Thryv Q1 Earnings Call Highlights

Key Points

• SaaS now 70% of revenue: Q1 SaaS revenue was $116.7M (+5% YoY), ARPU rose 13% to $378 with 96,000 subscribers, and multi‑product adoption plus Marketing Center growth (~30% YoY) are driving an up‑market shift toward higher‑value customers.
• Intentional near‑term margin trade‑off: Management is migrating low‑margin marketing services clients into SaaS (no price increase), which compressed SaaS adjusted EBITDA to $10.8M (9% margin) but is viewed as a strategic investment to improve long‑term profitability and retention.
• Guidance and balance sheet: Thryv raised the low end of full‑year SaaS revenue to $463–$471M and increased marketing services revenue outlook while keeping SaaS adj. EBITDA guidance intact; net debt was $258M (1.7x leverage) and the company plans to exit marketing services by 2028.

Thryv NASDAQ: THRY reported first-quarter 2026 results that management characterized as a “strong quarter,” led by SaaS revenue that came in ahead of expectations and marketing services that also outperformed guidance. Chairman and CEO Joe Walsh said the company is now “a 70% SaaS revenue company,” highlighting continued mix shift toward higher-value customers and product adoption across its Market, Sell, and Grow strategy.

Q1 highlights: SaaS beats expectations; marketing services also above guidance

Walsh said SaaS revenue totaled $117 million in the quarter, while marketing services also exceeded expectations, helping total company adjusted EBITDA beat guidance. CFO Paul Rouse reported SaaS revenue of $116.7 million, up 5% year over year, with a 67% SaaS adjusted gross margin.

SaaS adjusted EBITDA was $10.8 million, producing a 9% margin. Rouse noted the quarter’s SaaS profitability was pressured by a strategic move to upgrade “low-margin large digital agency customers” from the marketing services base to SaaS “with no change in pricing.” He said Thryv previously lacked an upgrade path for these customers under Business Center, but Market, Sell, and Grow provides a new motion, with Keap marketing automations viewed as a significant upsell opportunity over time. Rouse said gross margin compression from this initiative was “the primary factor of Adjusted EBITDA coming in below guidance for the quarter,” describing it as a deliberate near-term investment.

In marketing services, revenue was $50.9 million, above guidance, with adjusted EBITDA of $13.2 million and a 26% margin. Rouse said results reflected the cadence of the print publication schedule, which is weighted to the second half of the year for revenue recognition, adding that the timing dynamic does not impact billings or free cash flow.

Customer and product trends: “quality customers” and multi-product adoption

Walsh emphasized a continued shift toward higher-value customers, stating that “quality customers now represent 70% of revenue,” and that annualized client spend has eclipsed $4,500. He also said quality customer count grew 6% year over year and now represents 70% of SaaS revenue, up from 62% a year ago.

Rouse reported SaaS ARPU reached $378 per month, up 13% year over year, and Thryv ended the quarter with 96,000 SaaS subscribers. Seasoned net revenue retention (NRR) was 93%, which Rouse attributed to “the natural attrition of smaller, lower-spend clients.” He added that churn among high-value clients has been “trending favorably,” which he said supports management’s confidence in the long-term health of the business.

Multi-product adoption also increased. Rouse said customers with two or more SaaS products rose to 26,000, or 30% of the base, compared with 24,000, or 25%, a year earlier.

Marketing Center and upmarket push remain central to the strategy

Walsh repeatedly pointed to Marketing Center as a core growth driver, saying it grew “around 30% year-over-year in Q1” and describing it as the “centerpiece” of Thryv’s Market, Sell, and Grow strategy. He said the product is resonating with small businesses seeking to be found online, generate leads, and convert those leads into relationships.

On the call, Walsh also discussed Thryv’s “up-market motion,” which he said is attracting larger small businesses with more complex needs and greater spending capacity. In response to a question from Needham analyst Scott Berg, Walsh said the company is targeting larger businesses through sales automation and a defined prospect list, contrasting a “solopreneur” with a business doing $300,000 to $400,000 in annual revenue versus a “mid-sized business that has $1 million of revenue and 12 employees.” Walsh said the shift supports better retention and more expansion over time.

