– Company achieves 19% SaaS revenue growth
– Q3 SaaS Adjusted EBITDA exceeds guidance range by over $3 million
– Subscribers increased 29%
– Delivers strong operating cash flow of $45.9 million
DALLAS, November 2, 2023 – Thryv Holdings, Inc. (NASDAQ:THRY) (“Thryv” or the “Company”), the provider of Thryv®, the leading small business software platform, reported SaaS revenue growth of 19% year-over-year in the third quarter of 2023.
“We are reporting a strong third quarter as we continue to focus on driving profitable SaaS growth in 2023,” said Joe Walsh, Thryv Chairman and CEO. “Our SaaS revenue and EBITDA surpassed expectations, reinforcing our commitment to cost effectively scaling our business. SaaS subscribers showed continued strength and we increased our clients through ongoing innovation, cross-selling opportunities and operational execution. We are continuing to evolve our Thryv platform to deliver solutions that solve problems small businesses face. ”
In August, the Company announced the beta program for Thryv Command Center, an industry-first freemium offering that will be a core driver in its product-led growth initiative. Thryv Command Center enables SMBs to centralize all their communication through a modular, easily expandable, and customizable platform. The market’s reception has been strong as evidenced by the fast-growing number of users. Thryv Command Center continues the planned roll out of new centers to drive future growth and complements the Thryv Marketing Center and Thryv Business Center, as well as the company’s continued international expansion.
“We are pleased with our results this quarter and with our ability to raise our full-year guidance for SaaS revenue and EBITDA,” said Paul Rouse, Thryv Chief Financial Officer. “We achieved impressive free cash conversion, even with Adjusted EBITDA appearing lower due to the accounting treatment related to the extension of our printed directories. Moreover, our robust free cash flow enabled us to substantially reduce our debt by $42.5 million on our Term Loan. As we move forward, our primary focus remains on accelerating profitable growth in the SaaS business while upholding a strong and healthy balance sheet.”
Third Quarter 2023 Highlights:
- Total SaaS1 revenue was $67.4 million, a 19% increase year-over-year
- Total Marketing Services2 revenue was $116.5 million, a 48% decrease year-over-year, primarily driven by the timing of revenue recognition of the Company’s printed directories
- Consolidated total revenue was $183.8 million, a decrease of 35% year-over-year
- Consolidated net loss was $27.0 million, or $(0.78) per diluted share, compared to net income of $13.3 million, or $0.37 per diluted share, for the third quarter of 2022
- Consolidated Adjusted EBITDA was $7.3 million, representing an Adjusted EBITDA margin of 4%
- Total SaaS Adjusted EBITDA loss was $0.5 million, representing an Adjusted EBITDA margin of (0.7)%.
- Total Marketing Services Adjusted EBITDA was $7.8 million, representing an Adjusted EBITDA margin of 7%
- Consolidated Gross Profit was $103.6 million
- Consolidated Adjusted Gross Profit3 was $110.6 million
- SaaS Gross Profit was $42.9 million, representing a Gross Profit Margin of 64%
- SaaS Adjusted Gross Profit was $44.8 million, representing an Adjusted Gross Profit Margin of 67%
- Operating cash flow was $45.9 million
- SaaS monthly Average Revenue per Unit (“ARPU”)4 decreased to $365 for the third quarter of 2023, compared to $377 in the third quarter of 2022
- Total SaaS clients increased 29% year-over-year to 66 thousand for the third quarter of 2023
- Seasoned Net Dollar Retention5 was 92% for the third quarter of 2023, an increase of 300 bps sequentially
- SaaS monthly active users6 increased 22% year-over-year to 45 thousand active users for the third quarter of 2023
- ThryvPay total payment volume was $63 million, an increase of 57% year-over-year
1 Total SaaS revenue in the U.S. and International segments was $64.7 million and $2.7 million for the three months ended September 30, 2023, respectively.
2 Total Marketing Services revenue in the U.S. and International segments was $92.9 million and $23.6 million for the three months ended September 30, 2023, respectively.
3 Defined as Gross profit adjusted to exclude the impact of depreciation and amortization expense and stock-based compensation expense.
4 Defined as total client billings for a particular month divided by the number of clients that have one or more revenue-generating solutions in that same month.
5 Seasoned Net Dollar Retention is defined as net dollar retention excluding clients acquired over the previous 12 months.
6 Defined as a client with one or more users who log into our SaaS solutions at least once during the calendar month.
Based on information available as of November 2, 2023, Thryv is issuing guidance7 for the fourth quarter of 2023 and full year 2023 as indicated below:
Earnings Conference Call Information
Thryv will host a conference call on Thursday, November 2, 2023 at 8:30 a.m. (Eastern Time) to discuss the Company’s third quarter 2023 results.
