Thryv Holdings Earnings Call Highlights SaaS Momentum

Thryv Holdings, Inc. ((THRY)) has held its Q1 earnings call. Read on for the main highlights of the call.

Thryv Holdings’ latest earnings call struck a cautiously upbeat tone, as management highlighted faster‑than‑expected SaaS growth, rising average spend per client and strong adoption of new products like its Marketing Center and embedded AI tools. Transition pains are real, with shrinking legacy marketing services and some margin pressure, but executives framed these as deliberate investments to accelerate the shift to a higher‑quality SaaS revenue base.

SaaS Revenue Beat and Structural Mix Shift

Thryv’s SaaS business delivered $116.7 million in revenue, rising 5% year over year and topping guidance, underscoring the strength of its subscription model. SaaS now makes up roughly 70% of total company revenue, marking a meaningful step in the company’s pivot away from legacy marketing services toward a more predictable, software‑driven profile.

Marketing Center Emerging as Growth Engine

The company’s Marketing Center platform posted about 30% year‑on‑year growth in the quarter and was repeatedly described as the centerpiece of Thryv’s “Market, Sell, Grow” strategy. Management said the product is driving deeper engagement with new and existing clients, especially in larger accounts, and has become a primary wedge for upmarket wins.

ARPU Expansion and Higher‑Quality Customer Mix

Average revenue per user climbed to $378 per month, up 13% year over year, pushing annualized client spend above $4,500 and signaling successful upsell and cross‑sell motions. Notably, so‑called “quality customers” now represent 70% of SaaS revenue versus 62% a year ago, and their count grew 6%, shifting the base toward more durable, higher‑value relationships.

AI Tools Gain Traction but Not Yet Monetized

Thryv rolled out a broad suite of AI features, from image generation and lead scoring to automated review responses, website building and captioning, and reported strong early adoption. Management said these tools are improving client engagement, conversion and product stickiness, but they are being bundled into core offerings for now, limiting near‑term direct revenue upside.

Multiproduct Adoption Signals Growing Platform Stickiness

Clients using two or more SaaS products increased to 26,000, now representing about 30% of the subscriber base versus 25% a year ago, indicating accelerating cross‑sell success. Overall SaaS subscribers ended the quarter at 96,000, suggesting the company is deepening wallet share even as it prunes lower‑value accounts.

Marketing Services Still a Cash Generator

Despite being in structural decline, Marketing Services revenue came in at $50.9 million, ahead of guidance, and produced adjusted EBITDA of $13.2 million for a robust 26% margin. Management emphasized that while the business is shrinking, billings‑to‑cash conversion remains predictable and continues to support the funding of the SaaS transformation.

Balance Sheet Flexibility and Guidance Upgrades

Thryv ended the quarter with net debt of $258 million and a leverage ratio of 1.7 times, giving it room to keep investing in product and go‑to‑market initiatives. Reflecting confidence in demand trends, the company raised the low end of full‑year guidance for both SaaS and Marketing Services revenue while maintaining adjusted EBITDA targets for each segment.

Sharp Drop in Marketing Services Billings

A key blemish was Marketing Services billings of $54.5 million, down a steep 33% from a year earlier, underscoring the scale of the legacy business runoff. Management portrayed the decline as intentional, tied to migrating agency clients onto SaaS platforms and upmarket solutions, and warned that this pressure will persist through the transition.

SaaS Margin Pressure and EBITDA Shortfall

SaaS adjusted gross margin stood at 67%, and SaaS adjusted EBITDA was $10.8 million, or a 9% margin, landing below the company’s own guidance. Executives linked the squeeze to upgrading low‑margin agency customers into SaaS without immediate price increases, arguing that near‑term profit dilution should yield better long‑term unit economics and retention.

Churn Concentrated in Smaller Customers

Seasoned net revenue retention was 93%, reflecting churn primarily among smaller, lower‑spend clients that the company is deemphasizing. Management cautioned that overall customer counts will look noisy as legacy marketing‑services users are converted onto SaaS and some low‑value accounts naturally roll off.

Print Cadence Adds Revenue Timing Noise

Executives reminded investors that print publication schedules are heavily skewed toward the second half, creating quarter‑to‑quarter volatility in reported Marketing Services revenue and EBITDA. They stressed that this timing shift does not alter billings or free cash flow, but it can make interim results look lumpier as the print business winds down.

Forward‑Looking Guidance and Strategic Path

For the second quarter, Thryv guided to SaaS revenue of $114–$115 million and SaaS adjusted EBITDA of $12–$13 million, while lifting full‑year revenue expectations for both SaaS and Marketing Services and holding firm on profit targets. Management reiterated its plan to exit Marketing Services by 2028, expects associated cash flows into 2030, and aims to return the overall company to top‑line growth in 2027 as SaaS becomes the clear engine of the business.

Thryv’s earnings call painted the picture of a company in the late innings of a difficult but increasingly rewarding pivot from print‑era marketing services to a modern SaaS platform. With recurring software revenue growing, ARPU rising and AI‑enabled products gaining traction, the strategic progress appears to outweigh near‑term billings declines and margin pressure, leaving investors focused on execution through the transition window.