8-K: Thryv Holdings Q2 2026: Revenue Declines, Restructuring Underway

Thryv Holdings reported a net loss and declining revenue in Q2 2026, alongside a strategic restructuring plan aimed at improving operating efficiencies and focusing on its SaaS platform.

Summary

• Thryv Holdings reported a net loss of $16.7 million for the second quarter of 2026, a significant decrease from a net income of $13.9 million in the prior year's quarter.
• Consolidated total revenue for Q2 2026 was $150.7 million, down 28.4% year-over-year.
• SaaS revenue was $114.5 million, a slight decrease of 0.5% year-over-year, though Market, Sell, Grow initiatives within SaaS grew 21%.
• Marketing Services revenue significantly decreased by 62.0% to $36.2 million.
• The company announced a strategic restructuring plan expected to incur $20 million to $25 million in charges, with anticipated gross annualized cost savings of $55 million to $60 million starting in 2027.
• Consolidated Adjusted EBITDA was $20.8 million, a decrease from $51.2 million in Q2 2025.
• SaaS Adjusted EBITDA was $13.6 million, with an Adjusted EBITDA margin of 11.8%.
• The company is partnering with Ooma and plans a strategic partnership with Wix.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative score due to declining revenues, a net loss, and significant restructuring charges, despite some positive SaaS metrics.

Positives

• SaaS revenue now represents 76% of total revenue, indicating a continued shift towards the company's core platform.
• SaaS Monthly Average Revenue Per Unit (ARPU) increased by 12% year-over-year to $394.
• Market, Sell, Grow initiatives within SaaS revenue grew by 21% year-over-year.
• Quality customers (those contributing >$400 MRR) accounted for 72% of SaaS revenue.
• SaaS Gross Margin was 63.5% and Adjusted Gross Margin was 66.6%.
• The company is implementing a strategic restructuring plan to improve operating efficiencies and focus on a SaaS operating model.
• Partnerships with Ooma and planned partnership with Wix are expected to help small businesses succeed.

Negatives

• Consolidated total revenue decreased by 28.4% to $150.7 million in Q2 2026.
• Net loss for Q2 2026 was $16.7 million, compared to a net income of $13.9 million in Q2 2025.
• Marketing Services revenue saw a significant decline of 62.0% to $36.2 million.
• Consolidated Adjusted EBITDA decreased substantially from $51.2 million in Q2 2025 to $20.8 million in Q2 2026.
• SaaS revenue experienced a slight decrease of 0.5% year-over-year.
• Seasoned Net Revenue Retention was 90% for the second quarter of 2026, indicating some churn or reduced spending from long-term clients.
• The company expects to incur significant restructuring and related charges of approximately $20 million to $25 million.

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 and portals to alter or terminate agreements.
• Keeping pace with rapid technological changes and evolving industry standards.
• Risk of clients not renewing agreements or renewing at lower spend levels.
• Potential system interruptions, failures, including cybersecurity breaches and data loss.
• Challenges with managing the use of artificial intelligence, which could result in reputational harm and legal liability.

Future Outlook

For the third quarter of 2026, Thryv projects SaaS revenue between $111.0 $112.0 million and Marketing Services revenue between $34.0 $35.0 million. For the full year 2026, projected SaaS revenue is $453.0 $457.0 million and Marketing Services revenue is $161.0 $163.0 million. Full year 2026 Adjusted EBITDA is projected to be $73.0 $77.0 million.

Management Comments

• "Our second quarter marked another step forward in the transformation of our business, with SaaS now representing 76% of our revenue and ARPU growing 12% year-over-year," said Joe Walsh, Thryv Chairman and CEO.
• "Our SaaS profile now reflects our deliberate focus on the newly launched Thryv Growth Platform, the first platform purpose-built for the small business owner with AI running underneath to turn every lead into measurable revenue."
• "We are also announcing a restructuring plan that realigns our cost structure to focus on a SaaS operating model and extend the agentic AI capabilities embedded in Thryv's customer-facing platform."
• "Looking ahead, we remain focused on reaccelerating the growth of our SaaS business."
• "We are announcing today that we have partnered Ooma and plan to establish a strategic partnership with Wix, with a shared focus on helping small businesses succeed."
• "These initiatives are expected to be accretive to Adjusted EBITDA margins in the future, while strengthening the Company's free cash flow generation," stated Paul Rouse, Chief Financial Officer.

Industry Context

StockSavvy.ai notes that Thryv's strategic shift towards its AI-native SaaS platform, the Thryv Growth Platform, aligns with broader industry trends favoring integrated software solutions for small businesses. However, the significant decline in Marketing Services revenue highlights the challenges of managing a dual-business model and the competitive pressures within the digital marketing services sector.

Legal Proceedings

• The company is subject to risks and uncertainties set forth in its most recent Annual Report on Form 10-K, including potential regulatory investigations and subpoena from the SEC's Division of Enforcement.

Related Party Transactions

• Interest expense related to related party term loans was $2.5 million for the three months ended June 30, 2026, and $5.0 million for the six months ended June 30, 2026.
• Current portion of Term Loan, related party was $14.0 million as of June 30, 2026.
• Term Loan, net, related party was $78.8 million as of June 30, 2026.

Stakeholder Impact

• Shareholders may be concerned by the net loss, declining revenues, and the costs associated with the restructuring plan, although the long-term focus on SaaS and potential cost savings could be viewed positively.
• Employees may face uncertainty due to the restructuring plan, which aims to improve operating efficiencies.
• Customers of the Marketing Services segment may be impacted by the strategic shift, while SaaS customers are expected to benefit from the AI-native Thryv Growth Platform.

Next Steps

• Implement the strategic restructuring plan to improve operating efficiencies.
• Focus investments on scaling the Thryv Growth Platform.
• Establish a strategic partnership with Wix.
• Continue to reaccelerate the growth of the SaaS business.

Key Dates

Recommendation

The significant decline in revenue, shift to a net loss, and substantial restructuring charges outweigh the positive SaaS metrics like ARPU growth. The company's future performance hinges on the successful execution of its restructuring and its ability to reaccelerate SaaS growth, which remains uncertain given the current financial performance.

Keywords

SaaS, Small Business, Local Services, Growth Platform, Restructuring, Revenue, EBITDA, AI