Earnings call transcript Q2 2023

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Operator

Thank you for standing by. My name is Anna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Thryv Second Quarter 2023 Earnings Call. All lines have been place on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Instructions] [Operator

Lessard, your Cameron may you you. conference. begin Thank

Cameron Lessard

good everyone. earnings Welcome you, call. Operator. Thryv’s to and Hello XXXX Thank to day second conference quarter

On at release our website in Chief Chief Officer. Chairman on A Chief the our our Joe at investor.thryv.com. presentation Product Officer; Officer; the earnings can of press found Financial Cantor, Paul or Rouse, investor Investors call and Ryan and copy are and section today thryv.com Executive Walsh, be

today’s call contain uncertainties on subject the update to responses Thryv to the Please and release may made presented acknowledge, risks information of described the are and your questions company’s SEC. earnings has These and forward-looking operations no and call comments the to conference on today. the statements about other obligation statements in the the filings future results company. with

speakers Finally, on will for useful information will non-GAAP we GAAP which be certain of to believe our financial provide website. measures will Reconciliation reference investors. measures, those our posted

With the Walsh. call that over to turn like Joe Joe? to I would introduction,

Joe Walsh

all bottomline Good continue focus We joining quarter and flexibility Cameron. on SaaS, solid profitable had you from quarter today for our we thank And call another us on results. notably most growth, maintaining in perspective, to discuss as morning, a our second driving to executing efficiently.

engagement digits our growth, hit double-digit EBITDA and SaaS margins, continue the for revenue very continues XX% were quarter up growth SaaS Highlights to strong. double year-on-year a client be trends

SaaS we reached the is, had things of a we about which goal that for have our on for the year we are excited really already. profitability One business,

our efficient that to we something about. that did are a on very more revenue lot us get So, in is guidance for to our efficient, a miss SaaS. cause and It narrow excited more have we fervor got

raising SaaS But are all for are revenue we elements be are that going guidance and coming confident EBITDA we enough strong way position the for the the year a with together to in very year. we are and guidance the

strong in business. very a momentum the of So lot

We expensive about through just the profitability other inbound to a basically XX-point and decision from in resulted fewer swing sell come made channel that few in double-digit the and more the EBITDA it’s our a to efficiency around made of EBITDA. breakeven moves, sales

really really So business we that. this making the and of we are think the have control overall with business pleased the We that power over demonstrates model. profit

about So pretty pleased pretty excited that. with that,

a relied channels as For drive SaaS, that we have -- a have third. our described past a the third, third, to on three and and I in growth

from and people the that That’s begun a a coming lately. perfect thing from So to third coming to happy of zoo, then our them like out base our from inbound referring coming third a kind third third of channel. get just customers

zoo. bucket the bucket Actually, from third more bucket are so source of the that’s referral coming are of and well referring are coming largest customers happy zoo the is than out many because people there well that customers the in is that the XXs into in referrals people, the

we XX% our now than have less from gen funnels. year-to-date, And coming demand

it the expensive more those XX%. We been most was back period, on have In fact, in really recent sales. more cutting like

marketing because cases, less, marketing, some we to and do in have sales those love content paid We advertising.

we doing they can’t when things are through who folks these come We deminars, and are. webinars, these identify they to all control funnel, the

XX businesses. been always us are with established for They haven’t years. they So, mature

little end expensive to exposes risk, of a So it in which sale. an a more churn bit makes it more bit us little the

that in are and profitability. just going fourth now And will to minutes, element we our about business funnel ability to our of towards reduce our on couple important our are to what that talk and reliance Thryv a in adding has So do. been an we really efficiency excited

help before over spoken we generate customers use last for prospects product some value money. ask our product them year the leads, to qualified growth, to any to deliver new led implement new to so our to or have to We identify desire product and about customers,

for been our And going us product the years on we and have do that’s at several the we work an new Center. beta out are of now now to allow version important in right process that to of rolling Command

for a get an our raise value, Center our consume opportunity Command businesses by of become which products, their then and hand managed be can very sort sales led worked product-qualified to is motion. of some lead, small through and powerful

motion. up on sales getting the not are we led So

just funnel about excited cutting-edge basically culmination process and really work adding it’s of technology. and a efficient we We very a year’s to it. It’s really the highly fourth are are multiple

our so fits into our And playbook you I to a Chief business Ryan thunder, to Product on our are we AI more Center about want generative bring Cantor through model. bit stealing without Officer, any also how in little talk Command harnessing how and

Ryan? So,

Ryan Cantor

today expandable business Command The simply Moreover, built for beta entire it’s you, owner. of experience weak a into user average isn’t launch. and launch Center modular product the Joe. easily Thank platform a of the architecture a Thryv small

are arose need Number initial three needs identified the small primary most drivers. The business Center users our out one, even payments, that relationship to owner before of communication of primal Command our has. for close tools and

will to me. they e-mail about calendar, a on and times scheduling Before dates

how will they is most Conversational commerce payments, text operate operate how card to the credit today. amount small businesses most and due. continue accepting Before initially

where all Phone, client. want native owners Webchat communicates these they are, e-mail, meets Instagram, Command to in a free their a only that not Microsoft supports Center business Command not a Gmail, unified the integrations in single ways inbox, Center single conversation. to but with along It IMAP we business customers, be. with Outlook, XXX, just Native them Voicemail today a where covers Facebook, Texting, and

