A Primer on Thryv

Shifting to SaaS..

Company Overview

Thryv is a company dedicated to supporting local, independent service-based businesses and emerging franchises. It provides a cloud-based software platform and innovative marketing solutions to entrepreneurs. As of December 31, 2024, Thryv serves approximately 300K SMB (Small and Medium-sized Business) clients. The company's solutions are designed to help SMB clients attract new business leads, efficiently manage customer relationships using Artificial Intelligence (AI) tools and automations, and run their day-to-day operations to save time and compete effectively. As of December 31, 2024, Thryv had 3,016 employees, predominantly full-time.

Thryv's operations are divided into two reportable business segments:

• Thryv SaaS: This segment encompasses their Software-as-a-Service (SaaS) flagship, an all-in-one small business management platform.

• Thryv Marketing Services: This segment encompasses their print and digital solutions business.

Thryv Marketing Services

This segment provides both print and digital marketing solutions.

• Revenue: Generated $480.7 million for the year ended December 31, 2024.

• Strategic Shift: During the third quarter of 2024, Thryv made a strategic decision to terminate its Marketing Services solutions by the end of 2028. The final publication of printed directories is set for December 2028, with billing collection extending 24 months thereafter.

• Offerings:

  • Print: Primarily consists of Print Yellow Pages (PYPs), carrying "The Real Yellow Pages" tagline in the U.S.. Domestically, PYP titles are published on an 18 to 24-month cycle, mostly 18-month. Internationally (Australia, New Zealand), PYP and Print White Page titles are on 12-month or 18-month cycles. Revenue is generated by charging for advertisements. In 2024, approximately 21 million PYP directories were delivered domestically to strategically targeted homes. Thryv is the largest publisher of print directories in the United States. PYP users tend to be over 55, more affluent, and single-family homeowners, leading to higher sales conversion rates for SMB clients.

  • Digital:

    • Internet Yellow Pages (IYPs): Digital marketing solutions through proprietary IYPs like Yellowpages.com, Superpages.com, and Dexknows.com in the U.S., and various international sites. In 2024, U.S. sites averaged over 11 million visits per month, and international sites averaged approximately 5 million visits per month. Revenue comes from charging SMBs for advertisements and priority placement.

    • Extended Search Solutions (ESS): Enables SMBs to buy advertising on Thryv's network of owned and third-party directory websites, including Yelp and Nextdoor, offering expanded access to high-converting traffic at low cost. Thryv believes it is the only provider to offer this broad network with a single purchase.

    • Search Engine Marketing (SEM): Delivers business leads from Google, Yahoo!, Bing, Yelp, and other major engines and directories, leveraging in-house and off-the-shelf technology. Thryv tracks cost-per-click and cost-per-call metrics.

    • Other Digital Media Solutions: Include online display and social advertising, online presence and video, and Search Engine Optimization (SEO) tools.

Thryv SaaS

This segment is comprised of the Thryv Platform, Thryv's flagship all-in-one small business management platform, which also includes "Keap Automations".

• Revenue: Generated $343.5 million for FY24.

Thryv Platform Components

• Business Center: Designed to streamline day-to-day business operations for SMBs. Features include Customer Relationship Management (CRM), appointment scheduling, estimate/invoice creation, payments, document management, social media content, and online AI review management. It mirrors the consumer journey from search to booking, payment, reviews, and repeat business generation. It is built on a customizable CRM database, helps SMBs communicate with customers, and automatically updates client listings across the web. It is sold on a monthly auto-subscription basis with recurring revenue, offering various tiers and feature-rich upgrade options.

• Marketing Center: A fully integrated, next-generation marketing and advertising platform operated by the end user. It provides AI-driven analytics and lead attribution. Offerings include:

  • AutoID: Connects prospects' and customers' digital interactions with the business and synchronizes them with Thryv CRM records for device-level attribution.

  • Enhanced Online Presence: Includes paid profiles on YP.com, Yelp.com, and other partners, along with robust Google Business Profile Optimization.

  • Omni-Channel Paid Campaigns: Users can run paid advertising campaigns across Google, Facebook, Instagram, Yahoo Display, Connected TV, and Yelp from a single interface, with flexible budget allocation and automatic tagging, tracking, and analytics.

