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"In Q4, we continued to execute our strategy of profitable growth.  Thinkific Plus grew 27% demonstrating strength upmarket and we continued to expand the adoption of Thinkific Commerce which resulted in a 73% increase in Commerce revenue. We also generated solid Adjusted EBITDA and positive cash flow from operations.", said Corinne Hua, CFO of Thinkific. "Although we are experiencing headwinds to GMV growth that is limiting Commerce revenue, we are entering 2025 with a more focused strategy and confidence that we are well positioned to deliver strong long-term results."

Fiscal Year 2024 Financial Highlights

• Total revenue for 2024 increased 13% to $66.9 million compared to 2023.

  • Commerce revenue increased 77% to $10.2 million compared to 2023.

  • Subscription revenue increased 6% to $56.7 million compared to 2023.

  • On a customer group basis (inclusive of both subscription and commerce revenue), Thinkific Plus grew 29% to $15.7 million and Self Serve revenue grew 9% to $51.2 million compared to 2023.

• Gross margin was consistent at 75% for 2024 and 2023.

• Net loss for 2024 was $0.2 million compared to a net loss of $9.8 million in 2023.

• Adjusted EBITDA⁽¹⁾ of $2.9 million in 2024 compared to an adjusted EBITDA⁽¹⁾ loss of $3.0 million in 2023.

• GMV⁽²⁾ in 2024 was $459.1 million, up 3% compared to 2023. GPV⁽²⁾ processed through Thinkific Commerce increased 49% to $200.6 million in 2024 compared to $134.5 million in 2023.

• The company generated $7.0 million of cash from operating activities compared to cash used in operating activities of $5.4 million in 2023.

Fourth Quarter Operational Highlights

• On October 1, 2024, we introduced our value added tax solution to our customers to the UK and Europe.

• On November 6, 2024, we released Guided Onboarding, a new experience leveraging the power of AI to help customers get up and running quickly on the Thinkific platform.

• On November 12, 2024, the Company renewed its normal course issuer bid.

• On December 17, 2024, Thinkific deployed a host of new AI features including a single-prompt AI Course Landing Page Generator and an AI-powered Email Marketing Tool.

Fiscal Year 2024 Operational Highlights

• Throughout the year, Thinkific continued to introduce new products and features to the Thinkific Platform.

  • On June 5, 2024, the Company announced multiple platform updates and feature enhancements for our business customers on Thinkific Plus.

  • On July 1, 2024 Thinkific launched SCORM (Sharable Content Object Reference Model) functionality, a set of elearning technical standard that ensures content can be seamlessly integrated across various LMSs, making it easier to migrate to Thinkific from other platforms and provides access to content editing tools to enhance learning experiences.

• On January 10, 2024, the Company released its 2024 Online Learning Trends Report revealing the significant demand for educational content over pure entertainment, and how customers are evolving to meet the demand of learners.

• On March 25, 2024, in a partnership with Spotify, Thinkific announced a new test program launched by Spotify in the UK, aimed at giving users access to trial and purchase video learning content, from their Spotify app home screen.

• On May 14, 2024, the Company launched a substantial issuer bid to purchase for cancellation up to C$47,831,000 subordinate voting shares at a price of C$3.72 per subordinate Subordinate Voting Share. On June 24, 2024, the Company took up and purchased for cancellation 12,857,795 Subordinate Voting Shares (including the multiple voting shares converted into Subordinate Voting Shares) at the Purchase Price, for aggregate consideration of C$47,831,000.

• On June 26, 2024, the Company announced appointments of Amanda Malko as the Company's Chief Revenue Officer and Ryan Donovan as the Company's Chief Product & Technology Officer.

• On September 16, 2024, Thinkific announced the appointments of Paula Boggs, Lori Ell, and Russ Mann to the board of directors..

Outlook

For the first quarter of 2025, the Company expects revenue of $17.5 - $17.8 million, which represents 10% - 12% growth compared to the first quarter of 2024. We plan to continue growth-focused investments, in line with revenue growth, and expect Adjusted EBITDA⁽¹⁾ margin to be consistent with prior quarters.