Business thousands into purchasing, time owner and CRM with platform their for Number Thryv’s friction thousands with business get Center business. integrating to two, we magnificent small to disruption it commitment. their day-to-day to with first with day-to-day started and the the adopting value reduce the wanted to is eliminate Thryv less and

We and need identified commitment drive, who see business every owners a results who have simpler have simply But on our business for path. entry has every we the this products these day. owner others

Center just using sign up, you are Command few with customers up a less and than a to logins simple communicating Facebook, in existing couple Gmail minutes. your takes minutes or for of a set

more different be Center are them and CRM ready in when into unlocked threads conversation a entices user. context, channels seamlessly continue bringing conversation e-mails for channels, Every building the is customer, they robust combined them to ready. each every more Multiple are an a moment suddenly and This with to more Business to aha background, accounts. to connect the single

feature a to Center over conversations it Number be had and and the usage the XXXX three, it often Business inbox, in happening was and of million XXXX. growing million any first most adopted X already in X with feature year-to-date carried

seamlessly needed platforms, our and commonly to Yet, applications. had was clients To or Command Native other operate with challenges and features it an include users born. and feature capabilities requests, meet messaging overhaul Center growing like all E-mail found in e-mail

an gallery experience Command inbox. and media Center all platforms both like chat the inside centralizes brings and experience. founded a Native E-mail sent creates pinning into our brings like of files any into attachments iPhone visual and with labels experience. received across channel It a other It

is free for with Center convenience the in an for the and model. Command looks like and freemium built an it business that features an Gmail, all of small available all-new presents inbox operates iPhone forever Slack like

respectively, Paid available the with $XX plan plans more a small a United at size financial seat to scale start the additional even minutes and properly Professional in are plans plans maturity the $XX, and more business per those per of with for States offering seat channels, call these and features. and and Plus

on and Zealand. facets States, the of the Command Center is available of The phone. your the communication rhythm Australia text beta and Command customer New all turns Canada, Center you program messages convenience into in United virtually get

and imagine you your presented any phone, are open in to a easy isn’t one chat all like uniform contact it business you open So and customer messages text, experience. it’s in just up trying you a place prospective a you

Command be have you the we and platform a with can with platform following individuality been customized business business this Thryv Center, The to unique need frequently and meet each grow Thryv to reimagined company, the meet is be navigation the approach. of state is owner individual and Center needs. each that Command This to modular aspirations, small Since enables needs owners wants, and personalization. customized improve

of per platform Command volume expansion existing dollar By Center a path avenues focusing launch overall period the on it we to reducing friction coming the of seat use, our net pricing easy and model creating a size materializes the improvement believe the sustained retention in as and clear against presents re-architecture customization, business. of on and for

a new presents themselves believe the local force the efficient via be ready Command who by for adoption potential professional multiplier users a representative more local of business replacing channels frictionless sales their experience. our qualified can they to time Furthermore, force online and spend in for with sourcing community upgrade their it made Center reducing and we

seeing In every we XXXX, first the increase innovation of improvements half average and week. Beyond the improvements pace are released Center, major three were just on Command nicely. of platform new

in couple Marketing out Marketing XXXX, and sales. of we QX Centers of all in part soon active have first Center more the thousand sold June Marketing a of than rolling will slowly were After combined Center in

business the profiles, complexities businesses of single advertising paid campaigns, a tracking is more. offline small Google modern Center day and Marketing platform all websites, that call marketing, helps navigate

is These Marketing know these time, seek efforts each are ways small and which all ones working which business businesses aren’t. find Center and in just and real helps consumers out owner of various

enhancements. that due controlled platform. enable product the accelerating to fully We and inside and integrated paid also Nextdoor, are Sales Yelp enrichment profile launched with Yahoo! additional to integrations is YP.com,

both expansion Canada $XXX new of Center Center Australia, We of Marketing higher with Marketing also addition a tier just a of month. the into at coupled announced and

expected deliver We gross designed our month. and to will also being Plus Professional offering each an important on a north that XX% as margin at of a version at focus margin. is center centers bring $XXX higher state It gross to is are now both $XXX

launched e-signatures this QX innovation about signatures in Thryv of deliver quarter-over-quarter year-over-year been have app got Across device sent Pay thousands the growth the our And growth and rest and mobile This platform, XX% XX%-plus year, continues. integrated of and also helped then year-to-date. signed. tap-to-pay. since Earlier readers we

to is out Thryv authentication. but grow, We important is secure. universally to the remain successfully aren’t Thryv rolled now and continues user it QX, the equally platform the by multifactor that engagement enforced safe and usable protected every platform we takes proactive their on users inside have ensure features, our just In and steps data focused in as that

could tools Through invested team users hours XXXX, product the The XXXX and and been early them and practical their is the ways in generative about other on AI of in with end the day-to-day. of AI. hours has improve our focusing area generative Thryv speaking product help to parts

focus to the Our is blocks AI to generative help right right initially when use at time. using create the content AI and

and websites. generative groups create Center. used professionally creation leveraging copy, are in ad ad AI we Today, headlines, AI and to inside is publishing our of keywords the Marketing designed

the to small AI response media in aid future, are reviews to our the best to of help inbox in bring small our near better aiding on to and to new respond management content. bring to suggestions businesses our to plan excited online times. social it creation to In businesses to with how we review module, section We

