Thryv Holdings, Inc. (THRY) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for joining today's demo showcasing our new Thryv growth platform. My name is Cameron Lessard, and I lead IR at Thryv. Our guests today are Joe Walsh, Chairman and CEO; Grant Freeman, our President; Rees Johnson, our Chief Product Officer; and Ben Kaplan and Crystal Rees from the product leadership team that built what you're about to see. Our agenda is as follows: a 10-minute demo of the platform. And once the demo wraps, we'll open it up to Q&A with our covering analysts. For investors following along, they can e-mail questions directly to the investorrelations@thryv.com mailbox or to me directly. With that, let's turn it over to Joe.

Thank you, Cameron. Appreciate that. Well, thank you all for being here. We really appreciate it. This is a big day for us. This is the unveiling of our Thryv growth platform, which we're super excited to tell you guys all about. For decades, we've been working with local service businesses, plumbers, lawyers, dentists, chiropractors, all the service businesses in the local economy. And in most cases, these are people are really good at what they do. They like to be a chiropractor or they like to be a plumber. They're practicing their craft at a high level. But -- and they built real businesses. But the frustration that they have, we hear from them all the time is around advertising and around wasted money on advertising. And the ambitious ones that want to grow and want to scale their businesses up are constantly tinkering, trying to figure out how to solve this wasted advertising problem. And then you layer on the technological shifts where we've gone from analog to digital and now within digital, there's a constant movement there. It's very difficult to figure out what works and something that is working might stop working at some point. And it's just been a challenge. And so there's a lot of different software companies and a lot of different marketing companies that have tools that they've signed up for. In some cases, they're using 2, 3, 4, 5 different tools, trying to keep track of it. And they're still trying to be the roofer while they're doing that. And so there's an overall frustration there with this. And over the last number of years, our Thryv product portfolio has been evolving. We came out with Marketing Center. And Marketing Center began to address that, began to tell them exactly what worked and exactly how it works. Tim, maybe I'll throw up that first slide for me. So over the last few years, we've seen an acceleration in growth of this Marketing Center product. It's going up and up and up. And if you look at our Market, Sell, Grow package, you can see there's just tremendous growth. And so building on that success, building on those conversations we've had with customers, we've really made a really key insight. And that's a lot of these small businesspeople, they want control. They want to know what it is. They want to be able to understand it. They want to go to put their hands on it. They don't just want to go hands-free and give it to an agency and be in the dark and kind of hope for the best. But there are points along the journey once they're comfortable that it's working, they kind of want to turn it over to somebody else. And so we've got an ability to do almost like a hybrid model where we can do it with them, we can do it for them. And we have the AI doing a lot of it for them in this new product. Maybe put up that next slide, Tim. So this is all about getting found on that vast kind of online map of all the places that people could be, about growing your business, getting leads, keeping your order book full and about investing smarter, about knowing exactly what is and isn't working and being able to monitor that. If you've done an expensive truck wrap, is that pulling calls? You can actually track that. If you've got a yard sign in front of the business that you're working on, you can track that, too. You can track everything that you're doing digitally and analog, all in this platform that we've built, and you can actually figure out exactly what works and what didn't. Next slide, please. What we're finding in the beta period and the early run-up to this release is that we're delivering 1.5x faster closes with the AI insights that we're able to deliver and about 40% more revenue per client because you know with precision what the problem is and the sales conversation and everything is going right at the heart of it, you've got scored leads that are showing you. And a very high percentage of the sales that you're coming through are coming through these AI scored leads. So the new platform does a lot. We're super excited about sharing it with you. We've got Crystal Rees here today with us to take you through this new platform, and then we're going to have an opportunity to answer a whole bunch of questions. So Crystal, if you could take it away. [Presentation]

That's terrific. I'd like to bring our other panellists in, we're going to be doing a question-and-answer session now. Look forward to your thoughts and your questions. Tim, we're going to bring in the analysts as well, or...?

Yes, sir. I promoted them to panelists, and they have to turn the camera on and unmute their mics.

That's great. Look forward to taking their questions. Crystal, that was a terrific job telling us about it. Thank you. It was really nice. Very concise, very clear.

