Q4 2024 Thryv Holdings Inc Earnings Call
Before earnings call.
All lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
If you would like to withdraw your question Press Star One again, we do ask that you limit yourself to one question and one follow up.
I would now like to turn the call over to Cameron Lazard head of IR. Please go ahead.
Speaker Change: Good morning, and thank you for joining us for thrive fourth quarter earnings Conference call with me today are Joe Walsh, Chairman and Chief Executive Officer, and Paul Ralph Chief Financial Officer. During this call. We will make forward looking statements that are subject to various risks and uncertainties actual results may differ materially from there.
Statements and discussion of these risks and uncertainties are included in our earnings release and SEC filings.
Speaker Change: Today's presentation will also include non-GAAP financial measures, which should be considered in addition to but not as a substitute for our GAAP results reconciliation of these measures can be found in our earnings release.
Speaker Change: This quarter marks our first time reporting SaaS results inclusive of keep software following our acquisition on October 31, 2024, with only two months of keeps revenue reflected we're focused on executing our integration plan and realizing the synergies we outlined at analyst day.
Thank you for standing by my name is Jamie and I will be your conference operator today.
At this time I would like to welcome everyone to thrive fourth quarter and full year.
'twenty 'twenty four earnings call.
All lines have been placed on mute to prevent any background noise.
Speaker Change: To note for 2025 total SaaS revenue will reflect the combined performance of thrive and keep we will only specified thrive SaaS when isolating thrives performance.
After the Speakers' remarks, there will be a question and answer session.
If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
Speaker Change: This reporting approach aligns with our long term vision of a unified SaaS platform ensures investors have full visibility into our growth trajectory for.
If you would like to withdraw your question Press Star One again, we do ask that you limit yourself to one question and one follow up.
Speaker Change: Thank you I would now like to turn the call over to Cameron Lazard head of IR. Please go ahead.
Speaker Change: For a deeper insight into our future strategy, we encourage investors to review our December <unk> analyst day materials. The presentation details our roadmap, including the planned exit from marketing services in 2028 keeps role in accelerating SaaS adoption expected synergies with the acquisition product innovation and our updated medium term.
Good morning, and thank you for joining us for thrive fourth quarter earnings Conference call with me today are Joe Walsh, Chairman and Chief Executive Officer, and Paul Ralph Chief Financial Officer. During this call. We will make forward looking statements that are subject to various risks and uncertainties actual results may differ materially from.
Speaker Change: The outlook with that I'll turn the call over to Joe Welch, Chairman and CEO Joe.
Thank you Cameron and good morning, everyone.
Speaker Change: These statements and discussion of these risks and uncertainties are included in our earnings release and SEC filings.
Speaker Change: On today's call I will highlight our fourth quarter results key trends as well as progress in our SaaS transformation now I'll provide an update on our recent acquisition and then our CFO Paul Ralph will take you through some of the financial numbers.
Speaker Change: Today's presentation will also include non-GAAP financial measures, which should be considered in addition to but not as a substitute for our GAAP results. Reconciliations of these measures can be found in our earnings release. This quarter marks our first time reporting SaaS results inclusive of keep software following our acquisition on October.
Speaker Change: <unk> finished the year with strong momentum, beating the top and bottom line guidance for our SaaS business further.
Speaker Change: For the quarter total SaaS reported year over year revenue growth with 41% and normalizing for the effects of the <unk> acquisition.
Speaker Change: 31, 2024 with only two months of keeps revenue reflected we are focused on executing our integration plan and realizing the synergies we outlined at analyst day.
Speaker Change: SaaS revenue growth was 23%.
Speaker Change: For 2025 total SaaS revenue will reflect the combined performance of thrive and Keith we will only specified thrive SaaS when isolating thrives performance.
Speaker Change: For the full year 2024.
Speaker Change: Drive that year over year revenue growth was 25%.
Speaker Change: Total SaaS revenue is now officially well over 50% a milestone for our transformative business.
Speaker Change: This reporting approach aligns with our long term vision of a unified SaaS platform and ensures investors have full visibility into our growth trajectory.
Speaker Change: Subscribers and our drive SaaS business grew 50% year over year to 99000, including keep in the subscriber base takes us to 114000.
Speaker Change: For a deeper insight into our future strategy, we encourage investors to review our December 3rd Analyst day materials.
That adjusted gross margin increased to 76% for the fourth quarter.
Speaker Change: Presentation details our roadmap, including the planned exit for marketing services in 2028 keeps role in accelerating SaaS adoption expected synergies with the acquisition product innovation and our updated medium term outlook with that I'll turn the call over to Joe Welch Chairman and CEO Joe.
Speaker Change: Our quarterly SaaS EBITDA of $17 million beat guidance by over $5 million continue.
Speaker Change: Continuing to demonstrate our focus on building a profitable.
Speaker Change: Growing SaaS software company.
Speaker Change: SaaS obtained rule 40 milestone for the second quarter in a row.
Joe Welch: Thank you Cameron and good morning, everyone.
Speaker Change: On today's call I will highlight our fourth quarter results key trends as well as progress in our SaaS transformation now I'll provide an update on our recent team acquisition and then our CFO, Paul Ralph who will take you through some of the financial numbers.
Speaker Change: Net revenue retention was 98% as.
Speaker Change: As we've said our target is 100% and will be a couple of points plus or minus that sometimes it will be one on one on one or two and sometimes it will be 98% 99, but we will be right around 100% is what we expect going forward.
Speaker Change: So I finished the year with strong momentum, beating the top and bottom line guidance for our SaaS business for the quarter total SaaS reported year over year revenue growth with 41% and normalizing for the effects of they keep acquisition.
Speaker Change: The number of clients using two or more paid SaaS products increased by over 4000 year over year, now representing 16% of our client base.
Speaker Change: This is a key metric as it demonstrates growing engagement and the increasing value clients are deriving from our platform.
Speaker Change: SaaS revenue growth was 23%.
Speaker Change: For the full year 2024.
Speaker Change: Drive that year over year revenue growth was 25%.
Speaker Change: Now we broadened the definition beyond pain centers, which is 12% to include all paid SaaS products. This is underscoring the expanding adoption of our full suite of solutions and I think it shows we've been innovating and coming up with some interesting additional SaaS add ons that fill in and around.
Speaker Change: Total SaaS revenue is now officially well over 50% on milestone for our transformative business.
Speaker Change: Subscribers and our drive SaaS business grew 50% year over year to 99000 <unk>.
Speaker Change: Including keep in the subscriber base takes us to 114000.
Speaker Change: So the overall base increased tremendously so the percentage of center it looks like 12, but when we look at number of SaaS products overall, 16% or 4000 gain so pretty excited about what that shows in terms of the progress that we're making.
Speaker Change: That adjusted gross margin increased to 76% for the fourth quarter.
Speaker Change: Our quarterly SaaS EBITDA of $17 million beat guidance by over $5 million continuing to demonstrate our focus on building a profitable.
Speaker Change: One of our core strengths as a management team is integrating acquisitions with speed and efficiency.
Speaker Change: Growing SaaS software company.
Speaker Change: This key acquisition is our first half platform and something we've been working on for a while and planning for a while so we will come to a surprise that we've already crystallized 10 million of EBITDA synergies. We've done this primarily by eliminating redundancies between the two businesses.
Speaker Change: That's obtained rule of 40 milestone for the second quarter in a row.
Speaker Change: Net revenue retention was 98% as.
Speaker Change: As we've said our target is 100% and will be a couple of points plus or minus that sometimes it will be 101 on one or two and sometimes it'll be 98% 99, but we will be right around 100% is what we expect going forward.
Speaker Change: Under consolidations and some plan for cost reductions.
Speaker Change: From a cross sell perspective, the big long term opportunity as the revenue cross sell back and forth.
The number of clients using two or more paid SaaS products increased by over 4000 year over year, now representing 16% of our client base.
Speaker Change: And we're working hard to getting that set up now and we expect very strong revenue potential to be unlocked over the next couple of years.
Speaker Change: This is a key metric as it demonstrates growing engagement and the increasing value clients are deriving from our platform.
Speaker Change: We cross sell between the two customer bases.
Speaker Change: We had some pretty exciting product updates in Q4 that I think strategically positioning us really well as we go into 2025 I would like to highlight a couple of those for you now.
Speaker Change: Now we broadened the definition beyond just paid centers, which is 12% to include all paid SaaS products. This is underscoring the expanding adoption of our full suite of solutions and I think it shows we've been innovating and coming up with some interesting additional SaaS add ons that fill in and around.
Speaker Change: Reporting center launched with a <unk> motion.
Speaker Change: Positions us to unlock revenue expansion opportunities.
Speaker Change: It increases the client satisfaction, particularly of our larger accounts some of our larger accounts will pay to us we want more powerful reporting and so we are including reporting center on a kind of a PLD or a product led growth basis, and we will extract revenue down the road, but in the meantime.
Speaker Change: So the overall base increased tremendously so the percentage of center it looks like 12, but when we look at number of SaaS products overall, 16% or 4000 games. So pretty excited about what that shale is in terms of the progress that we're making.
Speaker Change: We've got an initiative to try to sell to a little bit bigger businesses to move ever so slightly upmarket with our VSP group and reporting center will really assist with that.