AI, of but of use but important is make each difference business various never Many improvement, will in to most simply small that dedication a guiding users. development ground items AI the towards benefit capability are of to to our stages our these instead a and the for testing, light sake resources each of of

centers road and continual ahead I exciting with with in an of look periods. sharing apps map you our improvements to have future forward We and to all

to With that, it over back turn Joe. I will

Joe Walsh

enter Thank how our point The Center will door. It’s product. idea of the entry enter Command Center. you, you It’s our will a platform It’s with front new our is Ryan. how company. products. Command multiple is you

Center. So, if you have a a Command have will Business also Center, you

only Marketing sell We very Marketing Command product. really Center. Center, is, you selling Center. have an Up now, it to Business opening you it will a can have a what us does have up frees that now have it very Center to customers And as Marketing ramping to deliberately, carefully already and anybody. we it use also until Center If been

moving along nicely. And it’s

front Command rather door. about annual at Center building ropes than recent Center can Marketing the new sort run our in and velvet down to universe, most you a It’s now Center months. X,XXX being come of We at able But the sell of into the now sell anybody, nicely. Center the with now Business rate advent are only Marketing

Center and is really years customers. using of prospect think to that out Command terms now is transformative product the So to in multiple market we of today fruition in it going the ideal coming work for right

themselves spend we And then our their journey based identify in they time sales and their people digital force’s that be and use on will of with good time. usage that as behavior, assist want a to really

qualified these certain We product of will value a leads reach as call consumption. point they

with pleased we funnel our that now selling adding now rather and efficient fourth centers. fourth one are multiple see of in that’s it’s than really to one we very how country, growth as countries, selling So machine XXXX, accelerating we into go are are because multiple we this funnel, center in part we

lean there’s that of So many vectors us and to more into our that growth. will expand allow growth

have we XX development finally there. these which Rule a how We have multiple about years are get company. part before This there, talked as is products, ourselves of been additional in that see we of

I comment on generative touched Ryan AI. will Last make,

We have X,XXX approximately employees.

all we and of kinds across our have departments So functions different business.

can team leverage to our Our AI it that and service superior little right we and big and to ways products looking across we business. the customers delivery our give right superior business in leadership generative and find seeing are additional efficiencies find are and across services additional and

So it forward. we become more efficient will us as help look

Paul to it’s hear Rouse. the let’s from time think get I numbers, into Paul?

Paul Rouse

Thank Joe, and everyone morning on to call. you, good the

from to listeners, international are As segments, and Marketing we a includes which Services, on reminder our and two SaaS to operations. going focus results domestic

business. in is feel the We beneficial and modeling understanding more this

for between international presentation. can domestic each details and of the section be the Appendix in segment investor found Additional

grow the call business. our we to into the beginning on growth SaaS second on jump differently, towards the let’s our segment. in In fourth Said results gear Okay, we to to continued we with SaaS our execute efficient want quarter, announced quarter profitably. plan

million and XX% guidance Second EBITDA by sequentially year-over-year $X or increased $X.X to slightly range our guidance grew sequentially, quarter below just midpoint. million the by outperforming Despite at revenue $X.X $XX.X adjusted of our range. million way million revenue, lower

the As expenses, sales in remarks, our channels. operating improvement by new EBITDA of SaaS Joe optimization laid and out particularly in adjusted marketing opening associated acquisition driven primarily his with expenses, was

our a XX.X% versus Center XX.X% result base installed adjusted as to representing the of was focus Our margin SaaS to margin our gross in Center prior improvement Business on clients. XX-basis-point selling of quarter, higher a Marketing

gross Command with sold Center, basis Center, Marketing to expect With business our improvement in freely into standalone we now margin on a we do the launch SaaS incremental move see of as XXXX.

of at to SaaS end an subscribers the year-over-year. XX% increased and and of totaled on the increase the approximately a year-over-year basis. XX,XXX growth flat X% in relatively ARPU quarter, represents sequential quarter $XXX SaaS second second

client. to strongly call, additional on the company clients As points. some with grows expansion NDR can new activating the we communicated attach previous and client have client each and lower feel the additional We as us are to we price at allows centers spend drive this we per experiencing

net of basis decline retention season was quarter XXX the versus prior points dollar quarter. Second a XX%,

colleagues. like will new Command experience, network Marketing rollout to subscribers additional is value software achieving lead and path their the to clients boost and Center Thryv a referring can on by friends loyalty. our higher and with to of and to of more This Center, providing to NDR upgrading renewing better customer subscriptions, a their products XXX% packages With satisfaction centers

revenue by to believe leads streams of offset churn also higher will generating We cost which we via addressing customer NDR. low, the these centers acquisition, keep while factors, to new new

