8-K: Thryv Holdings Q1 2026 Earnings: SaaS Growth Outpaces Decline

Thryv Holdings reported Q1 2026 results, with SaaS revenue increasing 5.0% year-over-year to $116.7 million, while Marketing Services revenue declined 27.5%.

Summary

• Thryv Holdings announced its first quarter 2026 financial results, highlighting a 5.0% year-over-year increase in SaaS revenue to $116.7 million, which now constitutes 70% of total revenue.
• Consolidated total revenue decreased by 7.5% to $167.7 million, primarily due to a 27.5% decline in Marketing Services revenue to $50.9 million.
• The company reported a consolidated net income of $4.5 million, or $0.10 per diluted share, a significant improvement from a net loss of $9.6 million ($0.22 per diluted share) in Q1 2025.
• Consolidated Adjusted EBITDA was $24.1 million, with an Adjusted EBITDA margin of 14.4%.
• SaaS monthly Average Revenue per Unit (ARPU) increased by 12.8% year-over-year to $378.
• Marketing Center revenue saw a substantial 29% increase year-over-year.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a mixed but leaning positive report, with strong SaaS performance and improved profitability offsetting the decline in Marketing Services revenue.

Positives

• SaaS revenue grew 5.0% year-over-year to $116.7 million, now representing 70% of total revenue.
• Consolidated net income turned positive at $4.5 million ($0.10 per diluted share) compared to a net loss of $9.6 million in the prior year.
• Consolidated Adjusted EBITDA increased to $24.1 million, with a margin of 14.4%.
• SaaS monthly ARPU increased by 12.8% to $378, indicating successful upmarket strategy.
• Marketing Center revenue grew by 29% year-over-year.
• Quality customers (>$400 MRR) now account for 70% of SaaS revenue.
• Seasoned Net Revenue Retention was 93%.

Negatives

• Consolidated total revenue decreased by 7.5% year-over-year to $167.7 million.
• Marketing Services revenue declined significantly by 27.5% year-over-year to $50.9 million.
• Free Cash Flow was negative at $(5.45) million for the quarter.

Risks

• Significant competition for Marketing Services solutions and SaaS offerings.
• Ability to maintain profitability and manage growth effectively.
• Challenges in transitioning Marketing Services clients to the Thryv platform and retaining them.
• Potential for internet search engines to alter or terminate agreements.
• Keeping pace with rapid technological changes and evolving industry standards.
• Risk of system interruptions, failures, or cybersecurity breaches.
• Potential failure to identify and integrate suitable acquisition candidates.
• Reliance on key employees and the ability to attract and retain talent.

Future Outlook

For the second quarter of 2026, Thryv projects SaaS revenue between $114-$115 million and SaaS Adjusted EBITDA between $12-$13 million. Marketing Services revenue is expected to be $31-$33 million with Adjusted EBITDA of $3-$4 million. For the full year 2026, SaaS revenue is projected at $463-$471 million with SaaS Adjusted EBITDA of $70-$75 million. Full year Marketing Services revenue is forecasted at $157-$163 million with Adjusted EBITDA of $30-$35 million.

Management Comments

• "We delivered a strong start to 2026, with SaaS revenue exceeding our guidance and now representing 70% of total revenue," said Joe Walsh, Thryv Chairman and CEO.
• "Our upmarket motion is clearly working, as ARPU grew 13% year-over-year and Quality Customers now represent 70% of our SaaS revenue."
• "We are expanding beyond our legacy client base, and are attracting larger small businesses with Marketing Center, engaging them at a higher level, and encouraging them to spend more - driving ARPU upward."

Industry Context

StockSavvy.ai notes that Thryv's strategic shift towards its AI-enabled unified growth platform, with a focus on increasing SaaS revenue and ARPU, aligns with broader industry trends favoring subscription-based software models and AI integration for small businesses. The decline in Marketing Services revenue, however, suggests a challenging market for traditional advertising or service models.

Comparison to Industry Standards

• The 5.0% year-over-year SaaS revenue growth is moderate compared to high-growth SaaS companies, but significant given the overall revenue decline.
• The 12.8% increase in SaaS ARPU is a positive indicator, suggesting successful upselling and value delivery to higher-spending clients, a trend seen in mature SaaS markets.
• The shift of SaaS revenue to 70% of total revenue indicates a successful transition towards a more recurring and potentially higher-margin business model, a common goal for software companies.

Legal Proceedings

• The company mentions potential risks related to regulatory investigations, including a subpoena from the SEC's Division of Enforcement.

Related Party Transactions

• Interest expense related to related parties was $2.466 million for the three months ended March 31, 2026.
• Current portion of Term Loan, related party was $10.5 million at March 31, 2026.
• Term Loan, net, related party was $82.063 million at March 31, 2026.

Stakeholder Impact

• Shareholders may see improved value due to the return to profitability and growth in the core SaaS business.
• Employees may benefit from the company's strategic focus and potential for growth, though restructuring costs could impact morale.
• Customers of the Marketing Services segment may face changes as the company prioritizes its SaaS platform.
• Creditors may be reassured by the improved net income and Adjusted EBITDA, though the negative free cash flow warrants attention.

Next Steps

• Continue to execute on the upmarket strategy to attract larger small businesses.
• Focus on expanding the Marketing Center offering and driving ARPU growth.
• Monitor and manage the transition of Marketing Services clients to the Thryv platform.
• Implement AI-driven lead insights and automated customer follow-up features.

Key Dates

Recommendation

The company shows positive momentum in its core SaaS business with growing ARPU and a return to profitability, which is encouraging. However, the significant decline in Marketing Services revenue and negative free cash flow present ongoing challenges. A 'hold' recommendation reflects a balanced view, awaiting sustained improvement across all segments and clearer signs of consistent free cash flow generation.

Keywords

Thryv Holdings, SEC Filing, 8-K, Q1 2026 Earnings, SaaS Revenue, Marketing Services, Adjusted EBITDA, Small Business Software