Speaker Change: One of our core strength as a management team is integrating acquisitions with speed and efficiency.
Speaker Change: This keep acquisition is our first half platform and something we've been working on for a while and planning for a while so we will come to a surprise that we've already crystallized 10 million of EBITDA synergies. We've done this primarily by eliminating redundancies between the two businesses.
Speaker Change: We also added a review response.
Speaker Change: <unk> business Center and marketing Center. This feature has been really well received by clients and sales paving the way for future innovations leveraging AI.
Speaker Change: The addition of social media to marketing center added enhanced communication tools for our clients that's been really well received also.
Speaker Change: Under consolidations has been planned for cost reductions.
Speaker Change: From a cross sell perspective, the big long term opportunity as the revenue cross sell back and forth.
Speaker Change: Within the key products.
Speaker Change: Had some improvements there as well updated.
Speaker Change: And we're working hard getting that set up now and we expect very strong revenue potential the unlocked over the next couple of years.
Speaker Change: Updated the automation builder, which decreased the time to publish and automation by two thirds, meaning it takes about a third of the time now to get one set up and so that was an opportunity there in the.
Speaker Change: We cross sell between the two customer bases.
Speaker Change: We have some pretty exciting product updates in Q4, but I think strategically position us really well as we go into 2025 I'd like to highlight a couple of those for you now.
Speaker Change: Keep team of leverage that.
Speaker Change: So the visual sales pipeline have been streamlined for clients and so there is a real product improvement there that I think customers within Keith will really appreciate.
Speaker Change: Reporting center launched with a <unk> motion.
Speaker Change: Positions us to unlock revenue expansion opportunities.
Speaker Change: So with that I'd like to turn it over to Paul Ralph our CFO to discuss our financial performance.
Speaker Change: It increases the client satisfaction, particularly of our larger accounts some of our larger accounts will say to us we want more powerful reporting and so we are including reporting center on a kind of a PLD or a product led growth basis, we will extract revenue down the road, but in the meantime, we.
Speaker Change: Thanks, Jeff that's the game effects hurdles.
Speaker Change: <unk> reported revenue was $104 3 million in the fourth quarter and above guidance, representing an increase of 41% year over year and up 20% sequentially full.
Speaker Change: We've got an initiative to try to sell to a little bit bigger businesses to move ever so slightly upmarket with our VSP group and reporting kind of will really assist with that.
Speaker Change: Full year SaaS reported revenue grew 30% year over year to $343 5 million.
Speaker Change: Excluding key drive SaaS business grew 23% year over year in the fourth quarter and 25% year over year for the full year.
Speaker Change: We also added AI review response.
Speaker Change: <unk> business Center and marketing Center. This feature has been really well received by clients and sales paving the way for future innovations leveraging AI.
Speaker Change: Taking the spam are acquired SaaS revenue was $99 million in the quarter landing within our guidance range and growing 23% year over year the.
Speaker Change: The addition of social media to marketing center added enhanced communication tools for our clients that's been really well received also.
Speaker Change: Within the key products.
Speaker Change: A key acquisition contributed $34 million in revenue in November or December 2024, surpassing our guidance range of $11 million to $12 million for.
Speaker Change: Had some improvements there as well.
Speaker Change: Updated the automation builder, which decrease the time to publish and automation by two thirds meeting it takes about a third of the time now to get one set up and so that was an opportunity there in the.
Speaker Change: For the full year, our total SaaS revenue grew 30% to reach $343 5 million.
Speaker Change: To keep team has leveraged that.
Speaker Change: Excluding <unk> our.
Speaker Change: Our thrive SaaS business achieved 25% year over year growth.
Speaker Change: Also the visual sales pipelines have been streamlined for clients and so there is a real product improvement there that I think customers within Keith will really appreciate it.
Speaker Change: Our total SaaS adjusted gross margin has shown significant growth increasing by 620 basis points year over year, and 370 basis points sequentially, reaching 76%.
Speaker Change: So with that I'd like to turn it over to Paul Ralph our CFO to discuss our financial performance.
Paul Ralph: Thanks, Jeff, let's begin with facts.
Speaker Change: Year total SaaS adjusted gross margin expanded to 72% up from 67% last year.
Paul Ralph: SaaS reported revenue was $104 3 million in the fourth quarter and above guidance, representing an increase of 41% year over year and up 20% sequentially.
Speaker Change: 540 basis point improvement.
Speaker Change: Importantly, our total tax adjusted gross profits grew 53% year over year outpacing our strong revenue growth.
Paul Ralph: Full year SaaS reported revenue grew 30% year over year to $343 5 million.
Speaker Change: In the fourth quarter total fast adjusted EBITDA increased to $17 3 million.
Paul Ralph: Excluding Chi drive SaaS business grew 23% year over year in the fourth quarter and 25% year over year for the full year.
Speaker Change: Exceeding our guidance range and resulting in an adjusted EBITDA margin of 16, 6%.
Speaker Change: As Joe mentioned earlier this marks the second consecutive quarter in which our SaaS business as a cheap route forward.
Paul Ralph: Taking this down our thrive SaaS revenue was $90 9 billion in the quarter landing within our guidance range and growing 23% year over year. The key acquisition contributed $34 million in revenue in November December 2024, surpassing our guidance.
Joe: In the fourth quarter, we delivered strong SaaS subscriber growth, reaching 114000 subscribers, excluding <unk> subscribers. A 15000 this represents a 73% year over year increase.
Paul Ralph: <unk> of $11 million to $12 million.
Paul Ralph: The full year, our total SaaS revenue grew 30% to reach $343 5 million excluding.
Joe: Total SaaS partnering for the fourth quarter was $324, including Q4.
Joe: <unk> SaaS <unk> was $313 an increase from the previous quarter, while <unk> was $424 four in November and December.
Paul Ralph: Excluding <unk>, our thrive SaaS business achieved 25% year over year growth.
Paul Ralph: Our total SaaS adjusted gross margin has shown significant growth increasing by 620 basis points year over year, and 370 basis points sequentially, reaching 76%.
Joe: Net revenue retention was 98% demonstrates strong performance and is a significant improvement compared to prior years underscoring the effectiveness of our land and expand strategy.
Paul Ralph: Full year total SaaS adjusted gross margin expanded to 72% up from 67% last year.
Joe: This result is very close to our long term goals of maintaining retention near 100%.
Paul Ralph: 540 basis point improvement importantly, our total fax adjusted gross profits grew 53% year over year outpacing our strong revenue growth in.
Joe: Which remains a key priority for the business.
Joe: Additionally centers per client grew to 12% at the end of the quarter compared to 6% in the prior year.
Paul Ralph: In the fourth quarter total fast adjusted EBITDA increased to $17 3 billion significantly exceeding our guidance range and resulting in an adjusted EBITDA margin of 16, 6% as.
Joe: Highlighting the traction we're seeing with existing clients.
Joe: Moving over to marketing services fourth quarter revenue was $82 3 million and within guidance full year marketing services revenue was $480 7 million.
Paul Ralph: As Joe mentioned earlier this marks the second consecutive quarter in which our SaaS business as a cheap route of sport.
Joe: Fourth quarter marketing services, adjusted EBITDA was $12 1 million, resulting in an adjusted EBITA margin of 15% full.
Paul Ralph: In the fourth quarter, we delivered strong SaaS subscriber growth, reaching 114000 subscribers, excluding <unk> subscribers. A 15000 this represents a 73% year over year increase.
Joe: Full year marketing services, adjusted EBITDA was $121 2 million, resulting in adjusted EBITDA margin of 25%.
Joe: The variance in reporting marketing services adjusted EBITDA guidance in the quarter was primarily due to legacy and operational costs, which the company plans to streamline in 2025, including system related expenses and support staff.
Paul Ralph: Total SaaS partnering for the fourth quarter was $324, including cute.
Paul Ralph: <unk> SaaS <unk> west $313, an increase from the previous quarter, while keeps RP was $424 four in November and December.
Joe: As indicated at our 2020 for analyst day, we are committed to decommissioning legacy systems through 2025, and converting many legacy digital marketing services customers onto our SaaS market.
Paul Ralph: Net revenue retention was 98% demonstrates strong performance and is a significant improvement compared to prior years underscoring the effectiveness of our land and expand strategy.
Joe: Practice, our overall EBITDA for the quarter was at the high end of our range of guidance.
Paul Ralph: This result is very close to our long term goals of maintaining retention near 100%.
Joe: Fourth quarter marketing services billings were $92 million, reflecting a 40% year over year decline. This.
Paul Ralph: Which remains a key priority for the business additions.
Paul Ralph: Additionally centers per client grew to 12% at the end of the quarter compared to 6% in the prior year.
Joe: This trend more closely aligns with our strategic direction for marketing services as we continue to convert many of our legacy marketing services clients to our SaaS offering.
Paul Ralph: Further highlighting the traction we're seeing with existing clients.
Paul Ralph: Moving over to marketing services fourth quarter revenue was $82 3 million and within guidance full year marketing services revenue was $480 7 billion.
Joe: <unk> this transition impact the rate of decline in marketing services billings.
Joe: As previously disclosed we are exiting the marketing services business by 2028.
Paul Ralph: Fourth quarter marketing services, adjusted EBITDA was $12 1 million, resulting in an adjusted EBITDA margin of 15% full.
