THRY - Earnings call 3 2023 | Thryv Holdings, Inc.

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Operator

Thank you for holding, and welcome everyone, to the Thryv Third Quarter 2023 Earnings Call. [Operator Instructions]I will now turn the call over to Cameron Lessard, Head of Investor Relations. Mr. Lessard, please go ahead.

Cameron Lessard

Thank you, operator. to day good and everyone. Hello, third Welcome earnings call. XXXX to Thryv's conference quarter

and the press believe will uncertainties be found the in company's Joe call and Chief Officer. our certain which measures, or reference the update today conference information Walsh, Thryv Paul at Financial SEC. other earnings release investor earnings can of at this described are copy non-GAAP On operations with financial comments your CEO, Investors made the filings to on our Walsh. to contain may the the are no thryv.com A Rouse, for in we useful presented speakers and will obligation questions like call posted our results statements Reconciliation on has today's measures statements on section and I those and over forward-looking website.With call the call.Finally, information to Chairman release presentation the to company. on and be the of Officer; Chief Joe would risks investor.thryv.com.Please to acknowledge, that about and subject introduction, future of GAAP to website our turn These will provide and investors. Executive Chairman responses

Joe Walsh

X you ideas. morning, third today with to dive us quarter to all discuss results. and Good big Cameron, on thank here in our joining for the call I'd like

and the Marketing allocated all is first line, because guidance in lesser our on The EBITDA had Services. revenue SaaS revenue revenue carrying the that we additional both while overhead was beat

and developing revenue going in over had optically about finally make we've look business.Secondly, we weak standout a quarter looming been quarter revenue. well and talking So it would to for shows got year, third this strength this we it a SaaS the light was where is that's quarter the like be recognition our for behind us, really

generated in in roughly adjusted million but $XX flow. we cash million So $X EBITDA,

business case, in of tell this control and this sort year cost look, very and a the is the management than strength the underscores is overall to this much in more of how team going to turn out. of so And you ahead it able and

seen Star up It's positive that using down to forecastable.I'd Services through with so of very, it's very of balance of North our last early in profit delivering declining, been kind updates you that sign-ups. beta revenue XX% strength Center. we've Marketing nearly year-over-year, was wrap and this the really working phone impact we've business, better grew channels, pay with X much sheet SaaS debt very the approximately soon.With signs engagement to up XX,XXX in adopters Marketing was promotion, shows it this resilient Command to video an X%. year-over-year from thousands received despite our over quarterly streamlined the little million weekly messages calls driving than closely over expenses. We're adjusted even of period making growth far highlights. we're team and very meetings. take We've pleased hours but So growth. our XX% like cash though beta no period, Services gross our connected we'll sequentially, strengthen and and XX% a EBITDA SaaS of still been to and XX,XXX engagement, just adjusted margin has Client year-over-year, grew improved guidance XX% adjusted gross of operating SaaS SaaS was XX%. and

general Center really with wouldn't to a our this strengthened you? product during the ways. achieving and month bugs in ready solidified We've few sign-ups out to beta would, period, release.We're So we're Command you later we a full and the found little X go

many we're those up. engagement them, online Those unassisted really And more their work These future.With that to drive are and let self-grade and it them highest sales other expanded cases, discuss are provide turn business usage opportunities. seconds, future to would and actually to that, sign call XX with quarter and really or take what, more help take financial the more they're This guess, channels like with them you value over their actually users, expansion to results. to seats him easy I in positioned us contact force. our Paul expanding. centers buying will Center somehow than offering their less where purchase these monitor partners. sign-ups, and our will toolkit, which to trusted we're demos we've With First, haven't Rouse, are usage Paul? the sales our third global and in I'd to sales over as through will our hand-raisers.Second, and advisers force leveraging turn Command seen well