Actual results may differ materially from Thinkific's financial outlook as a result of, among other things, the factors described under "Forward-Looking Statements" below.

Quarterly Conference Call and Webcast Information

A conference call will be held at 5:00 PM ET (2:00 PM PT) on March 5, 2025 to discuss Thinkific's fourth quarter and full year 2024 financial and operational results. To participate in the call, please dial 1.888.510.2154 (US/Canada toll-free) or 1.437.900.0527 (International/Toronto). For those unable to participate, a replay will be available an hour after the event by dialing 1.888.660.6345 (US/Canada toll-free) or 1.289.819.1450 (International/Toronto). The passcode is 72150#. The replay will expire at midnight ET on March 12, 2025. The conference call will also be available via webcast on the Investor Relations section of Thinkific's website at investors.thinkific.com/events-and-presentations.

Thinkific's audited consolidated financial statements and accompanying notes, and Management's Discussion and Analysis for the year ended December 31, 2024 are available on the Company's website at www.thinkific.com and on SEDAR+ at www.sedarplus.ca.

About Thinkific

Thinkific (TSX:THNC) makes it simple for customers and established businesses of any size to scale and generate revenue by teaching what they know. Our platform gives businesses everything they need to build, market, and sell digital learning products — from courses to communities — and to run their business seamlessly under their own brand, on their own site. Thinkific's 50,000+ active customers earn hundreds of millions of dollars in direct course, membership and community sales while teaching tens of millions of students. Thinkific is headquartered in Vancouver, Canada, with a distributed team.

For more information, please visit www.thinkific.com.

Non-IFRS Measures

The information presented within this press release includes "Adjusted EBITDA" and certain industry metrics. The "Adjusted EBITDA" is not a recognized measure under International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, does not have a standardized meaning prescribed by IFRS, and is therefore unlikely to be comparable to similar measures presented by other companies. Rather, this measure is provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, it should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We also use certain industry metrics: "Annual Recurring Revenue", "Paying Customers", "Average Revenue per User", "Gross Merchandise Volume" and "Gross Payments Volume". These industry metrics are unaudited and are not directly derived from our financial statements. The non-IFRS measure and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors and other interested parties frequently use non-IFRS measures and industry metrics in the evaluation of issuers. Our management also uses the non-IFRS measure and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation.

"Adjusted EBITDA" is defined as Net (loss) income excluding taxes, interest, depreciation and amortization (or EBITDA), as adjusted for stock-based compensation, foreign exchange loss (gain), finance income, restructuring costs, and loss on disposal of property and equipment. Adjusted EBITDA does not have a standardized meaning under IFRS and is not a measure of operating income, operating performance or liquidity presented in accordance with IFRS, and is subject to important limitations.

Please refer to "Reconciliation to IFRS from Non-IFRS measures" in this press release for more information.

Key Performance Indicators

We monitor the following industry metrics to help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions: "Annual Recurring Revenue" or "ARR", "Average Revenue per User" or "ARPU", "Gross Merchandise Volume" or "GMV",  "Paying Customers" and "Gross Payments Volume" or "GPV". Our key performance indicators may be calculated in a manner different than similar key performance indicators used by other companies.

"Paying Customers" is the count of unique Thinkific subscribers on paid plans as of period end, excluding all trial and free customers, and including both monthly and annual subscribers.

"ARPU" is the average monthly Revenue per Paying Customer in the quarter. ARPU is calculated by taking the average Revenue for each month in the quarter and dividing this by the average number of Paying Customers for the same quarter.

"ARR" is the annual value of all current Paying Customer subscriptions at the end of the period, with the number of Paying Customers multiplied by 12 times the average monthly subscription plan fee in effect on the last day of that period.

"GMV" is the total dollar value of all transactions of course sales, membership subscriptions, or other products or services by our customers, facilitated through our platform during the period, net of refunds. GMV does not include transactions for course sales, membership subscriptions, or other products or services processed by application programming interfaces or certain apps where the Company does not record the transaction value.