Joe: With cash flows from the business extending into 2030. This will provide the company with ample liquidity to meet its obligations during the transition to a fully SaaS focused model.
Paul Ralph: Full year marketing services' adjusted EBITDA was $121 2 million, resulting in adjusted EBITDA margin of 25%.
Joe: Fourth quarter consolidated adjusted gross margin was 69%.
Paul Ralph: The variance in reporting marketing services adjusted EBITDA guidance in the quarter was primarily due to legacy and operational costs, which the company plans to streamline it 2025, including system related expenses and support staff.
Joe: And full year consolidated adjusted gross margin was 68%.
First quarter consolidated adjusted EBITDA was $29 4 million, representing an adjusted EBITDA margin of 16%.
Paul Ralph: As indicated at our 2020 for analyst day, we are committed to decommissioning legacy systems through 2025, and converting many legacy digital marketing services customers onto our SaaS part in.
Joe: Full year consolidated adjusted EBITDA was $162 4 million, representing an adjusted EBITDA margin of 20%.
Joe: Finally, our net debt position was 279 billion at the end of the fourth quarter, a decrease of $61 million year over year.
Paul Ralph: Despite this our overall EBITDA for the quarter was at the high end of our range of guidance.
Paul Ralph: Fourth quarter marketing services billings were $92 million, reflecting a 40% year over year decline. This trend more closely aligns with our strategic direction for marketing services as we continue to convert many of our legacy marketing services clients to our SaaS offering.
Joe: Our leverage ratio was one point.
Joe: <unk> three times net debt to EBITDA.
Joe: As previously discussed we made an additional prepayment of $26 million on the new term loan during the fourth quarter, bringing our total amortization paid for 2024 under the new credit facility to $78 $8 million. This.
Paul Ralph: The pace of this transition impact the rate of decline in marketing services billings.
Joe: This eliminates the need for an additional payment until December 2025.
Paul Ralph: As previously disclosed we are exiting the marketing services business by 2028 with cash flows from the business extending into 2030. This will provide the company with ample liquidity to meet its obligations during the transition to a fully SaaS focused model.
Joe: This proactive debt repayment underscores our commitment to financial discipline and maintaining our healthy balance sheet. We intend to continue prepaying debt. This year reinforcing our focus on strengthening our financial position.
Paul Ralph: Fourth quarter consolidated adjusted gross margin was 69% and full year consolidated adjusted gross margin was 68%.
Joe: Finally on leverage we remain committed to further deleveraging of the business by the end of 125. However, as we have outlined at our December analyst day, net leverage will temporarily increase in the first two quarters of 2025 due to the prepayment of Keybanc.
Paul Ralph: Fourth quarter consolidated adjusted EBITDA was $29 4 million, representing an adjusted EBITDA margin of 16%.
Paul Ralph: Full year consolidated adjusted EBITDA was $162 4 million, representing an adjusted EBITDA margin of 20%.
Joe: Their contracts decommissioning of legacy systems, corporate bonus payments and the timing of direct REIT publications, which followed a 24 month cycle as we position our marketing services for exit in late 2028.
Paul Ralph: Finally, our net debt position was 279 billion at the end of the fourth quarter, a decrease of $61 million year over year.
Joe: Since leverage is calculated on a trailing 12 month basis, it will be impacted by this publishing schedule.
Paul Ralph: Our leverage ratio was 1.63 times net debt to EBITDA.
Joe: As a result, we expect significant deleveraging in the third and fourth quarters of 2025 and on a full year basis.
Paul Ralph: As previously discussed we made an additional prepayment of $26 million on the new term loan during the fourth quarter, bringing our total amortization paid for 2024 under the new credit facility to $78 8 million. This.
Joe: Turning to our outlook for 2025.
Joe: For the first quarter, we expect total SaaS revenue to be in the range.
Joe: $107 5 million.
Paul Ralph: This eliminates the need for an additional payment until December 2025.
Joe: Sure $110 million.
Joe: For the full year, we expect total SaaS revenue in the range of $464 5 million.
Paul Ralph: This proactive debt repayment underscores our commitment to financial discipline and maintaining our healthy balance sheet. We intend to continue prepaying debt. This year reinforcing our focus on strengthening our financial position.
Joe: $474 million, which implies drive SaaS revenue growth of 35% to 38%, we expect keep to contribute between 75% to $78 million for the full year consistent with what we announced at our recent analyst day.
Paul Ralph: Finally on leverage we remain committed to further deleveraging of the business by the end of 2025. However, as we have outlined at our December analyst day, net leverage will temporarily increase in the first two quarters of 2025 due to the prepayment of Keybanc.
Joe: For the first quarter, we expect SaaS adjusted EBITDA in the range of 9 million to $9 $5 million.
Joe: For the full year, we expect SaaS adjusted EBITDA to be in the range of $69 5 million to $71 million, which implies SaaS adjusted EBITDA margin.
Paul Ralph: Their contracts decommissioning of legacy systems, corporate bonus payments and the timing of direct REIT publications, which followed a 24 month cycle as we position our marketing services for exit in late 2028.
Joe: 15%.
Joe: For the full year, we expect marketing services revenue to be in the range of <unk>.
Joe: 310 billion with $314 million.
Paul Ralph: Since leverages calculated on a trailing 12 month basis, it will be impacted by this publishing schedule.
Joe: Quarterly guidance ranges for marketing services are available in our investor presentation, which can be found on our investor site.
Paul Ralph: As a result, we expect significant deleveraging in the third and fourth quarters of 2025 and on a full year basis.
Joe: For the full year, we expect marketing services adjusted EBITDA to be in the range of 77 5 million to $78 5 million.
Paul Ralph: Turning to our outlook for 2025.
Paul Ralph: For the first quarter, we expect total SaaS revenue to be in a range.
Joe: With that I'll carrier back over to Joe.
Joe: Thank you Paul.
Paul Ralph: $107 5 million.
Joe: As we look ahead to 2025, I am happy to share that including key our SaaS business will be 60% of total revenue that's a big milestone for us.
Paul Ralph: <unk> $110 billion.
Paul Ralph: The full year, we expect total SaaS revenue in the range of $464 5 million.
Joe: At our analyst day recently, we outline what some of the key inflection points coming up will be one of them is that in 2026. The majority of our EBITDA will come from SaaS.
Paul Ralph: $474 million, which implies <unk> SaaS revenue growth of 35% to 38%, we expect <unk> to contribute between $75 million to $78 million for the full year consistent with what we announced at our recent analyst day.
Joe: So that really kind of helps focus us on the fact that we are building a profitable SaaS business.
Joe: And then in 2027.
Paul Ralph: For the first quarter, we expect <unk> adjusted EBITDA in the range of <unk> 9 million to $9 5 million.
Joe: We anticipate a return to overall top line revenue growth as we continue to build out our platform and gain more and more traction deliver more and more value for clients.
Paul Ralph: For the full year, we expect SaaS adjusted EBITDA to be in the range of $69 5 million to $71 million, which implies that adjusted EBITA margin.
Joe: We are proud of the fact that we were recently given an important award and best software by <unk>. This is a third party and kind of validation of the progress that we're making and it echoes what we hear from our customers all the time and that's that our software is easy to use is that helping them run their business.
Paul Ralph: 15%.
Paul Ralph: For the full year, we expect marketing services revenue to be in the range of 310 billion with $314 million.
Paul Ralph: Quarterly guidance ranges for marketing services are available in our investor presentation, which can be found on our investor site.
Joe: More efficiently, helping them streamline operations and importantly, helping them grow.
Joe: And so we intend to continue to innovate and improve and expect to win more awards in the future, but that was really good external validation.
For the full year, we expect marketing services adjusted EBITDA to be in the range of $77 5 million to $78 5 million.
Joe: So as we look now and sort of finished up 2024 and look back on what happened.
Joe Welch: With that I'll turn it back over to Joe.
Joe Welch: Thank you Paul.
Joe: We're maturing as a software business our platform is getting built not quite done yet. So it is getting built out getting stronger and our ability to sell to a little bit larger businesses is coming that's been one of our goal a little larger HCV, we think theres little lower churn there we've already got low turnover. We think we can do even better as we sell.
Joe Welch: As we look ahead to 2025, I am happy to share that including Keith our SaaS business will be 60% of total revenue that's a big milestone for us at our analyst day recently, we outline what some of the key inflection points coming up will be one of them is that in 2026.
Joe: A little bit larger businesses, we think that thats worth the investment and as our platform is being more fully built out we're really focusing on leaning into the growth side of the business, helping small businesses grow being an industry, leading marketing and sales platform, helping them to deepen their.
Joe Welch: The majority of our EBITDA will come from SaaS.
Speaker Change: Is that really kind.
Speaker Change: Kind of help focus us on the fact that we are building a profitable SaaS business and then in 2027, we anticipate a return to overall top line revenue growth as we continue to build out our platform and gain more and more traction deliver more and more value for clients.
Joe: Licensure with their customers and so our dedicated team I think is delivering innovative technology and I am confident that we can continue to drive sustainable profitable growth and maximize shareholder value.
Speaker Change: We are proud of the fact that we were recently given an important award is.