Paul Rouse

Joe. Thanks,

We X As our on listeners, and a operations. reminder are Services, the to SaaS to feel which understanding modeling in more is we domestic this segments, focus beneficial international includes and business. Marketing results from going and

between jump results, presentation.Okay, in the our domestic the international, each with where section let's into segment investor beginning detail can found Additional of appendix be and segment. the SaaS

revenue of X% XX% year-over-year increase million, was sequentially $XX.X and above range. guidance and quarter Third our an

a year, range our SaaS promotion $X.X all provide and more increase a product, gross is margins SaaS color with to see SaaS EBITDA of sequentially. significantly Third quarter customers. bit adjusted on the Command expand and SaaS upsell new available versus basis representing XX.X% the expansion with to expanded to year-over-year will from continue will which increase a widely believe was negative me our they of the XX.X% adjusted point in negative million million.Let $XXX,XXX EBITDA to margin. Center now and XXX XXX adjusted prior continued gross of point $X margin adjusted our motion exceeded guidance centers the basis we

significantly pleased I report quarter, resulted impacted in Services, than X adjusted slight operating the quarter communicated, is were previously and this SaaS and negatively in million go-to-market the allocated carried more Marketing am strategic testament a our EBITDA our and channels This to in we during expenses of Due several lower to between reported and plan. to SaaS ability to third of our percentage and customer sustained $X more we the a a on materially margin loss managing narrow to revenue revenue improvements operating our the loss initiatives. acquisition to As by compared substantially print Services. continued execute EBITDA strength expense as effectively segments, our over Marketing quarters.However, that past team able our which

on revenue in And our priorities, carefully.SaaS opening As in our year-over-year. We growth continue key we long-term are to profitable SaaS remain Joe his dynamic. invest our expenses subscribers confident prospects and accelerating remarks, will growth we managing business. our said approximately some operating represents third now growth to in an decrease directory of print focused past recognition monthly a the end third X% in while headwinds subscriber quarter are in growth XX,XXX year-over-year. strategy, our anticipate SaaS grew but $XXX new quarter, of mix. increase the to due pricing product-led to and the ARPU we ARPU may the at face With XX% decreased growth, continued

our lower are ramping, signing SaaS subscribers than packages introductory for are average current While they ARPU. up our

per $X.XX Marketing popular $X.XX is For currently in and Center example, month U.S. the offering at priced our

seasoned to benefit of cross-sell which XXX an As products, net will retention upsell points us allow sequentially. additional we increase retention XX%, will dollar move dollar forward, basis net future.Third in and this was quarter the

upgrade to of and make centers products the integrations marketplace while as with it Signatures, paid easier previously, will introduction discussed Services. providing and customers to over website apps other like expand As Center Command customer new opportunity and expansion such support, and Center, our Marketing ThryvPay, NDR.Moving to excellent service our Marketing enhancing builder our and other

Third was guidance. our midpoint $XXX.X quarter million, of revenue the within

months.Third of adjusted This the in was of Third timing expected million, year-over-year. lengthening due million, revenue from quarter our margin representing XX decline was print to Marketing $XXX.X EBITDA $X.X X%. months EBITDA Marketing of quarter Services adjusted billings around a was Services XX% directories, recognition resulting an XX to

quarter consolidated gross margin was Third adjusted XX%.

million, third The position quarter. net adjusted EBITDA at X%. adjusted Finally, million the of $XXX quarter end representing margin Third was consolidated $X.X the of our an debt was EBITDA

guidance. Warrant X.Xx flow million million was in million generating to the quarter holders below of including made company year-to-date company XXXX.Lastly, in loan, the covenant exercised $XX issuance in and term regard and cash payments debt outstanding. to leverage down dilution X.X X.X August has additional pay million Our we of XX, was to in minimal approximately to for loan on made warrant in the $XX.X shares $XXX used debt unexercised which turn million Xx. approximately of repayments of expirations in $XX.X debt proceeds EBITDA, generated in $XX additional paydown.Now ratio an our million warrants third net stock, no XXX,XXX of common term cash any resulting and let's free the million resulting have warrants, The company our well longer in for expired, warrants the October,

