Billionaire John Paulson’s 10 Stocks with Huge Upside Potential

3. Thryv Holdings Inc. (NASDAQ:THRY)

Paulson & Co.’s Stake: $63.34 million

Number of Hedge Fund Holders: 23

Average Upside Potential as of May 2: 92.93%

Thryv Holdings Inc. (NASDAQ:THRY) provides digital marketing solutions and cloud-based tools to small-to-medium-sized businesses in the US. It operates in two segments: Thryv Marketing Services and Thryv SaaS. It was formerly known as Dex Media Holdings Inc. and was incorporated in 2012.

In Q1 2025, the company’s SaaS revenue reached $111.1 million, which was up 50% year-over-year. SaaS revenue now constitutes 61% of the company’s total revenue as of Q1. The Average Revenue Per User (ARPU) for SaaS also increased to $335 per month, fueled by newer products for existing customers. This is further supported by a seasoned net revenue retention rate of 103%. The total number of SaaS subscribers grew by 37% to 96,000.

Thryv has observed that when a customer adopts a second paid product, the churn rate drops significantly, sometimes by as much as half. Currently, 17.2% of the SaaS subscribers use multiple paid products, and the number of clients with two or more Thryv SaaS products grew to 16,000, up from 12,000 in the prior year. For Q2, Thryv Holdings Inc. (NASDAQ:THRY) anticipates SaaS revenue to be in the range of $113 to $115 million.

Laughing Water Capital is optimistic about Thryv and stated the following regarding Thryv Holdings, Inc. (NASDAQ:THRY) in its Q2 2024 investor letter:

“Thryv Holdings, Inc. (NASDAQ:THRY) – Thryv, our growing SMB software business that is milking its declining Marketing Services business for cash flow, grew SAAS customers 30% YoY, increased full year guidance, announced that seasoned net dollar retention improved by 300 bps, refinanced their debt on better terms, and initiated a share repurchase program during the quarter. These are all undeniably positive developments, but on the negative side of the ledger, the decline of their Marketing Services business has accelerated a touch, and shares have sold off sharply.

Last quarter under separate cover I included a longer writeup on THRY where I explained what I think is happening under the surface at THRY with the Marketing Services business and the new Marketing Center SAAS product, and how I believe the economics of Marketing Center will prove to be wildly superior to the economics of the Marketing Services business. Thus far the market not only does not care, but in fact seems to be punishing THRY for what I believe will be a positive evolution of their business.

Management has indicated that revenue from the SAAS business will eclipse revenue from the Marketing Services business around this time next year, at which point THRY should start to trade more like the software business it is than the marketing business it was. Unsurprisingly, insiders at THRY once again bought shares in the quarter.”