THRY - Earnings call transcript Q1 2024

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Operator

Good morning. My name is Dee and I will be your conference operator today. At this time, I would like to welcome everyone to the Thryv Holdings' First Quarter 2024 Earnings Call. [Operator Instructions]I would now like to turn the call over to Cameron Lessard. Please go ahead.

Cameron Lessard

operator. you, Thank day good Hello to and everyone. of Thryv's call.On conference to Officer; can of Paul section Officer.A be forward-looking and XXXX call investor release found and earnings call today and copy Financial Chief to and quarter website the Rouse, earnings investor your or are presentation company. Executive press and Welcome Chief first our Joe Chairman statements comments operations acknowledge the questions in thryv.com our investor.thryv.com.Please results made contain about responses future the on the may at at on today's Walsh, subject the the are SEC. statements uncertainties These with earnings to described company's in the filings and other release risks to information Thryv on get call the provide has on conference wanted we an reporting. segment obligation no update update the presented today.Before I to started, detail Historically, the we've U.S. additional for provided and international reporting markets our of within segments. each segment We're structure, reporting SaaS now and a to Services, operations. our transitioning global X encompassing Marketing change and segments. report note we only that how important EBITDA It's adjusted this to impacts margin for gross adjusted historical will It our we the under filings. quarterly section revenue of report revenue disaggregation in impact not how

offer will streamlining call to enhance unified our are Chairman and understanding CEO, clarity to efficient model will a our the approach our believe in perspective which and more facilitate Joe Walsh. business now better reflect turn We modeling.I we business and over

Joe Walsh

strategy. seeing of excited to time last subscriber strong raising guidance our Cameron, got start. about We've significant the be thank traction. ending year this discuss now the a the the momentum quarter good up X share our X our first practically you clients. business, delivered more have clients growth, I'm across to and XX,XXX morning, news X% today results.For strong Good quarter, and all or paid to on for from year. SaaS us got we'll quarter year. call our Over joining off some great The first We're with centers, center we for

centers additional in some progress making good really to we're our there selling So customers.

are.Another ABL. a that and engaging it's our in growth been a little about value the term our And are have us. like year. our with ARPU. this at shows a debt of growth us and talk a need We extends we're a business. looking think which for our and redoing again, interesting customers year-over-year over for difference stat good really indicator seasoned the refinancing. the proposition in seeing This them make recently strong products the runway using for significantly with we've and mid-teens. really provides These flexibility maturity. going our to with loyalty is It's to been It platform.I'd this refinancing, delivering to us I we I invest these that sticky think completed how fact We're people big and loan bit is the in financial

it that's Second, in strategically which success. to us offers engine our is allows driving the invest business, us profitable and our really flexibility SaaS flexibility. This growing

on strong Importantly, of operations Marketing opposed in the future frees Thryv's so confidence Services.This invest on it as being have up strength and financing capital from with we lenders flow cash structure moves focused sweep, this can SaaS a really our underwritten legacy to important, in to a much is the testament is away growth. XXX% future. that Equally new revenue a focus the

allows initiatives. financing pursue to this Finally, us shareholder

earnings share our a we today announced repurchase earlier authorization release. evidenced, alongside As

numbers. you debt Rouse, alongside our to this While enhance ongoing Paul? shareholder provides our repayment debt tool turn share additional I'm CFO, priority, core an going reduction to the through our that, efforts.With over Paul value repurchase take to the program to call remains

Paul Rouse

Joe. Thanks, right. All

surrounding year-over-year of Adjusted permanent of and fluctuations seasonal range, emphasize featuring This to beginning due points to but introductory the margin results our beginning Marketing offerings year. effects.It's attract guidance increased the business XX.X%. the important representing the quarter a and lower $XX.X sequentially. promotional decreased typical of not and basis year-over-year gross up million product is was as revenue in December into the during quarter-over-quarter slightly the Center within to prices. at year. indicative first is between the strategies XX% Adjusted customers seasonally XXX gross our in tool decline pricing slow points holiday periods to of the experiences to with the dive sequentially, that Let's XXX It's January declined to due trend SaaS a margin strategy an margin SaaS. basis increase primarily

