Thryv Holdings, Inc. (THRY) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. Thryv Holdings, Inc. operates two primary segments: SaaS (software business management tools) and Marketing Services (print and digital solutions). The company is executing a strategic transition to convert Marketing Services clients to its SaaS platform, with a planned termination of Marketing Services solutions by the end of 2028. The company completed the acquisition of Keap (Infusion Software) in October 2024, which is now fully integrated into the SaaS segment.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 |
|---|---|---|---|---|
| Revenue | $201.6M | $179.9M | $593.4M | $637.6M |
| Gross Profit | $136.5M | $112.0M | $402.4M | $414.2M |
| Gross Margin | 67.7% | 62.3% | 67.8% | 65.0% |
| Operating Income | $20.0M | ($88.6M) | $46.5M | ($26.1M) |
| Net Income (Loss) | $5.7M | ($96.1M) | $10.0M | ($82.1M) |
| Adjusted EBITDA | $40.8M | $19.6M | $113.0M | $133.1M |
| Cash from Operations (9M) | $41.3M (2025) vs $63.6M (2024) | |||
| Total Debt (Net) | $268.2M (as of Sept 30, 2025) | |||
| Cash & Equivalents | $11.6M (as of Sept 30, 2025) |
Material Changes vs. Prior Period
- Profitability Turnaround: The company returned to GAAP profitability in Q3 2025 ($5.7M net income) compared to a significant loss in Q3 2024 ($96.1M). This improvement is largely due to the absence of an $83.1M goodwill impairment charge recorded in the prior year.
- Revenue Mix Shift: SaaS revenue grew 33.1% year-over-year in Q3 2025 to $115.9M, driven by the Keap acquisition and client conversions. Conversely, Marketing Services revenue declined 7.7% to $85.7M, reflecting the strategic phase-out of print and digital services.
- Margin Expansion: Gross margin improved to 67.7% in Q3 2025 from 62.3% in Q3 2024, driven by the higher-margin SaaS mix and cost-saving initiatives.
- Client Base Dynamics: Total clients decreased 16% to 249,000. Marketing Services clients dropped 25% (secular decline), while SaaS clients increased 7% (driven by conversions and Keap).
Guidance, Outlook, and Risks
- Strategic Transition: Management continues to accelerate the conversion of Digital marketing clients to the Thryv SaaS platform. While this boosts SaaS revenue, it reduces Marketing Services revenue and carries a risk of higher churn for converted clients.
- Liquidity: The company maintains a $350M Term Loan (maturing 2029) and an $85M ABL Facility. As of September 30, 2025, approximately $14.1M was available to be drawn under the ABL Facility. The company is in compliance with all debt covenants.
- Regulatory Matters: The company is cooperating with an SEC investigation regarding the strategic conversion of clients from Digital marketing services to SaaS solutions. The company states this is a fact-finding inquiry.
- Tax Risks: The company has reserved $29.9M related to a Section 199 tax deduction dispute with the IRS. A settlement was finalized for one partnership, and a decision is awaited for another.
- Share Repurchases: The company repurchased 378,000 shares for $5.0M in Q3 2025. Approximately $34.5M remains available under the current $40M authorization.
Investor Verification Checklist
- Churn Rates: Verify the churn rate of clients converted from Digital marketing services to SaaS compared to organic SaaS clients to assess the sustainability of the transition strategy.
- Print Revenue Timing: Confirm the impact of the shift from 18-month to 24-month print publication cycles on future revenue recognition volatility.
- SEC Investigation Status: Monitor updates regarding the SEC subpoena related to client conversion practices for potential regulatory penalties or operational restrictions.
- Debt Covenants: Review the "Total Net Leverage Ratio" and "SaaS Revenue" covenants in the Term Loan agreement to ensure continued compliance as the business mix shifts.
- Keap Integration: Assess the long-term retention and expansion metrics of the acquired Keap client base to validate the $77M acquisition value.