Thryv Holdings, Inc. (NASDAQ:THRY) (“Thryv” or the “Company”), the provider of Thryv®, the leading small business software platform, reported SaaS revenue growth of 20% year-over-year in the second quarter of 2023, while SaaS EBITDA margins expanded to 10%.
“We delivered solid second quarter results,” said Joe Walsh, Chairman and CEO. “We have been focused on driving profitable SaaS growth - and we have a strong operating framework in place for this to continue. Our consistent, profitable SaaS growth is the result of leveraging our sales channels. We also continue to demonstrate that our traditional sales channels, selling SaaS to our existing Marketing Services customers, and our client referral initiatives, drive significant margin expansion and profitability. Together, this has improved our SaaS EBITDA margins by 10% sequentially.”
“We are continuing the evolution of our Thryv platform and are laser-focused on delivering solutions that solve problems that small businesses face,” Walsh continued. “We have released a beta version of Thryv Command Center, an industry-first offering that will be a core element to our product-led growth initiative. Thryv Command Center can be downloaded for free to all small business users, and they can upgrade to a more powerful and advanced paid version as their needs warrant. Thryv Command Center centralizes all communication, from email to text to phone and video, into one inbox. With all of our centers, users can upgrade as they are ready. We are excited about this new center, which reinforces our commitment to innovation and layers a product-led growth onto our sales-led motion.”
With this launch, the Thryv platform has been re-architected, providing small business owners a modular, easily expandable and customizable user experience that meets their needs. It creates a strong new customer acquisition channel and a clear path to sustained Net Dollar Retention improvement. This launch continues the roll out of new centers, such as the recently announced Marketing Center.
“As we continue to advance our strategy and look to the rest of 2023, we are raising our full-year guidance for SaaS revenue and EBITDA,” said Paul Rouse, Chief Financial Officer. "We are pleased with our results this quarter. We believe we have a sound strategy for accelerating profitable growth in the SaaS business for the balance of the year and into the future.”
Second Quarter 2023 Financial Highlights:
Revenue
- Total SaaS1 revenue was $62.5 million, a 19.6% increase year-over-year
- Total Marketing Services2 revenue was $189.0 million, a 32.9% decrease year-over-year
- Consolidated total revenue was $251.4 million, a decrease of 24.7% year-over-year
- Consolidated net income was $16.0 million, or $0.43 per diluted share, compared to net income of $58.0 million, or $1.61 per diluted share, for the second quarter of 2022
- Consolidated Adjusted EBITDA was $69.4 million, representing an Adjusted EBITDA margin of 27.6%
- Total SaaS Adjusted EBITDA was $6.2 million, representing an Adjusted EBITDA margin of 10.0%.
- Total Marketing Services Adjusted EBITDA was $63.2 million, representing an Adjusted EBITDA margin of 33.5%
- Consolidated Gross Profit was $160.1 million
- Consolidated Adjusted Gross Profit3 was $167.9 million
- SaaS Gross Profit was $39.2 million, representing a Gross Profit Margin of 62.8%
- SaaS Adjusted Gross Profit was $40.7 million, representing an Adjusted Gross Profit Margin of 65.1%
SaaS Metrics
- SaaS monthly Average Revenue per Unit (“ARPU”)4 increased to $377 for the second quarter of 2023, compared to $358 in the second quarter of 2022
- Total SaaS clients increased 12% year-over-year to 56 thousand for the second quarter of 2023
- Seasoned Net Dollar Retention5 was 89% at the end of the second quarter of 2023
- SaaS monthly active users6 increased 18% year-over-year to 45 thousand active users for the second quarter of 2023
- ThryvPay total payment volume was $60 million, an increase of 59% year-over-year
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1 Total SaaS revenue in the U.S. and International segments was $60.2 million and $2.3 million for the three months ended June 30, 2023, respectively. |
2 Total Marketing Services revenue in the U.S. and International segments was $137.7 million and $51.3 million for the three months ended June 30, 2023, respectively. |
3 Defined as Gross profit adjusted to exclude the impact of depreciation and amortization expense and stock-based compensation expense. |
4 Defined as total client billings for a particular month divided by the number of clients that have one or more revenue-generating solutions in that same month. |
5 Seasoned Net Dollar Retention is defined as net dollar retention excluding clients acquired over the previous 12 months. |
6 Defined as a client with one or more users who log into our SaaS solutions at least once during the calendar month. |
Outlook
Based on information available as of August 3, 2023, Thryv is issuing guidance7 for the third quarter of 2023 and full year 2023 as indicated below:
3rd Quarter | Full Year | ||||
(in millions) | 2023 | 2023 | |||
SaaS Revenue | $66.5 - $67.0 | $258 to $260 | |||
SaaS Adjusted EBITDA | $(3.5) - $(4.0) | $7 - $8 |
3rd Quarter | 4th Quarter | Full Year | ||||
(in millions) | 2023 | 2023 | 2023 | |||
Marketing Services Revenue | $114 - $118 | $166 - $170 | $653 - $663 | |||
Marketing Services Adjusted EBITDA | $187 - $190 |
Earnings Conference Call Information
Thryv will host a conference call on Thursday, August 3, 2023 at 8:30 a.m. (Eastern Time) to discuss the Company's second quarter 2023 results.