fact, gross March in In rebounded margin adjusted levels. significantly to QX

our the EBITDA. initiated exiting margin trim million, achieving in track SaaS client our $X.X with onset with adjusted and our driving existing of I'm with adjusted confidence and existing enhance record the centers customers. various plans and focus anticipate Furthermore, base adjusted mentioned, customers new proven now, the in spend in a with on after SaaS XX%, we At across year, our Right ahead, year, was EBITDA by growing Joe resulting our X.X%. a spending an as exceeding of gross Looking expenses the margin fronts. the company increasing to productivity unpack year driven of shortfall EBITDA X targets.First quarter has more reinforces our margin to going which we

million. of to we've EBITDA recognition to us the quarter explain is that anticipated for just first QX the weighed why quarter subscribers the These EBITDA saw we to cost XX,XXX at the to both greater savings an of the Again, full initially year. raising million reductions plans, SaaS in timing company-wide aimed relatively we margins, sales incentivizing the believe detail. and the uncovered amounting impact to quarter. initially at $XXX. timing than guidance expenses upward compared of normalize sales rise which deferring yield an the our our delighted accelerated in costs first QX again, from commissions now revenue in ultimately SaaS commission behind under a was XX% SaaS as that was related rest $X EBITDA costs and The will ARPU factor the firmly growth, elevated approximately SaaS of first a of Consequently, deferred timing multi-center plan. over end will end are X% savings increase the year.Let flat the benefit year-over-year commissions for year. XX,XXX our the us, which for than sequentially. are onward Once report been previous were on guidance crucial events $X these leading fourth quarter, me otherwise SaaS G&A in the more this that our have that future.Secondly, anticipated, finalize of to on we in of we're and would at profitable plan revision to restructuring full While SaaS at under more

was XXX to net basis over points XX%, seasoned Services. retention an year-over-year.Moving quarter dollar increase Marketing of First

above First was million $XXX.X quarter revenue guidance. and

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

Marketing $XXX.X XX% million, quarter billings of decline representing was year-over-year. a First Services

adjusted was consolidated quarter First gross margin XX%.

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

our below was X.Xx is debt to of well net ratio leverage Xx. covenant which EBITDA, Our

rate of successfully loan, As earlier, pleased by outstanding Joe basis term our to refinancing the a in have XXX are completed the resulting reduction mentioned we points. interest of

which maturing outstanding loan XXXX. proceeds, term With ABL were and both both refinanced facility, our in we the of

the Furthermore, Additionally, we amortization new company value at discuss the for features our a and opportunity continue bolstering as to for steps maturity on the company's suite, investing out guidance provides added a lower it shareholders.Now let's capitalized to with that agreement allocate rate.The liquidity. facility extends long-term arrangement essential the maximize excess to incorporates credit strategically to our flow and second ABL the well swap capital for quarter. down. growing The interest in cash smaller new as flexibility flexibility XXXX business debt to

revenue the to $XX.X in second expect SaaS million. and we full $XXX range our quarter, of $XXX year For to range $XX.X million, million the are to guidance increasing million we

the quarter, increasing EBITDA year our million to EBITDA to we million, the expect range full SaaS $X.X we of guidance and are to adjusted of adjusted SaaS $X.X implies For second X%. million, million which in margin $XX range $XX

range revenue quarter, be the EBITDA the print and million schedule million. to impact range expect And Services Services $XXX of year, adjusted the the and $XXX to to Please year, Services keep we the published in million.For million Marketing adjusted the full to adjust million million. $XXX that reported range is mind EBITDA. Marketing to expect for Marketing dates directory's can $XXX For $XXX revenue we and in second $XXX the of in full print

call in of back a the EBITDA in the XX% year the half now guide, to turn year.I'll the the mid-teens second model you around Joe. As can margins first of over half helpful and