Speaker Change: <unk> software by <unk>. This is a third party kind of validation of the progress that we're making and it echoes what we hear from our customers all the time and that's that our software is easy to use it's helping them run their business more efficiently, helping them streamline operations and importantly, helping them grow.
We appreciate your ongoing support and we look forward to the many opportunities that lie ahead in 2025.
Joe: With that operator, we can open the line for questions.
Joe: At this time I would like to remind everyone in order to ask a question Press Star then the number one.
Speaker Change: And so we intend to continue to innovate and improve and expect to win more awards in the future, but that was really good external validation.
Joe: Our phone keypad.
Speaker Change: And your first question comes from the line of Jason <unk> with Craig Hallum. Please go ahead.
Speaker Change: So as we look now and sort of finished up 2024 and look back on what happened we're maturing as a software business our platform is getting built.
Jason: Wonderful. Thank you guys. So look I know, it's early days on the <unk> side of things, but just wondering if you could give some early commentary on what the cross sell process looks like and getting those customers into some of the thrive centers.
Speaker Change: <unk> done yet, but what's getting built out getting stronger and our ability to sell to a little bit larger businesses is coming that's been one of our goals a little larger ACB.
Speaker Change: Sure.
The.
Speaker Change: Think there's little lower churn there we've already got low churn, but we think we can do even better as we fell to a little bit larger businesses, we think that thats worth the investment.
Speaker Change: The acquisitions as you know.
Speaker Change: Was just.
Speaker Change: With Halloween so it just had a couple of months to work on it so everything to thoughtfully fleet, but we do have some cross sells beginning.
Speaker Change: Our platform is being more fully built out we're really focusing on leaning into the growth side of the business, helping small businesses grow being an industry, leading marketing and sales platform, helping them to deepen their relationships with their customers and so our dedicated team I think is delivering innovative.
Speaker Change: The process is underway and.
It really goes two ways.
Speaker Change: Some of the key customers that are coming in through their portal with our pipeline.
Speaker Change: That come in and learn about the automation.
<unk>.
Speaker Change: Representatives that are working with that I really want to growth I really wanted to generate leads.
Speaker Change: <unk> and I am confident that we can continue to drive sustainable profitable growth and maximize shareholder value.
Speaker Change: Really wanted to build pilots.
Speaker Change: And that really is a natural conversation to talk to them about marketing center, our five products and so that works well.
Speaker Change: So we appreciate your ongoing support and we look forward to the many opportunities that lie ahead in 2025.
Speaker Change: <unk>.
Speaker Change: The thrive side.
Speaker Change: We have I would say one of our biggest problem that we generate huge numbers of leads for our small business customers and some of them just sort of fall Laura They don't really get followed up on.
Speaker Change: With that operator, we can open the line for questions.
Speaker Change: At this time I would like to remind everyone in order to ask a question Press Star then the number one question.
Speaker Change: As well as.
Speaker Change: They showed that we'd like them to and so putting in place a sales pipeline or funnel a an automated process that continues to follow up with those customers. Thanks, Jordan none of them are loss or missed.
Speaker Change: One key pad.
Speaker Change: And your first question comes from the line of Jason <unk> with Craig Hallum. Please go ahead.
Speaker Change: Wonderful. Thank you guys. So look I know, it's early days on the <unk> side of things, but just wondering if you could give some early commentary on what the cross sell process looks like and getting those customers into some of the thrive centers.
Speaker Change: I think will add tremendous value to.
Speaker Change: Our 100000.
Speaker Change: Drive customers on that side of the house.
Speaker Change: Our sales organization is excited about that.
Speaker Change: Sure.
Speaker Change: And.
The.
Speaker Change: That's sort of the plumbing and wiring for all of that is being put together. The groups are being trained and that will that will kick off and begin to happen as the year plays out. So we've had a couple of early sales already just sort of.
Speaker Change: The acquisitions as you know.
Speaker Change: Was just that.
Speaker Change: Halloween. So we've just had a couple of months to work on it. So everything is not fully complete but we do have some.
Speaker Change: Some cross sells beginning.
Speaker Change: Process is underway.
Speaker Change: And.
Speaker Change: Demand was strong and we figured out how to do it but the broad process will be picking up very soon and we expect about $5 million of cross sell back and forth between the customer basis. This year that would be a little bit back weighted just because it takes a minute to get it all set up and going.
Speaker Change: It really goes two ways.
Speaker Change: Some of the key customers that are coming in through their funnel through their pipeline.
Speaker Change: That come in and learn about the automation.
Speaker Change: Yes.
Speaker Change: Representatives that are working with them I really want to growth I really want to generate leads.
Speaker Change: Really wanted to build a pilot.
Speaker Change: But there is definitely in terms of the depth of demand.
Speaker Change: And that really is a natural conversation to talk to them about marketing center, our thrive products and so that works well.
Speaker Change: Our business advisors are really excited to get their hands on it.
To take the key automation into the base drive customer base.
Speaker Change: <unk>.
Speaker Change: On the drive side.
Speaker Change: We have I would say one of our biggest problems is we.
Joe: Okay. Thanks, Joe maybe similar topic.
Speaker Change: Great huge numbers of leads for our small business customers and some of them just sort of fall Laura They don't really get followed up on.
Speaker Change: You are targeting these larger businesses just curious if there is any.
Speaker Change: Anything different with that process. If there is any changes into the selling cycles and then.
Speaker Change: As well as they should or we'd like them to and so putting in place a sales pipeline or funnel a an automated process that continues to follow up with those customers. Thanks, Jordan none of them are lost or missed.
Speaker Change: Do you have any tangible evidence yet of the ability to cross sell into that group or is that maybe is it too early to tell there.
Speaker Change: Well look I want to be clear.
Speaker Change: I think we will add tremendous value to.
Speaker Change: About this we're not talking about go into really big companies like 200, 500 employee company.
Speaker Change: Our 100000 drive customers on that side of the house so.
Speaker Change: Im not going up from.
Speaker Change: Our sales organization is excited about that.
Speaker Change: Three employee business to <unk>.
Speaker Change: And.
Speaker Change: So it's not that different I would say the biggest difference.
Speaker Change: That's sort of the plumbing and wiring for all of that is being put together. The groups are being trained and that will that will kick off and begin to happen as the year plays out. So we've had a couple of early sales already just sort of width.
Speaker Change: That we hear when we get into a little bit larger we have a lot of service base.
Speaker Change: So the difference here is between a guy with one truck on the road and our Guy was five trucks on the road.
Speaker Change: The difference here.
Speaker Change: We find when we get into the kind of 10 15 employee businesses that we really target and really covet.
Speaker Change: Demand was strong and we figured out how to do it but the broad process will be picking up very soon.
Speaker Change: They are looking for more powerful reporting.
Speaker Change: We expect about $5 million of cross sell back and forth between the customer base. This year that would be a little bit back weighted just because it takes a minute to get it all set up and going but there is definitely the interest the depth of demand.
Speaker Change: Our our <unk> software is.
Speaker Change: On the continuum between complicated and really powerful and simple and easy to use we are closer to simple and easy to use.
Speaker Change: Our business advisors are really excited to get their hands on it.
Speaker Change: And so one of the things up until now lack is really powerful reporting.
Speaker Change: Take it to take the key automation into the phase five customer base.
Keith: I can say the same for Keith Keith tools work really well, but they don't have.
Joe Welch: Okay. Thanks, Joe maybe similar topic.
Speaker Change: As powerful reporting is a lot of their customers.
Speaker Change: As you are targeting these larger businesses just curious if there's anything different with that process. If there's any changes in the selling cycles and then.
Keith: So the reporting center, which we rolled out recently is.
Keith: The big answer to that and more.
Keith: Meaningfully improved client satisfaction for the larger more complex businesses.
Speaker Change: Do you have any tangible evidence yet of the ability to cross sell into that group or is that maybe is it too early to tell there.
Keith: Our current customer base and as we talk to customers in the future that had 15 or 18 employees are a little bit bigger or they have a manager. They have mastered people that don't that aren't just out there putting the roofs on or whatever.
Speaker Change: Well look I want to be clear.
Speaker Change: About this we're not talking about go into really big companies like 200, 500 employee company.
Keith: They will be able to look at reports and news reports.
Speaker Change: <unk> upfront.
Speaker Change: Three employee business to an eight employee.
Keith: Run their company to run the software in a way that we think will make us much more attractive to those a little bit bigger business that was.
Speaker Change: So it's not that different I would say the biggest difference that we hear when we get into a little bit larger we have a lot of service based businesses in our customer base.
Keith: I guess, a shortcoming up until now when we got into bigger businesses.
Speaker Change: The difference here is between a guy with one truck on the road and our Guy was five trucks on the road that's sort of the difference here.
Keith: They were giving us the feedback that look we're really looking for more reporting.
Speaker Change: And what we find when we get into the kind of 10 15 employee businesses that we really target and really covet.
Keith: So thats part of the reason that we prioritize building reporting center and something that the key product development team and are jumping up and down excited about getting reporting center.
Speaker Change: They are looking for more powerful reporting.
Keith: For their offerings as well.
Our our <unk> software is.
Speaker Change: On the continuum between complicated and really powerful and simple and easy to use.
Speaker Change: Your next question comes from the line of Scott Berg with Needham. Please go ahead.
