Thryv Holdings, Inc. (THRY): BCG Matrix [11-2024 Updated]

As Thryv Holdings, Inc. (THRY) navigates the dynamic landscape of 2024, it becomes essential to analyze its business segments through the lens of the Boston Consulting Group Matrix. This framework categorizes its offerings into four distinct categories: Stars, Cash Cows, Dogs, and Question Marks. With a robust 26% increase in SaaS revenue and a noteworthy established revenue stream from marketing services, Thryv's strategic positioning is crucial for investors and stakeholders. Dive deeper to explore how these segments are evolving and what they mean for Thryv's future.

Background of Thryv Holdings, Inc. (THRY)

Thryv Holdings, Inc. (“Thryv” or the “Company”) is a prominent provider of integrated marketing solutions and Software as a Service (SaaS) business management tools aimed at small-to-medium sized businesses (SMBs). The Company operates through two primary segments: Thryv Marketing Services and Thryv SaaS.

The Thryv Marketing Services segment encompasses both print and digital marketing solutions. This includes the well-known Print Yellow Pages (PYP), digital marketing services such as Internet Yellow Pages (IYP), search engine marketing (SEM), online display advertising, and search engine optimization (SEO) tools. For the three months ended September 30, 2024, Thryv Marketing Services generated revenue of $92.8 million, a decline from $116.5 million for the same period in 2023.

In contrast, the Thryv SaaS segment has shown significant growth, driven by an increasing demand for cloud-based business management solutions. This segment reported revenue of $87.1 million for the three months ended September 30, 2024, up from $67.4 million in the prior year, reflecting a growth rate of 29.2%. The flagship Thryv® platform offers a comprehensive suite of features including customer relationship management, appointment scheduling, and payment processing capabilities designed to streamline operations for SMBs.

Thryv has a history of strategic acquisitions to enhance its service offerings. Notably, on April 3, 2023, the Company acquired Yellow Holdings Limited, a New Zealand marketing services company, for approximately $8.9 million. This acquisition expanded Thryv's footprint in the international marketing services market.

As of 2024, Thryv serves approximately 300,000 SMB clients globally, focusing on delivering solutions that address the evolving needs of these businesses, particularly in adapting to remote work and digital interactions. The Company has been actively transitioning clients from traditional marketing services to its SaaS offerings, reflecting a broader industry trend where SMBs seek integrated solutions to enhance efficiency and customer engagement.

Financially, Thryv reported a total revenue of $637.6 million for the nine months ended September 30, 2024, a decrease from $680.8 million in the same period of the previous year. This decline was primarily attributed to a significant drop in Marketing Services revenue, although the SaaS segment's growth helped to partially offset the overall decline.

Thryv's operational strategy emphasizes providing value-based solutions tailored to the unique challenges faced by SMBs, positioning the Company as a key player in the digital transformation of small businesses.

Thryv Holdings, Inc. (THRY) - BCG Matrix: Stars

Strong growth in Thryv SaaS revenue, up 26% year-over-year

Thryv Holdings, Inc. reported a significant increase in its SaaS revenue, which reached $239.2 million for the nine months ended September 30, 2024, compared to $189.7 million for the same period in 2023. This represents a growth of 26.0% year-over-year.

Increased demand from SMBs for cloud-based solutions

The demand for cloud-based solutions among small and medium-sized businesses (SMBs) has surged as they transition from manual processes to more efficient cloud platforms. This shift has contributed to a substantial increase in SaaS revenue for Thryv, highlighting the growing preference for integrated technology solutions in the SMB sector.

Successful client conversions from marketing services to SaaS

As part of Thryv's strategic initiatives, there has been a successful conversion of clients from traditional marketing services to its SaaS offerings. This strategic decision has led to an increase of 30,000 SaaS clients, or 45%, as of September 30, 2024, compared to the previous year.

Improved gross profit margins, reaching 65% in 2024

Thryv achieved a gross profit margin of 65.0% for the nine months ended September 30, 2024, up from 61.5% in the same period of 2023. This improvement is primarily attributed to the increase in sales of higher-margin SaaS solutions and the reduction of lower-margin services.

Strategic focus on high-value clients enhancing revenue potential

The company has strategically focused on acquiring and retaining high-value clients, which has enhanced its revenue potential. This approach has allowed Thryv to optimize its product offerings and improve client satisfaction, further driving SaaS revenue growth.

Thryv Holdings, Inc. (THRY) - BCG Matrix: Cash Cows

Established revenue stream from Thryv Marketing Services, generating $398 million in nine months of 2024.

Thryv Marketing Services reported a revenue of $398.4 million for the nine months ended September 30, 2024, down from $491.1 million in the same period of 2023, reflecting a decrease of 18.9%.