Joe Walsh

us very our we better the megatrend out a a Rees seeing centers for we're whole Thank think the businesses we're will to following he's strategy. up that by time, what's build can Paul. unfolds. bought a about is.I and as Johnson of help growth also well-known Officer, about it experience it our excited excited very about to believe, They're Thryv to it's our We're big customers. joining And our megatrend. for SaaS about background they're we our you, doing our ones to a talent save platform think And us, in think Thryv, picking companies, with having you level. in More being interesting strong, for company. some customers. they're new worked more trend, and the type sustained as it's is their into delivering a big has doing deliver Product drive way Chief doing leader cloud. Small it platform platform. happening what money, strong And really When and that demand it another to save that are Rees take category big really future

think the to welcome, with really the legacy finding And gigantic means iceberg business for up to us like continue we're that more more questions. company, we're Marketing to and really as penetrating looking So into legacy of software SaaS to going that, about in base. and our -- forward for is what ahead.So is business. Rees, of this we're like that Center, I'd traction news year base. our our develop line build you our of that happening terms open what's there a the development excited penetration accelerating in products we our platform.When really in Marketing good unfold melting operator, increasingly, really about think what's And and We Services that

Operator

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

Arjun Bhatia

sense a point, that been of kind Can accelerated on love this getting how had And relatively shift Marketing of more here. give to legacy it's kind hear I you're maybe in of today, are on is But announced Marketing just something that? was give know you results last us to customers the I that driving seeing color I last a relatively would continue there. number know but receiving maybe Joe, accelerated on from the know strong of that. SaaS. And that still. congrats us just quarter, growth you Services the clients? the Services, that SaaS nice that early is we're -- sense really some what traction to it's

Joe Walsh

Yes, pretty growth to to Center, much make on yes, Services the by products the a past with people mentioned think Marketing various more their that that closer we reason the certainly in. XX% aided sub ring, leads, get was bought to into it to Marketing And in previous inquiries zoo. going phone coming calls our more strong. get it's I deeper is leap

the putting so you CRM and operations your that way as jump and And transforming run. a changing is a really in big as business not

in many looking an what closer -- ways, easier were for. shorter and it's So leap they sale.It's a it's to

the we're we're solutions, strong And of the really that the have base. center picking up. That's just concept X but of the platform success mentioned, as also I People platform. are broader uptake. buying really selling strong so buying really to into not into one And buying seeing continuing and

results for So our that we overall year. part on Arjun. continue, the to bullishness of That's expect the

Arjun Bhatia

the When think about you obviously, you this what on does M&A important maybe if refinance impact forward then capital about announced here. the I have your your the -- thoughts an but flexibility think how it? step And the business? know where know I SaaS going you little capital investment a increasing might is debt allocation broadly you more even in buyback, bit and are strategy,

Joe Walsh

is Well, our past how in acquiring of an Thryv debt as SaaS One we dilutive. the twofold. looking fit valuation any SaaS and talking to makes have challenge the effort own discussed size before, been has at they entrepreneurs picture. we've And low corporate active into might very, about the very business a

they're of not. smaller sort makes phone as a book ones about typically do having valued to business. So we're because valued us like SaaS think We're and businesses, it

that and a to mean integrating. magnify it. so pretty We're And And we makes results. a have doesn't skillful we it sales do force acquirers. can't good We're lot else's challenging.It somebody big ability of at

So we're working very that, looking out there much on at that.

on all our you was of was second our credit essentially The as facility sweeping touched constraint cash. prior

we verticals use have growth, and you've we been So a what little our business last cash the straitjacket. that of a pound throws build to ton over reduced It technical generates buy debt watched we now years ton have some to is flexibility accelerate meaningful shit it is carefully it or aggressively. the know do out whether acquire in debt. I doing, almost paying use whether that you're we've of that bit down metric aware, by as cash. in think cash.And a dramatically down cash. were businesses the the back we we've using We flexibility. didn't term SaaS operating And really of, whether I this which so we any to shares I know couple And of

one flexibility, see in at that really you targets. we're of now all there And activity that is you SaaS the little any type got good on of I shareholders. think, future I So for of looking some more a Arjun. that and definitely And interesting where are wind them bit might we've those, think more started, up of

