that date.
• Continue to improve SaaS solutions by analyzing user behavior, expanding features, improving usability, enhancing onboarding services and customer support, and making version updates.
• Continue to expand into international markets through acquisition, re-seller agreements, or other commercial arrangements.
• Explore specialized SaaS solutions for additional industry verticals.
• Evaluate an interim goodwill impairment assessment for the SaaS reporting unit in Q1 2026.
• Contribute approximately $5.4 million to the qualified pension plan and $0.5 million to the non-qualified plans for fiscal year 2026.
• The parties are awaiting the court to enter its final decision in the Print Media LLC partnership tax dispute.
• The SEC investigation regarding client conversion from Digital marketing services to SaaS is ongoing, with the company cooperating fully.

Key Dates

Recommendation

Thryv's transition to a SaaS-led model is showing progress with strong SaaS revenue growth and a return to net income. However, the decline in SaaS NRR, the overall client base reduction, and the ongoing SEC investigation introduce uncertainty. The potential for goodwill impairment in the SaaS segment in Q1 2026 also warrants caution. While the strategic direction is sound, these factors suggest a 'Hold' recommendation until there is clearer evidence of sustained SaaS client retention and resolution of regulatory and impairment concerns.

Keywords

SaaS, SMB, Marketing Services, Digital Marketing, Print Directories, AI, CRM, Keap, Thryv Platform, Financial Results, 10-K, SEC Filing, Corporate Governance, Risk Management, Debt, Share Repurchase, Cybersecurity, Pension, Revenue, EBITDA, Net Income, ARPU, NRR