Thryv NASDAQ: THRY reported second-quarter results that met its SaaS guidance and outlined a strategy centered on its newly launched AI-native Thryv Growth Platform, partnerships intended to expand distribution, and a restructuring expected to generate approximately $60 million in run-rate savings.
Chairman and Chief Executive Officer Joe Walsh said the company is narrowing its focus around Marketing Center, related add-ons and the new growth platform as it continues its transition toward a pure-play software-as-a-service business. SaaS represented 76% of total revenue during the quarter, Walsh said.
“We chose to build the thing worth selling before we scaled the team to sell it,” Chief Financial Officer Paul Rouse said, describing the company’s decision to prioritize product development before increasing sales and marketing investment.
Growth platform launches as Thryv narrows focus
Thryv said its Thryv Growth Platform became generally available on Aug. 3. The company described the product as AI-native and said it was built with 70% new code. The platform is aimed at established local service businesses, including businesses such as plumbers, lawyers, dentists and chiropractors.
President Grant Freeman said the platform combines software tools with optional done-for-you marketing services. Its AI capabilities are designed to score leads, help clients identify higher-value opportunities and direct marketing spending toward more productive sources.
Freeman said early client results showed 40% more revenue and that AI-scored leads closed 1.5 times faster. He also said the company will initially sell the platform to new customers through its direct sales channel before beginning migrations of its existing customer base in 2027.
Walsh said the company has spent several years developing the platform and believes its focus on helping local businesses grow will provide a more defined market position. He said Thryv intends for growth from Marketing Center, its add-ons and the growth platform to become the company’s principal growth narrative over the next several quarters, while its directory business and certain other software initiatives continue as run-off operations.
Partnerships and integrations target broader distribution
During the quarter, Thryv entered strategic partnerships with Wix and Ooma and introduced integrations with Breesy AI and Jobber.
Senior Vice President of Corporate Development and Strategy Cameron Lessard said the Wix agreement is a multi-pillar relationship that combines Thryv’s marketing platform with Wix’s website, commerce and payments capabilities. Thryv said the relationship could provide its clients with access to Wix’s online and point-of-sale payments, business checking and growth-capital offerings, while positioning Thryv’s platform in front of Wix customers.
The Ooma partnership will feature Thryv within the Ooma Office customer portal, according to Lessard. The companies plan joint webinars, sales incentives and cross-promotions during the quarter. Lessard said the partnership is designed to provide Thryv with introductions to Ooma’s business customers, while Thryv plans to recommend Ooma’s communications products to its own clients.
Thryv’s Breesy AI integration is now live and is intended for franchise-based home-service organizations. The Jobber integration, available through the Jobber marketplace, automatically scores, summarizes and syncs leads generated by the Thryv Growth Platform into Jobber in near real time, Thryv said.
Management said the partnerships and integrations support an ecosystem-led growth strategy, enabling Thryv to reach new prospective customers and work alongside software systems that clients already use. The newly launched platform also includes a free-trial capability, which management said could support partner distribution, inbound demand generation and sales conversions.
Second-quarter SaaS metrics and Marketing Services performance
Thryv reported second-quarter SaaS revenue of $114.5 million, within its prior guidance range. SaaS adjusted gross margin was 66.6%, while SaaS adjusted EBITDA was $13.6 million, representing a 12% adjusted EBITDA margin.
- SaaS average revenue per user rose 12% year over year to $394.
- The company ended the quarter with 95,000 SaaS subscribers.
- Seasoned net revenue retention was 90%.
- Clients using two or more SaaS products represented 29% of the customer base, compared with 28% a year earlier.
Rouse said SaaS gross margin was affected by increased adoption of add-on products, which carry traffic expenses and lower gross margins than platform software. However, he said the add-ons are helping Thryv move upmarket, attract larger clients and increase spending per customer.
Walsh said 72% of clients spent at least $400 with Thryv during the quarter, up two percentage points from the prior quarter.
Marketing Services revenue was $36.2 million, above guidance, and adjusted EBITDA was $7.3 million, for a 20% margin. Marketing Services billings totaled $48.7 million, down 36% year over year. Rouse said the decline reflects Thryv’s planned migration of legacy digital marketing-services customers to its SaaS platform.
Restructuring program and revised outlook
Thryv announced a restructuring program as it simplifies operations around the growth platform and winds down non-core products. The company expects approximately $25 million of restructuring charges, primarily tied to severance, employee benefits, contract exits and early-termination costs.
Lessard said roughly half of the restructuring charges relate to vendor spending and half relate to workforce reductions. Thryv expects about half of the charges to be incurred in 2026, with the remainder expected in the first half of 2027. The company expects approximately $60 million in run-rate savings from the program.
The company ended the second quarter with net debt of $241 million and a leverage ratio of 2.1 times. Responding to an analyst question, Rouse said Thryv continued to generate strong cash flow and did not foresee issues servicing its debt, noting that the company had been focused on reducing its revolver balance rather than its term loan.
For the full year, Thryv raised the low end of its Marketing Services revenue outlook to a range of $161 million to $163 million. It revised Marketing Services adjusted EBITDA guidance to $31 million to $33 million.
For SaaS, Thryv expects third-quarter revenue of $111 million to $112 million and adjusted EBITDA of $8.5 million to $9.5 million. Full-year SaaS revenue guidance was revised to $453 million to $457 million, while SaaS adjusted EBITDA guidance was revised to $42 million to $44 million.
Rouse said the lower SaaS outlook reflects measured investment in sales headcount during the first half while the company completed development of the Thryv Growth Platform, as well as elevated traffic expense related to expansion within its existing customer base. The company plans to redirect investment toward sales and marketing during the second half as it scales distribution of the new platform.
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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