  • Marketing Tools: Includes a heat mapping tool for website optimization, off-line call tracking numbers, and competitor watch to track digital advertising activities. Clients with Business Center can have new business opportunities from Marketing Center automatically injected into their CRM.

• Command Center: Launched in Q3 2023, it enables SMBs to centralize all internal and external communications. It allows connection of pre-existing email, Facebook, and Instagram accounts; installation of WebChat clients on websites; and use of Voice over Internet Protocol (VoIP), Short Message Service (SMS), and video calls. Its unique proprietary technology stitches all these channels into a single linear conversation per customer.

• ThryvPay: Thryv's branded payment solution for credit card and ACH payments, tailored for service-focused businesses. Features include:

  • Competitive flat-rate credit card processing with no set-up fees.

  • ACH payments processing, saving money on transactions.

  • Scheduled payments and customized installment plans.

  • Optional convenience fees/surcharges (where allowed) and tipping.

  • Ability to store credit card and bank account on file for future transactions.

  • Real-time reporting and integration with accounting software like QuickBooks Online/Desktop, MYOB, Freshbooks, and Xero.

  • Consumer financing partnership with Wisetack, enabling clients' customers to apply for financing.

• Thryv Add-Ons: Optional subscription-based add-ons that enhance user experience and drive incremental revenue. Examples include AI-assisted website development, SEO tools, Google Business Profile optimization, Hub by ThryvSM, and Thryv Leads.

• Keap Automations: Thryv's sales and marketing automation engine, acquired with Keap. It helps small businesses grow efficiently by automating repetitive tasks, campaigns, processes, and tools. Features include:

  • CRM: Manages contacts, notes, tags, and custom fields.

  • Sales and Marketing Automations: Streamlines tasks like lead follow-up, re-engagement, and gathering reviews.

  • Sales Pipelines: Organizes and manages leads with a drag-and-drop interface, triggering emails, quotes, and invoices.

  • Keap Business Line: A free business phone line on personal smartphones.

  • Text Messaging: Send 1:1 or broadcast messages.

  • Payments and Invoicing: Converts quotes to invoices and adds "pay now" buttons to emails/texts.

  • Landing Pages: Create and test sales offers quickly without a website.

  • Email Marketing: Send customized newsletters, broadcasts, or 1:1 emails.

  • AI: Generates professional copy for emails and campaigns.

Market opportunity

The SAM is pretty big:

Thryv is targeting a mid-segment, just above entry solutions like Square and Mailchimp:

Strategic Shift and Client Transition

Thryv launched its SaaS business in 2015 to provide SMBs with technology solutions to communicate with mobile consumers. The company has made a strategic decision to fully transition into a SaaS-driven business model by the end of 2028, completely exiting the Marketing Services business.

A key part of this strategy involves accelerating the transition of clients with digital Marketing Services solutions to the Thryv Platform.

• During 2024, approximately 46K clients were converted from digital Marketing Services to the Thryv Platform at no additional base cost at the time of upgrade.

• As of December 31, 2024, approximately 38K of these remained active SaaS clients.

• This conversion decreases clients and revenue in the Marketing Services segment and increases them in the SaaS segment. While intended as a valuable upgrade, there was a potential for higher churn rates, although in 2024, the churn of converted clients was in line with other SaaS clients. The no-additional-base-cost conversion also resulted in a decrease to SaaS monthly ARPU (Average Revenue Per User).

• The Marketing Services client base continues to serve as an important strategic client acquisition channel for Thryv SaaS, enabling low-cost client acquisition and providing significant potential for higher lifetime client value.

New products

The most recent additions are:

• Workforce Center

• Thryv for HVAC

AI

The company has introduced a host of AI-based product categories (AI-based automation, AI-based Social Media Management, and AI-based Reputation Management), with products like:

• Caption AI: Instantly create engaging social content.

• AI Review Response: Respond to reviews across sites in seconds.

• AI Service Description: Professional listing with the writing struggle.

• AI Content Assistance: Personalized writing assistant for customer follow-ups, landing pages, and emails.

• AI Automation Assistant: End-to-end campaign creation with assets.

• AI Social Image Generated: Ability to create AI images to fit exact needs.

• AI Call Analysis:

• AI Website Builder:

Company Strengths and Strategy

Thryv identifies several strengths and strategic pillars:

• Nationwide Scale and Extensive Sales Force: Thryv has one of the largest SMB-focused sales forces in the U.S., used for attraction, upsale, and client management. This differentiates them from competitors.