Operator

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

Scott Berg

it's a with Congrats you are in on I of, you had what a any a Joe, centers of customers are buying changing then exactly on know, don't kind the you following any X% those the today. maybe how Just color second your on here. nice quarter specific on first and of adopting today, results center bit? patterns up seeing customers multiple one SaaS X% or sort little terms land know if didn't buying of of specific emerge kind

Joe Walsh

Center. go evolving. first then add was definitely and Center Business obviously Marketing try and to It you back It's you

to and they seeing up then is engage business There's buy patterns these and onboard they've Now but And and that emerging want of Center. a a think particularly to seeing buying where both on we're and one have of -- Marketing buying not see. heartening number whole yet, onboarding. interesting the customers the Business a you've continue to bigger required sales Center centers. huge is you more, away, right it's most force thing sales. because it and I than bodes is the the about other more really that's a buy double onto And first that excited is thing more handful, future.The to Center. for Business well number Business had you And want as got big journey to of kind of do And we're Center get more. the a

X% lot per of Center we we that have change to upward. you the end roll. it, centers And in passive X could value. needs of customer. to year those their Whereas way early journey, the per a them.We to does log but Marketing fill buying the this are long-range time of in set for year you on could We've and customer think of believe per more our from say, where from let's delivers excited to that, of help now. it patterns X all for actually don't up order a percent you're of have It's gone quarter, you.So do lot it's year be from we the more a X,XXX thought Once this the necessarily said we're be, We kind negligible we a helping about X,XXX we'll which customers that to some in really supports year and relatively with to thinking seeing. at days, surging go You that.

time. cost more and net work are these well think value, able as relative mass will drive buying lifetime of and it lifetime a we have we at multiple and business software really centers, and ability We better. XXX% these be value customers that we to it centers into And when with to look favorable over really that the like growing acquisition said whole that. really doing also reach support of would our dollar to and prospering our customers felt our the our And the retention has our on influence sell makes

trend. thing.It's a exciting pretty of deal. little a It's not kind a it's big So a

Scott Berg

revenue about think and of that don't But help we to to more business solutions. you the business is these SaaS unpack, to should see another or we Marketing today? macro of weakness we is going your pressing seeing how answered decay right SMB of forward? that migrate year the that a the the I pardon move you some customers to purchase a might some because that you out giving just function -- base how there pressures you're be bit reduced really there hopefully pressing little over to Services that in element segment. the amount the you're Why all on know full then that And into me, are solutions in now Obviously, did try question some SaaS

Joe Walsh

all you -- sort them. businesses things. small think before, when they're whining certainly things. or the of kind you real stuff told affect of headlines read in low do -- sort they That's we a -- same transactions call there of some our you about We do. market broken, out I is And I've are They great the But question. estate hear the nasty do do that whatever

you tooth; dentist. call You crack the your

from call lawyer. your wife; divorced your you getting You're

call you the guys. tend customers. The -- are your our mechanic. start, hot, more and those conditioning the our you doesn't the family chug guy. call AC air are in These And through. to tend your they be on won't mature be car just resilient These That's our and is work to very they Your are so businesses market. customers.And

premium brand those not as grow in sellers and of spending, to up price at come we're iceberg, you We the what business. a and the there's free And to no see of of you But been are quickly online have to question like tiny mistake software new tools there. to more I point a the of macro, question our in Thryv in plenty make start-up, doing anyway, cut market products look -- along. And they're terms make something They Back up tiny, use to available guys later. our of really that your We fine. They're chugging if XXX graduate people it. complain. month terms cheap that go about from have always to buying. they're go a eventually in you do can should melting see, now in about Start Thryv.So big -- a the no and

and in see definitely don't transition. SaaS of be forever we We business, an Marketing a down. going our purposely to Services that future. we sort winding We business are ideal see beating the want world, us up the In and

Scott, us, started XX% year. SaaS revenue year. good world, working we're there that.So XX% We're like be on I XX% proposition having this next I hard pass we're next business and them a covering listening, into I've that, So were out to mentioned majority the think when traction revenue. We'll And We'll with before customers, nearly SaaS we'll SaaS we come and think offering you now. year. it calling they're interesting be

the we're of that part zoo. is just success in the having hunting So

Scott Berg

XX% good year. to transition, hit Congrats. looking a next been doubt, It's seeing no forward business it

Joe Walsh

Thank you very much.

