Thinkific Labs (THNC) Q3 2024 earnings summary

Executive summary

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

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

• Adjusted EBITDA improved 26% to $0.93 million, with continued positive cash flow from operations and margin expansion despite increased strategic investments.

• Cash and cash equivalents stood at $50.3 million as of September 30, 2024.

Financial highlights

• Commerce revenue surged 88% year-over-year to $2.8 million, with penetration rate rising to 47%.

• Subscription revenue reached $14.4 million, up 7% year-over-year; ARR grew to $58 million, also up 7%.

• ARPU rose 13% to $165 per month; GMV was $111 million, up 1% year-over-year; GPV grew to $52.4 million, up 49% year-over-year.

• Gross margin was 76%, with subscription gross margin at 83% and commerce gross margin at 41%.

• Adjusted EBITDA margin was 5.4% of total revenue; earnings per share was $0.01, reversing a loss per share of $0.01 in Q3 2023.

Outlook and guidance

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

• Adjusted EBITDA margin anticipated to remain consistent with prior quarters as growth-focused investments continue.

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

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