Total Revenue

Declined from $183.8M in Q3 2023 to $179.9M in Q3 2024 (~2% decline)

The modest decline in total revenue reflects an overall softening in demand, likely driven by a slight contraction in the Marketing Services segment that was only partially offset by stable or growing SaaS contributions. " " " "

International Revenue

Declined from $26.29M in Q3 2023 to $23.84M in Q3 2024 (~9% decline)

International revenue dropped by about 9%, which is likely tied to ongoing challenges such as the secular decline in traditional print and competitive pressures in foreign markets that continue to impact the international segment. " "

Operating Income

Deteriorated from -$19.4M in Q3 2023 to -$88.6M in Q3 2024

Operating income worsened dramatically due to a much steeper decline in revenue combined with insufficient cost reductions or operational adjustments, as expenses did not fall commensurately with the loss of higher-margin Marketing Services revenue. " "

Net Income

Fell from -$27.0M in Q3 2023 to -$96.1M in Q3 2024

Net income experienced a sharp negative shift, driven by declining total revenue and deteriorating operating margins despite some cost improvements, leading to a broader impact on profitability. " "

Basic EPS

Worsened from -$0.78 in Q3 2023 to -$2.67 in Q3 2024

Basic EPS deteriorated significantly, reflecting the compounded effect of larger losses (as seen in the net income decline) and potentially a higher weighted-average share count, which further diluted earnings per share. " "

Cost of Goods Sold (COGS)

Reduced from $80.18M in Q3 2023 to $67.87M in Q3 2024 (≈15% drop)

COGS dropped by about 15%, indicating effective cost savings and operational efficiencies—likely due to a revenue mix shift toward higher-margin SaaS services and a corresponding decline in the cost-intensive Marketing Services segment. " "

Interest Expense

Decreased from $15.13M in Q3 2023 to $8.19M in Q3 2024 (≈46% reduction)

Interest expense fell sharply (by nearly 46%), primarily due to reduced outstanding debt levels and refinancing initiatives that secured lower interest rates, reflecting a deliberate capital structure adjustment. " "

SaaS Revenue

Q4 2024

no prior guidance

$90 million to $92 million "

no prior guidance

SaaS Adjusted EBITDA

Q4 2024

no prior guidance

$9.5 million to $10.5 million "

no prior guidance

Marketing Services Revenue

Q4 2024

no prior guidance

$81 million to $83 million "

no prior guidance

Revenue Contribution

Q4 2024

no prior guidance

$11 million to $12 million "

no prior guidance

Adjusted EBITDA Contribution

Q4 2024

no prior guidance

de minimis "

no prior guidance

SaaS Revenue

FY 2024

$326 million to $329 million "

$329.5 million to $331.5 million "

raised

SaaS Adjusted EBITDA

FY 2024

$30 million to $32 million "

$33.5 million to $34.5 million "

raised

Marketing Services Revenue

FY 2024

$485 million to $492 million "

$479 million to $481 million "

lowered

Marketing Services Adjusted EBITDA

FY 2024

$128 million to $131 million "

$125 million to $128 million "

lowered

SaaS Growth

Q1 and Q2 calls reported strong subscriber expansion (70,000–85,000) and revenue increases with year‐over‐year growth in the mid-20% range " " " ; Q4 2023 highlighted a 25% increase and a strategic drive toward migration. " "

Q3 emphasized even stronger growth with SaaS revenue at $87.1M, 29% YoY revenue growth, 96,000 subscribers, and improved NDR – underscoring that high-margin SaaS offerings continue to outperform guidance. "

Recurring positive momentum with accelerated growth and improved retention, reinforcing a long-term SaaS transition strategy. " " "

Multi-Center Adoption

Q1 noted modest adoption (increases from <1% to 8%) and early upsell initiatives " " ; Q2 discussed a sequential increase to over 10% of clients with multiple centers " " ; Q4 mentioned diversified product adoption driving improved ARPU and NDR. " "

Q3 reported approximately 12% of customers now use two or more paid centers, with a strong "land-and-expand" strategy further boosting margins and customer lifetime value. " " "

Consistent increase in multi-center adoption with a more aggressive upsell strategy, indicating enhanced customer engagement and future revenue potential. " " "

