Thryv Holdings, Inc. (THRY) stock intrinsic value fair value estimate & owner earnings analysis

Thryv Holdings is two businesses, one being switched off and one that has to carry the company after that. The SaaS segment sells small businesses a subscription platform (customer management, scheduling, payments, marketing automation), including Keap, bought in October 2024. The Marketing Services segment is the old print and online yellow-pages business in the United States and Australia, and the company says it will exit it by the end of 2028. In 2025 SaaS brought in $461.0M of revenue and $73.8M of segment profit before depreciation and stock pay. Marketing Services brought in $324.0M and $78.0M. So about half of 2025's operating profit comes from a business with a stated end date. The first half of 2026 changed the picture. Marketing Services revenue fell 47% to $87.2M and its segment profit fell from $37.9M to $20.5M. SaaS revenue barely moved ($231.2M against $226.1M, and second-quarter SaaS revenue was slightly below a year earlier), while SaaS segment profit fell from $34.2M to $24.4M because SaaS cost of services rose from $59.6M to $76.8M. We could not find the reason for that cost increase in the filings we reviewed, so we have not treated it as permanent. Our base case uses a 13% SaaS profit margin, between the 12% midpoint of 2023-2025 and the 13.7% of the last twelve months, and above the 10.5% of the first half. Other signs of pressure: SaaS clients fell 12% in 2025, and revenue kept from SaaS clients of two years or more slipped from 98% to 94% of the prior year. How we measure earnings: we start from operating cash flow, take out working-capital swings, and subtract stock pay and the capital spending needed to keep the business running. On that basis the business made about $94.9M before interest in 2025, $94.5M in 2024 and $137.0M in 2023 (median $94.9M, or $2.13 per share). In 2025 that figure was flat in dollars and down 16% per share because the Keap deal added shares. We do not simply project the median forward, because roughly half of it disappears by 2028 on the company's own timetable. Instead we build each case segment by segment. Two costs stay with the business: stock pay of about $15M a year (the 2026 run rate) and capital spending of about $32M a year. Capital spending has stayed between $26M and $34M a year since 2018, even as revenue fell from $1.78B to $0.79B, so we do not assume it shrinks much when print ends. For 2026 as a whole the base case comes out near $38M, down about 60% from 2025. That drop is already visible in the first-half results; it is not an assumption. Change from our previous estimate: before, we valued earnings after interest and never subtracted the debt. That quietly assumed the $236.3M term loan would roll over forever on today's terms. We now value the business first and then subtract what it owes. The loan costs SOFR plus 6.75% (10.6% at year-end 2025), must be repaid at $35M a year, and matures May 1, 2029. Covenants require net debt of no more than 3.0 times EBITDA and a minimum level of SaaS revenue. At June 30, 2026 the company owed $236.3M on the term loan, $14.1M on its revolving credit line (with about $14.5M of availability left) and about $4.9M in finance leases, a total of roughly $255M, against $9.1M of cash that it needs to operate. The loan's rate is well above our 6% benchmark, so we add the present value of that extra interest: about $22M through 2029. In the base case we add another amount for refinancing the roughly $140M left in 2029 at a similar spread, and a larger amount in the bear case. We also now use the first-half 2026 segment results and the 2028 exit date, which our previous estimate did not reflect. Together these explain most of the drop. Base case, -$2.51 per share: Marketing Services profit roughly halves each year ($16M in 2027, $6M in 2028) and then stops, with about $5M a year of wind-down cost. SaaS revenue holds at about $460M through 2028 as print and digital clients are moved onto the software. After that it falls 3% a year, because retention of 94% is only partly offset by new sales. Margin is 13%, and about $5M a year of shared overhead is left over after print ends. The business is worth about $181M. It owes about $292M including the above-market interest. That leaves about $111M less than nothing: on these assumptions the company owes more than it is worth. From 2028 on, cash left after stock pay and capital spending runs about $14-16M a year. That will not cover $35M a year of required repayments, so the 2029 refinancing is critical. Bear case, -$7.31 per share: SaaS revenue shrinks 6% a year in line with 94% retention and a 12% drop in client count, margin stays near 9% (the first half was 10.5% and falling), capital spending runs 6% of revenue, $10M a year of overhead is left over, and wind-down costs are $10M a year. Under those assumptions the business loses cash in 2027 and 2028 and has nothing left over after print ends, so we give it no value past that point. It is worth about -$11M, owes about $314M (including the cost of refinancing the 2029 balance at about 13%), and ends up about $324M in the hole. In practice this is the case where lenders take control. Bull case, $5.11 per share: SaaS margin returns to the 16% it reached in 2025, and revenue holds at $460M through 2035 before fading 3% a year. Marketing Services runs off a little more slowly ($20M in 2027, $8M in 2028), and capital spending falls to 4% of revenue once print ends. The business is worth about $504M, owes about $277M, and leaves about $227M for shareholders. We credit no growth in any case. Growth would depend on winning new customers faster than old ones leave, which Thryv has not shown, and Keap's own customer count fell from 15,000 to 12,000 in its first year. What would prove this estimate wrong: a clear reason in the filings why SaaS costs jumped in 2026 that shows the jump is temporary, SaaS revenue growing again without help from moving print clients over, or the term loan being refinanced on much cheaper terms well before 2029. What would make it worse: a covenant breach as print profit disappears, or a refinancing on punishing terms. Because the base case is below zero, price alone does not establish a margin of safety. The margin-of-safety price is $2.00 a share, and it applies only if SaaS margins recover and the 2029 maturity is dealt with.