Thryv Holdings Reports 29% SaaS Growth Despite Challenges in Marketing Services Segment

Thryv Holdings Sees Impressive SaaS Growth Amidst Broader Challenges

Thryv Holdings, Inc. showcases a remarkable third quarter performance for 2024, emphasizing its commitment to small business software solutions. The company reports a 29% year-over-year increase in Software as a Service (SaaS) revenue, reaching $87.1 million. This growth is complemented by a 45% surge in SaaS clients, now totaling 96,000. Thryv's strategic focus on transitioning marketing service clients to its SaaS platform is paying off, with CEO Joe Walsh highlighting the achievement of the "Rule of 40"—a metric indicating a healthy balance between growth and profitability. This validation of Thryv's business model sets a positive tone for future endeavors.

Despite the strong performance in the SaaS segment, Thryv faces challenges in its Marketing Services division, which reported a 20% revenue decline to $92.8 million. The overall consolidated revenue dips by 2% year-over-year to $179.9 million, contributing to a net loss of $96.1 million. This loss includes a significant non-cash goodwill impairment charge of $83.1 million. Nevertheless, the company’s Adjusted EBITDA stands at $19.6 million, reflecting a solid margin of 10.9%. Thryv’s seasoned Net Dollar Retention rate improves to 101%, further underscoring the effectiveness of its land-and-expand strategy within the SaaS ecosystem.

Thryv's recent acquisition of Keap is poised to bolster its offerings in the marketing and sales sectors for its expanding base of over 100,000 SaaS clients. This strategic move aligns with the company’s goal of enhancing its suite of solutions and maintaining competitive advantages in the small business software market. By focusing on this integration and leveraging its growing SaaS capabilities, Thryv aims to navigate the current challenges while fostering long-term growth and client retention.

In summary, Thryv Holdings demonstrates robust SaaS growth and a commitment to enhancing its service offerings through strategic acquisitions. While facing difficulties in its Marketing Services segment, the company's strong client retention rates and positive performance metrics signal a promising trajectory for future success in the small business software industry.