Moving over Marketing Services. to

guidance. the Second midpoint million, of matching quarter revenue was our $XXX

margin Marketing quarter an million, resulting of Services adjusted $XX.X EBITDA XX%. was in Second EBITDA adjusted

margin quarter Second adjusted XX%. gross was consolidated

EBITDA margin of representing EBITDA was adjusted an adjusted consolidated $XX.X quarter million, XX%. Second

million position in $XXX was debt Finally, quarter. second the our net

for credit towards in generated times loan. our $XX.X net of quarter leverage with the company flow quarter debt second X to cash covenant X.X was term our accordance the Our ratio and $XX.X million facility below an paid our EBITDA in second free million well additional in and The times.

Now let’s turn guidance. to

our full year range $XXX the to million of $XXX are guidance revenue We in raising million. SaaS

guidance $X also We $X of full million million. our SaaS raising are to range in year EBITDA the

Services, our range $XXX and $XXX we million EBITDA XXXX, $XXX for of in of range to $XXX million. to maintaining year are is adjusted full million the revenue the of outlook For million the Marketing which in

are adjusted the to the lower a that Services million operating more expense result revenue we print SaaS third third SaaS $X of the carrying in million. XXXX, million the EBITDA timing $X.X SaaS as recognition. quarter loss business due of will Marketing to due quarter in revenue guiding around the revenue $XX.X to the be allocations For to and of range note Please range $XX in million overhead

SaaS can levels operating normalized you as guidance, levels see from to allocations quarter. positive As the fourth returned year to expense the returns our full EBITDA for

quarter million million and we third expect Services in to the Marketing range XXXX, of to in $XXX adjusted Marketing million revenue the to to $XXX Services be million EBITDA. For $X deliver $X

I over will the turn to back now Joe. call

Joe Walsh

affected. Thank you, debt the Zealand. pay $XXX because will beginning the and at lower but of New revenue cash revenue of before bought have recognition, million the We Paul. we about for said is we QX not optically down EBITDA, the of That year. would was year,

moment, this of $XX paid million down As year-to-date. we

down absorbed $XX the acquisition, Zealand million. the So million $XXX of we New paid

very, And very strong. in will cash QX, continue

and they the recognition When you Cash having anomaly really year good So, back. we back and then on XXXX, in a cash. something is really plan concerned roaring and should isn’t think EBITDA be revenue in on year, the of the start are right you balance revenue roar about about. QX

little go share comes bit into of and QX, note then, make salary and QX carries as of the obviously a of more Marketing that year, in in overhead. we Services back its of SaaS and portion more next is general will and overhead, a of more One overhead, the general carry item just to Paul’s mine, a

be about to want I clear this.

meticulously air expect XX-month have that made this anybody little last was over up follows to there’s doesn’t communicated that I pocket this year. think that books. We the transition don’t this company our of

innovation It’s air EBITDA. it. good in good That of and been has incredibly about all except us It’s genius and been for knows in revenue environment. delivering terms pocket everyone for the little ways, for this

you surprise paying kind attention. a So haven’t you, any it’s to if of been

we acquisition. Zealand Zealand. pace, performing month, Let greater April. me had are New talk New And in launch the along the right at in New nice They and the integrating into them plan of They a acquired are track. on moving We beginning that SaaS Thryv. turn about at Integration we Zealand. is to next

So that we going about local New Zealand there. and are the in really really folks excited about excited are getting

at and cash years said quarter. that we pay up get And on it’s investment, attention notice flow bought SaaS of time of Two that ago, will is of Australia those this money three that I SaaS we actually EBITDA, you scaled. close be and business along. coming there investment years already the would of that business mean, Australia investment to fully making that

will So so money, year That it to push delivering will and up we be amazing. into a making going this as XXXX, a about going be business for schedule bottomline. at actually it full the closer the ahead finish is year of year

is up customer awareness the and Customers it’s is now product, are satisfaction using brand significantly scaled high. high,

are Australia it’s is Our periods employees going incredible there. engaged. are well one our number really now. region It’s where how There

in on like and New can feel it build with really So that pleased Zealand. we

We the recently were to top Best call wrap -- Sell fun For. news named top giving I’d Companies list. one There’s little by a to item. list like XX final

XX. are the top in We

list. higher in So and keep climbing this we higher

company to for super fact that are advisers call professionals, within amazing of create proud environment we And an the we proud are their that really and that’s we practice craft of. something our sales business them we

turn to Operator? So, with let’s over the that, it operator.

