Thryv Holdings (THRY) Declined Approximately 40% in Q2. Here’s Why

Laughing Water Capital, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter of 2025, Class A interests in Laughing Water Capital returned approximately 13.1% net of all expenses. The SP500TR and R2000 returned 10.9% and 8.5%, respectively. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second 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 -0.50%, and its shares lost 36.35% of their value over the last 52 weeks. On July 23, 2025, Thryv Holdings, Inc. (NASDAQ:THRY) stock closed at $12.08 per share, with a market capitalization of $528.357 million.

Laughing Water Capital stated the following regarding Thryv Holdings, Inc. (NASDAQ:THRY) in its second quarter 2025 investor letter:

“Thryv Holdings, Inc. (NASDAQ:THRY) – Thryv, our small and medium business software company that is also harvesting cash flows from a legacy business that is in runoff mode, declined approximately 40% from its February high until quarter end. The high price came in the wake of the company becoming “rule of 40” with greater than 100% net review retention, while the low price came in the wake of the company slightly cutting FY’25 guidance due to tariff uncertainty. The real issue here is the assumption that small and medium businesses will suffer in a recessionary environment, and the assumption that tariffs will lead to that recession.

From my view, at current prices the stock is trading as if the business is imploding. Yet, according to the National Federation of Independent Business, small business optimism remains above its long-term average, which suggests that Thryv should be able to continue executing their playbook. To be fair, Thryv does need to prove to the market that they can shift their growth model from relying on the transition of legacy customers to their software and more toward relying on product led growth, and at this point we have limited visibility on that front. However, I gain some comfort from the announcement subsequent to quarter end that HubSpot’s (HUBS) former VP of Product is joining Thryv’s board. Presumably, he does not think the business is imploding either. Let’s hope that he brought some of HubSpot’s multiple with him, as HubSpot trades at more than 9x 2025 revenue, while Thryv trades at less than 2x 2025 SaaS revenue, giving no credit to the cash that the legacy business continues to generate.”

In another article, we covered Thryv Holdings, Inc. (NASDAQ:THRY) and shared billionaire John Paulson’s stocks with huge upside potential. In addition, please check out our hedge fund investor letters Q2 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.