Thryv: Post Earnings Crash
Is it a disaster?
I first wrote about Thryv at roughly 6$ USD, and the stock closed today at 2.10 USD. Thryv is down 46% day over day as a result of earnings.
Thryv reported Q4 SAAS revenue of 119 million USD, +14% year over year, and in excess of analyst expectations. SAAS adjusted EBITA was 20 million USD, for a adjusted EBITDA margin of 16.8%.
These are great numbers in my opinion, especially relative to the market capitalization.
The primary reason the market punished Thryv after earnings was guidance for flat revenue in 2026.
Guidance
(Thryv Q4 Earnings Report)
Management was straightforward about the conservatism of the guidance, which amounted to a sequential revenue decline in Q1 2026, and flat revenue for the year.
To me this is not unsurprising guidance given the sequential revenue slowdown in the 2nd half of 2025. This largely reflects a shift from a prior era that management has highlighted in prior calls. The company has long taken advantage of a large legacy customer base in its directory and marketing services business, transitioning these customers to the new SaaS offerings.
This era of easy acquisition is largely tapped out, with the final result being a substantial SaaS revenue base, which includes a fair number of churnier solopreneur clients who spend less than 400 USD per month.
This legacy customer spigot drying out is, to me, a very valid reason to experience a transitionary deceleration in revenue growth.
Strategy Going Forward
Thryv’s disclosed metrics are a cogent way to assess the state of the business, and where the Company is moving.
(Thryv Q4 Earnings Report)
Thryv tracks a Quality Client number, defined by monthly spend over 400 USD on the platform, which has shown continued growth. These customers now account for 69% of SaaS revenue and sport a high retention rate of 94%.
In my opinion management is correct to highlight this number and continue to focus sales and marketing spend on increasing this Quality Client count metric. At the same time, this means that the other 31% of customers are not going to be replenished at a rate that compensates for churn, and so it is very likely that overall customer count will decline sequentially.
The low-end client pool will be serviced in an efficient manner and acquisition will be driven by a product led sales motion, with little or no sales team intervention. Management commentary around AI is very interesting in this regard, as AI enables frictionless experiences for new users, devoid of hand holding from a sales team.
Product Strategy:
Management signaled that they intend to focus on the Thryv Marketing Center product, building a full suite of business support functions into the platform to make it a one stop Thryv platform. This is a pivot from Thryv’s historic strategy of multiple product lines. Considering that Marketing Center continues to be Thryv’s fastest growing product, this focus seems appropriate.
Valuation:
The current market capitalization of Thryv represents a fraction of SAAS revenue and a substantial discount to my 18-20 USD valuation target, which remains unchanged, as I believe the underlying facts for the Thryv thesis remain the same. See my previous write-ups on Thryv for more analysis.
I remain bullish on Thryv.
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