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

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

our to in $XXX of a adjusted and new million are productivity million Joe. We reasons business. Services SaaS decision our and business Marketing drive now sales range The enter ultimately facing will pressure the some an this of an the the to outlook call proactively million over retain in into Marketing year to periods.I'll lowering we to in for For full the back XXXX, in our as Services $XXX more are for is we million. investment $XXX the future revenue force SaaS growth have our the and effort range benefit structure that of turn higher to view made EBITDA $XXX revision that in and commission FX

Joe Walsh

Paul. you, Thank

on services we're as develop believe more continue And old months. in will, Our pace.I couple customers. that more That's all sell our to more nicely. Center. that's next platform to optimism we Marketing if available international year, to our that's those business develop part Center look recently international And is the of a sells. last to markets. centers marketing have as to Marketing at application, and of our with Marketing closer now nice lot a just as really you wanted centers Services is Marketing comment advertising a business Services We all we to just will ahead traction, continuing therefore, with the finding business

the zoo more penetrating you really So I do if will. job you think see of will a us deeply good

Marketing network word-of-mouth marketing is confidence -- a bunch the Center is we've customers the is of in are really and the sales got and to spreading along kicking things happy is there build. me, that beginning excuse and Now and spreading, referral force

I the metrics The develop. SaaS are he raised of SaaS business Rule more penetration see to delighted our you'll we're We're to business improving. think and XX. Paul's a really for continuing guidance So there.In that remarks, is driving

seeing you're overall expand, You're margins acceleration. an retention seeing net dollar expand, gross

next we we to accelerate expect As will year, being growth And a we're expand margins to toward Rule in and will expect look business. ahead revenue year, of best-of-breed push continuing SaaS we the get XX there. we and that toward. in And that's And won't be us margin XX help expansion to next but we're both will the driving business. the growth revenue growth direction

that's our we it for So why up open don't quarter.Operator, the on thinking questions?

Operator

[Operator Instructions] first of Our William from Arjun line the Bhatia comes question with Blair.

Arjun Bhatia

quarter, additions jumps mean, Joe, net on in think it good customer the this the out new one of business. SaaS the a sticks out things way that is I I

capitalize talk What added you then Command drive a line sure do But just has I that. it these about with a how like seems it because huge can -- I'm for unpack the adds Center quarter-over-quarter. customers like that to opportunity down expansion think bit? you you? new you customer something and XX,XXX And on little seems

Joe Walsh

a There paying against paying involved up, sales hasn't through after of self-upgraded -- in selling whole it is customers. those do doesn't no still signed just free beta, are effort Center -- and to anything. been with the and they number a we're that it those and lot customer -- this which now because the Command -- Center, But are those don't are beta had most in they force go of Yes. later going freemium Command to in month, remove sign-ups no have are sales account. matriculated the we've

much you're I uptake Services. in mentioned were the much, is purpose what Marketing to So is buying so seeing of Marketing the prepared for mostly remarks, which Center.And our the as Center closer Marketing people

second the that's more your really -- part And traction. we're terms hunting effect the we're zoo a And in getting well. and your with in question, more working lot And of out so of decommission -- them some came in over promotional we allow at to to were and of move the even level the us older entry-level lower them distinct some groups there or to did stuff price systems. some our that

problem. see a It's so scope why a of down not of permanent time. little ARPU. next increase the to a of period on over And bit actually a them quite that's you There's bit tug

the for spring, you So in it's coiling retention will, if future. sort of net the dollar

Arjun Bhatia

having can that how others? that's to over just driven maybe is that by there Sensis And year impact Paul, Yes, to the just the on this Marketing you lowering and FX. was you of hear the you that's we an little that with are was some on maybe sales restructuring expect businesses can Services mostly expand or touch And out play that? a guidance. bit -- next great going on on Marketing so? Center. acquired the mentioned if Part the and of What Can