Yes. Thanks, Joe. It was fun just being able to talk to the customers, too. I mean, we like to launch new products, and it's always fun for a company, but it makes such a difference for our customers when it works for them, and that's what excites us in the product team.

I think watching the demo, it's one of those products that just kind of makes sense. And I'm sure when you get in the hands of customers, they can figure it out pretty quick. You kind of showed some of the self-service go-to-market. Could you just talk a little bit more? Obviously, like if you're a one-man shop, right, you're the IT department as well as the plumber or whatever your main business is. How are you ensuring that customers are successful right away and kind of figure out everything that the platform has to offer?

Yes, good question. We can see how customers are successful right away by optimizing their Google Business profile, taking their Google -- all their listings and pushing it out into dozens of other listing platforms and then seeing what kind of leads come in, also seeing what kind of presence, web activity, web clicks, impressions, also the social calendar, if they get their social calendar up and running and they start pushing content out to multiple different people -- multiple different platforms, excuse me, such as different Meta platforms or others. So those are some of the ways we see the customer really getting traction. The first one they do is often optimize Google Business profile, push out their listings.

If I could just piggyback on that to get deeper into your question. Ben Kaplan is on the screen here, the handsome gentleman with the glasses. He comes to us from Constant Contact, a lot of experience of engaging with free trials and freemium offerings. And so they've made the self-onboarding and self-provisioning very simple. It's step by step. It's a guided journey. And along the way, AI is popping up recommendations where it's already created what you're supposed to do next. And it really shifts the dynamic of the business owner from creator, which is where they get stalled, to approver. And so we're seeing success in onboarding that way. So we don't have to have a bunch of humans helping them along the way for the smaller customers.

Yes. It's really exciting, Matt, in the sense that, that smaller business, we want to be able to serve them, but in a very self-serve type of way, right? And so basically, what the exciting part of the platform is that we can serve basically 2 markets with 1 product, right? So we will get those smaller SMBs. And Crystal showed in the video that it's very intuitive of what they're supposed to do next because we've built this experience that is designed to be self-serve. And then for larger businesses who are more -- a little bit -- have a little bit more experience, a little bit more complicated use cases, the product actually adapts to that, right? Because we are asking during the initial setup of like what type of business they are, what's their vertical, what are their goals. And we sort of understand intuitively from that information what the experience should morph into be so that we can serve those 2 different markets, but within that same experience, right? So we're really excited about that -- the product's ability to do that because it expands our sort of addressable base because we're able to serve 2 markets with 1 product.

Yes. And I'll say one of the businesses actually was telling us about how it does it for him. It was actually a pet boarding business, said before Thryv, she'd go weeks without posting because she had that blank page, right? Like I don't know what to post. I've got a business, but I don't know what to do. I don't know what to put in my listings. So she said, we put the tools together and put posts together for her in minutes using the platform. We weren't doing it for her. AI was doing it for her in the approver state. So she said she immediately felt more polished. She was getting more business because of it because new client inquiries come from checking your social presence.

Matt, do you have anything else? We jump over to...

Sorry, I didn't know if you wanted to jump back and forth or just keep going. Could we -- talking just kind of about like that flywheel that the customer example is talking about, which is -- I mean, exactly I'm sure you imagine this platform working where the return on ad spend gets reinvested back into Thryv, which leads to more revenue for them, which leads to more money on Thryv and everybody is happy. Can you talk about kind of the data side of that as well? And kind of are there use cases that you can use data across customers for benchmarking and things like that? Or kind of just how, I guess, that side of the flywheel works?

Rees, do you want to talk a little bit about that? That's really data and just the sheer volume of transactions we're able to study.

