Thinkific Labs (THNC) investor relations material

Executive summary

• Q3 2025 delivered 8% revenue growth to $18.6 million, surpassing guidance, driven by strong Commerce performance, a 5% ARPU increase to $173, and a strategic focus on upmarket customers and AI-driven product innovation.

• The company invested in AI features, notably the AI Teaching Assistant, which entered early access with strong feedback and is planned for broader rollout in early 2026.

• Strategic partnerships, such as with Spotify, are expanding distribution channels for online education businesses.

• The go-to-market strategy shifted to prioritize upmarket opportunities, reallocating resources from lower ROI campaigns to improve ARPU, retention, and close rates.

• Notable customer wins include migrations from third-party platforms and large educational institutions.

Financial highlights

• Q3 revenue was $18.6 million, up 8% year-over-year, with Adjusted EBITDA of $1.1 million (6% margin) and net income of $0.2 million.

• Subscription revenue reached $15.1 million (+5% YoY); ARR was $61 million (+5% YoY); Commerce revenue was $3.4 million (+23% YoY) with a 61% penetration rate.

• GMV was $115 million (+3% YoY), GPV $70 million (+34% YoY), and ARPU $173/month (+5% YoY).

• Gross margin was 73%, down from 76% YoY due to a revenue mix shift toward Commerce.

• Cash and equivalents stood at $52 million with no debt after share repurchases.

Outlook and guidance

• Q4 2025 revenue is expected between $18.4 million and $18.7 million, with continued positive Adjusted EBITDA and ongoing R&D investment.

• Focus remains on upmarket growth, AI-driven product innovation, and expanding commerce capabilities.

• Self-Serve subscription revenue may decline in the near term due to reduced marketing spend on mass-market events.

• Commerce revenue growth is expected to continue, though penetration rates may plateau next year.

• Management continues to invest in strategic priorities to drive long-term growth and sustainable value.