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 3rd Quarter 2023 Financial Results Conference Call. As a reminder, this conference call is being broadcast live on the internet and recorded. All lights 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 1 on your telephone keypad. If you would like to withdraw your question, please press part two. Thank you. I would now like to turn the conference call over to Ross Romio. Please go ahead.

Thank you, JP, and good afternoon, everyone. Welcome to Thinkific's earnings call for the third quarter of 2023. Joining us today are Greg Smith, co-founder and CEO, and Karine Wah, CFO. After the prepared remarks, we will open up the call to questions. During the call today, We'll 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 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, Ross. Hello, and welcome to our earnings call. Thank you for joining us. I am excited to announce a milestone quarter for Thinkific. We are seeing the benefits of the decisive actions we have taken over the last 18 months, which resulted in our achieving adjusted EBITDA profitability, a full two quarters ahead of plan, along with positive cash flow from operations. We grew revenue 13% year over year to $15 million in the quarter, driven by the continued success of our customers on the Thinkific platform. with notable strengths from newer products and features that help propel commerce revenue growth by 86% year over year. I want to thank the whole team here at Thinkific for the tireless work and passion they have put into pursuing our goals and priorities. As our team continues to deliver valuable product features that drive customer success, I believe we can continue our momentum into Q4 and have set the stage for continued profitable growth in 2024. I want to start this call digging into our GMV growth. In a general sense, our GMV is a proxy for the success our customers are seeing with Thinkific. As the pandemic receded in 2021, we saw a period of flat year-on-year performance for this key measure. But now we're well into a new phase and our customers are seeing a return to growth. And this is evidenced by a steady year-long trend in GMV expansion. For the majority of our self-service customers who are monetizing their knowledge through their digital products, including courses, memberships, communities, and more, This is a trend we're very pleased with and makes us very optimistic for our combined future. Customer success through GMV is a key component of our flywheel. It not only helps us retain and expand our relationships with existing customers, but their success also generates more interest and awareness of the power of the Thinkific solution. This in turn helps us attract new customers in the future. Now let's move into how we are doing against the clear priorities we have set out for 2023. As always, we are firmly focused on helping our customers succeed And we do this by making it easier for them to get started and make their first sale, helping more customers sell and earn more to grow their businesses, and continuing to drive success with larger businesses on Thinkific Plus. Additionally, achieving positive EBITDA was a priority for us, and we're happy to have come in ahead of schedule here. Returning to our first priority of making it easier for customers to get started and make their first sale, we're very pleased to be able to share more about the launch of The Leap. Thinkific first launched the Leap as a media property starting on TikTok in 2022 as a way to reach more creators earlier in their journey. In the last 18 months, the Leap has grown to become the world's most popular media property focused on creator monetization. With over 150,000 visits a month, 50,000 newsletter subscribers, and millions of views on social media, the Leap has now launched as a product to build on this success. Fueled by AI, the Leap's first of its kind digital product authoring tool allows creators to input a content idea and in just a few clicks generate comprehensive drafts for digital products like mini courses, guides, and tutorials, all designed to be consumed on mobile and feel intuitive to social audiences. Learning on demand where you want it and when you want it in consumable nuggets. The Leap provides tools to help creators in building mini courses or guides, creating lead magnets, building sales pages, storefronts for their digital products. all with an intuitive, helpful AI-powered interface. Our launch was very successful, and we were excited to see we landed as number two on Product Hunt on the day of launch, which is a testimony to the amount of excitement in this space. We're also very pleased with the volume of creators adopting the Leap, with over 6,500 active accounts launching an impressive 5,000 digital products in less than 30 days. As the Leap evolves, it represents both an on-ramp to our larger Thinkific self-service platform, and also as a distinct standalone product, which we are seeing serve distinct needs from our core product. In addition to making it easier for creators to get started, we also want to ensure they are able to sell more and spend less time on administrative functions. That's where Thinkific Commerce comes in. Thinkific Commerce is a growing suite of tools built alongside our hugely successful Thinkific payments platform. It is designed to help customers on Thinkific sell more and easily manage and measure their business. This quarter, we delivered important features to help more of our customers sell more on our platform. From buy now, pay later, to adding new payment methods to their checkout, our customers can earn more than ever before from their learning products. We also continue to simplify business processes for customers with our sales tax solution and advanced analytics options. More tools to let our customers spend more time doing what they love and less time on administration. The feedback from our customers on these products has been exceptional. Shifting to our mobile app efforts, in Q3, we expanded the availability of our custom branded mobile offering to all customers as an add-on to self-service plans. Initially launched with strong success to our plus customers, we're now seeing the benefits of adoption across self-serve. For the students of our customers, our mobile app seamlessly integrates into their daily lives, giving them convenient access to content and courses on their own terms. We are executing on the strategic priorities we laid out for ourselves last year and are encouraged by the progress to date. We are innovating rapidly and have had more product launches over the last six months than ever before. And this is in addition to driving operational efficiencies throughout the organization. As a result of our improved productivity, we were able to achieve our EBITDA profitability goal ahead of plan and do not intend to look back now that we have achieved that milestone. We are seeing encouraging signs that the investments we have made will help accelerate growth and engagement, and we will continue to build on our platform and deliver valuable new features. We look forward to the sustained and 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.