Thinkific Labs (THNC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 12% year-over-year to $16.2 million, driven by 69% growth in Commerce and 28% in Plus segments, with record new bookings and milestone $2 billion in cumulative GMV.

• Net income for Q2 2024 was $0.9M, compared to a net loss of $2.1M in Q2 2023; operating loss improved to $0.08M.

• Key executive hires and investments in go-to-market and product teams are expected to accelerate growth in the second half of 2024.

• Customer count declined by 200 in Q2 due to timing of campaigns and trials, but corrective actions are in place to stabilize and grow this metric.

• Substantial issuer bid and normal course issuer bid led to repurchase and cancellation of over 14M shares in H1 2024.

Financial highlights

• Q2 revenue: $16.2 million, up 12% year-over-year; six-month revenue reached $32.2M, up 13%.

• Commerce revenue: $2.2 million, up 69% year-over-year; Plus revenue: $3.7 million, up 28%; subscription revenue: $14 million, up 7%.

• ARR reached $57 million, up 7% year-over-year; ARPU increased 10% to $155/month.

• Adjusted EBITDA positive for the fourth consecutive quarter at $0.9M (5% margin); net income was $0.9M.

• Cash and equivalents at $48.6 million as of June 30, 2024; cash flow from operations positive at $0.2M.

• Gross margin stable at 75%; commerce gross margin improved to 39%.

• Operating expenses down 15% year-over-year to $12.3 million.

Outlook and guidance

• Q3 2024 revenue expected between $17.0–$17.3 million, representing 14–16% year-over-year growth.

• Continued growth in GMV and Thinkific Commerce penetration anticipated, with a target of 68% penetration by end of 2025.

• Positive adjusted EBITDA to be maintained, with increased investment in growth levers.

• Customer count expected to stabilize in 2024 and contribute to growth in 2025.