Thryv Holdings: A SaaS Success Story with Long-Term Potential

In the rapidly evolving SaaS landscape, Thryv Holdings (NASDAQ: THRY) has emerged as a standout performer, particularly in the small and medium-sized business (SMB) market. With a 48% year-over-year surge in SaaS revenue for Q2 2025, the company has demonstrated not just growth, but a strategic transformation that positions it as a compelling long-term investment. But is this growth sustainable? And can Thryv's unique positioning in the SMB SaaS space justify its current valuation? Let's break it down.

The Numbers Behind the Growth

Thryv's Q2 2025 results are nothing short of impressive. SaaS revenue hit $115.0 million, up 48% from $77.8 million in Q2 2024. Even when excluding the Keap acquisition, which closed in October 2024, organic growth still reached 25% to $97.3 million. This dual-driver model—organic expansion and strategic M&A—creates a robust foundation for scalability.

The company's client base has expanded to 106,000 SaaS clients as of June 2025, a 25% year-over-year increase. More importantly, its Seasoned Net Revenue Retention (NRR) rate of 103% indicates that existing customers are not only staying but increasing their spending. This metric is a critical indicator of long-term sustainability, as it reflects the power of product-led growth and customer loyalty.

Profitability has also improved dramatically. SaaS Adjusted EBITDA surged to $23.4 million in Q2, with a margin of 20.3%, up from 13.1% in the same period in 2024. Thryv's ability to scale efficiently while maintaining profitability is a rarity in the SaaS sector and signals strong operational discipline.

A Unique Position in the SMB SaaS Market

Thryv's success stems from its clear niche: serving SMBs with 2–99 employees, a segment underserved by giants like Salesforce and HubSpot but over-served by basic tools like Mailchimp. This positioning allows Thryv to offer a balance of affordability and functionality, with AI-driven tools such as CaptionAI (for social media content) and AI-powered review responses enhancing customer value.

The company's $40 billion addressable market (10 million serviceable SMBs) provides ample room for expansion. Thryv's cross-selling strategy—17,000 customers now use multiple products—further strengthens its moat. By bundling services like ThryvPay (payment processing) and marketing automation, the company creates a sticky ecosystem that's hard for competitors to replicate.

Competitive Advantages and Risks

Thryv's competitive advantages are clear:
- High NRR and customer retention: A 103% NRR rate outperforms many SaaS peers.
- Profitability: 20.3% SaaS EBITDA margins are rare for a company in this growth phase.
- Strategic acquisitions: The Keap integration has accelerated SaaS adoption without derailing organic growth.

However, risks remain. The Marketing Services segment, which declined 35% YoY, still accounts for a portion of revenue. While Thryv has shifted focus to SaaS, the long-term success of this transition hinges on its ability to fully phase out underperforming segments. Additionally, the SaaS market is crowded, with competitors like Zoho and HubSpot expanding into SMB-focused offerings.

Long-Term Investment Potential

Thryv's long-term vision is ambitious: $1 billion in SaaS annual recurring revenue by 2030. With current SaaS revenue at $460–$465 million for 2025, this would require a 118% CAGR over five years—a steep but not impossible target given its growth trajectory. The company's $250–$300 million unlevered free cash flow projection from 2025–2030 also provides financial flexibility for R&D, M&A, and shareholder returns.

For investors, the key question is whether Thryv can maintain its current growth rate while expanding margins. The answer appears to be yes: its 20.3% EBITDA margin is already ahead of its 2024 guidance, and CEO Joe Walsh has noted that the “pinch point” of its SaaS transformation has been navigated ahead of schedule. This operational momentum, combined with strong customer retention, makes Thryv a rare SaaS play that balances growth with profitability.

Conclusion: A Buy for the Patient Investor

Thryv Holdings is a compelling long-term investment for those who can stomach short-term volatility. Its SaaS segment is a cash-generating machine with a durable moat, and its strategic focus on SMBs—a market with $40 billion in potential—provides ample growth runway. While the Marketing Services segment is a drag, the company's raised 2025 guidance and strong EBITDA margins suggest it's on the right path.

For now, Thryv's stock is trading at a P/E ratio of -43.76, reflecting skepticism about near-term profitability. However, the underlying business fundamentals—strong NRR, expanding margins, and a clear vision—make this a potential buying opportunity for patient investors who see the long-term value in Thryv's SaaS transformation.