Thinkific Labs Inc T.THNC

Alternate Symbol(s): THNCF

Technology Software - Application

Thinkific Labs Inc. is a Canada-based company that offers a software platform that enables entrepreneurs to create, market, sell, and deliver their own online courses. The Company operates primarily in one segment, which being the development, marketing and support management of the Company’s cloud-based platform. Its platform gives businesses everything they need to build, market, and sell online courses and other learning products, and to run their business seamlessly under their own brand, on their own site. Its platform provides its customers with the functionality needed to launch, grow, and diversify their businesses by creating, marketing, and selling learning products comprised of customized courses, communities, membership sites, digital products and other experiences that its customers can create, sell and deliver using its platform. Its customers identify as creators, entrepreneurs, business owners, consultants, authors, speakers, social media influencers, and others.

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Comment by tinkvidon Mar 04, 2024 7:40pm

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RE:RE:RE:Robert Tattersall - Globe and Mail -net-net

Thinkific Labs loses $9.77-million (U.S.) in 2023

2024-03-04 16:27 ET - News Release

Mr. Greg Smith reports

THINKIFIC ANNOUNCES FOURTH QUARTER AND FULL YEAR 2023 FINANCIAL RESULTS

Thinkific Labs Inc. today released its financial results for the quarter ended Dec. 31, 2023. Thinkific reports in United States dollars and in accordance with international financial reporting standards (IFRS).

Fourth quarter revenue up 13 per cent to $15.6-million, ahead of issued guidance;
Full year 2023 revenue of $59.1-million grows 15 per cent versus 2022;
Second consecutive quarter of positive cash flow from operations and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).

"Thinkific delivered a solid Q4 to end what was truly a milestone year for the company," said Greg Smith, chief executive officer of Thinkific. "In 2023 we achieved our cost efficiency and productivity targets, while continuing to grow the top line in double digits. We also released more new and innovative products and features in the past 12 months than in any other time in our history. The Thinkific platform has never been easier for our customers to start a business, sell their digital products and grow their businesses to new heights. We are seeing evidence of this success of our customers in key performance metrics in the business.

"This sets the stage for 2024 where we intend to incrementally invest in those areas of the business we have already seen significant momentum. Thinkific is in a good position to accelerate top-line growth while maintaining our commitment to remain profitable. Our primary focus continues to be on the success of our customers and providing them with the tools they need to grow their businesses."

Fourth quarter financial highlights

These results include enhanced disclosure with revenue split between Subscription and Thinkific Commerce (Commerce) streams, with an additional separation at the customer level between Self Service and Thinkific Plus (Plus) customers.

Total revenue increased 13 per cent year over year to $15.6-million compared with the fourth quarter of 2022, above the company's guided range of $15.2-million to $15.4-million.
Commerce revenue increased 96 per cent year over year to $1.8-million, building on the success of Thinkific Payments and other recently launched commerce tools.
Subscription revenue increased 7 per cent to $13.8-million.
On a customer group basis (inclusive of both subscription and commerce revenue), Self Service revenue grew 9 per cent to $12.2-million and Plus increased 31 per cent to $3.4-million.
Gross margin decreased from 78 per cent recorded for the fourth quarter last year to 75 per cent due to an increasing mix of Thinkific Commerce.
Net income for the fourth quarter of 2023 was $300,000, compared with a net loss of $3.7-million in the fourth quarter of 2022.
Adjusted EBITDA of $600,000 remained positive for the second consecutive quarter, and is an improvement of $4.9-million over the prior year.
Total paying customers grew 4 per cent to 34,800 in the fourth quarter of 2023 compared with the prior year.
ARPU (average revenue per user) increased 9 per cent to $150 per month compared with $138 per month in the fourth quarter of 2022.
ARR (annual recurring revenue) grew 7 per cent to $55.3-million from $51.5-million, primarily driven by strong growth in the company's Plus business.
GPV (gross payment volume) processed through Thinkific Payments was $38.8-million compared with $22.8-million in the prior year, a 70-per-cent increase. GPV represented 34 per cent of GMV (gross merchandise value).
GMV in the fourth quarter was $115-million, up 9 per cent compared with the fourth quarter of 2022. This is the fifth consecutive quarter of year-over-year growth.
Cash and cash equivalents were $87-million at Dec. 31, 2023. Cash flow from operations in the fourth quarter of 2023 totalled $1.0-million.
Thinkific repurchased and cancelled 393,336 shares for a total of $900,000 under the company's NCIB (normal course issuer bid).

