Thryv Holdings, Inc. (NASDAQ:THRY) Q2 2023 Earnings Call Transcript

And so you could get in there and accomplish a lot for your business without spending any money at all. So we think that, that is really the key, it’s not a real marketing heavy thing. As far as Marketing Center goes, we are experiencing stronger and stronger demand, the better the sales force understands this and we have had Australia ringing the bell, scream and give it to us and so we have done that now this week, given it to Australia and they have got a backlog of people that are interested in it. So we think we will see a nice surge in sales from there as well. So, overall, if you think about it, the way you think about it from a modeling standpoint, we are not going to spend any more than we have budgeted or planned for the year. We are going to redirect some of those resources into some of these messaging around these new elements, but that was our plan all along to be honest with you.

Scott Berg: Got it. Very helpful. And then, Paul, from a follow-up question, your season churn did tick out 2-point as you noted, one quarter certainly not a trend, but your churn over the prior four quarter, five quarters was amazingly consistent, especially as the macro changed a little bit. How should we read that 2-point change, is that just something specific in the quarter, should we expect it to bounce back, maybe it’s macro, obviously, we are all seeing the macro, so don’t need to make too big deal out of the macro necessarily, but just try to help us understand that maybe small difference here in the quarter? Thank you.

Paul Rouse: Well, the season churn is flat. And so does that — I think that’s the issue you are trying to address here, right?

Joe Walsh: Paul, I think, he’s going for net dollar retention.

Scott Berg: Yeah. I am trying net dollar retention. Yeah.

Paul Rouse: I think this is a temporary thing, because we had a slight delay in or not a ramp as we expected on Marketing Center. So that pulls down a little bit. And we are expecting — Marketing Center gives us a perfect opportunity to add additional products, particularly with Command Center, the new front door. We are going to see net dollar retention head towards 100% fairly quickly with this new innovation. So we are expecting that to build. We are not concerned about where it is. It’s not a trend. In fact, we expect it to reverse and go the other way.

Joe Walsh: I would add. You can sort of mark it down and circle it on your calendar. This quarter sort of the beginning now of our net dollar retention journey, because if you think about it, other than some very small add-ons, we didn’t really have anything else to sell to a small business. When we went in, we were using an expensive sales channel with a big demo and we were making the entire sale at the time of the sale. So there wasn’t really a lot to add on and in soft economic periods, people weren’t buying as big, there were even a handful of downgrades of people that were — would buy maybe the good, better, best, they would buy the best and then downgrade a little bit out of economic fear reading all the headlines.

So we had a little bit of headwinds there. You start now and you look at our business, we now have the ability to go in and make an initial sale and then go back and add additional meaningful very high margin software centers, not just little signature packages or other small add-ons. This is a very significant change. So from here forward you are going to see our net dollar retention rise to that 100% that we have guided you all along on. We now have the products to sell.