Operator

Instructions] of [Operator question Thank from line first comes you. Arjun from Your Blair. Bhatia the William

open. is line Your

Arjun Bhatia

I Okay. Thank with will for maybe you. Thanks you. guys. taking questions. the Hey, -- I Joe start

bit on guidance you for that seeing is QX, a was the coming us new when today, a than you lighter one, seeing some the sense picking net that year for are behind about little we year. first the the where forecasted, up? the think seems inbound like you in you SaaS but raised What’s that So Can you had SaaS side the giving you revenue big maybe full are give what just where marketing confidence It the business should challenges. driver QX developing there? we in see revenue

Joe Walsh

Arjun. from seeing of in are question, are center the really going countries really wide for we selling we one all kicking strong and it Thanks three one selling country acceleration. open, in a Well, to centers our

So we limited And of and Christmas We last let end me sales very at quickly. Center honestly, way we began you brought little it. more fairly planned year, in Marketing we -- to out through walk selling initially. had right it the a before ramp a had

needed getting weren’t with customers the on. early finding a we we cases of things But satisfied work who edge couple and those were to feedback from very we were

sales Our in. force it dialed was still of getting kind

mentioned But have over Marketing we prepared it momentum, that cured all running remarks, lot like of rate of the X,XXX ramping annual really months, as the and a caught last recently and a we in Center and this month, more run quickly. at as number has of last

confident guidance where us for we the revised that in for year the the alone actually are Center will we carry guidance raise year. over that’s going Marketing the ramping on So

Keep to U.S. very, in carefully. and on curated and in Center very a Center of Marketing Business basis selling were mind that kind only customers we the very only

in want you lead a Zealand. Now can that it Center customer, New we can be, Center have product to the Business it we have to Canada product doesn’t be the and, and the have can sell XX in we we where Marketing momentum anybody, in be do, also Australia, days, sell that it you to

kicked open. So we that wide have

on it’s the very that brief hundreds just we Center, sales. out, which data have already, Command in add of been the that come rolled have sign-ups period we to already Now in

already happening. dreams and is my of One sleeping have sales that’s to am while I

in. are these already seeing We come things

the and Business I bit very Business in noise hidden little little Center strong, of So our the guess, bit Center ahead and numbers, actually for a trends underlying a continue to of plan. be is the the

and are at very that guidance are the So, we a to is bottomline. to going for we the we be deliver point able important are year thing generated. We really we of proud that to that the profitability that, confident at think really deliver this raised have this

Arjun Bhatia

you, Got it. Joe. Thank

Operator

Your next question…

Arjun Bhatia

Joe, just dynamic your you I really one squeeze can a Center -- led If Business are for freemium more. that the around Marketing doing Center, Center would sales we newer interesting Command go-to-market, announcement Sorry, in the get is this the that’s there, something growth sleep? drive successful, consider product you more in seeing. and go-to-market motion across

Joe Walsh

Great while freemium, demo. question. to little designed get tip dream, as of going night. We I product designed right, are and you the innovative a very am I That my at is tomorrow, to to see are think going a sleeping this we We do product spear. the kind it as this of

I it, people are XXX And a and customer, you this, when a been for engineers see impressed in pull product all away. you place threads it’s working lift. three of building the And been development if not together blown that in one at to of more investment years going plus it’s think be major than just

process set It’s to -- it’s up. on up getting a set involved by a that by business it’s much of CRM, business more difficult get effort comes Business it’s a is the and a a bigger, small lot a them offer thing of is change. populating much to it’s bigger, everything free, and for much Thryv both the CRM, onboarded the because Center more

but take the it a the bite needle So more, free it’s if not -- something and it, spin. go it it for give ahead you you could it’s do bullet and moves say, here, and

the populate going do all the time are need You stuff and you to. to not to spend the CRM

your So a Command if this all get got all in that build that. you because using who new actually and think sort about sort if of it, accept are begins it, of you the CRM, to free you have stuff Command Center, you record building coming it of a actually, customers inbox Center and

it’s beautiful So on-ramp. a

the The take are Command we freemium will be it on-ramp a motion kind the time was this to a our a will XX-lane But interstate. of massive highway or at add company So centers. and it two-lane to Center. product not planning PLG into make a other coming into what

of of conversation we number with will able have the Command that will broaden with advent Center. be tremendously people So to a the

Arjun Bhatia

you. Very helpful. Thank

Joe Walsh

Thanks, Arjun.

Operator

of The the Company. Berg Scott Needham & next question line from comes from

open. line is Your

Scott Berg

for Hi, the taking have I two question here. everyone. Thanks here.

sound of about on selling those excited do First core new today? the you in platform knowing selling new the but going you. the Joe, that spend a for the modules Thank require we your new the priorities customers. modules products versus you all, you to really think How the I quarter, these just of channels to marketing base, bit spend new some in probably back prioritize those and marketing about do obviously, do product are are new inbound about and channels. little how of some the impact we How think your kind of know pulled that? on marketing

Joe Walsh

two to dark the have we really start people have without sign-ups with in Command we already. and some beta upgrade the Well, in promotion. any own let’s It hundreds and people sharing is about It’s a start off I out Yeah. days rolled and telling Center, is guess, had just of which thing. had really good employee our ago,

and bigger at Day it and media and get and Labor beta the stuff market to Our and briefly plan advertising after to the off earned some point kind out kick a promotion run all in that there. do with word it then launch of is

no be go with We sort it’s it do the delivers it’s for viral, is, to a in product cost to key of believe much so potential value available honest a here you, has I self-discovery best the mean, because and marketplace anything. that the the really product element doesn’t it money.

without there and any a spending business money at your get could lot in accomplish so And you all. for

So we a the that, that really is not thing. think key, heavy it’s real marketing

scream Marketing and have far this force sales this us interested better have we demand, stronger done the have Australia given and a we had it people and are to we give the of and and in backlog it. as As they experiencing goes, bell, week, understands are Australia stronger that now that Center the to so it ringing got

we see will a in well. from think So we there nice sales surge as

from the if budgeted you modeling we the we more think not it, about about any going overall, you have to are or for it planned than standpoint, So, think a spend year. way

are be plan going our some messaging but to these of some all honest elements, was to resources of We into along new those around with redirect that these you.