Joe Walsh

related plan our Sure. pressure The New to Australia FX in were and Zealand. experiencing we was

we the all look restructuring, forward sales the time. On

best for think So we kind XXXX. of what's

thought, were having right strong. sales success force right XXXX, Marketing the quarter, put now we and maintain drive revenue given and place very should a now and we third structure now really we come So in to into we have out the during we with Center the have commission

the in made ourselves think behind thinking the we and that's company move an investment for we long-term the and best So that. there that's

Operator

from comes Berg Our next with question and Needham of the line Scott Company.

Scott Berg

side the Hi, was start -- quarter. Paul's the got revenue a strong, obviously on guess, Joe, additions the but guess what growth there. maybe on to expecting statement kind of SaaS customer is macro the but I SaaS the you couple on to nice still want Congrats with confidence accelerate in statement statement, everyone. were 'XX, out weighing I that or in it I gives I

confidence where play? Just help into us of that takes maybe understand the puts and comes

Joe Walsh

selling mean, comes coming really X a X we been we and now back from, from if center in with I in stroke year platform really all to as doing it of forward X singing, been forthcoming Yes. to coming we've dancing all look X And where you -- at we've kind countries. it all centers, 'XX, full the are selling look markets. next

macro And where Center. confidence year getting We It's in so slow last figured talked to kind how now not is really of quite it wonderful. right, comes a of with moving. kind all beginning make it kept we of the briskly It's from. that's traction moving lot the earlier Marketing We're and sure better. out, it's got about we now.So not you're the

selling we'll massive have believe but all will So full there next do platform acceleration, year I'm markets. that not acceleration saying we be the just based in on

Scott Berg

historically. as some of Joe, the seen why But because pulled influx quarter, follow-up was in go from maybe a you've SaaS of of from I you top the perspective, quarter? But in the to with customers notes then kind about versus marketing weren't this know And kind to last customer If funnel of they converting back this as additions those was back quarter the what my different asked question I quarter? just question what second additions. customer strong

Joe Walsh

company. zoo. the hard after little of products there. closer We We as pretty Services a talked business bit of orange. it's your more requires different customers what CRM, finding Marketing amount is we're Marketing It's the they've maybe the the a so into go like a center past, if really it to center, lot lot incorporate and this and apples-to-apples, thing.And about the It's green opposed Center. process you we've it which does, in the kind change about center to past. easy business into went it into conversation apples business think a Marketing And the some adopt Marketing biggest does, red very a of Scott, original Services to standing our Center buying basically is been with a went that in an

discussed, and it's where channel new bit seeing the how about for if we've is into credit our you're there's business. you've into we're cannibalization base. in when Marketing known, And do know the standing not only just so it's already world opposed iceberg zoo melting outside adding but They're Marketing in there, some customers already a We our too, that's what as those 'XX, in of may, over some the driving to of them center, know let's increasing And already meet nice is out deeper a into cases, We accounts. optimism say, them. a paying customer people.So of already our already good, an going do, drive moving you've have And to trying I their Services acceleration into Center. our to able us little like -- penetration. we'll best call acquisition is They where we're us. as

predominant that forward We if aren't growing We're and we really a I'm our and not sort higher SaaS to higher percentage revenue every in grow doing out future harvesting that honest, And it. us. the when hard at distant day too for crossover business. the a anything of revenue cash point there's it. stream We're year.And of to not of working look is SaaS is

to platform and of a so service, are do get now that we much win Center Marketing level that because it of that have say to some migrate our the the onto that Marketing them day better they engagement a able we where Services higher of really value, can moved a land the speeds they we And double and crossover. that nicely we modern up platform, onto extent kind customers get

Operator

Baird. from of comes Oliver line Rob the next Our with question

Robert Oliver

Great. I for Joe, then a you I you. had follow-up and had one Paul, for

you the on just like Command trends that out curious tiered the pricing really curious through And Center, in it just may sounds to Joe, plans? where your could had some how here out usage customers I'm So of encouraging just land Center, guys play on Command there in terms usage pricing hear you're within what Center. patterns those tiered of seeing and for Command beta.

