Thryv Holdings Q1 2026 Earnings: SaaS Growth and Strategic Transformation
Thryv Holdings Q1 2026 Earnings: SaaS Growth, Strong Net Income Reversal, and Strategic Outlook
Key Highlights from Q1 2026 Earnings Report
- SaaS Revenue Growth: Software-as-a-Service (SaaS) revenue rose to \$116.7 million, marking a 5.0% year-over-year (YoY) increase. SaaS now represents 70% of total company revenue, a significant milestone as Thryv continues its business transformation.
- Marketing Services Decline: Marketing Services revenue dropped 27.5% YoY to \$50.9 million, reflecting the company’s deliberate strategic shift away from legacy marketing services and toward SaaS offerings.
- Total Revenue and Profitability: Consolidated total revenue was \$167.7 million, down 7.5% YoY. However, Thryv recorded a net income of \$4.5 million (\$0.10 per diluted share), a dramatic turnaround from a net loss of \$9.6 million (or \$(0.22) per share) in Q1 2025.
- Adjusted EBITDA: Consolidated Adjusted EBITDA was \$24.1 million (margin of 14.4%). SaaS Adjusted EBITDA was \$10.8 million (margin of 9.3%), while Marketing Services Adjusted EBITDA was \$13.2 million (margin of 26.0%).
- Gross Profit: Consolidated gross profit reached \$109.3 million. SaaS gross profit was \$75.6 million (gross margin 64.8%), with SaaS Adjusted Gross Profit at \$78.2 million (67.0% adjusted margin).
- ARPU and Customer Quality: SaaS monthly Average Revenue per Unit (ARPU) increased 12.8% YoY to \$378, driven by upmarket expansion. Quality customers (over \$400 in monthly recurring revenue) made up 70% of SaaS revenue. SaaS clients totaled 96,000 at quarter-end, with a seasoned Net Revenue Retention (NRR) of 93%.
- AI and Product Adoption: Rapid adoption of new AI-driven platform features and strong demand for Marketing Center were cited as growth catalysts, with Marketing Center revenue up 29% YoY.
Guidance and Outlook
- Q2 2026 Outlook:
- SaaS Revenue: \$114M – \$115M
- SaaS Adjusted EBITDA: \$12M – \$13M
- Marketing Services Revenue: \$31M – \$33M
- Marketing Services Adjusted EBITDA: \$3M – \$4M
- Full Year 2026 Guidance:
- SaaS Revenue: \$463M – \$471M
- SaaS Adjusted EBITDA: \$70M – \$75M
- Marketing Services Revenue: \$157M – \$163M
- Marketing Services Adjusted EBITDA: \$30M – \$35M
Note: Guidance excludes contributions from the Keap acquisition for certain metrics.
Detailed Financials
Income Statement (Three Months Ended March 31)
- Revenue: \$167.7 million (2026) vs. \$181.4 million (2025)
- Gross Profit: \$109.3 million (2026) vs. \$119.3 million (2025)
- Operating Expenses: \$103.8 million (2026) vs. \$122.3 million (2025)
- Operating Income: \$4.1 million (2026) vs. (\$3.0) million loss (2025)
- Net Income: \$4.5 million (2026) vs. (\$9.6) million loss (2025)
- Net Income Margin: 2.7% (2026) vs. -5.3% (2025)
- Adjusted EBITDA: \$24.1 million (2026) vs. \$20.9 million (2025)
- Free Cash Flow: (\$5.5) million (2026) vs. (\$17.6) million (2025)
Balance Sheet Highlights (As of March 31, 2026)
- Cash and cash equivalents: \$8.0 million
- Accounts receivable: \$147.1 million
- Total assets: \$693.7 million
- Total liabilities: \$468.3 million
- Stockholders’ equity: \$225.4 million
- Term Loans (including related party): \$167 million
- ABL Facility: \$29.5 million
Strategic and Price-Sensitive Developments
- Business Transformation: Thryv’s revenue mix shifted decisively toward SaaS, now 70% of total revenue, signaling progress in its strategic transformation and focus on higher-margin, recurring-revenue streams.
- Profitability Turnaround: The company achieved positive net income after a year-ago loss, indicating the success of restructuring and cost management initiatives. This is a major inflection point that could positively impact investor sentiment.
- Rapid AI Adoption: Thryv’s new AI-driven features are seeing rapid adoption. The company’s focus on AI-driven CRM, lead insights, and automation is attracting larger SMBs and driving up ARPU. Successful AI integration may provide a competitive edge and further margin expansion.
- Strong Retention and Upmarket Motion: 93% seasoned NRR and a growing base of higher-spending “Quality Customers” reflect strong client engagement and upselling success—key metrics for future SaaS growth.
- Marketing Services Weakness: The ongoing decline in Marketing Services revenue (-27.5%) continues to weigh on total revenues. This transition risk may be a concern for some investors until SaaS growth fully offsets legacy declines.
- Forward-Looking Risks: The company highlights risks including competitive pressures, technological change, customer retention, integration of acquisitions (including Keap), reliance on third-party providers, cybersecurity threats, and pending regulatory investigations (including an SEC subpoena). These could all impact future financial performance.
- Cash Flow and Liquidity: While net income is positive, free cash flow remains negative, largely due to capitalized software investments. Liquidity remains adequate for now, but investors should monitor cash balances and debt levels as Thryv invests in growth.
Management Commentary
“We delivered a strong start to 2026, with SaaS revenue exceeding our guidance and now representing 70% of total revenue. Our upmarket motion is clearly working, as ARPU grew 13% year-over-year and Quality Customers now represent 70% of our SaaS revenue. We are expanding beyond our legacy client base, and are attracting larger small businesses with Marketing Center, engaging them at a higher level, and encouraging them to spend more – driving ARPU upward.”
– Joe Walsh, Chairman & CEO
Investor Takeaways
- Thryv’s successful pivot to SaaS and AI-powered solutions is gaining traction, reflected in growing margins, higher-quality customers, and a return to profitability.
- Risks remain around legacy revenue attrition, integration of new acquisitions, and macroeconomic headwinds.
- Guidance for 2026 suggests continued SaaS momentum, but investors should monitor execution, especially on free cash flow and customer retention metrics.
- Any further positive surprises in SaaS growth, profitability, or AI adoption could be catalysts for share price appreciation, while execution or regulatory setbacks could pose downside risks.
About Thryv
Thryv (NASDAQ: THRY) is an AI-enabled global marketing platform helping small businesses get found online, win new customers, and drive repeat business. Their software suite includes AI-driven lead insights, customer follow-up, payment processing, and CRM solutions. Thryv serves over 200,000 businesses worldwide.
Investor and Media Contacts
Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. Investors should review all publicly available information and consult with their financial advisor before making any investment decisions. Financial results and forward-looking statements are subject to risks and uncertainties as disclosed by Thryv Holdings in their SEC filings. Past performance is not indicative of future results.
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