Thryv (THRY) Q3 2024 earnings summary

Executive summary

• SaaS revenue grew 29.2% year-over-year to $87.1M in Q3 2024, driven by accelerated client migration and upsell strategies, while Marketing Services revenue declined 20.3%, resulting in a 2.2% decrease in consolidated revenue to $179.9M.

• Adjusted EBITDA rose to $19.6M (margin 10.9%), up from $7.3M a year ago, despite a net loss widening to $96.1M due to an $83.1M goodwill impairment in Marketing Services.

• Completed the $80M Keap acquisition in October 2024, adding 15,000 customers, expanding product and engineering capabilities by 50%, and expected to drive cross-sell, margin uplift, and accretive non-GAAP EPS in 2025.

• Strategic shift continues, accelerating client migration from digital Marketing Services to SaaS and focusing on larger SMBs using Keap's automation tools and partner ecosystem.

Financial highlights

• SaaS adjusted gross margin improved to 72.2% in Q3 2024 (up 560 bps year-over-year); SaaS adjusted EBITDA was $10.3M (11.8% margin); SaaS subscriber base grew to 96,000, up 45% year-over-year.

• Marketing Services revenue was $92.8M (down 20.3% YoY), with adjusted EBITDA of $9.3M (10% margin); billings declined 35% year-over-year due to migration to SaaS.

• Consolidated adjusted EBITDA was $19.6M (11% margin); consolidated gross margin improved to 62.3% in Q3 2024.

• Net debt at quarter-end was $307M; leverage ratio reduced to 1.66x net debt to EBITDA.

• Generated $27.5M in free cash flow in Q3 2024, used to prepay $52.5M in term loan amortization.

Outlook and guidance

• Raised full-year SaaS revenue guidance to $329.5–$331.5M and SaaS adjusted EBITDA to $33.5–$34.5M; Marketing Services revenue expected at $479–$481M with adjusted EBITDA of $125–$128M.

• Q4 SaaS revenue expected at $90–$92M; Marketing Services revenue at $81–$83M; Keap expected to contribute $11–$12M in Q4 revenue with minimal EBITDA during integration.

• Company expects FY 2024 SaaS growth of 25–26% and Marketing Services revenue decline of 26–27%.

• No full-year 2025 guidance provided; further details expected at Analyst Day.