Thryv Holdings, Inc.

Good day, ladies and gentlemen. Thank you for standing by and welcome to the Thrive Q2 2021 earnings 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 a session, you'll need to press star 1 on your telephone. Please be advised today's conference is being recorded. If you require any further assistance, please press star 0. I'll hand the conference over to KJ Christopher. Please go ahead.

Good morning, everyone, and welcome to this recorded management discussion of Thrive's second quarter 2021 results. By now, you should have received a copy of the company's second quarter 2021 earnings release and investor supplement, which is also posted on our website at investor.thrive.com. With me today are Joe Walsh, Chief Executive Officer and President, Paul Rouse, Chief Financial Officer, and Grant Freeman, our Vice President of Client Success. Before we begin, I would like to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to the risks and uncertainties described in the company's earnings release and other filings with the SEC. Thrive has no obligation to update 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 GAAP will be posted on the Investor Relations website at investor.thrive.com. With that introduction, I would like to turn the call over to Joe Walsh. Thank you, KJ.

Good morning, everyone, and welcome to our second quarter 2021 earnings call. Our second quarter results demonstrate strong and continued growth in our SaaS business, highlighted by accelerating penetration within our new customer acquisition channels, record client retention metrics, and year-over-year client growth. Total SaaS revenues accelerated and grew by 32% year-over-year, ahead of our guidance, and demonstrates that we are executing well against the strategy we introduced last year. To us, it appears clear that SMBs will move to the cloud. We feel Thrive is well positioned to seize on this opportunity. We made the decision to invest in SaaS growth. SMBs are currently evaluating and transforming the critical aspects of how they manage their business. This has been happening at an enterprise level for many years. It is just now happening for small businesses. They're taking those steps, they're modernizing, and it's still pretty early in the game. From my point of view, these small businesses are putting their faith in us as they prepare to take that first digital leap to begin to modernize their business. It's a lot of responsibility, and we try to do a really good job of it. I've spent my whole career working with local businesses. I spend a lot of time now In the pandemic, I'm not as much in the field, but prior, I'm in the field. But I can join sales calls by Zoom. I'm able to listen to recorded sales calls. I'm able to call existing customers and talk with them about how they use the software and where it comes up short, any concerns they have, any glitches that we have. you know, as big and powerful as the Thrive tool is, it does a lot. There's always something that customers have in mind that it should do better or it should do that it doesn't do. And so that feeds into our product roadmap and we're constantly tuned in to what our customers have to say. We also have a really cool, believe it or not, Facebook site where You know, the power users all get together and talk about how the youth thrive and what they do. They teach each other. There's a real sense of community. All of that is part of what's guiding the improvement and part of why you're seeing such high user engagement levels in the product and part of why you're seeing churn continue to fall. So we're making a lot of progress with those local businesses, and that's making a big difference. To finish up my opening comments, clients are trusting in us as they look to modernize and organize and grow their business. All of this is reflected in our strong quarterly results that we announced this morning. Given this solid progress, we're raising guidance. The acceleration in revenue and billings was driven by strong business performance in the quarter, a result of the challenging business environment we experienced in Q2 of last year. Our SaaS new channels are performing well. We recently hit high teens as a percent of our overall sales versus our traditional sales scores. And that's about double where we were the same time last year. I'll remind you that we expect to hit about half of all sales in the medium term. So you'll see that continue to grow as a percentage of sales. And our churn hit record lows. You know, we're continuing to dial in our onboarding and time to value so that we're continuing to bring churn down. And that's something that, you know, we think makes a big difference and feels really good to have customers staying, paying, and feeling good using the product. Our net dollar retention increased 18 points year over year to 92%. ARPU continues to rise, $323 in Q2, a significant year over year increase. double-digit gains in weekly and daily active users. We attribute the strength in these metrics to the prioritization of engagement. We've really focused on engagement, and we've got teams of people working with customers, teaching them and showing them how to use the product. Time and app is up, and the percentage of clients using our core features continues in an upward trajectory. So overall, great progress in this last period. Next, I'd like to introduce Grant Freeman, our VP of Client Success.