"GPV" is the total dollar value of transactions processed using Thinkific Payments in the period, net of refunds and inclusive of sales taxes where applicable. GPV does not represent revenue earned by us. Penetration rate is the percentage of GMV processed through Thinkific Payments, it is calculated by dividing GPV by GMV for the respective period. We believe that growth in GPV and penetration is an indicator of success of our customers in monetizing their learning products and of our Thinkific Payments offering. It is also a positive growth driver of revenue, which is derived from payment processing fees. Revenue earned from Thinkific Payments is included in our commerce revenue.

Forward-Looking Statements

This press release includes forward-looking statements and forward–looking information within the meaning of applicable securities laws in Canada. Forward-looking statements and information may relate to our future financial outlook and anticipated events or results and may include information regarding our financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, performance, achievements, prospects or opportunities or the markets in which we operate is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "trends", "directional indicator", "indicator", "future success", "expects", "is expected", "opportunity", "budget", "scheduled", "estimates", "outlook", "forecasts", "projection", "scalability", "trajectory", "prospects", "strategy", "intends", "anticipates", "adoption", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or, "will", "occur" or "be achieved", and similar words, or the negative of these terms and similar terminology. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. Forward-looking statements in this press release include, but are not limited to statements regarding our financial position; management's ability to increase business efficiencies necessary to build and maintain a sustainable cost structure; business strategy, budgets, operations, investments, financial results, our ability to retain a profitable Adjusted EBITDA run rate, plans and objectives around growth and profitability; industry trends; growth in our industry; our growth rates and growth strategies; the expectations regarding our revenue and the revenue generation potential of Our Platform and other products including the Spotify pilot; and our competitive position in our industry.

Forward-looking statements and information are based on our opinions, estimates and assumptions that, while considered by the Company to be appropriate and reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including, but not limited to, the Company's ability to execute on its growth strategies; the impact of changing conditions and increasing competition in the global e-learning market in which the Company operates; the Company's ability to keep pace with technological and marketplace changes including, but not limited to fluctuations in currency exchange rates and volatility in financial markets; changes in attitudes, financial condition and demand of our target market; developments and changes in applicable laws and regulations; and such other factors discussed in greater detail under the "Risk Factors" section of our 2024 Annual Information Form ("AIF").

Forward-looking statements and information are necessarily based upon estimates and assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which, regarding future business decisions, are subject to change. Assumptions or factors underlying the Company's expectations regarding forward-looking statements or information contained in this press release include, among others: our ability to continue investing in infrastructure to support our growth and brand recognition; our ability to continue maintaining, innovating, improving and enhancing our technological infrastructure and functionality, performance, reliability, design, security and scalability of our Platform (as defined in our AIF); our ability to maintain existing relationships with customers (as defined in our AIF) and to continue to expand our customers' use of our platform; our ability to acquire new customers; our ability to maintain existing material relationships on similar terms with service providers, suppliers, partners and other third parties; our ability to build our market share and enter new markets and industry verticals; the continued development, rollout, integration and success of new products, features, and services; our ability to retain key personnel; our ability to maintain and expand geographic scope; our ability to execute on our expansion and growth plans; our ability to obtain and maintain existing financing on acceptable terms; currency exchange and interest rates; the impact of competition; the changes and trends in our industry or the global economy; and the changes in laws, rules, regulations, and global standards. The foregoing list of assumptions cannot be considered exhaustive.

If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information provided herein. The opinions, estimates or assumptions referred to above are described in greater detail in "Summary of Factors Affecting our Performance" and in the "Risk Factors" section of our AIF, which is available under our profile on SEDAR+ at www.sedarplus.ca, should be considered carefully by prospective investors. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material, that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents our expectations as of the date specified herein, and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements. Readers are cautioned that any such forward-looking information should not be used for purposes other than for which it is disclosed.

Reconciliation from IFRS to Non-IFRS Measures (unaudited)
(expressed in thousands of U.S. dollars)

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SOURCE Thinkific Labs Inc.

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