"Our commitment to a strategy of profitable growth resulted in our second consecutive quarter of positive adjusted EBITDA and cash flow from operations while still maintaining double-digit growth," said Corinne Hua, chief financial officer of Thinkific. "In 2024, we plan to take advantage of our strong financial position and make targeted investments in areas we believe will result in an acceleration of revenue growth."

Fiscal year 2023 financial highlights

FY 2023 total revenue increased 15 per cent to $59.1-million compared with full year fiscal 2022.
Commerce revenue increased 92 per cent to $5.8-million on solid new customer adoption and incremental product introductions that have increased take rates.
Subscription revenue increased 10 per cent to $53.3-million.
On a customer group basis (inclusive of both subscription and commerce revenue), Self Service revenue grew 10 per cent to $46.8-million and Plus revenue grew 36 per cent to $12.2-million.
Gross margin for 2023 was 75 per cent, a slight decrease from 76 per cent recorded in 2022. The decrease reflects a mix-shift resulting from the strong growth of lower margin commerce revenue.
Net loss for full year 2023 was $9.8-million, compared with a net loss of $36.4-million in 2022.
Full year 2023 adjusted EBITDA of $(3.0)-million improved by $23.4-million versus 2022.
GPV processed through Thinkific Payments was $134-million compared with $67-million in the prior year, a 100-per-cent increase. GPV represented 30 per cent of GMV.
GMV for 2023 was $445-million, up 9 per cent from the prior year -- evidence of the increasing success the company's creators are having in monetizing their learning products on Thinkific.

Fourth quarter operational highlights

Launched a normal course issuer bid (NCIB) on Nov. 10, 2023. The authorization allows Thinkific to purchase for cancellation, an aggregate of 2,444,358 subordinate voting shares, being approximately 10 per cent of the public float of the subordinate voting shares as of Oct. 30, 2023.
Launched The Leap by Thinkific, a powerful AI (artificial intelligence) tool for content creators and influencers that makes it easy to build, promote and sell exceptional digital products in minutes. To date, The Leap has seen approximately 13,000 new accounts being created and the company is observing strong activation rates.
Introduced new features on Commerce including gifting and improved analytics reporting and dashboards. Gifting allows customers to increase sales by offering their learning products as unique and specialized gifts.
Recognized for the company's strong culture and commitment to building an exceptional team. Thinkific was recognized as a Certified Great Place to Work for the third year, after a thorough, independent analysis conducted by Great Place to Work Institute Canada. The certification is based on direct feedback from Thinkific employees, provided as part of an extensive and anonymous survey about the company's workplace experience and culture.
Announced a suite of new features to support business customers on its fast-growth Plus platform, the most significant of which are the new learnings paths feature and advanced analytics. Plus provides enterprises with a robust, highly-secure and scalable learning management solution to educate, engage and retain customers.
Thinkific Payments reached a major milestone by surpassing $200-million in total payments volume processed since it launched in November, 2021.

Subsequent to quarter-end

On Feb. 20, 2024, the company attained the Service Organization Control Type 2 (SOC2 Type II) level of assurance with no audit findings. The certification affirms that the company's information security practices, policies, procedures, and operations meet the stringent SOC 2 standards for security.