For analysts to register for this conference call, please use this link. After registering, a confirmation email will be sent, including dial-in details and a unique code for entry. We recommend registering a day in advance or at a minimum thirty minutes prior to the start of the call. To listen to the webcast, please use this link or visit Thryv's Investor Relations website at investor.thryv.com. A live webcast will also be available on the Investor Relations section of the Company's website at investor.thryv.com.
If you are unable to participate in the conference call, a replay will be available. To access the replay, please dial (800) 770-2030 or (647) 362-9199 and enter “87769.”
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7 These statements are forward-looking and actual results may materially differ. Refer to the “Forward-Looking Statements” section below for information on the factors that could cause our actual results to materially differ from these forward-looking statements. |
Final Results Thryv Holdings, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
(in thousands, except share and per share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Revenue | $ | 251,421 | $ | 333,995 | $ | 496,976 | $ | 642,370 | |||||||
Cost of services | 91,336 | 106,013 | 182,083 | 216,532 | |||||||||||
Gross profit | 160,085 | 227,982 | 314,893 | 425,838 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 75,683 | 91,813 | 152,026 | 185,768 | |||||||||||
General and administrative | 53,695 | 52,650 | 101,375 | 104,844 | |||||||||||
Impairment charges | — | 222 | — | 222 | |||||||||||
Total operating expenses | 129,378 | 144,685 | 253,401 | 290,834 | |||||||||||
Operating income | 30,707 | 83,297 | 61,492 | 135,004 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (16,292 | ) | (13,756 | ) | (32,780 | ) | (26,864 | ) | |||||||
Interest expense, related party | — | (896 | ) | — | (2,655 | ) | |||||||||
Other components of net periodic pension (cost) benefit | (1,865 | ) | 9,153 | (1,986 | ) | 9,223 | |||||||||
Other income (expense) | — | 2,404 | (366 | ) | 8,626 | ||||||||||
Income before income tax benefit (expense) | 12,550 | 80,202 | 26,360 | 123,334 | |||||||||||
Income tax benefit (expense) | 3,428 | (22,200 | ) | (1,068 | ) | (31,821 | ) | ||||||||
Net income | $ | 15,978 | $ | 58,002 | $ | 25,292 | $ | 91,513 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation adjustment, net of tax | (302 | ) | (10,139 | ) | (2,490 | ) | (4,691 | ) | |||||||
Comprehensive income | $ | 15,676 | $ | 47,863 | $ | 22,802 | $ | 86,822 | |||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.46 | $ | 1.69 | $ | 0.73 | $ | 2.68 | |||||||
Diluted | $ | 0.43 | $ | 1.61 | $ | 0.68 | $ | 2.47 | |||||||
Weighted-average shares used in computing basic and diluted net income per common share: | |||||||||||||||
Basic | 34,575,338 | 34,250,706 | 34,625,561 | 34,205,593 | |||||||||||
Diluted | 36,863,295 | 36,137,989 | 36,956,933 | 37,048,087 | |||||||||||
Thryv Holdings, Inc. and Subsidiaries Consolidated Balance Sheets | |||||||
(in thousands, except share data) | June 30, 2023 | December 31, 2022 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 15,245 | $ | 16,031 | |||
Accounts receivable, net of allowance of $14,399 in 2023 and $14,766 in 2022 | 243,893 | 284,698 | |||||
Contract assets, net of allowance of $28 in 2023 and $33 in 2022 | 1,746 | 2,583 | |||||
Taxes receivable | 3,640 | 11,553 | |||||
Prepaid expenses | 29,318 | 25,092 | |||||
Indemnification asset | — | 26,495 | |||||
Other current assets | 15,557 | 11,864 | |||||
Total current assets | 309,399 | 378,316 | |||||
Fixed assets and capitalized software, net | 38,569 | 42,334 | |||||
Goodwill | 569,780 | 566,004 | |||||
Intangible assets, net | 31,321 | 34,715 | |||||
Deferred tax assets | 122,548 | 113,859 | |||||
Other assets | 29,610 | ||||||