Scott Berg

your from churn you And bit. certainly is in maybe deal quarter, was difference changed all should us churn back, question, that especially small seeing Got maybe but X-point a a we consistent, as quarter in necessarily, expect so we of macro, you. don’t should the understand it just help that tick the Paul, the specific to need out something here quarter? it’s the to big the obviously, are make macro Thank to try macro, it. Very noted, just How helpful. did bounce read too we quarters little but the prior change, as that quarter, macro four out season X-point your trend, amazingly a not five follow-up over then, one

Paul Rouse

flat. is churn season the Well,

trying to does right? so issue -- that’s that the you I address And are here, think

Joe Walsh

going he’s retention. think, dollar for I Paul, net

Scott Berg

I Yeah. net dollar retention. am Yeah. trying

Paul Rouse

because a I we think Marketing slight expected Center. delay is as temporary thing, not on a or a this had we in ramp

add expecting And the additional opportunity bit. that perfect door. particularly products, Center, gives Center to are us new with pulls a down So front we Marketing a Command -- little

innovation. head going XXX% net see with quickly new towards fairly retention to dollar are We this

are we to expecting that So build.

not about trend. not are is. a We It’s where it concerned

and In go fact, way. the reverse expect we it to other

Joe Walsh

add. would I

mark calendar. on down of sort can it and circle it You your

to retention went add-ons, our sort we a sale have really the to small dollar were sale. of When channel making were business. small other think expensive of because we net anything beginning if about the journey, it, than we in, a with of very some and sell demo using we didn’t the the now you entire big an else quarter This time sales at

little would buy that maybe buy best the downgrades people weren’t wasn’t add economic and as people out good, periods, all and downgrade So handful fear -- in big, would they lot of economic there reading on there really a then the best, were a better, the to bit soft of buying of even a were headlines.

a of there. bit had we headwinds little So

at initial back and our an add a is little and not start You signature very then software margin centers, significant to additional and very in you the we meaningful This now go have look small business, high make go change. sale now add-ons. and ability or other packages just

products to to XXX% rise So to along forward retention going dollar we our have now from all have that you you sell. here guided We on. net the that see are

Scott Berg

am on the I marking to Joe, I the that. appreciate soon. follow-up. on look you calendar. you to Congrats I forward Excellent. talk and very

Joe Walsh

did. it know know wrote you down. I I you

Operator

of the from Patrick from Baird. Schulz Your comes question next line

open. is line Your

Patrick Schulz

Thanks. Appreciate Hey. Good morning, everyone. question. taking my you

I and lot talk the you both you I about growth in mean, provided remarks -- Just the a appreciate SaaS guys ARPU. color business. the around prepared

wanted a dig more. little this into Just to bit

So ARPU growth decelerated again quarter. this

since impact last changed guys from or maybe patterns So greater to and on upgrades? you more curious the me. -- has that So a slower hear color are Are just be customers would customer the around quarter, spending helpful. macro excuse what on seeing a to buying about

Joe Walsh

going that like in small am from of over We we the part half I in you last a the and feedback some months, had little businesses. Street. that few the it we right kind the Yeah. I conferences on could definitely have with see last in done earnings did our investment cautious -- the we crazy the saw here more first a little the to drive of and behavior of of bit call

tended our we better, They They less. And and purchase. the making definitely good, about saw think the tended people the little savings best. movement opposed bit or terms of and on better value good cautious a a spending in to as little a to best, bit be of more for to buying

well, that in And about saw it, We that will I are average let our in data. We new we a get that can think me I saying, along our later. that without in. while see add if the little it caution to for saw add-ons. sale saw came People in

little people So bit for were a cautious more sure.

lightning lift. seeing week that we this with that and the leadership topic last bolt. they here’s I talking wholesale are was agree the team about Now

change. that begin to We are seeing

year small or morale than Just better in feel, sort about like of months the nine they conversations, months and are have over business what and now the of the look pants the the seat expectations been coming last the so.

the of cases, than supply was. it’s the better business their the have small definitely a are or People inflation was. end than in and sort it they improved, somewhat It’s headlines for the chains backing interest is some seeing seeing rate nearing perfect, but of not end it the tightening are off, better cycle,