Full year 2023 operational highlights

In partnership with Stripe, Thinkific announced it would be the world's first platform to distribute Stripe's apps with the intention of helping customers automate their administration and increase their sales.
Added AI-powered features that help the company's customers sell more such as AI sales funnels and generative AI learning product building tools. The launch of an AI service layer built into the Thinkific platform will empower the continued innovation of AI tools for the company's customers.
In Q1 2023, Thinkific Payments reached a major milestone by surpassing $100-million in total payments volume processed, six quarters after launch. Thinkific doubled the total payment volume processed in half that time, exceeding the $200-million mark in Q4.
Thinkific obtained SOC 2 Type 1 cybersecurity compliance certification through the successful completion of the Service Organization Control (SOC) 2 Type 1 audit with no findings. The certification affirms that the company's information security practices, policies, procedures and operations meet the stringent SOC 2 standards for security.
Launched an automated sales tax solution, powered by Stripe, which removes the complexity and confusion associated with sales taxes for the company's Thinkific Payments customers, allowing them to focus on growing their business rather than tracking and remitting taxes.
Provided buy now, pay later (BNPL) credit options through providers Affirm, Klarna and Afterpay, Thinkific's BNPL functionality allows customers to more easily sell higher-priced products, and provide their students with more flexible payment options. The latest functionality enables Thinkific's customers to offer credit at checkout options thereby increasing accessibility of their products to wider audiences and driving increased sales.
Added advanced analytics capabilities that provide Thinkific customers with deeper insights into their enrolments, orders, student and course engagement, revenue, and bottom-line business performance, so they and their teams can track ROI (return on investment) and make smart, informed decisions to grow and scale their businesses quickly and effectively.
Launched mobile app solutions Thinkific Mobile and Branded Mobile. that enable creators to reach their audience anywhere, anytime. Thinkific Mobile is a dedicated Thinkific app that makes course content and communities more easily available to students on the device they use the most. Branded Mobile is a fully customizable mobile app development solution for creators who want their own brand, on their own app, and enables creators to deliver incredible educational and community experiences that meet their students exactly where and when they want to learn.
Introduced Thinkific Analytics: New dashboards that provide valuable insights to creators helping them earn more, and provide more impactful learning experiences. The analytics tool offers superior performance and usability, including data on enrolments, orders, revenue and course engagement.
Completed the localization of pricing across the United Kingdom and European Union which removes a barrier to new creators getting started in these territories.

Outlook

For the first quarter of 2024, the company expects revenue of $15.8-million to $16.0-million. The company will continue to invest in the business to accelerate top-line growth; however, the company is committed to maintaining positive adjusted EBITDA.

Quarterly conference call and webcast information

A conference call will be held at 5 p.m. ET (2 p.m. PT) on March 4, 2024, to discuss Thinkific's fourth quarter financial and operational results. To participate in the call, please dial 1-888-664-6383 (United States/Canada toll-free) or 1-416-764-8650 (international/Toronto). For those unable to participate, a replay will be available an hour after the event by dialling 1-888-390-0541 (U.S./Canada toll-free) or 1-416-764-8677 (international/Toronto). The pass code is 823394 followed by the pound key. The replay will expire at midnight ET on March 11, 2024. The conference call will also be available via webcast on the investor relations section of Thinkific's website.

Thinkific's consolidated financial statements and accompanying notes, and management's discussion and analysis for the three months and year ended Dec. 31, 2023, are available on the company's website and on SEDAR+.

About Thinkific Labs Inc.

Thinkific makes it simple for creator educators and established businesses of any size to scale and generate revenue by teaching what they know. The company's platform gives businesses everything they need to build, market and sell digital learning products -- from courses to communities -- and to run their businesses seamlessly under their own brands on their own sites. Thinkific's 50,000-plus active creators earn hundreds of millions of dollars in direct course, membership and community sales while teaching tens of millions of students. Thinkific is headquartered in Vancouver, Canada, with a distributed team.