Thinkific Labs (THNC) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 15% year-over-year to $17.2 million, driven by strong performance in Thinkific Plus, self-serve, and commerce segments, with robust adoption of new features and solutions.

• Plus revenue grew 32% year-over-year to $4.2 million, supported by record new customer bookings and the largest Plus deal to date.

• Self-serve revenue increased 10% year-over-year to $13 million, with stabilization in ARR and improvements in customer activation and onboarding.

• Achieved net income of $579 for Q3 2024, reversing a net loss of $932 in Q3 2023; significant share repurchases reduced outstanding shares by nearly 16%.

• Continued positive Adjusted EBITDA and cash flow from operations, even as strategic investments increased.

Financial highlights

• Q3 2024 revenue was $17.2 million, up 15% year-over-year; ARR grew 7% to $58 million; ARPU rose 13% to $165 per month.

• Adjusted EBITDA was $930,000, or 5.4% of total revenue; cash flow from operations was $2.5 million.

• Subscription revenue reached $14.4 million, up 17% year-over-year; Commerce revenue was $2.8 million, up 88% year-over-year.

• Gross margin was 76%, with gross profit of $13,054; subscription gross margin 83%, commerce gross margin 41%.

• Cash and cash equivalents stood at $50.3 million as of September 30, 2024, down from $86.6 million at year-end due to share repurchases.

Outlook and guidance

• Q4 2024 revenue is expected to be $17.6–$17.9 million, representing 13–15% year-over-year growth.

• Continued strength anticipated in Plus and positive seasonal effects from commerce in Q4.

• Adjusted EBITDA margin expected to remain consistent as growth-focused investments continue.

• Targeting GMV penetration of 68% by end of 2025, with new commerce features planned to drive adoption.

• Management notes seasonality in operations, cautioning that interim results may not indicate full-year performance.