Dallas, Texas – Thryv, a SaaS business based in Dallas, Texas, is making waves with robust performance and growth rates exceeding 24%. Despite facing challenges in its legacy marketing services business, the company remains profitable. Investors have shown concern over the company’s debt, even as management extends its maturity until 2029. However, a valuation model suggests significant potential for growth, making Thryv an attractive option for investors looking to take a Long position.

Thryv’s recent earnings report for the first quarter showcased strong performance in its SaaS business, surpassing revenue and adjusted EBITDA projections. The company’s Net Retention Rates (NRR) remained resilient, offering a positive outlook for future growth. On the flip side, the decline in billings from the legacy marketing services sector has accelerated, impacting cash flows utilized for debt repayment, standing at $350 million at the end of the quarter.

In a strategic move to address financial risks, Thryv recently refinanced its debt, extending maturity to 2029 at lower interest rates. This decision enhances the company’s flexibility in capital allocation and fosters growth opportunities. The CFO highlighted the importance of this step in driving long-term value for shareholders during the Q1 earnings call.

Looking ahead, Thryv anticipates continued growth in its SaaS business, driven by the launch of Command Center. The product’s user-friendly design aims to attract and retain a large user base, potentially translating into increased revenue and improved NRR. Despite the decline in legacy marketing services, cost reductions and targeted consumer outreach efforts are expected to maintain profitability.

Furthermore, with a new share repurchase program in place, Thryv demonstrates a flexible capital allocation strategy, focusing on value accretive opportunities for future growth. The company’s valuation, considering the SaaS business alongside the declining legacy sector, presents a complex but promising outlook for investors.

While risks like debt burden and declining cash flows persist, the potential for growth and value creation outweighs these concerns. Thryv’s current positioning in the market hints at a Buy rating, offering investors a compelling opportunity for substantial returns in the coming years.