Thryv (THRY) 1 Aug 24 2024 Q2 Earnings call transcript

Thryv, a leading provider of software solutions for small businesses, recently held its second quarter 2024 earnings call, offering insights into the company's performance, strategic initiatives, and future outlook. The call, led by CEO Joe Walsh and CFO Paul Rouse, showcased Thryv's robust growth and optimism for the future.

Financial Highlights

Thryv reported a 25% year-over-year increase in SaaS revenue to $77.8 million, exceeding expectations and reflecting the company's successful transition to a software-as-a-service (SaaS) model. SaaS adjusted gross margin improved significantly, reaching 69.7%, demonstrating the company's operational efficiency and financial health. SaaS adjusted EBITDA grew by over 60% year-over-year, highlighting Thryv's ability to generate profitability and scale its business.

Strategic Initiatives

The call emphasized Thryv's strategic shift towards SaaS, with a focus on enhancing its Thryv AI capabilities and product offerings. The company's marketing center, a game-changer for businesses seeking to efficiently manage advertising campaigns and enhance their online presence, has been a significant driver of growth. Thryv's AI-enabled customer support and social media feature in the business center are further examples of its commitment to leveraging technology to empower small businesses.

Customer Growth and Retention

Thryv's subscriber growth continues to be a standout, with a 52% year-over-year increase in clients, reaching 85,000. The company's strategic transition of legacy marketing services clients to its innovative SaaS platform is a key factor in this success. Thryv's focus on customer retention and upselling has resulted in a 94% second quarter seasoned net dollar retention, a testament to the value Thryv delivers to its customers.

Future Outlook and Growth Opportunities

Looking ahead, Thryv anticipates SaaS revenue to account for over 40% of its consolidated revenues in 2024, with expectations of surpassing 50% in 2025. The company's platform strategy, including the launch of new centers, is expected to drive growth and profitability, positioning Thryv for a strong future in the SaaS landscape.

Investor and Analyst Questions

During the call, key shareholders and analysts asked questions about Thryv's SaaS performance, customer acquisition strategies, and future product initiatives. These interactions provided valuable insights into the company's relationship with its investors and highlighted the importance of Thryv's strategic transition to a SaaS model.

Conclusion

Thryv's second quarter 2024 earnings call underscored the company's impressive growth and strategic initiatives. With a focus on enhancing its SaaS offerings and customer-centric approach, Thryv is well-positioned to capitalize on the trend of small businesses moving to the cloud. As the company transitions to a majority SaaS business, investors and analysts will be keenly watching its progress and the potential for continued growth and profitability.