Speaker Change: Closer to simple and easy to use.
Speaker Change: So one of the things up until now it has lacked it's really powerful reporting and I can say the same for Keith Keith tools work really well, but they don't have.
Scott Berg: Hi, everyone nice quarter here I guess, a couple of questions for me.
Speaker Change: Joe, Let's turn to sales in the in the fourth quarter you guys I would just say it a lot going on with the acquisition and whatnot, but if your customer adds or I guess your net customer adds in the CT SaaS business declined a little bit from what you saw in Q2, and Q3 and I know, there's a little seasonality in the business there, but did you see any.
Speaker Change: As powerful reporting is a lot of their customers would like.
Speaker Change: The reporting center, which we rolled out recently.
Speaker Change: It's a big answer to that and we will.
Speaker Change: Meaningfully improved client satisfaction for the larger more complex businesses than ever.
Scott Berg: I think different there around buying.
Speaker Change: And our current customer base and as we talk to customers in the future that have 15 or 18 employees are a little bit bigger they have a manager of the asset management people that don't that aren't just out there putting the roofs on or whatever.
Scott Berg: Buying appetite from your customers how are you guys to go into market.
Scott Berg: What was really a strong middle part of the year.
Scott Berg: Look this is Scott that the holidays are always a little soft for us.
Speaker Change: They will be able to look at look toward and use reports to run their company to run.
Speaker Change: Our small businesses are they I'm not sure on the continuum between enterprise and consumer almost closer to consumer so they literally go on vacation or half.
Speaker Change: Software in a way that we think will make us much more attractive to those a little bit bigger business that was.
Speaker Change: Had things going on in their lives, where it's hard to pin down so.
Speaker Change: I guess, the shortcoming up until now when we got into bigger businesses.
Speaker Change: Thanks, giving through kind of early January.
Speaker Change: They were giving us the feedback that look we are really looking for more reported numbers. So thats part of the reason that we prioritize building reporting center and something that the key product development teams are jumping up and down excited about getting reporting center.
Speaker Change: It's always a little harder for us to be as productive as we'd like with our sales force to be honest with you. So that's kind of I'd always happen. So.
Speaker Change: In terms of if you're trying to ask kind of about the macro and get a read there was perhaps but again.
Speaker Change: For their offerings as well.
Speaker Change: I think immediately following the election I think that there was a sense of.
Speaker Change: Your next question comes from the line of Scott Berg with Needham. Please go ahead.
Speaker Change: A positive sense amongst small businesses that we were going to have a more business friendly administration in the climate would be better going forward and I think thats still there, but there is a layer now.
Scott Berg: Hi, everyone nice quarter here I guess, a couple of questions for me.
Scott Berg: Joe Let's start let's talk I guess sales in the fourth quarter you guys I would just say it a lot going on with the acquisition and whatnot, but your customer adds or I guess your net customer adds in our core SaaS business declined a little bit from what you saw in Q2, and Q3 and I know, there's a little seasonality in the business there, but did you see anything.
Speaker Change: Concern about tariffs and about.
Speaker Change: Potentially in place and things.
Speaker Change: Thanks, It's still a little softer the people out there.
Speaker Change: <unk>.
Speaker Change: And I think theres some theres some concern just because theres so much going on.
Speaker Change: <unk>.
Scott Berg: Different there around buying.
Speaker Change: It's not negativity.
Scott Berg: Buying appetite from your customers. How you guys are going to market versus what was really a strong middle part of the year.
Speaker Change: Just a little bit more of a caution than just the pure a positive feeling that was there an immediate two months after.
Scott Berg: Look Scott.
Speaker Change: After the election, so I would say overall and I've said this before I don't really feel like our results.
Scott Berg: The holidays are always a little soft for us.
Scott Berg: Our small businesses are they almost are.
Speaker Change: Ride on small business sentiment or consumer sentiment at all it's really down to our own execution, but you guys often ask me about whats the whats the macro what's the climate and I would say it's Matt.
Scott Berg: On the continuum between enterprise and consumer almost closer to consumer so they literally go on vacation or half.
Scott Berg: Had things going on in their lives, where it's hard to pin down so.
Scott Berg: Thanks, giving through kind of early January.
Speaker Change: It's not bad.
Speaker Change: But there is just a little bit of extra concern now out there in the environment and it does not really impact on our results.
Scott Berg: It's always a little harder for us to be as productive as we'd like with our sales force to be honest with you. So that's kind of had always happen. So.
Speaker Change: Yeah.
Speaker Change: Understood certainly understand the seasonality in the fourth quarter, it's apparent in some of your historical metrics as well.
Scott Berg: In terms of if you're trying to ask kind of about the macro and get a read there which is what I'm sort of hearing your app.
Scott Berg: Yes.
Scott Berg: I think immediately following the election I think that there was a sense of.
Speaker Change: From a follow up Paul the keep acquisition outperformed your expectations.
Speaker Change: In Q4 by I'll call it $2 million round number.
Scott Berg: A positive sense amongst small businesses that we were going to have a more business friendly administration in the climate would be better going forward and I think that thats still there, but theres a layer now of <unk>.
Speaker Change: Roughly yes, you maintain the fiscal 'twenty five contribution from that business I guess, what drove the upside in the two months that you had it and then.
Speaker Change: Is there any follow through on that and how should we should think about maybe upside opportunity for that keeps segment here in fiscal 'twenty, yes.
Scott Berg: Concern about tariffs and.
Scott Berg: About.
Scott Berg: Potentially in place and.
Speaker Change: Yes, we were a bit conservative estimate we just got the business and we wanted to make sure we deliver solid two was conservatism that over performance.
Scott Berg: Thanks, it's still a little softer to people out there.
Scott Berg: <unk>.
Scott Berg: And I think theres some theres some concern just because theres so much going on.
Scott Berg: Yes.
Speaker Change: I think we're going to stay with our because integrating businesses are hard.
Scott Berg: It's not negativity.
Scott Berg: Just a little bit more of a caution than just a pure a positive feeling that was there an immediate two months after.
Speaker Change: For caution.
We're going to stick with our estimates that we gave at the analyst day between 75% to 78 for the year from the <unk> business, we picked up.
Scott Berg: After the elections, so I would say overall and I've said to see before I don't really feel like our results.
Speaker Change: Number to go with right now.
Scott Berg: Ride on small business sentiment consumer sentiment at all it's really down to our own execution, but you guys often ask me about what's the what's the macro what's the climate and I would say it's met.
Speaker Change: Okay.
Excellent thanks for taking my questions.
Speaker Change: Thanks Scott.
Your next question comes from the line of Arjun Bhatia with William Blair. Please go ahead.
Scott Berg: It's not bad.
Scott Berg: But there is just a little bit of extra churn now out there in the environment and it does not really impact on our results.
Arlinda Lee: And thank you for taking our question. This is arlinda Lee therefore, our Shan.
Speaker Change: First question is what are the feedbacks from customers, who have experienced the cross sell between driving steep.
Scott Berg: Okay.
Speaker Change: Understood certainly understand the seasonality in your fourth quarter, it's apparent in some of your historical metrics as well.
Arlinda Lee: What are you learning some dose customer conversation so far.
Scott Berg: From a follow up Paul the keep acquisition outperformed your expectations.
Arlinda Lee: So it's very early days.
Arlinda Lee: We are only.
Scott Berg: In Q4 by I'll call it $2 million round number.
Arlinda Lee: Just just getting that process started I mentioned earlier some of it some of the <unk>.
Scott Berg: Roughly you maintained the fiscal 'twenty five contribution from that business I guess, what drove the upside in the two months that you had it and then scale is there any follow through on that and how should we should think about maybe upside opportunity for that keeps segment here in fiscal 'twenty side, yes.
Arlinda Lee: Keep leaves if you will people coming in to keep.
Speaker Change: Are trying to figure out how to grow their business and.
Arlinda Lee: Keeps offering is really kind of a second depth and growth you need to have a list that you need to have.
Arlinda Lee: Customers that you can then nurture and put through keeps automation process. He doesn't isn't really advertising are really well kind of go generate that lift to generate leads for ya.
Scott Berg: Yes, we were a bit conservative estimate we just got the business and we wanted to make sure. We delivered solid it was conservatism that led to that over performance.
Scott Berg: I think we're going to stay with our.
Arlinda Lee: And so thrive.
Arlinda Lee: Thrives marketing center is actually designed to do that and this is really helpful. In doing that so that's been really cool for them they've been able to capture some leads which otherwise would have just been.
Scott Berg: <unk> businesses are hard.
Scott Berg: And.
Scott Berg: For caution we're going to stick with our estimates that we gave at the analyst day between 75% to 78 for the year from the <unk> business, we picked up.
Arlinda Lee: Gone away before that we've had great feedback there and I think as they get some success with winning new business and building up their list they will naturally.
Scott Berg: The right number to go with right now.
Speaker Change: Excellent thanks for taking my questions.
Scott Berg: Thanks Scott.
Arlinda Lee: Be able to add the automation to nurture and manage their sales pipeline.
Speaker Change: Your next question comes from the line of Arjun Bhatia with William Blair. Please go ahead.
Arlinda Lee: Kind of a hand in glove perfect scenario on the drive side of the house.
