Q1 2024 Revenue of
Generated
Thinkific Commerce and Thinkific Plus Growth Remain Strong at 80% and 28% Respectively
We continue to execute against our strategy of profitable growth as evidenced by our solid Q1 results, and we saw strong growth in GMV representing the sales our customers are earning. We continue to see that customers who adopt Thinkific Commerce sell more. We're proud to deliver this suite of features to help them grow their businesses." said
First Quarter Financial Highlights
- Total revenue increased 13% to
$16.0 million , compared with the first quarter of 2023, at the top end of our guided range of$15.8 million -$16.0 million . - Commerce revenue increased 80% to
$2.1 million , compared with the first quarter of 2023, building on the success of Thinkific Payments and other recently launched commerce tools. - Subscription revenue increased 7% to
$13.8 million , compared to the first quarter of 2023. - On a customer group basis (inclusive of both subscription and commerce revenue), Self Service revenue grew 10% to
$12.4 million and Thinkific Plus increased 28% to$3 .6 million. - Gross margin declined slightly to 74% for the first quarter of 2024 from 75% for the first quarter of 2023, as we saw an increasing mix of Thinkific Commerce to our overall revenue.
- Net loss for the first quarter of 2024 was
$1.1 million compared to a net loss of$7.0 million for the first quarter of 2023. - Adjusted EBITDA(1) of
$0.2 million remained positive for the third consecutive quarter, and is an improvement of$3.3 million over the first quarter of 2023. - Total Paying Customers(2) grew 3% to 35.1 thousand in the first quarter of 2024 compared to the same period of the prior year.
- ARPU(2) increased 10% to
$152 per month compared with$139 per month in the first quarter of 2023 due to strong growth in Thinkific Plus, and higher adoption ofThinkific's own Commerce Solutions versus third-party payment vendors. - ARR(2) grew 8% to
$56.6 million in the first quarter of 2024 from$52.3 million in the first quarter of 2023, primarily driven by strong growth in our Thinkific Plus business. - GPV(2) processed through Thinkific Commerce increased 54% to
$44.7 million in the first quarter of 2024 compared to$29.0 million in the first quarter of the prior year. GPV represented 37% of GMV. - GMV(2) in the first quarter of 2024 was
$122.1 million , up 8% compared to the first quarter of 2023 reflecting customer success in growing their businesses and increasing adoption of the Thinkific Platform. - Cash and cash equivalents were
$87.3 million atMarch 31, 2024 . Cash flow from operations in the first quarter of 2024 totaled$3.1 million . - During the first quarter of 2024,
Thinkific repurchased and cancelled 697,004 shares for a total of$1.8 million under our NCIB.
(1) Non-IFRS measure. See "Non-IFRS Measures" and the reconciliation to the most directly comparable IFRS measure. |
(2) Key Performance Indicators. See definition in "Key Performance Indicators". |
"Our third consecutive quarter of double digit growth, positive cash flow from operations and adjusted EBITDA shows we are executing well against our strategy toward sustainable, profitable growth," said
- Signed a partnership with Spotify to test a program in the
United Kingdom that offersThinkific courses alongside music, podcasts and audiobooks in the Spotify app. - Added Group Buying to our Commerce Solutions, a buying option that allows a business to derive additional value through bulk purchases of courses that can then be shared with their learners for self-enrollment.
- The LEAP, a powerful AI tool for content creators and influencers that makes it easy to build, promote, and sell exceptional digital products in minutes has now seen new accounts grow to 20,000.
- Announced the availability of "Digital Downloads", a feature that makes it easier for Creators to start their business. This is part of our continued strategy to allow Creators to offer a multitude of digital learning products to suit their needs. It also makes it easier to get started with simpler to create products such as eBooks, PDFs, and spreadsheets.
For the second quarter of 2024, the Company expects Revenue of
Actual results may differ materially from
A conference call will be held at
For more information, please visit www.thinkific.com.
The information presented within this press release includes "Adjusted EBITDA" and certain industry metrics. The "Adjusted EBITDA" is not a recognized measure under International Financial Reporting Standards ("IFRS") as issued by the
"Adjusted EBITDA" is defined as net loss excluding taxes, interest, depreciation and amortization (or EBITDA), as adjusted for stock-based compensation, foreign exchange (gain) loss, finance income, restructuring costs, and (gain) loss on disposal of property and equipment. Adjusted EBITDA does not have a standardized meaning under IFRS and is not a measure of operating income, operating performance or liquidity presented in accordance with IFRS, and is subject to important limitations.
