Thryv Reports 50% SaaS Revenue Growth in Q1 2025, Exceeding Guidance and Setting New Seasoned NRR Record

Thryv Holdings, Inc. (NASDAQ:THRY), a leading provider of sales and marketing software for small and medium-sized businesses (SMBs), reported robust first-quarter 2025 results that exceeded its guidance. The company saw a 50% year-over-year increase in SaaS revenue, reaching $111.1 million, and its SaaS revenue comprised over 60% of total revenue. Additionally, seasoned net revenue retention (NRR) hit a record high of 103%, driven by effective upselling and cross-selling strategies. Q1 2025 Financial Performance: Under the leadership of CEO Joe Walsh, Thryv has been focusing on transforming itself into a premier SMB software business. The strategic shift is evident from the financials: total revenue decreased by 22% year-over-year to $181.4 million, primarily due to a 56% drop in Marketing Services revenue to $70.2 million. However, SaaS revenue excluding Keap showed a solid 24% year-over-year growth to $92.2 million. This trend underscores the company's emphasis on scaling its SaaS offerings. The consolidated net loss for Q1 was $9.6 million, or $(0.22) per diluted share, a stark contrast to the net income of $8.4 million, or $0.22 per diluted share, recorded in the same period last year. Despite this, the company maintained a positive Adjusted EBITDA, which stood at $20.9 million, or an 11.5% margin. SaaS Adjusted EBITDA was $10.8 million, representing a 9.7% margin, while Marketing Services Adjusted EBITDA was $10.1 million, with a 14.4% margin. Operational Highlights: Thryv's balance sheet remains solid, with total assets slightly down to $703.7 million from $712.1 million at the end of 2024. Current assets decreased to $202.7 million, reflecting a drop in cash and cash equivalents to $10.993 million from $16.311 million at the start of the year. Meanwhile, current liabilities decreased to $189.4 million from $196.3 million at the end of 2024. In Q1, Thryv spent $7.085 million on additions to fixed assets and capitalized software, a marginally lower amount compared to the previous year. The company also made significant payments on its ABL Facility, totaling $109.647 million, while reducing its Term Loan payments. Forward Guidance: Looking ahead, Thryv projects continued SaaS revenue growth and improved margins. For the second quarter of 2025, the company anticipates SaaS revenue in the range of $113.0 to $115.0 million, with SaaS Adjusted EBITDA between $18.5 and $19.5 million. The full-year 2025 outlook includes SaaS revenue of $460.5 to $471.0 million and SaaS Adjusted EBITDA of $67.0 to $71.0 million. Marketing Services revenue is expected to decline throughout the year, with forecasts of $90.0 to $91.0 million for Q2, $83.0 to $84.0 million for Q3, and $72.0 to $73.0 million for Q4, summing up to a full-year range of $310.0 to $314.0 million. Management's Perspective: Joe Walsh highlighted the company's progress in transitioning to a SaaS-focused model, emphasizing the importance of deepening customer relationships and expanding average revenue per user (ARPU). Paul Rouse, the CFO, noted the importance of disciplined cost management alongside sustained top-line growth, attributing the record NRR to successful upselling and cross-selling efforts. Industry Insight and Company Profile: Industry analysts have praised Thryv's strategic pivot towards SaaS, viewing it as a critical move to adapt to the evolving digital landscape for SMBs. The company's ability to integrate AI-supported marketing and automation tools into its platform is seen as a significant advantage, helping business owners streamline operations and scale their businesses efficiently. Thryv's extensive experience and robust ecosystem position it well to capitalize on the growing demand for integrated marketing and sales solutions. With over 100,000 businesses globally using its software, Thryv continues to be a leader in the SMB software market, poised for further growth and innovation.