Thinkific Labs Inc.

Good afternoon, my name is Anas and I'll be your conference operator today. I would like to welcome everyone to Thinkific's second quarter 2021 financial results conference call. At this time, all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw a question, please press the star, then the number two. Thank you. As a reminder, this conference call is being recorded. Janet Craig, you may begin your conference.

Thank you, Ness, and good afternoon, everyone. Welcome to Think Epic Earnings calls for the second quarter of 2021, our first call as a public company. Joining me today are Greg Smith, co-founder and CEO, Miranda Levers, co-founder and COO, and Crane Wah, CFO. After the prepared remarks, we'll open the call up to questions. During the call today, we will make forward-looking statements that are based on assumptions and therefore subject to risks and uncertainties that could cause actual results to differ materially from those projected. We undertake no obligation to update these statements except as required by law. You can read about these risks and uncertainties in our regulatory filings that were filed earlier today. Our commentary today will include adjusted financial measures which are non-IFRS measures. These should be considered as a supplement to and not a substitute for IFRS financial measures. Reconciliations between the two can be found in our regulatory documents, which are available on our website. In addition, our commentary today will include key performance indicators that help us evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. Such key performance indicators may be calculated in a manner different to similar key performance indicators used by other companies. I should also note we have a slide deck that supports our remarks available to download on the webcast interface or on our website. And finally, note that because we report in US dollars, all amounts discussed today are in US dollars unless otherwise indicated. I will now turn the call over to Greg Smith, CEO of Thinkific. Greg?

Hello and welcome to our second quarter 2021 conference call. Thank you for joining us. Thinkific's momentum continued in the second quarter of 2021, delivering year-over-year growth across all our metrics. Revenue increased by 101% to $9.1 million compared with the second quarter of 2020. We delivered ARR growth of 81% and an increase of 68% in paying customers. I am pleased with this strong performance and outlook, given the evolving behaviors of people as we see restrictions lifting. We continue to be firmly focused on our long-term strategy to make it simple for entrepreneurs and established businesses, our course creators, to scale and generate revenue by teaching what they know. We continue to provide the functionality for course creators to launch, grow, and diversify their businesses by creating and selling online courses and other learning products. We believe any business can use education as a tool for growth, and over the past year, we've seen even more entrepreneurs and established companies adopt education as a core component of their business model. We continue to focus our innovation on the largest problems affecting the majority of course creators. This helps them achieve greater success, and we scale along with them. In our second quarter, paying customers continued to drive our growth. Paying customer growth combined with growing average revenue per user, our ARPU, resulted in our annual recurring revenue, our ARR, increasing to $38.1 million. We believe that the growth is driven by the strength of the Thinkific platform and user experience, as well as growing brand awareness and increasing popularity of online learning and teaching online as a business model. COVID brought the future forward for us, and as expected, at almost 18 months into COVID, with restrictions lifting, vaccination rates rising, and among other factors, We are seeing our growth tempered relative to the explosive growth we had last year. We continue to see the underlying market forces contributing to our future growth. We remain firmly focused on what we do best, executing against our strategy and having an extremely data-driven approach to our business. We expect to deliver on our business plan this year. More on that later from Corinne. A key component of delivering on our growth strategy was having the financial flexibility to invest in and scale our growing business. Our IPO in April, raising $184 million Canadian, has given us the financial capacity to do just that. Before I pass it over to Miranda, I want to turn to our course creators. We believe in putting the success of our course creators at the heart of everything we do. Our own growth is aligned with the success of our customers, and this creates a compounding effect in our business.