Thinkific Labs (THNC) Canaccord Genuity 44th Annual Growth Conference & Private Company Showcase 2024 summary

Business evolution and product strategy

• Originated from a need for creators to control content, revenue, and customer relationships, evolving from individual course creators to serving SMBs and enterprises.

• Expanded offerings from online courses to digital products, communities, coaching, and live events, all under customers' brands.

• Developed a full suite of commerce features, including payment processing, tax collection, and upsell tools, creating a new revenue stream.

• Entered the mid-market and enterprise segment with Thinkific Plus, targeting larger customers at higher price points.

• Surpassed $2 billion in total revenue processed for customers, with accelerating growth in commerce and enterprise segments.

Thinkific Plus and enterprise growth

• Thinkific Plus addresses customer education for enterprises, generating new revenue lines and increasing customer loyalty.

• Sales cycle for Plus is fast, with lead-to-close under 30 days and implementation in 30-45 days.

• Recent investments in marketing and sales are accelerating the Plus pipeline, with a 50% increase in sales team size.

• Expansion revenue is emerging, with most current growth from new customer wins; contracts now include automatic expansion at year one and two.

• Growth target for Plus is 28%-32% over the next year, supported by a healthy pipeline.

Commerce segment and payments

• Gross payment volume (GPV) has exceeded expectations, driven by high-margin digital goods and strong adoption of Thinkific Payments.

• Take rates are currently 4.7%, with room to grow, as customers accept higher fees due to high margins.

• 80% of new signups adopt Thinkific Payments; geographic limitations are the main barrier for the remaining 20%.

• Introduced a surcharge for third-party payments in July to encourage adoption of the in-house payment solution.

• Strategic partnership with Stripe provides support and early access to new features, enhancing payment capabilities.