• Comprehensive Solutions: Offers a full portfolio of marketing solutions, enabling SMBs to craft a comprehensive marketing strategy with Thryv as a "one-stop provider".

• Industry Experience: Deep history of serving SMBs, rooted in decades of providing marketing solutions.

• Dynamic Tracking and SMB Data: Utilizes tracking software for ad campaign performance analysis and provides actionable insights to SMBs.

• Optimizing Advertising and Leads: The integration of Marketing Center (generating leads) and Business Center (managing them) allows for automatic injection and enrichment of new business leads into the CRM. Command Center centralizes communication for improved customer experience.

Strategy Focus Areas

• Fully Transition into SaaS by 2028: Optimizing book formatting, streamlining ad pricing, and extending phone directory contract periods to support client retention and maximize value during the transition. Continued advancement of the Thryv Platform with new features and integrations.

• Leverage Nationwide Scale and Sales Force: To introduce and expand SaaS solutions to new and existing clients.

• Manage Marketing Services Revenue for Profitability: Through cost management strategies like using third-party printers and cost-effective contracts.

• Cash Flow Generation and Capital Allocation: Focused on maintaining a variable cost structure to generate significant cash flow, reduce debt, and pursue acquisitions.

• Opportunistic Acquisitions: Experience in executing accretive acquisitions like Keap, which result in cost synergies and new SaaS clients.

• International Growth: Intent to expand globally through acquisition, re-seller agreements, or other commercial arrangements.

Acquisitions

Thryv has strategically grown through acquisitions, including:

• Keap: Acquired on October 31, 2024, Keap is a SaaS email marketing and sales platform for small businesses.

• Yellow Holdings Limited: Acquired on April 3, 2023, this is a New Zealand marketing services company.

• Vivial Media Holdings, Inc.: Acquired on January 21, 2022, this is a marketing and advertising company with operations in the United States.

Competition

The industry is described as highly fragmented, intensely competitive, and constantly evolving. Principal competitive factors include customized solutions, flexible technology, quality, pricing, ease of use, brand recognition, onboarding and support, and sales force presence. Thryv believes it competes favorably.

• Marketing Services Competitors: National companies selling marketing campaigns on major search engines/social media sites, and website building/hosting services.

• SaaS Competitors:

  • Point Solution Providers: Offer single features, often low-cost, and some have been in the market longer than Thryv.

  • Vertical Solutions: Customized products for specific categories (e.g., Home Services, Health & Wellness), some with consumer-facing apps.

  • All-In-One Competitors: Most direct competitors, some priced higher or targeting larger companies.

Intellectual Property

Thryv relies on intellectual property laws (trade secrets, copyright, patent, trademark) and contractual agreements to protect its technology and IP.

• Key IP Assets: Trademark protection on brands (Thryv®, Thryv Leads®), proprietary roadmap and product stack with proprietary code, machine-learning algorithms, a patent related to systems and methods underlying Thryv Leads, strategic alliances, branding via proprietary print and online assets, and copyright protections on work product.

• Maintains a library of proprietary communications, including product features, customer FAQs, ideal client profiles, website content, industry templates, how-to videos, articles, blogs, and guides.

• The SaaS industry is characterized by frequent IP claims and litigation.

Use of Technology

Thryv strategically employs technology across its segments:

• Marketing Services: Uses a customized platform for print directories, proprietary software for IYPs, and third-party cloud-based software for other digital offerings, all managed by an in-house engineering team.

• Thryv Platform: Comprised of unique integrations and solutions primarily built by or for Thryv, augmented by Keap Automations. It integrates with select third-party vendors. Thryv's strategy is to utilize best-in-class systems and tools and integrate them in unique ways to unlock value for customers. Internal engineering teams create technology and innovation on top of the existing interoperable technology stack for strategically important functionality not readily available.

Government Regulation

Thryv is subject to various U.S. federal, state, and foreign laws and regulations concerning privacy, data protection, content regulation, intellectual property, consumer protection, and employment. Compliance has not materially affected capital expenditures, earnings, or competitive position, but these laws are constantly evolving and could impact the business.

Stay tuned for our upcoming Quick Take where we discuss recent results and whether buying the post Q3 dip is worth buying.