Joe Walsh

buy Well, early, still anymore. unified and it we're as but are in of communications It's yet, discover do go all coming your and some but And we're beta. using things is numbers, sort in move there really And start all checks it's And early up together it's online, of and social not a downloaded it not customers into XX pulling wow, day. from the hearing Command missing and self-upgrade are big that like some we cool, thing say, worked a inbox that very we've laborious out. always and and outlets and every kind process through numbers like is move little goes and center, the messages really pull buy another a we I'm different Center center, said, I people during it's all together hook and it, place. areas. way to had all different beta more the stuff.So like glitches early, small the mean, were who one customers, of period business seconds, this every one through seeing there things buy

will So that in we're new meet of qualified future. clients what us helping mean in optimistic terms about super the ideal customers,

the like it actually So people and very promote and it it about we anybody and and look available, tell But what spread yet. Center off as the self-upgraded super we generally haven't begin word. have it to we're that people numbers of small becomes will buying, sold and it comes are data, about Command are optimistic

Robert Oliver

it to impact live any revenue if then, go quarter? for relative starts just your this guidance Paul, Center the in to was And contemplated Command quarter since curious

Paul Rouse

see fourth by success have little, outyear you're optimism the optimism quarter. we very the -- Center really something It's Command Center driven in Marketing the that's to Marketing Center, going period. is more the in the but of really

Joe Walsh

those even just the a Yes, revenue of relatively bit -- but powerful through to new meet half kind answer revenue, any ocean the users whole we're we a markets, to a later tool going are little moon. while going of going ask deliver for excitement go because of we're spread it's will will I'm first excited in enter users, for slow them be we to don't before ramp for what we tiny really to value next to a of just audience. follow want doing, And not in The Command us the motion this blue any Center, customers it, about be revenue we to see because customers, about new a year, really it year. it's money. think add And of of that freemium

of motions some were the it where So soon rolled it. out, as started it's where not you you there as selling centers like other sales-driven

Operator

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

Zach Cummins

in ask give just existing Joe, to little bit us opportunity is zoo? of term, about the I within left in seems near just that sense to just Center. really on a wanted it's side? there Marketing much get terms how you is a more how been focus a of more sense of but trying a go runway It Can much to like the adoption

Joe Walsh

a whole lot. lot, A

Paul Rouse

of XX through but us getting they're the XXX,XXX they are through And just that that mean, to got you'll I'm us, tell some bullish can't to a We've nearly businesses penetrate some going carry us? that, Yes. drive since I buying a them Why business. give these with of There's approaching hunting and Why relationship and to why a we're spending on should our they from of talk done of wouldn't center have customer, than base. way.Maybe average the year sign bigger balance to them with a way as bullish we're ] all for virtually quite is. we've change and Right our so marketing in really XX-odd-thousand over CRM small be full a has think the process SaaS services really it of approaching customers I'm this not kind won't I and the we will wouldn't with order. us have chance? adopt lot. [ with decade, reason able been And customers. of a And tools. years I now, got they us. you, marketing-related average. to that continues But easier a inbound way to outbound And and puzzle customer need quite is zoo acquire that It's they as And see and now. less them a will it this and definitely margins piece better in acquisition. different for relying products up well. do next business what sure, the on traction they business easier more I'm is change money

Zach Cummins

And restructuring regarding a margin within terms of Services that business? of Marketing think salespeople. way to we manage margins the as the across of Marketing Services the Should that Or continuing the of decision, impact more QX? about those think one-time that in maintain in to more what's just right here

Joe Walsh

Yes.

