Q4 2020 Thryv Holdings Inc Earnings Call
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Dead dead dead, ladies and gentlemen and welcome to the fourth quarter and full-year 2025 call at this time. All participants are in a listen-only mode.
After the speaker's presentation. There will be a question-and-answer session to ask a question during the session. You'll need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star at zero. I would now like to hand the conference over to your speaker for today page at Christopher from Thrive. Thank you. Go ahead and after Christopher, good morning everyone and welcome to this recorded management discussion of thryvs fourth quarter 2020 results by now. You should have received a copy of the company's fourth-quarter 2018 is released and investor supplement, which is also posted on our website at investor with me today are Joe Walsh chief executive officer and president Paul Ross Chief Financial Officer and Treasurer and John Fallon Chief Executive Officer of census Holdings.
Before we begin I would like to remind you that some of the comments made up space call and some of the responses to your questions may contain forward-looking statements. These statements are subject to their risks and uncertainties is from the company's earnings release and other filings with the SEC drive has no obligation to update the information presented on this call.
Also on today's call our speakers will reference certain non-gaap Financial measures, which we believe will provide useful information for investors reconciliation of those measures to Gap will be posted on the investor relations website had investor with that introduction. I would like to turn the call over to Joe Walsh. Thank you KJ, good morning and Welcome to our fourth quarter of 2020 earnings call to begin. I'll talk about 20 20 and then comment on recent development following that our CFO call Ralph will provide both sides on our Q4 numbers and an update to our 2021 guidance and then we'll open it up for questions and answers in 2020. We had a big year wage became a public company again on the NASDAQ. We refreshed our board of directors and brought in real fast and software talent and expertise to help us accelerate the growth of birth.
Fast Business, we launched our own gaming platform Drive pay and most importantly we returned our staff business to grow. We're really proud of the fact, you know milestones in 2020 because let's face it. There were unprecedented challenges for small businesses this last year and we were inspired and impressed by the way, small businesses worked off to stay in business and just were determined to persevere and our team actually, I think played a pretty big role in helping a lot of small businesses adapt and naked and figure out how may really alter their business model using the software to be able to do e-commerce or to be able to you know, become a business that delivers or whatever to make it through those really difficult. Sometimes to Thursday. We really impressed by that twenty-twenty was really an exclamation point on this need for small businesses to modernize and transition to the cloud.
We believe that the changes that the panda.
Nick brought a balance or durable and will forever really accelerate the the transformation of small businesses using Cloud tools and and digitizing their business office. So we think there's a really strong foundation for our growth coming off of that like to talk a little bit about growth turn arpu some of the things happening in our business our staff platform grew a little over 8% in the fourth quarter our churn the down and has been you know, totally coming down. We're at a level now that I would describe our car. We probably aren't going to do a whole lot better because we are dealing with modern pop small businesses and there is some ins and out there. So it's a very acceptable in our models we can get really strong both being a mid-term level so we can cats around the right place to be our arpu has been improving improving because we made a big shift in our strategy. We we had experimented with going down Marg.
We moved back up Market selling to a little bit bigger businesses selling a little bit more complete robust solution a little higher price point. We're getting really fully engaged customers month. We've been disciplined about our ideal client profile getting right customers in consequently you were seeing arpu or spend for customer Rising nicely. I would encourage you to take a look at those stats Off. The Wall. Our clients growth is about flattish. We're you know, looking to see that begin to accelerate as we go through this year that the smaller less engage customers, you know roll and we're bringing in the larger ones that are spending more much much more committed in or truly using the software. So, you know, we're looking forward to having not just Revenue growth, but also Club of this year goes on the big story for us of the last year or so is engagement. We've seen tremendous growth in engagement and and engaging
I would describe as you know people that we see active in the inbox using it. We see them adding contact cards to their CRM. We see their scheduler lighting up with people scheduling appointments. We see them sending out marketing automation campaigns using our Council for social media and maybe most importantly we see the payments on you know, we see them accepting more and more payments in drive. So that really shows us, you know, what's happening in that business. We recently hit an all-time high of active users with daily and weekly user growth up the most it's it's up to remember the year over year and we think we're going to continue to invest in education and engagement growth. We've been really building our client success team actually investing in in one thousand more people to just spend time with their customers teaching showing remember old bringing the unclouded into the cloud here. So it requires a little hand-holding.
Tencent the opposition we made in Australia, you know closed March 1st. It's over 100,000 small business clients. It's
Marketing Services business that really is a whole lot like the five business here just minus the software. That's a big Zoo a hundred thousand customers first or hunting now and really expand our staff business with their performance in Australia and arguably world's best. They have the advantage of the White Pages, which they're white pages Business Health performed the elevators business with a slower red Klein and higher margins. In fact, they've delivered margins north of 40% So John is team are really good at this High free cash flow generation. This thing is throwing off a ton of life will be impressed by the amount of commonalities between the two now, I've known John now and he's been in that job for over eight years. I've known him for most of that time. We've been friends. He's come here to the multiple times to meet with me and our team and I've been to Australia and that was he and his team our teams have talked and shared best practices and ideas dead.
So there's a good warm feeling between the two companies. I really like John a lot and I think you will too. I want to take this time and introduce you to John Allen have him just have a word with you John.