Scott Berg: Hey, Thanks for taking our question. This is arlinda Lee here for our Shannon.
Arlinda Lee: We're already bringing that leads we're already building there and all of that.
Scott Berg: First question is what are the feedbacks from customers, who have experienced the cross sell between driving steep.
Arlinda Lee: So we will soon begin to sell.
Arlinda Lee: Sell the automated for those customers and another thing thats, preventing us to do it.
Speaker Change: What are you learning from those customer conversations so far.
Arlinda Lee: Is customize and build some vertical automation so that we can have.
Scott Berg: So it's very early days.
Speaker Change: We are only.
Speaker Change: Just just getting that process started I mentioned earlier some of the some of the.
Arlinda Lee: Have a a very successful HVAC I, our very successful <unk> help us build.
Speaker Change: Keep leads if you will people coming in to keep.
Automation for their industry that we can then go to thousands of other HVAC or roofing Guy and really say look this is being used by one of the leaders in your industry and it's got all the automation design just the way you would want that for your business.
Speaker Change: Are trying to figure out that grow their business and.
Speaker Change: Keeps offering is really kind of a second debt and growth you need to have a lift you need to have.
Speaker Change: Customers that you can then nurture and put through keeps automation processes keep doesn't isn't really advertising are really well kind of go generate that list to generate leads per year.
Arlinda Lee: But you could of course customize them, but this is turnkey.
Arlinda Lee: Turnkey and ready to go and so that's a big piece of what we're doing going forward because.
Speaker Change: And so.
Arlinda Lee: While we are a horizontal software we've had a tremendous amount of success.
Speaker Change: Drives marketing center is actually designed to do that and it's really helpful. In doing that so that's been really cool for them. They have been able to capture some leads which otherwise would have just been.
Arlinda Lee: A lot of verticals.
Arlinda Lee: Further customizing for the vertical and that's something that we really were excited about doing and key permits that and let us do that in a really big hurt. So that's something that I can tell you. Our sales organization is really excited about getting those.
Speaker Change: Gone away before and so that we've had great feedback there and I think as they get some success with winning new business and building up their list they will naturally.
Arlinda Lee: Optimized automation to take to their to their clients and feel like there'll be a very strong appetite for them.
Speaker Change: Be able to add the automation to nurture and manage their sales pipeline.
Arlinda Lee: Awesome and kind of moving.
Speaker Change: Kind of a hand in glove perfect scenario on the drive side of the house.
Arlinda Lee: Any changes to the go to market Q2, returning overall business growth by 2027.
Speaker Change: We're already bringing that leads were already building their lift and all of that.
Speaker Change: So we will soon begin to sell.
Arlinda Lee: Yes.
Speaker Change: Sell the automakers to those customers and another thing it's permitting us to do.
Arlinda Lee: The acquisition of Keith.
Arlinda Lee: <unk> added a really significant partner channel we have a thousand.
Speaker Change: Is customize and build some vertical automation so that we can have.
Arlinda Lee: And that partner channel.
Arlinda Lee: We had a small partner effort within dry, but we were honestly not that great at and buying a proven to.
Speaker Change: A very successful HVAC I, our very successful <unk> help us build.
Speaker Change: Automation for their industry that we can then go to thousands of other HVAC or roofing guide and really say look this is being used by one of the leaders in your industry and it's got all the automation design just the way you would want that for your business you could of course customize them, but this is turnkey.
Arlinda Lee: Two decade old really well oiled well running partner channel.
Arlinda Lee: Is a meaningful adder for us to enhance our sales channel to the more sophisticated kind of businesses.
Arlinda Lee: Choir.
Speaker Change: Yourself or through partners.
Speaker Change: The other piece it does is it really amplifies our international effort into markets that.
Speaker Change: Yeah, and ready to go and so that's a big piece of what we're doing going forward because.
Speaker Change: We don't currently have a footprint and so yes, I do think that.
Speaker Change: While we are a horizontal software we've had a tremendous amount of success and a lot of verticals and.
Speaker Change: Thats, a big amplifier of our.
Speaker Change: Sales efforts and will contribute mightily by 2027% to the overall top line growth that we anticipate getting back to.
Speaker Change: Further customizing for the vertical and that's something that we really were excited about doing and key permits that and let us do that in a really big hurry.
Scott Berg: Thanks Scott.
Speaker Change: Thank you.
Speaker Change: That's something that I can tell you our sales organization is really excited about getting those.
Speaker Change: Your next question comes from the line of Daniel Moore with CJS Securities. Please go ahead.
Speaker Change: Optimized autonation to take to their to their clients and feel like there'll be a very strong appetite for them.
Daniel Moore: Good morning, I appreciate the color and thanks for taking the questions Ken I guess two quick ones one.
Speaker Change: Awesome and kind of moving broadly any changes to the go to market sure Cheesecake, returning overall business growth by 2027.
Speaker Change: You reiterated it in the slide deck and great to see the lines so to speak cross on revenue and SaaS, making up the majority of revenue now.
Speaker Change: Just update us on your confidence that.
Speaker Change: Yes.
Speaker Change: The acquisition of Keith.
Speaker Change: Yes.
Speaker Change: And maybe any.
Speaker Change: Added a really significant partner channel we have a thousand.
Speaker Change: Greater specificity in terms of when you expect the lines to cross on EBITDA, just wondering whether you still feel like fiscal 'twenty fivefold, Mark roughly the bottom for EBITDA.
Speaker Change: Partner and that partner channel.
Speaker Change: We had a small partner effort within thrive.
Speaker Change: But we were honestly not that great at and buying a proven too.
Speaker Change: When we start to restrict to think about overall growth there.
Speaker Change: Two decade old really well oiled well running partner channel.
Speaker Change: Sure.
Speaker Change: That's in our investor deck.
Speaker Change: I think great slide shows.
Speaker Change: Is a meaningful adder for us to enhance our sales channel to the more sophisticated kind of businesses.
Speaker Change: Sort of.
Speaker Change: Inflexion point.
Speaker Change: We're anticipating the majority of our EBITDA source of EBITDA in 2006 will be coming from the SaaS business. So it will actually be.
Speaker Change: Choir.
Speaker Change: Software through partners.
Speaker Change: The other piece it does is it really amplifies our international efforts into markets that.
Speaker Change: Take the baton and it sounds like marketing services still won't be making a whole lot of money, well, but but the SaaS will actually eclipse. It and then the following year in 2027, we believe that the now that.
Speaker Change: We don't currently have a footprint and so yes, I do think that.
Speaker Change: That's a big amplifier of our.
Speaker Change: Those efforts and will contribute mightily by 2027% to the overall top line growth that we anticipate getting back to.
Speaker Change: That much bigger SaaS business will be able to deliver overall topline growth for the visit even add marketing services continues to decline rapidly.
Scott Berg: Awesome. Thanks, Scott.
Speaker Change: Thank you.
Speaker Change: Your next question comes from the line of Daniel Moore with CJS Securities. Please go ahead.
Speaker Change: That's sort of how we see it playing out as far as trying to parse it all the way down to like what quarter that happens or whatever.
Speaker Change: I think that would be a little too clever.
Daniel Moore: Good morning, I appreciate the color and thanks for taking the questions Ken I guess two quick ones one of.
Speaker Change: For us to try to do right now.
Speaker Change: Do have model that we're looking at them and we think about it but I'm not sure that would be appropriate for me to go.
Daniel Moore: You reiterated it in the slide deck and great to see the lines so to speak cross on revenue and SaaS, making up the majority of revenue now.
Speaker Change: <unk> take it out tighter than that.
Speaker Change: Understood.
Daniel Moore: Just update us on your confidence that.
Speaker Change: And maybe just speak to the cadence of the launch of additional centers over the next say one to two years or focus more on integrating and capturing revenue synergies from Keith. Thanks.
Daniel Moore: Yes.
Daniel Moore: And maybe any.
Daniel Moore: Greater specificity in terms of when you expect the lines to cross on EBITDA, just wondering whether you still feel like fiscal 'twenty fivefold, Mark roughly the bottom for EBITDA.
Speaker Change: Yes, we have already sort of pre announced at our analyst day.
Daniel Moore: When we start to restrict to think about overall growth there.
Speaker Change: What's the next center its workforce center.
Daniel Moore: Sure.
Speaker Change: We've had.
Daniel Moore: In our Investor deck, there is that I think great slide shows.
Speaker Change: The demand there for time tracking and paying.
Daniel Moore: Yes.
Speaker Change: Employees and contractors.
Daniel Moore: Inflexion point.
Daniel Moore: We're anticipating that the majority of our EBITDA source of EBITDA in 2006 will be coming from the SaaS business. So it will actually.
Speaker Change: That is something that we've been building for a couple of years.
Speaker Change: Actually haven't.
Speaker Change: Sort of alpha level now.
Speaker Change: And so we're confident that that will come out this year, probably won't add any revenue this year the revenue as the year after.
Daniel Moore: Take the baton and it sounds like marketing services still won't be making a whole lot of money will but but SaaS will actually eclipse. It and then the following year in 2027, we believe that the now.
Speaker Change: As far as additional centers going into 'twenty six 'twenty seven we've stopped short of promising any any further center now it doesn't mean, we won't added.