camera really that back for We're a a big it about doing the here, harvest and business on picture any running we we we're kind if of what grow bit and up cash. Services of the to business. not taking little making we're a So think are efforts Marketing

what is we be. and revenue be are it's what what out And to to cost high And likely the so map over you've out lay Marketing before summer predictable in deliver about to the to following down decline.So we've variabilizing all we think XXXX revenue been if you sit years Services, in the number of costs of incredibly we against should company, advance those been continue the and be and last revenues projectable our margins. going

variabilize street, adjusting the one used big feet the that levers is cost of that how #X is. business we've number to of so on force sales the And the the of

So much excuse more inflection is we're of getting overall where and reaching the so have of overheads.And force Services that now point kind that now necessarily a our number. carrying shrinking luxury me, an bigger to into SaaS not point revenue -- be a sales Marketing or actually much, -- of and we percentage

And cost future. we the into show of SaaS into go think little you will revenue we see that it, up there's that a stronger but so bit quickly as convert in

transitory specific just quarters, next directionally, cross of been of the directionally XX% bunch much within this to slowing year. will And revenue It's actually we're and a down And next adding opposed predominant business be as how not -- It's margin SaaS the all at inside on our not it's really become It's action So, more business. more so gradual. but place we've grow revenue so approaching manage the be it's not is our thing stream.And just that anything, just at meant and that's over taking to SaaS kind to business. how the Marketing taking. looking once. to Services guidance, of

Operator

Instructions] CJS. Moore [Operator Dan with

Dan Moore

X relative or Services for we gave of 'XX, billing time guidance Maybe cycle. kind about EBITDA year, last this you X given we just outlook look Marketing Maybe others. Marketing Services do the to cycle? change to the EBITDA, your When the think in the 'XX how under current printing

Joe Walsh

next start year. Clearly, books more let's cycle. with there's -- printing a come back Well, the

there'll to in a Services on the Services. side our Marketing of a and comeback continuing you is steady to good point Marketing little I'll reliable, billings. Eddie way. in bit be a So That's perform

getting we're aggressively more quarters traction like with bit consistently into many You go given the coming products it we're we're and not zoo, but can just look back that doing of with, feeling can out many, at many, that little self-cannibalization. said the a that, new add-on performs.Having look that we even sales, how

really SaaS think growing more before, ourselves be. as as plan be, modeling that a overall, we're think with a on its just moving people mentioned iceberg bit a we're business Services actionable than in little a Marketing we year will letting we healthy call, much we're going And more that rather to they're on in off work like. possibly melt and engagement, helping and to wind cannibalize and the people thing, faster But the sitting I penetrate higher and side is directionally, modern own, of February on. real 'XX we as business there other and much what I will next also guide the little move platform. that's you a product It's going that because probably the in our the we over, what we of turn a ourselves.And doing decline systems some we'll on us because right costs can look the reduce And now earnings so legacy down on

So think year, a up the pub I think when next in in books more of But next schedule showing this. year. there's about lot about I parts moving

good it a Services, to that's have us a Marketing on cannibalization but than in harder maybe guide leaning the little we past. So from

Dan Moore

yet, that haven't I I a change seeing any it deck, billings if put seen sort supplemental in you in And so of decline seen XX% -- annual haven't forgive all? out but not at me,

Joe Walsh

don't We Cameron, add have no. do anything anticipate you to that? to that,

Cameron Lessard

cannibalization, it but -- little might a With bit not wave over the time,

Joe Walsh

Not future. we're do I Yes. on you very and SaaS be communicative we And doing we think a little the grow harder on can how little as would Marketing Services next But the to with a we'll is. year that what lean now order into to in again, faster. much expect work we'll

Operator

question Needham next Our comes from with XXX. Emily

Joe Walsh

can the call. You end just

Operator

participation. Q&A you for as call. This your thank session concludes We well as the the

You may disconnect. now

Thryv (THRY) 2 Nov 232023 Q3 Earnings call transcript