The it in the talking -- organization here the definitely literally, am that’s of recent I you so weeks business morale yet, that picked more heard definitely towards meter first. our the the it sales the but green about And says very in has up case. -- small small

to Center of yesterday every yesterday, Center, talking spent steady it. I I talked on ago a CRM owner. I campaigns very price a software, met and main our business hothubs has time they some customers few a Business Marketing a There’s running half and just customers. added to piece with who very, week. are actively they months our

a him. was the of I and he’s but a He it’s He’s the go tech is like, really really his in dashboard GM, Center. Marketing at and Actually, background XXs, understands. intuitive, for that it’s changer direct name not got understands Jim, very his thinks meeting got game easy-to-use feedback, letting with Toshiba, like his

to talking and him, in up has business been So picking said he better.

us are am never and feedback. not I that really sort definitely think better it’s to better, I is better going for say, came, it’s So are getting we past, -- things of definitely but

feedback a from Street. there’s little the So

Patrick Schulz

question. a detail. really I That’s good appreciate follow-up that. very that. appreciate Also I

Just offering. for the Center. congrats this nice sounds be really new like Center the a Marketing on could It catalyst Command

and about be your additional in M&A in and efforts? think helpful. trade-off pretty driving would we existing centers to color as that just internally investing So any view relative centers marketing the potential investment do international how opportunities, between Just expansion you

Joe Walsh

a front that’s have, such great we and that page us because this a question, Yeah. I That’s delivering of you of point. really year. the on think, are at guys in we center still one choices guided And that are

track year. So very still an on much for next we center important are

and far sure along are center on that next work center and for very year. another are We planning

baked into our So I investing our think is spending, priority. that cadence

touchdown you else, with we that needs else a met. above we in need internally businesses. way we those now small three last because most have important will about thing. That’s And be three years I probably or all engineering that’s are the are and like serving for playing tell front anybody the prioritized to product lead, four investment in -- of

We brand. are the standard gold

aspirational are We the brand.

We offerings. have of The service churn. lowest broader the highest satisfaction. set The client

businesses innovation. We platform about don’t are chinsy blow small and for to by the in our want being that investment we

of overhauled If the Center. at the forget radically Business XX% have just number and for you Center, we we improvements Business in delivered look that mean, technology I that up invoicing but whole about new it’s innovations provide the we now year-to-date. centers,

we asking up customers payments. mean, and other a for making our really few We that were year-over-year. and swiper were I keep So, more XX% payments things than a improvements added around important

really we product-first I are mean, and So, are focused. where guy. we That’s engineering

expanding is So think to priority? that, what’s I us. important after the next

we President. we I hired international an to -- think want

all is, sort weights doing have internationally, look I note gym, XXXX, the let’s We a GDPR, lifting we as for think on and to poster and our the push big at of the in training stuff forehead working on you need go. been that’s

into start We faster area. and in pushing going are going geographies out more to that

money been wonders for a so year. us marketing in of as that and she have efficient without of done of Tami of big and the we really good more at really only all skilled sound of amounts spend As with far of marketing, is warfare, spending all huge guerilla surround CMO, us she’s terms Cannizzaro, the a making on far and sort she’s

So expect things we from her. big

experience really And as internationally soften the beachhead markets. more out she’s we and into push got to is prepared

we having generate. and a lot success they the think that marketing what able follows been I of of skill on are Canada have team that to the

Patrick Schulz

appreciate for all I the Great. my and taking questions. color thanks

Joe Walsh

Yeah. questions. Thank for the Yeah. you

Operator

from Securities. next B. question comes Zach the Your Riley from of line Cummins

open. line Your is

Zach Cummins

decision taking quarter? here Hi. my that flow EBITDA driving back Good can you how efficiency of adjusted SaaS you the some pull I have questions. improvement for forward see additional marketing does to inbound you now to the marketing that go products morning as mean, spend change and approach from here? really on was of through? your And some in Joe, just what and your offer, about talk thanks really that that efforts the

Joe Walsh

inbound-outbound funnel been referrals it motion. nauseam, and Look, talked the we ad we have the business and three a have about zoo,

meeting, to nothing. and We download help it, that’s us, the from have no efficient get allowing no fourth the without value our without talking from, to meaningful any businesses value real funnel, and discover funnel explanation, added from no just ever demo, like small most tool no marketing, no us, it

just within they can themselves. And they experienced can and from us, and go then have after ahead a the then self-upgrade value tool, upgrade of right lot they

are we definitely check, not, We have beta, sure a already just have but of or those in. that I I was to if coming had do the in. in asleep already, Not it couple seeing flow sales

is adding it opens fourth most think So years we we four have important funnel really last we or five fourth this us the in that the this important funnel the in to and marketplace thing years, up think way. a done

words, business, little work, As And with his bit conservative, Paul far working me, as SaaS guys better know of know, EBITDA debt who delivering Rouse more out company a is actually you of a of as for debt cash. you are that, very bit he SaaS our we lately. have become a all loves our and expensive I carries that little

that our towards our profitable and organization a toward higher in is everything sure higher activities. is do there efficiency real drive we and so shifting and And emphasis margin making

the you We how power we that at pretty that, do this showed line? and companies promise. impressed the are XX-point you great by a swing follow see And mean, and hope you I EBITDA it business. profit-making that have think, can of many of I are that proud