That much bigger SaaS business will be able to deliver overall topline growth for the visit even add marketing services continues to decline rapidly.
Speaker Change: But what we are going.
Speaker Change: You're really focused on is making it all really work well together and making sure the platform or tools that we have.
Daniel Moore: That's sort of how we see it playing out as far as trying to parse it all the way down to like what quarter that happens or whatever.
Speaker Change: Is interoperable with all those things in the market.
Daniel Moore: I think that would be a little too clever.
Speaker Change: Keeps coming out of it.
Daniel Moore: For us to try to do right now.
Speaker Change: Silky smooth working between everything that utilize our integrated everything just works well.
Daniel Moore: Do have model that we're looking at them.
Daniel Moore: We think about it but im not sure that would be appropriate for me to go there and take it down tighter than that.
Speaker Change: Frankenstein here.
Speaker Change: To really easy to use platform.
Speaker Change: Understood and then maybe just speak to the cadence of the launch of additional centers over the next say one to two years.
Speaker Change: One of the things that we're dealing with there.
Speaker Change: Very small businesses you have to make it kind of consumer grade, it's got to be really simple and clear you can't challenge people with hard to use tools.
Speaker Change: Or is the focus more on integrating and capturing revenue synergies from Keith. Thanks.
Speaker Change: That's going to be really important for us and we.
Speaker Change: Yes, we have already sort of pre announced at our analyst day.
Speaker Change: We have not promise.
Speaker Change: You have more centers each year after that.
Speaker Change: The next center is its workforce center.
Speaker Change: Some of our innovations baked in at or above.
Speaker Change: <unk> had.
Speaker Change: Demand there for time tracking and paying employees.
Speaker Change: Add ons or other other product offerings that maybe don't rise to the level of being a whole separate center.
Speaker Change: Employees and contractors.
Speaker Change: That is something that we've been building for a couple of years.
Speaker Change: We had an initial vision for the platform, we are trying to build which workforce center.
Speaker Change: <unk> actually havent.
Speaker Change: Sort of alpha level now.
Speaker Change: The big lines on and now we've got a lot of <unk>.
Speaker Change: And so we're confident that that will come out this year, probably won't add any revenue. This year the revenue adds come the year after.
Speaker Change: I would not guide you that you'll see.
Speaker Change: Another massive center coming out each of the next few years, just us continuing to innovate and make everything work better together.
Speaker Change: As far as additional centers going into 'twenty six 'twenty seven we've stopped short of promising any any further center now that doesn't mean, we won't added.
Speaker Change: Understood I appreciate it.
Dan: Thanks, Dan.
Speaker Change: But what we.
Speaker Change: Your last question comes from the line of Zach Cummins with B Riley Securities. Please go ahead.
Speaker Change: If you really focused on it.
Speaker Change: Is making it all really work well together and making sure the platform or tools that we have.
Zach Cummins: Hi, good morning, Thanks for taking my questions.
Speaker Change: It's interoperable with all these things in the market and in the case of keep coming in.
Zach Cummins: Joe I wanted to ask about the <unk> just of course drives asset it was nice to see that sequential uptick from Q3 to Q4.
Speaker Change: Silky smooth working between everything that utilize our integrated everything just works well.
Speaker Change: Frankenstein here, we want to really easy to use platform.
Zach Cummins: Or are we approaching the trough in terms of where you think <unk> will be for that business I know it can fluctuate just given <unk> got a new marketing legacy marketing services customers versus layering in additional products just curious how youre thinking about that progression of the RFP for the core business.
Speaker Change: One of the things that we're dealing with.
Speaker Change: Very small businesses you have to make it kind of consumer great. It's got to be really simple and clear you can't challenge people with hard to use tools.
Speaker Change: That's going to be really important for us and we have not promise.
Zach Cummins: You're right the number can be noisy and bounce around a little bit based on the.
Speaker Change: You have more centers each year after that.
Zach Cummins: The conversion activity working with.
Zach Cummins: With the marketing services folks that has benefit a bit noisy but.
Speaker Change: Some of our innovations may come in the form of <unk>.
Speaker Change: Add ons or other other product offerings that maybe don't rise to the level of being a whole separate center.
Zach Cummins: I do feel like if I look at the whole of 25.
Zach Cummins: One of the story when we look back at the end of it we'll have bed.
Speaker Change: We had an initial vision for the platform, we were trying to build which workforce center.
Zach Cummins: Very strong progress.
Zach Cummins: On <unk> growth I think we spent.
Speaker Change: Put the big lines on and now we've got a lot of it so I would not guide assume that youll see.
Zach Cummins: The last couple of years really building a very big client base 114000, whatever clients may include Keith.
Speaker Change: Other massive center coming out each of the next few years just us.
Zach Cummins: And I think what we want to do now and what were what were.
Speaker Change: Continuing to innovate and make everything work better together.
Zach Cummins: Asking our sales organization, our marketing team to do is really spend time with that.
Speaker Change: Understood I appreciate it.
Dan: Thanks, Dan.
Zach Cummins: Installed base and make sure that they are engaged with the product bedded down using it and.
Speaker Change: Your last question comes from the line of Zach Cummins with B Riley Securities. Please go ahead.
Zach Cummins: Yes, hi, good morning, Thanks for taking my questions.
Zach Cummins: That we are meeting more and more of their needs. So they don't have to go elsewhere.
Zach Cummins: Joe I wanted to ask about the <unk> and just the core thrives assets. It was nice to see that sequential uptick from Q3 to Q4.
Zach Cummins: Wanted to do it with us and so.
Zach Cummins: Not to be craft, but upselling that basically working with them to.
Zach Cummins: Get more products in place I think one of the slides in the deck talked about the significant progress that we've made so far on.
Zach Cummins: Are we approaching the trough in terms of where you think Arthur will be for that business I know it can fluctuate just given adding new marketing legacy marketing services customers versus layering in additional products just curious how youre thinking about that progression of the RFP for the core business.
Zach Cummins: Adding additional SaaS products to existing customers I think this year 25 would be a year, where that's a <unk> that's like a big focus.
Zach Cummins: Within marketing and sales of the company.
Zach Cummins: You're right the number can be noisy and bounce around a little bit based on.
Zach Cummins: And so I.
Zach Cummins: I do expect that will be.
<unk> growth will be probably the big.
Zach Cummins: The conversion activity working with.
With the marketing services folks so that has benefit a bit noisy but.
Zach Cummins: The big thing for 25.
Zach Cummins: Got it got it.
Speaker Change: Alrighty, partially addressing about one follow up question, but can you speak to just some of the other paid SaaS products that you've crafted and are selling within the base now aside from just.
Zach Cummins: I do feel like if I look at the whole of 25.
Zach Cummins: One of the stories when we look back at the end of it we'll have been very strong progress on our <unk> growth.
Zach Cummins: For additional centers and driving that percentage upward.
Zach Cummins: We spent the.
Zach Cummins: The last couple of years really building a very big client base of 114000 whenever clients may include keep.
Speaker Change: Yes.
Speaker Change: We are trying to kind of fill out the offering with an eye toward helping our small business growth.
Zach Cummins: And I think what we want to do now and what we're what we're.
Zach Cummins: Asking our sales organization that our marketing team to do is really spend time with that.
Speaker Change: <unk> background, our legacy from <unk> 86, with linking buyers and sellers together and we still own and control some of the most.
Zach Cummins: Installed base and make sure that they are engaged with the product bedded down using it and.
And the most powerful directory sites around the world and we have a very large network directory partners for which we we work and we monetize their traffic.
Zach Cummins: That we are meeting more and more of their needs. So they don't have to go elsewhere.
Zach Cummins: Wanted to do it with us and so.
Speaker Change: And so we're trying to bring all of that bear to make the phone ring bring inbound inquiries to our customers.
Zach Cummins: Not to be craft, but upselling that basically working with them to get more products in place I think one of the slides in the deck talked about the significant progress that we've made so far.
Speaker Change: And what we find is that.
Speaker Change: <unk>.
Speaker Change: Customers will stop and really have a conversation with you if you can help them grow.
Zach Cummins: Adding additional SaaS products to existing customers I think this year 25 will be a year, where that's <unk>, that's like a big focus.
Speaker Change: You can make their phone rings, you can bring job Dan if you can help them get new customers and so we've been building products to help them do that and reaching back to some of our.
Zach Cummins: Within marketing and sales of the company.
Zach Cummins: And so.
Zach Cummins: I do expect that will be.
Speaker Change: Our legacy capabilities.
Zach Cummins: Our <unk> growth will be probably the big the big thing for 25.
Speaker Change: Capabilities, if you will to do that one of the one of the things that we added last year.
Speaker Change: A product we call growth packages in these growth packages.
Zach Cummins: Got it got it.
Speaker Change: Alrighty, partially addressing about one follow up question, but can you speak to just some of the other paid SaaS products that you've crafted and are selling within the base now aside from Jeff.
Speaker Change: <unk>.
Speaker Change: When when they go with marketing center or an add on marketing center.
Speaker Change: Jeff.
Speaker Change: To help you help you bring inbound inquiries.
Zach Cummins: Or additional centers and driving that percentage upward.
Speaker Change: It is really working very very well.
