8-K: Thryv Holdings Reports Strong Q1 2025 SaaS Revenue Growth, Exceeds Guidance

Thryv Holdings, Inc. announced a 50% year-over-year increase in SaaS revenue for the first quarter of 2025, driven by growth in SaaS clients and ARPU.

Summary

• Thryv Holdings reported its Q1 2025 financial results, highlighting significant growth in its SaaS business.
• SaaS revenue increased by 50% year-over-year to $111.1 million.
• Excluding the impact of the Keap acquisition, SaaS revenue grew by 24% year-over-year to $92.2 million.
• Marketing Services revenue decreased by 56% year-over-year to $70.2 million.
• Total consolidated revenue decreased by 22% year-over-year to $181.4 million.
• The company reported a net loss of $9.6 million, compared to a net income of $8.4 million in Q1 2024.
• Consolidated Adjusted EBITDA was $20.9 million, with a margin of 11.5%.
• SaaS Adjusted EBITDA was $10.8 million, with a margin of 9.7%.
• The company's Seasoned Net Revenue Retention (NRR) reached a record 103%.
• ThryvPay total payment volume increased by 13% year-over-year to $71 million.
• Thryv is guiding for Q2 2025 SaaS revenue of $113.0 $115.0 million and full-year SaaS revenue of $460.5 $471.0 million.
• The company expects full-year 2025 Marketing Services revenue to be between $310.0 and $314.0 million.

Sentiment

Score: 7

Explanation: The document presents a mixed picture. While SaaS revenue growth is strong and exceeds guidance, the overall revenue and net income are down. The focus on SaaS and positive NRR contribute to a moderately positive sentiment.

Positives

• Significant growth in SaaS revenue, indicating a successful strategic shift.
• Record Seasoned Net Revenue Retention of 103%, demonstrating strong customer loyalty and upselling capabilities.
• Increase in SaaS clients by 59% year-over-year.
• SaaS Adjusted EBITDA margin improvement is expected for the remainder of 2025.
• Strong customer demand and disciplined cost management.
• ThryvPay payment volume is up 13% year-over-year.

Negatives

• Consolidated total revenue decreased by 22% year-over-year.
• The company reported a net loss of $9.6 million, compared to a net income of $8.4 million in Q1 2024.
• Marketing Services revenue decreased by 56% year-over-year.

Risks

• Significant competition in the Marketing Services and SaaS markets.
• The ability to transition Marketing Services clients to the Thryv platform and maintain them.
• Potential system interruptions or failures, including cybersecurity breaches.
• The potential loss of key employees.
• Rising inflation and the ability to control costs.
• General macro-economic conditions, including a recession or an economic slowdown.
• Adverse tax laws or regulations or potential changes to existing tax laws or regulations.
• Costs, liabilities and reputational harm resulting from regulatory investigations, including the subpoena from the Division of Enforcement of the Securities and Exchange Commission (the SEC).

Future Outlook

Thryv is guiding for Q2 2025 SaaS revenue of $113.0 $115.0 million and full-year SaaS revenue of $460.5 $471.0 million. The company expects full-year 2025 Marketing Services revenue to be between $310.0 and $314.0 million.

Management Comments

• Joe Walsh, Thryv Chairman and CEO, stated that Thryv started 2025 with strong positive momentum as SaaS revenue accelerated to over 60% of total revenue.
• Paul Rouse, Chief Financial Officer, stated that they exceeded their guidance in the first quarter and balanced SaaS top-line growth with disciplined cost management.
• Paul Rouse also noted that Seasoned NRR increased to a record 103% in the first quarter as a result of upselling and cross-selling additional products and services to their customer base.

Industry Context

Thryv's focus on SaaS revenue growth aligns with the broader industry trend of businesses shifting towards cloud-based software solutions. The company's success in increasing SaaS revenue and NRR positions it well to compete in the SMB software market.

Comparison to Industry Standards

• Companies like HubSpot and Salesforce have demonstrated the potential for high growth and profitability in the SaaS market, setting a benchmark for Thryv to aspire to.
• Thryv's NRR of 103% is a strong indicator of customer satisfaction and retention, comparing favorably to industry averages for SaaS companies.
• The company's focus on ARPU expansion is a common strategy among SaaS businesses to drive revenue growth.

Stakeholder Impact

• Shareholders: The strong SaaS growth is positive, but the net loss may be concerning.
• Employees: The focus on SaaS growth may lead to new opportunities within the company.
• Customers: Continued investment in the platform should lead to improved features and functionality.
• Suppliers: The company's financial performance will impact its ability to meet its obligations.

Next Steps

• Thryv will continue to focus on acquiring and upgrading subscribers to the platform.
• The company plans to deepen relationships with existing customers and expand ARPU.
• Thryv will lean into cross-selling and anticipate continued growth as they enhance their product-led strategy and expand into new verticals.

Key Dates

Keywords

SaaS, Marketing Services, Revenue, Adjusted EBITDA, Net Revenue Retention, ThryvPay, ARPU, SMB, Keap, Financial Results, Guidance