Thank you, Joe. I thought I'd share a little bit of information about sensors in terms of the company and the market we compete in and then how we intend to bring a drive to Australia the way to think about sensors is very similar to thrive in the US. We're a leading digital marketing services and print directory company here in Australia. We publish and distribute the Yellow Pages and the White Pages books right across the country as well as managing marketing Services made of over a hundred thousand businesses. The majority of these businesses are small to medium businesses employing less than two hundred people are strategy of the past few years at home has been to develop a range of digital Marketing Solutions whilst also transitioning our customers from print to digital depending on the changing habits that Australians now as a country, we are significant digital package that but I print directory serve an important service to older and more regionally-based people. What's the Australian population is around 25 million people Australian Bureau of Statistics indicates. There are over two years.
Julien registered businesses here the small medium business population, which we primarily focus on is over 800,000 of those businesses. These small to medium business has been affected by The Reserve Bank of Australia to account the 70% of all employment and over 30% of GDP. So they're really significant component of the Australian economy the name and small-to-medium businesses a very similar to the us and we see a lot of similarities between Thrive and sensitive. However, what makes me particularly excited about Thrive acquisition four sensors is the Thrice oft we're over the past year at census we started to develop our own software strategy. But really we're at a nascent level today by launching Thrive into Australia will save us years of investment help us Fast Track our products to the local market our existing customers as well. As new ones. We think there's going to be a significant opportunity of solutions such as Drive in Australia now birth
We saw an uptick in.
Small-medium business is having an interest in software making them more efficient helping them manage their customers and improving their service. We also are an environment here of low unemployment rates and higher wage labor rights. So Australians motor main businesses are becoming much more aware about the opportunities that software can really help them optimize and improve their business performance. Also the Australian government you value in digital efficiency and you're in the middle of last year made it compulsory for single touch payroll forcing small-to-medium businesses to large tax payments to the Australian tax office in an automated fashion. This is meant is invade had to go out and get accounting software but for many Industries we deal with that's as far as the digital Journey has taken them during February twenty Twenty-One price of Life by tribe. We undertook an independent survey using glow asking Australian small-to-medium businesses about the attitudes and interests in software. We didn't specifically ask them about Thrive but wage
so they did show is 69% would be interested in software that could help them manage their customer interactions their website listing information across the web appointments and the light many days of features of Thrive businesses know they have to do more to digitize here and they're looking for support in that transition to Market Our intention is to launch later this year and will be focusing on the product pricing and overall service offering being right for Australian conditions driving the
Dispute an enviable reputation within the SAS community and with their customers, and my team will be ensuring we launched on the rightful here, so to mirror their success, so thank you Joe for letting me talk about sensitive. Let me pass back to you.
Thank you John, but we're awfully happy to have John Allen and his team on board. There's a really good feeling back and forth between these two teams. We're excited about the beachhead that you know, bringing these iconic hundred plus year old Brands, you know into the family here. Give us an Australia over a hundred thousand small businesses. And we think that we can very quickly become the same story leader for small business CRM how to find experienced platform in Australia. Remember John is team are phenomenal executors. They've executed superbly on the other business plan. They believe in this business plan and we think that they will be phenomenal executors here with not so welcome to John and his team couple of other quick things. I wanted to comment on, you know, vertical nation is a big part of our road map here. We are about to roll out drive home, which is a really a vertical play on the Home Services space where we have so much birth.
Christian and so much stuff and there are a couple of vertical players out there and nipping at it's just a little we don't have a ton of competition most of them what we're doing is bringing the unclouded into the cloud but there's a couple of other jobs out there trying to do it and I think us having verticalization like drive home followed by Drive Legal followed by Private health think these are these are things that were really help us grow more deeply into his vertical make sure we don't leave any white space for somebody to crawl in here with us drive pay has been off to a great start, you know, it's just four or five months in now it's still early days, but we're seeing them to come through almost every day. We're seeing growth in Revenue, you know for active Merchants. We're seeing the total payment volume trending up up up each month so often, you know plant the flag and call that a a big win, but I'll tell you one thing when you're getting paid by your CRM your likelihood of turn and go down to look that. I'll now turn it over to Paul to discuss the 4th.
Financial results and I'll be back to discuss our Outlook at the end.
Thank you, Joe before we begin. I'd like to point out that while we will be talking about Revenue during this call due to the global pandemic the company temporary office issued certain customer credits throughout 2020, which have masked the true year-over-year comparability in both size and marketing Services. During the fourth quarter. The company has recognized pandemic credits of 3.3 million dollars provided to customers most impacted by COVID-19.
Wu here 2022 pandemic credits totaled 17.5 million dollars the company has reflected these Goodwill adjustments as a reduction too long as of this moment, we are continuously monitoring the business environment of our clients and expect to provide further assistance to those clients and need walk through the first part of spring twenty twenty-one.
Throughout the spring months, we expect the business environment to improve as more and more people are vaccinated and thus we expect the Need For assistance to significantly diminish off by the middle part of cute to twenty Twenty-One. Now, let's turn to the business segments.
I'll start first with our SAS segment fourth quarter. 2026 Revenue was 34.9 Million to increase of 8% sure over a year off and the head of our Guidance full year twenty-twenty SAS. Revenue was 129.8 Million.
Fourth-quarter SAS Billings with thirty eight point eight billion dollars an increase of 13% year-over-year the full year twenty-twenty SAS Billings were 137 point seven billion dollars.