THRY

Thryv is a legacy Yellow Pages/Marketing Services business trying to reinvent itself as an SMB SaaS platform (Thryv Platform, bolstered by the Oct-2024 Keap acquisition). The transition is real but unfinished: total revenue has fallen four straight years — from $1.20B (FY2022) to $785M (FY2025, -4.7% YoY) — because the SaaS ramp still isn't outrunning the secular runoff of the directory business, which the 10-K flags creates 'variability in our operating results due to directory publication cycles.' Until the growth line inflects positive, the top-line decline caps any bull case.

What keeps this from a sell is that the underlying economics are improving and the stock is genuinely cheap. Gross margin is a healthy 67.9%, operating income jumped +270% to $56.7M (7.2% operating margin), and the company swung to a (razor-thin) $307K profit after two years of heavy losses. It threw off $63.5M of operating cash flow and ~$31M of free cash flow after $32.4M capex — against a $189M market cap, that's a high-teens FCF yield. Management is using that cash to delever (long-term debt -13% to $236M) and even bought back $5M of stock, while lifting R&D +148.9% to $39.1M to fund the platform. At 0.2x sales the market is pricing in continued decline, so any stabilization could re-rate the shares.