Speaker Change: Both of them are from our results for our customer standpoint, but also from a sales standpoint, I mean, our sales force gets it and it's been really great at selling that and so that's part of why we broadened the definition.
Speaker Change: Yes.
Speaker Change: We are trying to kind of fill out the offering with an eye toward helping our small business grow.
Speaker Change: Our background our legacy from <unk> 86 is linking buyers and sellers together and we still own and control some of the most the biggest and most powerful directory sites around the world and we have a very large network directory partners or which we we work and we monetize their traffic.
Speaker Change: Instead of just additional centers, we've made additional products because growth packages arent they.
Speaker Change: They are in a full new center there more of a.
Speaker Change: An add on to marketing center, but.
Speaker Change: They have made a big difference.
I think our are helping us really stakeout ownership of that growth category. There is a lot of software out there to help you with.
Speaker Change: And so we're trying to bring all of that is fair to make the phone rang bring inbound inquiries to our customers.
Speaker Change: <unk> type stuff in back office type stopped tracking your trucks when they drive around and all of this kind of stuff and there's a lot of that out there but.
Speaker Change: And what we find is that.
Speaker Change: Customers will stop and really have a conversation with you.
Speaker Change: It's something that the thought that a small business can embrace that will actually help them grow and then helped that really tracks how that growth is working.
Speaker Change: You can help them grow.
Speaker Change: If you can make their phone rings, you can bring jobs, there and if you can help them get new customers and so we've been building products to help them do that and reaching back to some of our.
Speaker Change: There's the famous John water maker.
Speaker Change: Both from last century, where he said I know have all my advertising is wasted.
Speaker Change: Our legacy capabilities.
Speaker Change: Capabilities, if you will to do that one of the one of the things that we added last year.
Speaker Change: I, just don't know which half.
Speaker Change: The marketing center addressed is that it allows you to instrument and no absolutely everything that you're doing and how it's working that yard sign that you put in front of.
Speaker Change: Was a product we call growth packages in these growth packages.
Speaker Change: <unk>.
Speaker Change: When when they go with marketing center.
Speaker Change: Our house that Youre, putting siding on is that actually working on marketing Center will tell you exactly how many calls are generated and then link that to your results, whether you sold them or not.
Speaker Change: <unk> marketing center.
Speaker Change: Yes.
Speaker Change: <unk> help you help you bring inbound inquiries and it is really working very very well.
Speaker Change: Both of them are.
Speaker Change: From our results for our customer standpoint, but also from a sales standpoint, I mean, our sales force gets it and it's been really great at selling that and so that's part of why we broadened the definition.
Speaker Change: The phone numbers on the side of your truck you can figure out that's working everything that you're doing you can track our people bouncing out of your web site you can heat map your website and figure out what's working and what is it.
Speaker Change: Instead of just additional centers, we've made additional products because growth packages arent.
Speaker Change: Really every piece of your marketing and so to have that kind of absolute transparency with marketing center and then have tools that actually that actually drive leads into it.
Speaker Change: They are in a full new center there more of an.
Speaker Change: Add on to marketing center, but.
Speaker Change: We think is a really valuable place to sit within the market.
Speaker Change: We have made a big difference.
Speaker Change: Sure.
Speaker Change: I think our are helping us really stakeout ownership of that growth category. So there's a lot of software out there to help you with.
Speaker Change: And customers are really responding well to it and then it cuda graph as you've come a lot behind it and.
Speaker Change: And you add the key product.
Speaker Change: <unk> type stuff in back office type stopped tracking your trucks when they drive around and all of this kind of stuff and there's a lot of that out there but.
Speaker Change: Our sales pipeline and automation to that followed it makes sure that none of those lasers spilled on the ground.
Speaker Change: Something that is that a small business can embrace that will actually help them grow and then helped that really track how that growth is working.
Speaker Change: You really are starting to cook with gas here, you've got a really great growth oriented package and then for the businesses.
Speaker Change: <unk> as they grow and they get a little bit bigger.
Speaker Change: To sustain this John water maker.
Speaker Change: We obviously haven't CRM estimates invoice billing payments, we can help you manage social media. We now got powerful report that you can track.
Speaker Change: Quote from last century, where he said I know have all my advertising is wasted.
Speaker Change: I, just don't know which half.
Speaker Change: Marketing center addressed is that it allows you to instrument and no absolutely everything that you're doing and how it's working that yard sign that you put in front of.
Speaker Change: How it's all working in a daily report you can run your business all looks like.
Small business version of Domo like something really simple that helps you run your business.
Speaker Change: How's that youre, putting citing on is that actually working on marketing Center will tell you exactly how many call to generated and then link that to your results, whether you sold them or not.
Speaker Change: And soon you'll be able to also pay our employees and keep track of contractors.
Speaker Change: Hours and so on so we're really building almost like a complete platform to run a small business and.
Speaker Change: The phone numbers on your truck you can figure out thats working everything that you're doing you can track our people bouncing out of your web site you can heat map your website and figure out what's working and what isn't.
Speaker Change: And it's really.
Speaker Change: And this is really important this is where the market is now if we look back five years, most small businesses, we're not in the cloud and if they were or they were just using a little narrow point solution. They were maybe.
Speaker Change: Clearly every piece of your marketing and so to have that kind of absolute transparency with marketing center and then have tools that actually that actually drive leads into it.
Speaker Change: Bringing in a loyalty tool some little thing that coupled with social media or may be a payment tool the.
Speaker Change: The question that's on their list now.
Speaker Change: We think is a really valuable place to sit within the market.
Speaker Change: Rather than this piecemeal point solution thing.
Speaker Change: Is there a more complete platform that I can sign up for that I can have one login I can show my employees how to use it.
Speaker Change: And customers are really responding well to it and then it could grasp as you've come a lot behind it.
Speaker Change: And you add the key product when you put a sales pipeline and automation to that follow up to make sure that none of those leads are spilled on the ground and you really are starting to cook with gas here, you've got a really great growth oriented package and then for the businesses.
Speaker Change: Set permissions within this one sei and I could have this more.
Speaker Change: Most enterprise wide for my 12 employees.
Speaker Change: Tool that I haven't had access to on my mobile device.
Speaker Change: At the Kid's soccer game I'm away for the weekend I can track everything I know what's going on.
Speaker Change: <unk> as they grow and they get a little bit bigger.
Speaker Change: We obviously have a CRM estimates invoices billing payments, we can help you manage social media. We now got powerful report that you can track.
Speaker Change: Get rid of some of the paper in my life.
Speaker Change: Im actually able to run my visits and the whole thing is less than $1000 a month run my business on.
Speaker Change: How it's all working in a daily report you can run your business all looks like a small business version of Domo like something really simple that helps your banking business.
Speaker Change: And that that's a spot we've been aiming at and I will admit we might have been.
Speaker Change: We were out there trying to sell a complete platform to people that were opening ready for point solutions early stages of it.
And soon you'll be able to also pay your employees keep track of contractors.
Speaker Change: But now the small businesses are moving toward this wanting this more complete solution and I think we have the right product for the right time I think the second half of this decade will be a big wave of demand for what we offer and I think that we're really well positioned we're working with great urgency.
Speaker Change: Hours and so on so we're really building almost like a complete platform to run a small business and it's really.
Speaker Change: And this is really important and this is where the market is now if we look back five years.
Speaker Change: Most small businesses, we're not in the cloud and if they were or they were just using a little narrow point solutions. They were maybe.
Speaker Change: Finish our platform finished building it out and work out all the little Kinks in Bergen problem. So it's super Super easy to use and very interoperable with everybody else's tools, but but we think we will capture an enormous amount of demand at the top.
Speaker Change: Bringing in a loyalty tool or some little thing that coupled with social media or may be a payment tool.
Speaker Change: The question that's on their list now.
Speaker Change: Rather than this piecemeal point solution thing.
Speaker Change: We're super excited about it.
Speaker Change: Is there a more complete platform.
Speaker Change: I can sign up for that I can have one law I can show my employees how to use it I could set permissions within this one sei and I could have this more.
Speaker Change: Got it I appreciate all the color and congrats on the strong results.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change: All of this enterprise wide for my 12 employees.
Speaker Change: Tool that I haven't had access to on my mobile device.
Speaker Change: At the Kid's soccer game room away for the weekend I can track everything I know what's going on.
Speaker Change: Get rid of some of the paper in my life and I am actually able to run my visits and the whole thing is.
Speaker Change: Less than $1000 a months run my business on.
Speaker Change: And that's that spot we've been aiming at and I'll admit we might have been earlier.
Speaker Change: We were out there trying to sell a complete platform to people that were only ready for point solutions early stages of this but now the small businesses are moving toward this wanting this more complete solution.
Speaker Change: I think we have the right product for the right time I think the second half of this decade will be a whoosh big wave of demand for what we offer and I think that we're really well positioned and we're working with great urgency to finish our platform finish building it out and work out all the little Kinks and burden problems. So it's.
Speaker Change: Super Super easy to use and very interoperable with everybody else's tools, but.
Speaker Change: We think we will capture an enormous amount of demand.
Speaker Change: And we're super excited about it.
Speaker Change: Got it I appreciate all the color and congrats on the strong results.
Speaker Change: Thank you.
Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.
Speaker Change: Please wait the conference will begin shortly.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Sure.
Speaker Change: [music].