Yes, excellent. There's -- from a social -- from a benchmarking standpoint, we actually do have a dashboard that is coming out in a follow-on release for different platforms, for example, social platforms, that will show how you compare to others from an industry standpoint. We already do that relative to things like CTR, like click-through rate. We're more than double the standards for social, for Meta Platforms, for example. And also -- so we definitely are doing industry benchmarking because of our vast trove of data. Joe asked me to talk a little bit about the data from the ROI perspective. So far, we've had -- we've done a measurement, and we've been working on this for a while. So we've had this in beta for a while. And we have from November 2025 into 2026, 2.7 million leads scored -- we have 35,000 MCs that are now available for this functionality in addition to our new Thryv growth platform, a lot of this functionality. And we've noticed that what happens is if you tap the lead scoring turned on versus if you don't have it turned on, and this is real data. This isn't survey data, right? We have 416,000 new clients with an AI lead score, 121,000 without. So really, really clean, strong data of with and without. And so those scores that Joe showed is real-world data that our customers do convert at 50% higher the rate of a lead when they have this functionality in this platform. And they do get 40% more revenue per client. For example, we've got a cosmetic dentist on the East Coast, and they're getting they've gotten 2,700 leads so far as part of this program. And they're able to set up 2 dozen additional appointments per week because they have this insight and they can focus right into where to call back and where to spend their time. Very good.

Jason, how are you today? This is a big day for us. So we're excited.

Good to see you. Thanks for hosting. I just wanted to talk about like a push versus pull in terms of like a cross-sell, upsell opportunity. Obviously, you're embedding a lot of self-serve into the platform. But at what point does a salesperson get interjected into the conversation and try to push the client into something that might serve them a little bit better?

Yes. I mean, it's really a matter of spend. So this thing -- there's a free version. There's a $99 version where you kind of put your own credit card in, and it's all set up to do it without you and the AI without really us getting too involved. But we'll be monitoring all that. And if your firmographic information is of a bigger company and you are showing certain other kind of green signals, at some point, that gets promoted to an SDR talking to you about maybe meeting with one of our business advisers. We're really trying to deploy our business advisers at $400 a month and up. So a little bit bigger spend, a little bit bigger customer. It's just hard for us to afford to do it for the smallest. And so we've created this kind of dual track where we've got the self-serve and then the -- we go help you out. But within that group of people that are coming in through the free trial or coming in through the entry level, do it themselves, there's going to be some great leads coming out of that and some great people that we can grow.

Joe, can I share one more use case? Something that the business advisers, Jason, were super excited about at the rollout on Monday was that if somebody didn't say yes after the first couple of appointments, they kind of had to leave and there was no free version that they could give the upmarket prospect to get their hands on and connect some things and feel the power before just asking them to convert. So now when they can't close the deal, they can help them by activating the free trial, which, in essence, is just the great platform on its own, free for 30 days. They can get them set up really quickly, and they can now come back and have a more relevant conversation and somebody is experiencing the power of the platform versus them just talking about it every time they come back. So that's a really exciting way that they're going to use this to land more of the upmarket customers as well.

I love this, Grant, because you and I have talked about free trials for a couple of years now. Can you share anything -- I mean, we've talked about how this has been in beta for a long time. Can you share anything about the effectiveness of a free trial and what your thoughts are on conversion and that ability to grow through that means?

Ben, why don't you take that one? Ben, you're muted. But I'm sure it's very good what you're saying.

Sorry, Joe. Yes, we are seeing really, really strong engagement, right? Given that this is a brand-new motion for us, I couldn't be happier with what we're seeing from the level of engagement from our customers, right? It is a tremendous amount of work that the team has put in over a tremendously long period of time to build this experience that we believe in, right? And in terms of -- and what I mean by that is it is extremely simple to sign up. It is extremely simple to get started. And we have done a really good job at explaining the value of the platform in terms of get your listing set up and why that's important to the business, why it's important to connect to your social, why it's important to do Google Business profile as we've talked about and connect the CTN to it, right? So it is extremely intuitive. And what we're seeing -- what we saw week-over-week in terms of the beta was that we were driving engagement up into the right, which is exactly what you want to see when you come out with an effort like this. So we are seeing extremely good engagement from our customers. When those customers end up speaking to a sales rep in the terms of if we know that they're going to be a $400 a month customer, what we're finding is those customers have a much better understanding of what we do as a company. Therefore, our sellers are having a much easier time having a conversation with those prospects about our overall holistic offering and having a much easier sale and conversion effort.

Joe, can I squeeze in one more?

Sure.