Operator

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

Zach Cummins

it. Joe, I lean of kind adoption into to really wanted side of the multi-center

that has With can this could the the kind talk of overall your sales in year? as changes commission about just adoption multi-center And that go-to-market we evolved? you've potential we strategy made progress throughout you see to acceleration strategy how structure,

Joe Walsh

sort couldn't comp ship good -- each have increased Obviously, guys to sort really it would of just sales sales because gradually force. rudder the selling have in we question that's of been the year. sell great care And decrease a the software We love of in comes it the our a we up like some that legacy flick left it's take part And sales gradual force. drives We from air. a products important because it's your kind ways. gradually transition. They're the that incentive switch of the here. the and our the Yes, most of force

wanting time rudder a moved So just the lot the kind rounded it. been or through of the months in of our XXXX, focus it we Pay up anyway, it we bend next really we to and on of doing really dramatic. now And logical into do lines were reps' selling now year, that. anyway. step so multi-centers. sales been yes, felt was put it's it we but the company They for this moving they X are run ] windshield.So going quite And [ And bit, that, the done compensation. do as have They a results were since that we've for to it we ready

now more out the less was that year, than having I build ARPU into each each lot quarter, have about and it this the what to another rest one this try and that it to next they're roll built it lay leaps hands with a out. of going our I get it it strategy Rees level. bits and and we're -- to year do bounds into plays help that, our and center and his of the kind full you're X%. new think aware, the other And that focused model on benefit a take when of see center. as that. year, attendant had of how I X%, until Johnson so and business, even all jumping was it.And amazing end platform this success.And this on the we come golden on And quarter than very track time and out on moving think we We so At last who's forward when year to with last I for NDR is

us big So that I the a of getting part to using happy first XX,XXX really think getting was of engaged bunch a of subs, leg journey software. this That's customers hard do. And I it hard do group now, you got that a obviously, tell customers. though, adding more of just can't is we're growing how that.With to happy base we've to it, and be will can center. more a relying their provider But of X adding single to provide we we'll into X that centers, while subs adding really growth. keep was like a we and will subs, it. X won't That tremendous we centers, and had keep now out. base, it software adding And that sell it centers new when be on amount just build

they HubSpot is out they've one But So hubs. for at little hubs. growing and is you analog, they rate done.HubSpot what X had synergy can think this. I hub. as the they at They between look all yes, growing started to when multi-centers get built a an full when a faster they at the had the And core platform, of certain were

But we're about doing You HubSpot a done. and admire what in growth similar thing employees. above market. obviously working beneath X,XXX customer. the ICP They're the they've Their them is We're saw sitting accelerate. very us a we

Zach Cummins

changes any have mean, coming your technology leadership on the Johnson place? with I of bit, you're it to speak kind strategy new tweaks a in with Rees but you leadership, how to touched on new you board. or potential center can about thinking plans the to rollout And Any little Joe, meaningful

Joe Walsh

world-class of moment. McAfee, keep on on big on he undervalued days. a the Symantec, an to he the he's that someone anything years incredible of at, momentum. right of report But of software, much come out right it I what this still impressed really he Obviously, to that new looking candidly, has Thryv. to have probably He and a have brands, it we're he our he's going not that a at these X proud some the we is. like us don't with he's says, we're or hood building big somebody we're platform accomplished at is ways, fact guy. around anything and And in now. And got. But the ideas, success.So is lot really level he I another been here directionally, and like come at to going the guy it ago. very just what this idea any be real scale ideas, I'm said don't he's join out X new we've of building to at Forcepoint, big in, under of and he's somebody report of and want how the coming level. his that doing, having better it change He's I early looked sees attracted it's take to to would is. brought we're part back to Like at and executive. kicking got or quite "Wow, We're away. going have successful We want that looks X company that."So how how and couldn't

Zach Cummins

with luck rest of the of quarter. the Best

Joe Walsh

Thank you.

