Thryv Holdings Reports Major Revenue Drop Amidst SaaS Growth and Marketing Services Decline

Thryv Holdings, Inc. (NASDAQ: THRY) recently reported its quarterly results for the period ended March 31, 2025. Here are the key points related to the company's income statement and overall performance:

• Revenue: Decreased by 22.4% to $181.4 million compared to $233.6 million in the prior year. This drop primarily stemmed from a significant decline in the Thryv Marketing Services segment.
• Gross Profit: Contracted 22.4% to $119.3 million, maintaining a gross margin of 65.8%.
• Operating Income: Reported an operating loss of $3.0 million, down from an operating income of $31.1 million a year earlier.
• Net Loss: Recorded a net loss of $9.6 million, contrasting with a net income of $8.4 million in Q1 2024.
• Earnings Per Share (EPS): Basic and diluted EPS at $(0.22) compared to $0.24 in the same quarter last year, reflecting the company's challenging performance.
• Client Segments: Total clients decreased from 328,000 to 281,000, with Marketing Services clients dropping by 76,000 (26%) and SaaS clients increasing by 41,000 (59%).

Positive Aspects:

• SaaS revenue increased by 49.5% to $111.1 million, demonstrating strong demand for the company’s SaaS offerings.
• Cost of services decreased by 22.4%, aligning with the revenue drop, showcasing effective cost management.
• Improved adjusted EBITDA at $20.9 million, though down from $54.1 million, indicating ongoing profitability from core operations.

Negative Aspects:

• The sharp decline in the Thryv Marketing Services segment revenue, specifically a drop of 55.9%, significantly impacted the overall results.
• Operating expenses remained high at $122.3 million, leading to a negative operating income, highlighting the need for further cost optimization.
• Higher interest expenses of $9.1 million, although lower than the prior year, continue to apply pressure on profitability levels.

In summary: Thryv Holdings, Inc. is experiencing a complex landscape with substantial growth in its SaaS segment contrasted by declines in print and digital marketing services. The company's ability to manage costs and navigate through this transition will be crucial for future performance and profitability. Investors should closely monitor the ongoing developments following the Keap acquisition and the associated challenges the company faces in shifting client bases.