So if I'm an existing Thryv customer using a Marketing Center, a Business Center, full suite of services, whatever that may be, what does the process look like for me, whether something has already happened or something is going to happen in terms of migrating to this new platform versus what I'm using today?

Yes. So as I mentioned in the opening, I mean, the impetus and the confirmation that we needed, the direction we wanted to go ahead came from the success of Marketing Center. But Marketing Center was initially written before this kind of AI explosion had happened. So it had some elements in it, but it wasn't really written from the studs up as AI. So this is really Marketing Center on steroids, on steroids. So the transition over for them, they won't lose anything. They'll gain a whole bunch of stuff. So today, right now, the customers being put on the new platform are the ones buying it new. And we have a plan of migration that will happen over the next period of time. We're not prepared to go through every detail of it today. But it's not something where there's going to be -- they're going to lose a function or they're going to have a big price up. It will just be -- we'll upgrade them, and we'll be there with client experience to make sure they understand kind of how to leverage it. Alinda, you got some good zinger questions for us?

Yes, I do. It says I'm there is Arjun Bhatia, but Alinda Li here for William Blair on for Arjun Bhatia. Joe, in terms of the AI score, that's something that is -- sounds very interesting, sounds something that customers do really want, especially in the new era of AI. Could you give us a little bit more insight in terms of what is the measurement behind the AI score? And so how this score comes about? And is that different per industry depending on each customer. So maybe a customer is in the HVAC industry. Maybe is the measurement for that a little bit different than another customer of yours using a platform in a different industry?

Crystal, can I pitch that one to you?

Yes. No problem. I'm actually really glad you asked that, Alinda. I think you said, Alinda?

Yes.

Awesome. Yes, I'm glad you asked. I get to brag on the team a bit here. Lead scoring, it's not something that's new for us as a company. It's actually something we used to do with real humans listening to calls. And then we talk to thousands of businesses. We've been doing it for a very long time. And we know exactly what the different verticals. We know what a plumber, a roofer, a med spa. We know what they qualify as a lead. We know what they want to get notified about. Some of those, they're on the roof, they don't want the notification for everything, but they have to have that control, and we've learned that against all the verticals. And we've used that to build AI lead scoring. And what we do that's different and more than everyone else is that we've already scored 2.7 million leads through this platform already. We allow them to customize what the score means. So -- if we say it's a 3, we help them learn, but then they have that customization where they can change that and say, this to me is not as important. I really want to focus on my 4s and 5s. So we help them focus that. So they get the lead summary, they get the score, they get smart tags or tasks that they can actually have as follow-up items. So it's more than just that score, but we -- it's core to how we've designed it against all of the verticals.

That's super helpful. Another question is with the new platform, what do you think customers are most excited about? Any particular parts of the platform that you think is particularly interesting that you're also very excited about? I know what they're excited about.

They're excited to have connected tools. They get really excited about being able to post to social and to connect all their listings. Right now, people -- they understand listings a lot. They connect their Google Business profile. They have a Yelp. They can do that on their own. But what they can't do is the 16, the 60, the dozens of different listings. They can't keep up with them. They have a digital marketing score that actually tells them where they are and exactly what they need to do next. And for most of that is, hey, you've got a couple of listings, we'll give you 60 of them and help you publish that consistently. That's what they're excited about. It saves them time, but it's more about the connected tools. A lot of them come with their own website. We score it and say -- hey, you can use one of ours, we can build one for you, but we actually meet you where you are, and that includes telling them what their website needs. Sometimes it's an AI chatbot they need on theirs or there's something else that they need for data tracking, but that's what they're excited about. It's the digital marketing score that brings it all together and tells them the health of their business, what to do next because they're less interested about learning about a new software, they want to know their business in this.

Yes, I totally agree. Alinda, AI is an opportunity and a threat. Because if you don't sort of smile for the camera just the right way, you end up being shunted down to the bottom of the pile. And most people have figured that out and are trying to figure out how to get good at it. And this is very relevant for answer engine optimization, everything that we're doing here to help you come up and to know where you are missing or where you're hitting, and that all goes into that score.

Helpful.

Matt, any more questions?