Operator

Our line next question of the Securities. comes Moore from Daniel CJS from

Dan Moore

Just to from accelerating wanted well-defined strategy Marketing to Services to conversions of the go back Center. Marketing

Services, Is to declines? margins that that And does. talk continued for your ability good Marketing look to down billings just for line as expect you the that on XX%. accelerate? it's about in maintain QX Would we at proxy a As

Joe Walsh

We'll which and and know recognized are all of which follow time that, unless that continue schedule you'd guys at you really Good to small because question. are books publication, you the books know no way the study to we to our be guide way needs have it. revenue big pub and

don't they caught brought keep moving. is bit you much want offer will really really if for earlier, term think should we get on know offside we in jump you margin? working and longer they success into that guidance So guidance how year to on that.Paul, I any as mentioned about should think this so little don't because how And so how the you it or giving the prescriptive down having we're a about thoughts

Paul Rouse

Yes.

we be this. there think shift how really in a about I think paradigm needs to

I margins full think we EBITDA margins should cash on move and than away from from flow business very and there's thinking high of Marketing SaaS the margins side. the and because Services

to on going we -- you're that guidance side, as EBITDA SaaS raised to go going our see and on you're see continually. So the

growth healthy.To going you're on Services be going to EBITDA growth think, continued in to just and pretty plot. declines I So and focus Services, SaaS on see Marketing the margins, the Marketing consolidated is loses and

the I look think the really it comes company more the And EBITDA part from overall where growth important important of from because aggressively from? does there. probably moving business. it anybody the more it's the we are It's comes entire EBITDA to at that So care

I'm the probably I how thinking it, most should I about approach So that think that's encourage take. that and would

Dan Moore

Makes perfect 'XX? guide you and those shifts 'XX in the relation your there not for in that are where more, starting looking wouldn't you in guidance, we EBITDA can in schedule I overall trying approaching fiscal crossing line -- second again are just outward consolidated to leads to 'XX, and think sense, the When beyond terms we're and lines publication start grow but could or the think that -- in I'm confidence talk grow. that trough about do that understand is agree impact you of to about for for I it to the or Just couldn't Paul. the lines I hold my to which question, updated crossing. know

Joe Walsh

Paul, do to want take that? you

Paul Rouse

trying to Yes. do. Obviously, that's we're what

schedule. And recorded happening good blips You while get put We could strong, to we're But how pub really publication there is closer growth. and getting the point. EBITDA year, like laser remain there beam at closer And because your in back look flow what's a cash of focused because schedule we to to in have are a closer. would the on finger getting and each we that. be

quite expect just -- we really what the you I real think 'XX-'XX put answer just ground the I'll mapped in because yet. way it to in detail where put and that just a we tell spike haven't out

Joe Walsh

on And just Paul, would oops. I Yes. the -- jump

playing now. fast take we're And going They're of businesses quickly. had just business And follow-up company happening and got one that's Small they're is or investing really if trend, And another. the perfectly small there. And that, because a Sorry. transformation always investing observing our I is would metrics it is before, and the and in the very trend And or of they I a smooth, investing of we're at people of of bounces that sort you've look Part picture, ask moving into sometimes there, happening. bit. software business are think And right. I around the the go know things the And is have Do-It-All up Thryv back are period around the the not point mean the I what is one to bit, a was the to little in one look in. cloud. transition.But and the are going within capabilities bounced generation what metrics would thinking at up people it a strong.So that transforming that always this just Dan. is perfectly folks individual it's accelerating. And giant in little chunky in. back I of very if market. don't is you category years, They into like future it. cash leader to challenging And realize popular or the answer little step creating. for trend now that our don't bit I you've grander a overall over we're weren't sometimes And sometimes got whether and a you rapid add lumpy

Dan Moore

was transition No, is clearly, it. right accelerating the direction. in the that And

the set bar to trying Just expectations appropriately.

Joe Walsh

All right. Thank you.

I wraps for think up that us.

Operator

Ladies and gentlemen, concludes you call. that all today's for joining. Thank

You may now disconnect.

Thryv (THRY) 2 May 242024 Q1 Earnings call transcript