Walsh added that the company’s overall customer metrics can be “noisy” as it transitions customers from legacy marketing services systems into SaaS, bringing over some smaller customers who may not fit its ideal customer profile. Some of these customers adopt more software products, he said, while others churn because they were accustomed to legacy offerings like listings products.

In a separate exchange with RBC’s Matthew Swanson, Walsh said Marketing Center is becoming the “center of gravity for the company,” with the sales organization increasingly focused on it rather than selling standalone Keap or Business Center. Walsh said Thryv is working to replace the current Marketing Center platform “very soon” with a new version that has Keap “fully integrated,” is written “from the ground up,” and includes “agentic tools everywhere.”

Walsh also described add-ons and “growth packages” that leverage Thryv’s directory network and non-Google traffic sources, including properties the company controls and partnerships with other directory-type sites. He framed this as a way to help customers measure marketing while also helping execute it.

AI rollout: adoption strong, with monetization a longer-term opportunity

Walsh said early engagement with Thryv’s AI capabilities has been “genuinely encouraging,” noting strong adoption of AI image generation, AI lead scoring, and an AI-guided dashboard. He also mentioned AI review responses, an AI website builder, and AI caption tools, emphasizing they are live and in use by customers.

Asked by Berg about monetization, Walsh said Thryv’s near-term focus is embedding AI to enhance the core experience—improving retention and supporting pricing over time rather than charging discretely for AI features. “I do think that there will be significant monetization opportunities down the road,” Walsh said, “but we are not going for that at the moment.”

In response to William Blair’s Linda Leon, Walsh described lead-scoring capabilities that can provide transcripts and grade leads, with the system expected to improve over time using customer-specific data. He said users are seeing stronger lead conversion and fewer leads “falling through the cracks,” and reiterated a goal of making the software deliver value in the background without requiring constant customer logins.

Guidance: SaaS revenue range raised at the low end; marketing services outlook increased

Management issued the following outlook:

• Second-quarter SaaS revenue: $114 million to $115 million
• Full-year SaaS revenue: $463 million to $471 million (low end raised)
• Second-quarter SaaS adjusted EBITDA: $12 million to $13 million
• Full-year SaaS adjusted EBITDA: $70 million to $75 million (maintained)
• Full-year marketing services revenue: $157 million to $163 million (raised)
• Full-year marketing services adjusted EBITDA: $30 million to $35 million (maintained)

Management noted that the second quarter has a lighter print publication schedule, which can create timing variation in marketing services EBITDA due to revenue recognition cadence, though it does not impact billings or free cash flow.

Rouse also said first-quarter marketing services billings were $54.5 million, down 33% year over year, reflecting an intentional strategy to upgrade legacy digital marketing services clients to SaaS. He said the company remains on track to exit marketing services by 2028, with cash flows lasting through 2030. Thryv ended the quarter with net debt of $258 million and a leverage ratio of 1.7x, Rouse said.

In the Q&A, management signaled expectations for relative stability in certain operating metrics as the customer mix continues to shift. Responding to Craig-Hallum’s Jason Kreyer, Walsh and SVP Cameron Lessard said overall customer count is expected to remain roughly flat from the beginning to the end of the year as Thryv adds larger customers while losing “sub-scale” customers. Lessard also said seasoned NRR is likely to stay in a similar range near term, with improved retention among quality customers expected to benefit NRR over time.

Looking ahead, management framed the company as nearing an inflection point in its transformation. “As we look toward 2027, we expect to return to overall top-line growth,” Lessard said, pointing to SaaS now representing 70% of revenue and continued momentum in the Market, Sell, and Grow strategy.

About Thryv NASDAQ: THRY

Thryv Holdings, Inc NASDAQ: THRY is a software and technology solutions provider focused on helping small- and medium-sized businesses manage customer relationships, marketing and communications, appointments and payments through a unified platform. Headquartered in Dallas, Texas, the company delivers cloud-based software designed to simplify administrative tasks and enable business owners to engage with customers across multiple channels.

At the core of Thryv's offerings is its flagship Thryv software platform, which combines customer relationship management (CRM) tools, automated marketing and social media management, online scheduling, invoicing and payment processing.

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