Thinkific Labs Inc.

Good afternoon. My name is JP and I will be your conference operator today. I would like to welcome everyone to Thinkific's first quarter 2023 financial results conference call. As a reminder, this conference call is being broadcast live on the internet and recorded. 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 would like to ask a question during this time, please press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star two. Thank you. I would now like to turn the conference over to Janet Craig, Head of Investor Relations. Please go ahead.

Thank you, JP, and good afternoon, everyone. Welcome to Thinkific's earnings call for the first quarter of 2023. Joining me today are Greg Smith, co-founder and CEO of and Corinne Roy, CFO. After the prepared remarks, we will open up the call to questions. During the call today, we will discuss our business outlook and 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. These comments are based on our predictions and expectations as of today. 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. They should be considered as a supplement to and not a substitute for IFRS 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, all dollar amounts discussed today are in U.S. dollars unless otherwise indicated. I will now turn the call over to Greg Smith, CEO of Thinkific.

Thank you, Janet. Hello and welcome to our earnings call. Thank you for joining us. In the first quarter, we continued to execute against our strategy and remain focused on helping creator educators succeed. We delivered revenue of $14.1 million, which was above the top end of our guidance range, and adjusted EBITDA was better than what we guided to, coming in at a loss of $3.1 million. Other notable results included total paying customers, which were 34,000, the second consecutive quarter of customer growth. Thinkific Payments continues to perform well, with a penetration rate exceeding 26%, and GPV, that's the amount of payments processed on Thinkific Payments, of $29 million. Earlier today, we also announced a significant milestone for our Thinkific Payments business. We've processed over 100 million in payments volume to date. As we bring on more creator educators and these creators find success on our platform, we expect the number to grow at an accelerated rate. Thinkific Payments was launched in November 2021, and the growth we have seen here has exceeded our expectations. We built it to improve the payments experience for our creators and simplify the administration they face, as well as helping them sell more. We will continue to focus on building features that deliver on that goal. A few quick facts. 78% of new creators to Thinkific in the United States, the United Kingdom and Canada start with Thinkific payments. Globally, that number is about 60% and we expect that to increase as we roll out new features and local payment methods in more countries. Customers adopting Thinkific payments saw a 22% larger average transaction size and For those utilizing our order bump feature, they enjoy an impressive 98% larger average transaction size, showcasing Thinkific payments as a powerful driver of customer success. Our success and our strong partnership with Stripe will continue. Yesterday, we announced some exciting development at Stripe's annual conference. Namely, we announced that Thinkific is one of the world's first platforms to integrate Stripe apps. This increases the tools available to creators that help them reduce admin and maximize time spent building remarkable businesses. Upcoming products from the partnership will help creators sell higher-ticket education by providing payment options, including Buy Now, Pay Later, currently in beta, a credit option that significantly reduces the administration required to offer student payment plans and makes it easier to sell and to purchase higher-priced courses and education products. And we aren't stopping there. Over the coming quarter, you can expect to see more feature announcements that benefit our creators coming to our payments platform. And one that I'm particularly excited about addresses one of the larger administrative burdens creators face. Thinkific Payments exemplifies our commitment to creating tools that help creators succeed. And ultimately, when they succeed, so do we. We see more and more larger creators and businesses moving to Thinkific Plus for the service and features it supports. Bliss Spot is a prime example of an organization that has harnessed the immense capabilities of Thinkific Plus to build and scale an incredible well-being platform. The Australian SaaS company, which is known to many as the Netflix of well-being, sells access to its platform to small and mid-sized companies who are able to provide their employees with an exceptional array of resources to support their mental, physical, and emotional health. At first, Bliss Spot experimented with live events, workshops, and seminars. but they soon realized that online learning would allow them to have the largest impact and reach as many people as possible. That's when they found Thinkific Plus, which provided the integrated out-of-the-box solution they've been looking for. In the words of founder Deborah Tyson, my vision was for a seamless, accessible, comprehensive well-being platform. Thinkific Plus has allowed me to fully realize that vision. BlissBot has Thinkific's enterprise strength platform fully integrated into their own, which Deborah says, is like a bespoke solution, so customized that it feels like part of our product. Users sign into BlissBot and seamlessly access all the content courses through Thinkific Plus. That was hugely important to Deborah as a designer. I care about what things look like and about staying true to our brand, she said. Perfecting these user experiences for our customers and giving them the power to create seamless and expansive experiences for their own customers is what is making Thinkific Plus such a growing force for organizations looking to leverage the power of online learning to fuel their growth. As we continue to innovate, we want to make sure we meet and exceed our creators' needs. A few weeks ago, we launched two mobile offerings that allow creators to reach their own audiences anywhere, anytime. Thinkific Mobile is a dedicated app that makes course content and communities more easily available to students on the device they use the most. This app, available on both the iOS and Android platforms under the Thinkific brand, allows our creators and their students to leverage the power of a mobile app and is available to customers today. For creators who want a customized app under their own brand, our branded mobile offering is a solution that provides customers with just that, their own customizable app for their online courses and communities. These branded apps enable creators to deliver incredible educational and community experiences that meet their students exactly where and when they want to learn. As part of this offering, Thinkific Stick handles the process to get branded mobile apps accepted to the App Store. Customers also have the ability to fully customize the app listings in the Google Play and Apple App Stores to reflect their unique brand identity and can tailor in-app experiences to their specific audiences and course designs. Our mobile offerings include features like push notifications and activity feeds right in students' pockets. Students are able to stay engaged and connect to the content and their community at all times. By enabling students to control their learning experience, mobile apps have been shown to increase course completion rates and community engagement within mobile learning, helping creator educators build stronger, more successful businesses. Our branded mobile offering is available as an add-on for creators, starting with Thinkific Plus customers and rolling out to additional plans later in the year. The reception so far has been strong, and we have a waiting list for creators who want our customized branded mobile solution. And we look forward to sharing with you some of the innovative ways our creator educators adapt their mobile offering to reflect the mobile environment. Looking forward to what is next, I wanted to touch on an area that holds great interest for almost everyone these days, AI. AI, artificial intelligence, or machine learning represents immediate and exceptional value to creators and the entire creator economy, and Thinkific is committed to using this tool to unlock value for creator educators. The pace of innovation here is rapid and accelerating, and we're excited to be part of it and unlock new value for creators. We are already leveraging it to do our own jobs better and faster, as well as integrating it into Thinkific. For creator educators, one of the biggest challenges they face is the time and motivation to develop products and to take them to market. AI has the ability to accelerate this experience dramatically, which could not only help creator educators build and scale their businesses faster, but also widen the scope of who can be a successful creator educator. Before I turn the call over to Corinne, I want to reiterate that we are focused on our path to profitability, strong efficiency and execution across the business, And this includes a focus on return on investment and delivering value to our customers. We are pleased with the progress we've made in our key metrics, the successful launch of mobile, along with continued advancements in our core platform and payments offerings. Furthermore, our disciplined approach to our go-to-market programs are starting to yield results in the form of increased customer counts. We're executing on the path we laid out for ourselves late last year and are encouraged by the progress to date. We look forward to the sustained, consistent execution of our plan to deliver both growth, and profit. Now to speak about our current results in more detail, I'm going to turn the call over to Corrine.