Thryv Holdings, Inc. (NASDAQ:THRY) Q4 2023 Earnings Call Transcript

Joe Walsh: That’s another excellent question. We’ve been actually doing what you just described sort of – sort of transitioning to that – that’s putting really throughout the last year. If you remember, we kind of brought marketing center along slowly in Q1 and Q2 of last year. Then it really hit stride when we let it out for full relief in the summer. And up until that time we did not allow the sales force to sell to anybody and we really had kind of a gated process because as you know very well, churn is the thing that we just do not want. So we wanted to make sure we sort of brought it along slowly for successful. So if you go back and you look at Q3 of last year, you saw a pretty strong acceleration in subscriber adds. That was us really getting onto that putting and us organizing around that. So it’s past tense, we’ve already done it. So you’ve already seen it flow through our numbers.

Arjun Bhatia: Perfect and appreciate it. Thank you, guys.

Joe Walsh: Thanks, Arjun.

Operator: Your next question comes from the line of Zach Cummins from B. Riley Securities. Your line is open.

Zach Cummins: Hi, good morning. Thanks for taking my questions and congrats on the solid Q4 results here. I was hoping to maybe add to a question towards grant in terms of this transition process within that legacy marketing services base. I mean can you talk about, has there been any sort of change in terms of incentives that are offered to some of these legacy customers or the approach to really accelerate that jump over to either marketing center business center?

Grant Freeman: Yes, good morning, Zack. That’s a great question actually. So I think what we’ve been laser focused on during this process is ensuring that we still provide a value that’s commensurate with what they were receiving on the digital marketing services side but then focus on giving them access to the additional tools that the more modern and up-to-date and invested in platform can afford them. So in terms of bringing them across, while still generating them whether it’s leads or the exposure that they have on the old side, still giving them that. Still doing things like managing the listings, et cetera, but now giving them more modern technology, as I mentioned before, it really in many cases no additional costs. And that also increases their level of engagement in the platform.

When you speak to for example, people that are moving over from more passive value digital marketing services lead-generation products and to the platform to marketing center for example, where you will now see them understanding things like attribution, the return on investment at the beginning where their customers are coming from et cetera. So again, it’s really important to us and we’re laser focused on giving the value that they had on the digital marketing services side and delivering upon that but then adding more in many cases at no additional cost. So it’s been received very well and we’re turning people that were relatively passive, yet happy clients into more active and engaged happier clients. So I don’t know I hope that answers your questions, Zach

Zach Cummins: Yes extremely helpful. Thanks for that Grant. And Joe, just one question for me around just the number of SaaS subscribers. You had the big jump up in Q3 and it seems well strong growth year-over-year in Q4, essentially pretty similar from Q3 to Q4. Can you talk about any moving parts around that metric and kind of what played out in Q4 for that SaaS subscriber metric?

Joe Walsh: Yes I mean, it’s actually a pretty natural process. Our customers are seeing value in – I mean Grant said it so beautifully there, in adding these analytics and diagnostic tools and we are basically allowing them to do it for little or no additional money. We’re kind of moving them over and that is going to set up the opportunity for us and you’ll probably get a little bit of rate at the next couple of years go by. There’s a little bit of an upgrade path. I think that will be able to happen there. And you’ll see that flowing through in net dollar retention and some of our growth numbers in the future. But some it’s allowing us to also reduce or even eliminate some of the investments that we would have been making in some of those older platforms, as people moving over.

So in terms of the — I guess, the way what to expect as you keep going forward we think there’s a lot more our sales force really has that on the story down. They’re comfortable telling the story. Now, the product is performing well and none. We think there’s going to be more I think what you’ve been seeing you will see for a while.

Zach Cummins: Understood. Well, thanks for taking my questions and best of luck here in 2024.

Joe Walsh: Thank you very much.

Operator: Your next question comes from the line of Rob Oliver from Baird. Your line is open.

Rob Oliver: Great. Thanks guys. Good morning. Appreciate it. Joe you — I appreciated the color that you gave around some of the RPU trends and the fact that kind of newer customers are coming in at promotional pricing. Can you talk a little bit about how we should think about customer growth versus ARPU in 2024, because while there is some pressure on those new customers this season ARPU numbers actually really nice. I just wanted to understand, how you guys are thinking about that? And then I just had a quick follow-up.