Expansion of SaaS Gross Margins

Q1 disclosed adjusted gross margins around 68.4% with expectations to exceed 70% by year-end " ; Q2 showed margins near 69.7% driven by higher-margin product sales " " ; Q4 illustrated significant margin improvements with sequential and YoY gains. " "

Q3 reported adjusted gross margins at 72.2%, with managerial comments emphasizing surpassing the 70% goal early and outlooks toward 75% as volume and upselling improve profitability. " "

Gradual and consistent improvement in gross margins and profitability, reflecting operational efficiencies and strategic product mix enhancements. " " "

Decline and Transition of Legacy Marketing Services

Q1 identified a purposeful decline (24% YoY drop) and described the legacy business as a “melting iceberg” to be phased out " " ; Q2 reported declines around 28% with confidence that SaaS growth would offset losses " " ; Q4 pointed to a 23% decline and structural challenges. " "

Q3 noted a sharper decline with marketing services revenue down 35% YoY, including significant noncash impairment charges, but framed it as an accelerated and necessary transition to SaaS. " " "

Accelerating decline in legacy revenue as the transition to SaaS intensifies; while short-term revenue declines appear steep, they are viewed as a strategic, positive shift for long-term growth. " " "

ARPU Volatility and Pricing Pressure

Q1 reported relatively flat ARPU with seasoned ARPU growing in the mid-teens despite introductory promotional pricing affecting gross margins " " ; Q2 explained declines due to promotional discounts and partial billing, stressing recovery as promotions expire " " ; Q4 discussed “noise” from freemium models impacting ARPU. " "

Q3 highlighted near-term ARPU pressure driven by onboarding many customers at lower introductory price points, seen as a strategic trade-off to build a larger, upsellable subscription base. " "

Short-term pricing pressures and ARPU volatility persist across periods, though management is confident that upselling and rate normalization will drive mid-to-long-term ARPU improvements. " " "

Emergence of AI-Driven Innovation

Q2 featured strong commentary on enhancing AI capabilities for customer support, content generation, and new center rollouts, with detailed plans to introduce freemium trials for AI-enabled products " " " " ; Q1 and Q4 contained no explicit mention of these initiatives.

Q3 earnings call did not include any new or updated commentary on AI-driven product innovation or new product rollouts.

Previously emerging as a strategic focus (notably in Q2), AI-driven innovation is not mentioned in Q3, suggesting a temporary de-emphasis or integration into broader product discussions. " "

Acquisition and M&A Strategy

Q1 referenced a cautious approach to acquisitions focused on smaller, accretive SaaS targets given valuation constraints " ; Q2 noted newfound flexibility with a “doable” M&A environment but without specifics " ; Q4 provided general M&A insights amid limitations from debt constraints. "

Q3 presented a detailed discussion on the Keap acquisition – outlining strategic rationale, synergies (including $10M), international expansion, and cross-selling opportunities, indicating a shift toward active integration and expansion via acquisitions. " " "

An increased focus on strategic acquisitions in the current period, with the Keap deal exemplifying a proactive move to enhance growth, margins, and market expansion compared to more cautious earlier periods. " " "

Financial Flexibility and Debt Constraints

Q1 highlighted refinancing achievements that extended debt maturities to 2029 and improved coupon terms, enabling strategic investments " " " ; Q2 emphasized the end of a 100% cash sweep and more flexible cash allocation " " ; Q4 acknowledged debt reduction progress but noted constraints with an unfavorable credit facility. " "

Q3 reiterated enhanced financial flexibility following earlier refinancing, citing extended maturities and reduced cash sweep constraints that now enable investments in SaaS growth and M&A, despite some ongoing limitations noted in previous quarters. "

Progressively improved flexibility over time, enabling strategic investments and acquisitions; however, challenges with current credit facilities remain a slight concern. " " "

Volatility in Financial Metrics

Q1 discussed fluctuations in metrics (e.g. gross margin swings from promotional pricing and timing impacts on EBITDA) as part of the transition, with management expecting normalization " " ; Q2 and Q4 similarly acknowledged “choppy” metrics due to timing of customer onboarding and promotional strategies. " " "

Q3 continued to highlight volatility in key financial metrics (ARPU, NDR) driven by the rapid migration from legacy to SaaS and varied pricing strategies, while management remained confident of future stabilization as the transition matures. " "

Consistently observed short-term metric volatility during the SaaS transition; although fluctuations persist, expectations are that stabilization will occur as the new model matures and promotional effects phase out. " " "