For analysts to register for this conference call, please use this link. After registering, a confirmation email will be sent, including dial-in details and a unique code for entry. We recommend registering a day in advance or at a minimum thirty minutes prior to the start of the call. To listen to the webcast, please use this link or visit Thryv’s Investor Relations website at investor.thryv.com. A live webcast will also be available on the Investor Relations section of the Company’s website at investor.thryv.com.
If you are unable to participate in the conference call, a replay will be available. To access the replay, please dial (800) 770-2030 or (647) 362-9199 and enter “87769.”
7 These statements are forward-looking and actual results may materially differ. Refer to the “Forward-Looking Statements” section below for information on the factors that could cause our actual results to materially differ from these forward-looking statements.
Our results included in this press release include Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Gross Profit, which are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are presented for supplemental informational purposes only and are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the tables below for a reconciliation of Adjusted EBITDA to Net (loss) income and Adjusted Gross Profit to Gross profit. Both Net (loss) income and Gross profit are the most comparable GAAP financial measure to Adjusted EBITDA and Adjusted Gross Profit, respectively. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue.
We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. However, it is important to note that the particular items we exclude from, or include in, our non-GAAP financial measures may differ from the items excluded from, or included in, similar non-GAAP financial measures used by other companies in the same industry.
The following is a reconciliation of Adjusted EBITDA to its most directly comparable GAAP measure, Net (loss) income:
Supplemental Financial Information
The following supplemental financial information provides Revenue, Adjusted EBITDA and Adjusted EBITDA Margin by (i) Marketing Services businesses in the U.S., International and in Total and (ii) SaaS businesses in the U.S., International and in Total. Total SaaS Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. Total Marketing Services Adjusted EBITDA and Adjusted EBITDA margin are also non-GAAP financial measures. These non-GAAP financial measures are presented for supplemental informational purposes only and are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Please refer to the supplemental information presented in the tables below for a reconciliation of these non-GAAP financial measures to the corresponding segment financial measures presented in accordance with GAAP.
We believe that these non-GAAP financial measures provide useful information about our global SaaS and Marketing Services financial performance, enhance the overall understanding of our global SaaS and Marketing Services past financial performance and allow for greater transparency with respect to important metrics used by our management for financial and operational decision-making. We believe that these measures provide additional tools for investors to use in comparing our core financial performance over multiple periods.
Certain statements contained herein are not historical facts, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve a number of risks and uncertainties. Statements that include the words “may”, “will”, “could”, “should”, “would”, “believe”, “anticipate”, “forecast”, “estimate”, “expect”, “preliminary”, “intend”, “plan”, “target”, “project”, “outlook”, “future”, “forward”, “guidance” and similar statements of a future or forward-looking nature identify forward-looking statements. These statements are not guarantees of future performance. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: risks related to the ongoing COVID-19 pandemic, the Company’s ability to maintain adequate liquidity to fund operations; the Company’s future operating and financial performance; the Company’s ability to consummate acquisitions, or, if consummated, to successfully integrate acquired businesses into the Company’s operations, the Company’s ability to recognize the benefits of acquisitions, or the failure of an acquired company to achieve its plans and objectives; limitations on our operating and strategic flexibility and the ability to operate our business, finance our capital needs or expand business strategies under the terms of our credit facilities; our ability to retain existing business and obtain and retain new business; general economic or business conditions affecting the markets we serve; declining use of print yellow page directories by consumers; our ability to collect trade receivables from clients to whom we extend credit; credit risk associated with our reliance on small and medium sized businesses as clients; our ability to attract and retain key managers; increased competition in our markets; our ability to obtain future financing due to changes in the lending markets or our financial position; our ability to maintain agreements with major Internet search and local media companies; reduced advertising spending and increased contract cancellations by our clients, which causes reduced revenue; and our ability to anticipate or respond effectively to changes in technology and consumer preferences as well as the risks and uncertainties set forth in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on From 10-Q filed with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.
If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. For these reasons, we caution you against relying on forward-looking statements. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. These forward-looking statements speak only as of the date hereof and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Thryv Holdings, Inc.
Thryv Holdings, Inc. (NASDAQ: THRY) is a global software and marketing services company that empowers small- to medium-sized businesses (“SMBs”) to grow and modernize their operations so they can compete and win in today’s economy. Over 50,000 businesses use our award-winning SaaS platform, Thryv®, to manage their end-to-end operations, which has helped businesses across the U.S. and overseas grow their bottom line. Thryv also manages digital and print presence for approximately 400,000 businesses, connecting these SMBs to local consumers via proprietary local search portals and print directories. For more information about Thryv Holdings, Inc, visit thryv.com.