Please refer to "Reconciliation to IFRS from Non-IFRS measures" in this press release for more information.
We monitor the following industry metrics to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions: "Annual Recurring Revenue" or "ARR", "Average Revenue per User" or "ARPU", "Gross Merchandise Volume" or "GMV", "Paying Customers" and "Gross Payments Volume" or "GPV". Our key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.
"Paying Customers" is the count of unique
"ARPU" is the average monthly Revenue per Paying Customer in the quarter. ARPU is calculated by taking the average Revenue for each month in the quarter and dividing this by the average number of Paying Customers for the same quarter.
"ARR" is the annual value of all current Paying Customer subscriptions at the end of the period, with the number of Paying Customers multiplied by 12 times the average monthly subscription plan fee in effect on the last day of that period.
"GMV" is the total dollar value of all transactions of course sales, membership subscriptions, or other products or services by our customers, facilitated through our platform during the period, net of refunds. GMV does not include transactions for course sales, membership subscriptions, or other products or services processed by APIs or certain apps where the Company does not record the transaction value.
"GPV" is the total dollar value of transactions processed using Thinkific Payments in the period, net of refunds and inclusive of sales taxes where applicable. GPV does not represent revenue earned by us. We believe that growth in GPV is an indicator of success of our customers in monetizing their learning products and of our Thinkific Payments offering. It is also a positive growth driver of revenue, which is derived from payment processing fees. Revenue earned from Thinkific Payments is included in our commerce revenue.
This press release includes forward-looking statements and forward–looking information within the meaning of applicable securities laws in
Forward-looking statements and information are based on our opinions, estimates and assumptions that, while considered by the Company to be appropriate and reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including, but not limited to, the Company's ability to execute on its growth strategies; the impact of changing conditions and increasing competition in the global e-learning market in which the Company operates; the Company's ability to keep pace with technological and marketplace changes including, but not limited to the ethical, legal and regulatory implications in the advancement and potential use of artificial intelligence; fluctuations in currency exchange rates and volatility in financial markets; changes in attitudes, financial condition and demand of our target market; developments and changes in applicable laws and regulations; and such other factors discussed in greater detail under the "Risk Factors" section of our Annual Information Form ("AIF").
Forward-looking statements and information are necessarily based upon estimates and assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which, regarding future business decisions, are subject to change. Assumptions or factors underlying the Company's expectations regarding forward-looking statements or information contained in this press release include, among others: our ability to continue investing in infrastructure to support our growth and brand recognition; our ability to continue maintaining, innovating, improving and enhancing our technological infrastructure and functionality, performance, reliability, design, security and scalability of our Platform (as defined in our AIF); our ability to maintain existing relationships with customers (as defined in our AIF) and to continue to expand our customers' use of our platform; our ability to acquire new customers; our ability to maintain existing material relationships on similar terms with service providers, suppliers, partners and other third parties; our ability to build our market share and enter new markets and industry verticals; the continued development, rollout, integration and success of new products, features, and services; our ability to retain key personnel; our ability to maintain and expand geographic scope; our ability to execute on our expansion and growth plans; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and interest rates; the impact of competition; the changes and trends in our industry or the global economy; and the changes in laws, rules, regulations, and global standards. The foregoing list of assumptions cannot be considered exhaustive.
If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information provided herein. The opinions, estimates or assumptions referred to above are described in greater detail in "Summary of Factors Affecting our Performance" and in the "Risk Factors" section of our 2023 Annual Information Form, which is available under our profile on SEDAR+ at www.sedarplus.ca, should be considered carefully by prospective investors. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material, that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents our expectations as of the date specified herein, and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.
All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements. Readers are cautioned that any such forward-looking information should not be used for purposes other than for which it is disclosed.