Zach Cummins

XX here anticipate customer in expansion. Understood. you that stronger question we portion will And months? sort really do how But has that, next of of year. a follow-up the go of for just the growth my XX dynamic been months customer really know dynamic as really of around normalize half the I kind first over kind versus is one to growth the ARPU

Joe Walsh

would in in a What perfectly things the sync. jump baton I front little ARPU It’s going you never going are back and forward. anticipate is, funny. These to see bit run take

I think, to centers have more begin we multiple to we now. to have as sell sell people,

a had really add-ons. make was six-figure mean, I before professional force we software a to our very one just sales of small for hard really element because big it software handful our sale of earning and

now add-ons a created in and software of have his these to and have and go suite big customers product ability Ryan pretty with even into sell sell team to there’s more the what We incredible them.

can actually So bigger today. a make you sale

I it to So really But a sell. looking instant, expect quarter. hit move now in will XXXX, may ARPU over start about something when one not not may would out we I to think that catch like bit be it have because and

Zach Cummins

best the and of of Well, my quarter. thanks it. the rest Got for for taking questions luck

Joe Walsh

very you much. Thank

Operator

Your comes next from CJS. of question from line Daniel the Moore

Your line is open.

Daniel Moore

am that of we seat Professional get Center details talk initially? key just Paul, could maybe a plans to about in at but sure add more behind will the you, maybe but and Joe the good per and differentiating lot the of freemium tomorrow, -- revenue $XX of ground, and $XX kind morning. version features the I cover Thank least and Command

Joe Walsh

what Well, was am to our sort upgrade. hoping ask between version what’s somebody some when start detailed get different with questions. I Cantor, question. Ryan? out you of Ryan to ask Ryan I thanks to you tease Head would for free and going is the that Product, of -- us.

Ryan Cantor

Thanks, Daniel. Sure.

Our connect. The with forever can paid plan. starts you between limitations channels a and number fully is freemium freemium in of free functional plan main a version

So connect our up to available online free you to allows channels. current offering three

and channel. that Instagram, Gmail for video e-mail, add a it would to to So SMS to paid one as add could channel, them upgrade channel activate video one could and even second be someone as if plans. calls prompt fourth phone meetings Facebook, and add third But their video of want the a that channel, they as

On primary one is TeamChat our count on channel we retention. focus limitation. message Center, Command So capabilities inside

So XX days is retention included.

going what’s problem, this for now no right your great collaboration TeamChat period, is So with in real-time team collaboration tool. a on members,

want would messages, to plans. to to the oneX paid you you need upgrade unlock historical If of

voice Currently, having to an additional included XX we that minutes. minutes allotment video plan. month. without to we of capability the calling of someone provide important buying their have note does upgrade per minutes and It’s lastly, And of

plan, suggested but studies that people us pricing Our paid upgrade to going weren’t opportunity as that minutes catalyst be for well. a another enough alone to to a becomes for revenue

fleet to we perspective focusing that. again, that getting using from free from single largest variety paid a that freemium is friction we think do on methods to And are of a someone low a freemium

hopefully will but answers So drive upgrade. them that of couple that to Center your question, Command Daniel, avenues there’s inside a different of

Daniel Moore

helpful. That’s No.

much is, see me action And the longer Day that obviously, As meaningful? we back, implies with then, Center, more inflection you see the Is in to something it term a Center XXs inflection in Analyst going tomorrow. other of guide the expect Investor looking higher rollout and out from the for meaningful XXXX Marketing that you laid Command to are at where hopefully, in fiscal teens, said, you that is that growth. point and to

Joe Walsh

This where is spent you time upshifts know a we understand story. Yes. Like many one we just, you in many higher a Thryv we I countries, where selling one of in it selling product, mean, like, are right. gear, yes, that products. are lot exactly country moment got not you. into I the with the

gives real retention. scope ARPU. scope It to gives us dollar to net it both grow us so grow And real

we to on businesses thousands us in this ready spear sell for gives have with business us full modernizing, to in the and transformation. interested a broad something the who it new which of sharp meet else freemium Command not Center, application Now but dive very point tens very lets are of of necessarily

will of And are of for fruit to reaching tree the hanging the after fruit, high trying we is They broaden We funnel CRM have lower a out get, piece not of now first kind we a on looking along. think we in. coming people were which going a sale. pretty selling way the CRM. for are go got really They the their can we inch were just when

for see EBITDA resoundingly, is of into to go see a And growth, business. as company. a We So, levels see year We XX%. reaccelerating which ourselves circa higher business this continuing meaningfully see we We we really Rule XX that run yes. forward. our as the positive us as

you think the or beds and start that you think doing you XX that that’s XXXX the that’s down don’t we get that, this how we and years can zone into on gets easily away, and can So of math going. Rule stuff as see

Daniel Moore

and right. again. All marked. to seeing Look Thanks forward details

Joe Walsh

Okay. Thank you.

Operator

you today’s for concludes conference. This joining. Thank

disconnect. now may You

Thryv (THRY) 3 Aug 232023 Q2 Earnings call transcript