Consistent demand for print services contributing to stable cash flow.

Print revenue increased by $25.4 million, or 13.6%, for the nine months ended September 30, 2024, compared to the same period in 2023. This increase was influenced by publication timing differences, although overall print services still face a secular decline in demand.

Effective cost management leading to reduced operating expenses.

Cost of services decreased by $38.9 million, or 14.8%, for the nine months ended September 30, 2024, primarily driven by a decline in revenue and strategic cost-saving initiatives.

Historical profitability in core service offerings, despite revenue decline in digital services.

Despite a decrease in digital revenue by $118.0 million, or 38.7%, for the nine months ended September 30, 2024, Thryv continues to maintain profitability in its core service offerings.

Thryv Holdings, Inc. (THRY) - BCG Matrix: Dogs

Significant impairment charges of $83 million in 2024 due to declining marketing services.

In 2024, Thryv Holdings, Inc. recorded a non-cash impairment charge of $83.1 million related to its marketing services segment. This charge effectively reduced the goodwill of the Thryv Marketing Services reporting unit to zero, highlighting significant challenges within this unit.

Digital revenue decreased by 38.7%, highlighting market challenges.

For the nine months ended September 30, 2024, Thryv's digital revenue experienced a substantial decline of $118 million, or 38.7%, compared to the same period in the previous year. This decrease was attributed to a strategic shift in the company’s offerings, transitioning clients from digital marketing services to Software as a Service (SaaS) solutions.

Competitive pressure from larger firms like Google and Facebook affecting client retention.

Thryv has faced increasing competitive pressure from larger entities such as Google and Facebook. This competition has adversely impacted Thryv's ability to retain clients within its marketing services segment, contributing to the overall decline in revenue and market share.

Declining client base in marketing services segment.

The marketing services segment of Thryv has been witnessing a consistent decline in its client base, exacerbated by the strategic decision to phase out its traditional marketing services by the end of 2028. This decision was influenced by a historical trend of declining demand for print and digital marketing services.

Thryv Holdings, Inc. (THRY) - BCG Matrix: Question Marks

Need for strategic pivot as marketing services are phased out by 2028.

Thryv Holdings is undergoing a significant transformation as it shifts its focus from traditional marketing services to Software as a Service (SaaS) solutions. The company reported a decline in revenue from its Thryv Marketing Services segment, which fell by $92.7 million, or 18.9%, for the nine months ended September 30, 2024, compared to the same period in 2023. This decline underscores the urgent need for a strategic pivot to ensure sustainability and growth as the marketing services are expected to be phased out by 2028.

Uncertain future of client migration success to SaaS solutions.

The migration of clients to Thryv's SaaS solutions remains uncertain. While Thryv's SaaS revenue increased by $49.4 million, or 26.0%, for the nine months ended September 30, 2024, this growth is contingent on successfully converting existing clients from its declining marketing services. The ongoing transition poses risks, as any failure to effectively onboard clients could hinder revenue growth.

Potential risks in managing operational costs amid ongoing market shifts.

Thryv faces challenges in managing operational costs as it navigates market shifts. The company reported a gross profit decrease of $4.3 million, or 1.0%, for the nine months ended September 30, 2024. Although the cost of services decreased by $38.9 million, or 14.8%, due to strategic cost-saving initiatives, the overall financial performance indicates a precarious balance between cost control and maintaining service quality.

Continued investment in technology and talent required to enhance service offerings.

To enhance its service offerings, Thryv must continue investing in technology and talent. The company acquired Infusion Software, Inc. (Keap) for $80 million. This acquisition aims to bolster its SaaS capabilities but also necessitates substantial ongoing investment to integrate and improve its technology stack. The company’s adjusted EBITDA decreased by $2.2 million, or 1.6%, for the nine months ended September 30, 2024, indicating the need for focused investment to drive profitability in its SaaS segment.

As Thryv Holdings, Inc. navigates the complexities of positioning its Question Marks effectively in the market, the financial metrics reflect both the challenges and opportunities that lie ahead. The strategic decisions made in the coming years will be crucial in determining whether these Question Marks can evolve into Stars.

In summary, Thryv Holdings, Inc. (THRY) presents a mixed portfolio as evaluated through the BCG Matrix. With strong growth in SaaS revenue and a robust cash flow from established marketing services, the company showcases its Stars and Cash Cows. However, significant challenges in its marketing services segment highlight its Dogs, while the need for strategic adaptation towards SaaS solutions positions it as a Question Mark. Navigating these dynamics will be crucial for Thryv's future success and sustainability in the competitive landscape.

Updated on 16 Nov 2024

Resources:

1. Thryv Holdings, Inc. (THRY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Thryv Holdings, Inc. (THRY)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Thryv Holdings, Inc. (THRY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.