Condensed Interim Consolidated Statements of Financial Position (unaudited)
(expressed in thousands of
|
| |
$ | $ | |
Assets | ||
Current assets | ||
Cash and cash equivalents | 87,314 | 86,611 |
Trade and other receivables | 4,285 | 4,097 |
Prepaid expenses and other assets | 2,165 | 3,174 |
Contract acquisition assets | 555 | 528 |
Lease receivable | 119 | 165 |
Derivative asset | 73 | 570 |
Total current assets | 94,511 | 95,145 |
Property and equipment | 866 | 853 |
Lease right-of-use assets | 715 | 812 |
Contract acquisition assets | 841 | 875 |
Intangible assets | 107 | 110 |
Total assets | 97,040 | 97,795 |
Liabilities and shareholders' equity | ||
Current liabilities | ||
Accounts payable and accrued liabilities | 7,226 | 5,294 |
Lease liabilities | 535 | 555 |
Deferred revenue | 10,099 | 9,529 |
Total current liabilities | 17,860 | 15,378 |
Lease liabilities | 340 | 477 |
Total liabilities | 18,200 | 15,855 |
Shareholders' equity | ||
Share capital | 146,439 | 147,739 |
Contributed surplus | 8,433 | 8,667 |
Accumulated other comprehensive income | 35 | 532 |
Accumulated deficit | (76,067) | (74,998) |
Total shareholders' equity | 78,840 | 81,940 |
Total liabilities and shareholders' equity | 97,040 | 97,795 |
Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)
(expressed in thousands of
Three months ended | ||
2024 | 2023 | |
$ | $ | |
Revenue | 15,964 | 14,093 |
Cost of revenue | 4,088 | 3,488 |
Gross profit | 11,876 | 10,605 |
Operating expenses | ||
Sales and marketing | 4,988 | 5,525 |
Research and development | 4,644 | 5,252 |
General and administrative | 3,781 | 4,454 |
Restructuring | — | 3,186 |
Total operating expenses | 13,413 | 18,417 |
Operating loss | (1,537) | (7,812) |
Other income | ||
Finance income | 904 | 690 |
Foreign exchange gain (loss) | (436) | 115 |
Total other income | 468 | 805 |
Net loss | (1,069) | (7,007) |
Other comprehensive income | ||
Unrealized loss on derivatives | (497) | — |
Total comprehensive loss | (1,566) | (7,007) |
Weighted average number of common shares outstanding - basic and | 81,067,077 | 79,157,399 |
Net loss per share | ||
Basic and diluted | $ (0.01) | $ (0.09) |
Condensed Interim Consolidated Statements of Cash Flows (unaudited)
(expressed in thousands of
Three months ended | |||
2024 | 2023 | ||
$ | $ | ||
Cash from (used in): | |||
Operating activities | |||
Net loss | (1,069) | (7,007) | |
Items not affecting cash and cash equivalents: | |||
Depreciation and amortization | 332 | 343 | |
Stock-based compensation | 1,445 | 704 | |
Unrealized foreign exchange (gain) loss | 434 | (119) | |
Finance income | (904) | (690) | |
Interest received | 1,336 | 656 | |
Changes in non-cash working capital: | |||
Trade and other receivables | (355) | (69) | |
Prepaid expenses and other assets | 999 | 64 | |
Contract acquisition assets | (120) | (205) | |
Accounts payable and accrued liabilities | 411 | 345 | |
Deferred revenue | 570 | 634 | |
Cash from (used in) operating activities | 3,079 | (5,344) | |
Investing activities | |||
Proceeds on disposal of property and equipment | 77 | — | |
Investment in property and equipment | (193) | (3) | |
Cash used in investing activities | (116) | (3) | |
Financing activities | |||
Operating lease payments | (144) | (102) | |
Payments received on net investment in finance lease | 33 | — | |
Exercise of stock options | 47 | 200 | |
Shares repurchased for cancellation under normal course | (1,764) | — | |
Cash (used in) from financing activities | (1,828) | 98 | |
Effect of exchange rate fluctuations on cash and cash | (432) | 168 | |
Increase (decrease) in cash and cash equivalents | 703 | (5,080) | |
Cash and cash equivalents, beginning of period | 86,611 | 93,846 | |
Cash and cash equivalents, end of period | 87,314 | 88,766 |
Reconciliation from IFRS to Non-IFRS Measures (unaudited)
(expressed in thousands of
Three months ended | ||
2024 $ | 2023 $ | |
(In thousands of | ||
Net loss | (1,069) | (7,007) |
Stock-based compensation | 1,445 | 704 |
Depreciation and amortization | 332 | 343 |
Foreign exchange (gain) loss | 436 | (115) |
Finance income | (904) | (690) |
Restructuring costs (1) | — | 3,681 |
Adjusted EBITDA | 240 | (3,085) |
(1) Represents employee compensation for severance amounts for Company wide restructuring in the first quarter of 2023. |
SOURCE
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