SaaS Growth Accelerates, Becomes Majority of Revenue
Thryv delivered a standout fiscal year in 2025, driven by a 34% annual increase in SaaS revenue—cementing its transformation from marketing services provider into a cloud-first software company. SaaS now accounts for more than 62% of total revenue, supported by increased adoption from high-value customers and a rising average revenue per unit.
Strategic Pivot: AI-Enabled Platform Takes Center Stage
With legacy marketing services revenues declining 32.6% for the full year, Thryv’s growth now rests on its AI-driven "Market, Sell, Grow" platform. The company is putting artificial intelligence front and center to help small and medium businesses (SMBs) automate customer management, boost lead quality, and streamline payment and sales processes. This focus comes as SaaS monthly ARPU reached $373 in Q4, up 15% from the prior year.
Key Financial Highlights: EBITDA Margin Expands, Quality Metrics Improve
Fiscal 2025 saw key metrics move in the right direction for the next phase of the company:
| Metric | 2025 | 2024 | % Change |
|---|---|---|---|
| SaaS Revenue | $461.03M | $343.48M | +34.2% |
| SaaS Adj. EBITDA Margin | 16.0% | 12.0% | +4.0 pts |
| Consolidated Adj. EBITDA Margin | 19.3% | 19.7% | -0.4 pts |
| Net Income (Loss) | $0.31M | $(74.22M) | N/A |
| Free Cash Flow | $31.14M | $56.25M | -44.6% |
| Seasoned NRR | 94% | N/A | N/A |
| Q4 SaaS Monthly ARPU | $373 | $324 | +15.1% |
| SaaS Gross Margin | 70.7% | 69.4% | +1.3 pts |
High-Value Customers and Revenue Quality on the Rise
Customer quality continues to improve: 69% of SaaS revenue in the fourth quarter came from clients contributing more than $400 in monthly recurring revenue. Net revenue retention (NRR) for established customers held steady at 94%, supporting the case for sustainable, recurring growth as the company scales its AI platform.
Marketing Services in Decline, but SaaS Gross Margin Rises
Legacy operations faced continued headwinds: marketing services revenue dropped by nearly a third in 2025. Yet with SaaS gross margin improving to 70.7%, Thryv offset much of that contraction as high-margin software shifted to the core of its results. Operating cash flow stood at $63.53 million, providing a buffer for reinvestment in platform development.
Why This Matters: Strategic Shift Points to Sustainable Software-Driven Growth
Thryv’s results offer a template for legacy businesses adapting to the SaaS era. The focus on high-ARPU clients, expanding gross margin, and adoption of an AI-powered platform indicates a path toward more predictable, higher-margin revenue. Investors will be watching future earnings to see how quickly Thryv can continue to grow SaaS revenues while navigating the sunset of legacy business lines.
Key Earnings Call Details
The company will further discuss its results and future plans in its earnings call on February 26, 2026, at 8:30 a.m. Eastern. Details can be found on the Thryv investor relations website.
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