Laughing Water Capital, an investment management company, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter of 2025, Laughing Water Capital declined approximately -1% net of all expenses, bringing year-to-date returns to approximately -2.7%. The SP500TR and R2000 returned 12.4% and 8.1% respectively, in the quarter, and 14.8% and 10.4%, respectively, for YTD. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its third-quarter 2025 investor letter, Laughing Water Capital highlighted stocks such as Thryv Holdings, Inc. (NASDAQ:THRY). Thryv Holdings, Inc. (NASDAQ:THRY) is a digital marketing solutions and cloud-based tools provider to small-to-medium-sized businesses. The one-month return of Thryv Holdings, Inc. (NASDAQ:THRY) was -1.02%, and its shares lost 18.64% of their value over the last 52 weeks. On October 29, 2025, Thryv Holdings, Inc. (NASDAQ:THRY) stock closed at $11.70 per share, with a market capitalization of $514.055 million.
Laughing Water Capital stated the following regarding Thryv Holdings, Inc. (NASDAQ:THRY) in its third quarter 2025 investor letter:
Thryv Holdings Inc (THRY) – Thryv is our small and medium business software company. The bottoms up thesis is that a declining business (that is spitting off a ton of cash) has been masking the growth in the software business. From the top down, there are millions of small businesses in the U.S. and other geographies that are run on excel and sticky notes. As the baby boomer generation moves on, the next generation of business owners is investing in software that increases their revenue and decreases their costs. Thryv’s SAAS business is a rule of 40 company (Q2: 25% organic YoY organic revenue growth, 20% adj. EBITDA margin) with rising ARPU, net revenue retention of ~100%, that has been rapidly paying down debt. As a result, now for the first time the company has some flexibility on how it will allocate their capital going forward. Insiders appear excited about the future, as 4 of them have bought shares in the open market this year, and the company recently raised guidance.
However, the GAAP financials remain messy due to the declining Marketing Services business, which will have been completely exited by 2028, and the company still “screens” as a “Media / Advertising” business, despite the fact that the SAAS business has eclipsed the legacy business. Additionally, recent growth has been tied to upselling existing customers rather than growing total customer count, which causes some to question the growth model. This has been a deliberate decision made by management; the return on SG&A dollars is simply higher when they are focused on the upsell rather than new customers. To me, trying to maximize your return on spend is completely logical and management has indicated that in 2026 they will once again shift focus toward increasing customer count rather than upselling. But for now, it seems as if the market disagrees…” (Click here to read the full text)
Thryv Holdings, Inc. (NASDAQ:THRY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 17 hedge fund portfolios held Thryv Holdings, Inc. (NASDAQ:THRY) at the end of the second quarter, compared to 19 in the previous quarter. While we acknowledge the risk and potential of Thryv Holdings, Inc. (NASDAQ:THRY) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Thryv Holdings, Inc. (NASDAQ:THRY) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Thryv Holdings, Inc. (NASDAQ:THRY) and shared Laughing Water Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
