Thryv Holdings Earnings Call Highlights SaaS Pivot

Thryv Holdings, Inc. ((THRY)) has held its Q4 earnings call. Read on for the main highlights of the call.

Thryv Holdings, Inc. used its latest earnings call to underline a confident pivot toward a higher-margin SaaS model, even as it absorbs deliberate short-term pain from exiting legacy marketing services. Management highlighted robust full-year SaaS growth, rising profitability and better customer quality, arguing these positives outweigh flat retention metrics and near-term revenue headwinds.

Full-Year SaaS Growth Underpins Strategic Shift

Thryv’s SaaS revenue climbed 34.2% year over year to $461.0 million for 2025, confirming strong momentum in its transition away from legacy offerings. Management framed this growth as validation that its software platform is gaining traction with small and midsize businesses as the core of the company’s future.

Q4 SaaS Performance Shows Scaling Profitability

In the fourth quarter, SaaS revenue rose 14.1% to $119.0 million, showing continued albeit moderating growth. SaaS adjusted EBITDA reached $20.0 million, implying a 16.8% margin, while full-year SaaS adjusted EBITDA of $73.8 million at a 16.0% margin signaled that the software business is scaling with disciplined cost control.

Operational Leverage Drives Higher Gross Margins

The SaaS unit delivered adjusted gross margins of 70.4% in Q4 and 72.7% for the full year, about 70 basis points higher than a year earlier. Management pointed to this steady margin lift as evidence that the platform can expand profitability as revenue grows and infrastructure and support costs are leveraged.

Marketing Center Emerges as Growth Engine

Marketing Center was described as the fastest-growing product and a central pillar of the new Thryv Platform. Growing north of 50% year over year and more than doubling revenue in 2025, it now represents a majority of SaaS revenue and anchors the firm’s strategy to deliver an integrated, AI-enabled marketing and operations suite.

Higher-Value Customers and ARPU Push Up Revenue Quality

The company continued to shift its base toward larger spenders, with customers paying at least $400 per month rising by 3,000, or 18%, in Q4. This quality cohort now accounts for 69% of revenue versus 60% a year ago, helping lift SaaS ARPU to $373, up 15% year over year.

Multi-Product Adoption Deepens Client Engagement

Thryv reported that 19,000 clients now use at least two SaaS products, representing 23% of its subscriber base, up from 16% a year earlier. Clients using two or more centers climbed to 15% from 12%, suggesting growing cross-sell traction and tighter integration into customers’ workflows.

Keap Acquisition and AI Investments Accelerate the Platform

The Keap acquisition added $16.2 million in Q4 revenue and was cited as accelerating Thryv’s roadmap with enhanced conversion and lifecycle management features. Management said it is embedding AI across the unified Thryv Platform, which is slated to launch later in 2026, positioning the company for more automated and intelligent small-business solutions.

Cash Flow Strengthens and Leverage Moves Lower

Free cash flow reached $31.1 million in 2025, giving Thryv more financial flexibility to invest while reducing debt. Net debt declined by $15 million to $251 million, bringing leverage down to about 1.7 times, which management argued leaves the balance sheet in solid shape for the ongoing transition.

Intentional Transition and Detailed 2026 Road Map

Executives laid out explicit 2026 targets, including SaaS revenue and EBITDA ranges, emphasizing a deliberate focus on quality growth over headline top-line acceleration. They stressed that guidance is conservative as the company replatforms, tightens go-to-market motions and manages through the shift away from legacy marketing services.

Steep Drop in Marketing Services Billings

Marketing services billings fell 34% year over year in Q4 to $60.9 million, a decline management said is by design as it winds down this lower-quality business. Investors were reminded that this line will continue to shrink as Thryv redirects resources toward its SaaS platform.

Marketing Services Revenue to Shrink Further Near Term

Full-year 2025 marketing services revenue came in at $324 million but is guided sharply lower to $150 million to $160 million for 2026. The company acknowledged this creates a substantial near-term revenue headwind but framed it as a necessary step to reduce reliance on declining, legacy offerings.

Flat Net Revenue Retention Highlights Work Ahead

Seasoned Net Revenue Retention remained flat at 94%, signaling that overall retention has not yet improved despite gains in higher-spend cohorts. Management suggested that as the mix shifts further toward quality customers and multi-product users, retention should trend higher over time.

Legacy Small-Customer Tail Distorts Metrics

A large tail of micro-business customers, many spending under $200 per month, continues to create churn and noise in overall customer counts. Thryv expects elevated attrition from this group as it migrates clients to the new platform and prioritizes more durable, higher-value relationships.

Growth Moderation and Conservative Near-Term Outlook

Management cautioned that SaaS growth rates will moderate in the near term as easier upgrades from legacy products are largely complete. The company is using this period to replatform and refine its sales approach, setting expectations for a slower first half followed by re-acceleration later in the year.

Cannibalization and Migration Friction Weigh on KPIs

The rollout of the new Market-Sell-Grow platform is displacing some existing Business Center customers, producing mild cannibalization. Executives also pointed to a prior hump of churn after large migrations and warned that further migration work could cause additional short-term volatility in customer metrics.

Guidance Points to Steady SaaS and Stronger Cash Flow

For 2026, Thryv guided Q1 SaaS revenue to $114 million to $115 million and full-year SaaS revenue to $461 million to $471 million, with SaaS adjusted EBITDA of $12 million to $13 million in Q1 and $70 million to $75 million for the year. Marketing services revenue is expected to fall to $150 million to $160 million with adjusted EBITDA of $30 million to $35 million, while free cash flow is projected to grow to $40 million to $50 million as the firm maintains a cautious near-term stance and targets a full exit from marketing services by 2028.

Thryv’s earnings call painted the picture of a company trading near-term legacy revenue for higher-quality, higher-margin SaaS growth. While retention and churn in the small-customer tail remain watch points, management’s detailed guidance, improving margins and strengthening balance sheet suggest a disciplined transition that could ultimately benefit long-term shareholders.