Thinkific Announces Second Quarter 2025 Financial Results

Executive Summary

• Thinkific Labs Inc. reported financial results for the quarter ended June 30, 2025, showing a 12% year-over-year increase in total revenue to $18.1 million, beating the guided range of $17.7 - $18.0 million.
• The company delivered positive Adjusted EBITDA of $1.0 million (6% of revenue) and generated $2.3 million in cash from operations, while net income decreased to $0.4 million compared to $1.0 million in the prior year period.
• Strategic updates include the elimination of the dual-class share structure, a secondary offering of approximately C$15 million by the Rhino Group, and the appointment of Russ Mann as Board Chairman.

Key Details

• Revenue Performance: Total revenue increased 12% to $18.1 million (vs. $16.2 million in Q2 2024).
• Revenue Breakdown:
  • Commerce Revenue: Increased 48% to $3.2 million.
  • Subscription Revenue: Increased 6% to $14.9 million.
  • Thinkific Plus Subscription and Commerce: Grew 25% to $4.7 million.
  • Self Serve Subscription and Commerce: Grew 8% to $13.4 million.
• Key Metrics:
  • Average Revenue per User (ARPU): Increased 9% to $169.
  • Gross Payments Volume (GPV): Grew 48% to $65 million.
  • Gross Merchandise Volume (GMV): Remained flat at $111 million.
  • Commerce Penetration Rate: Increased to 58% (from 40% in Q2 2024).
  • Annual Recurring Revenue (ARR): Increased 6% to $60.5 million.
• Profitability & Margins:
  • Gross Margin: 73%, consistent with prior periods.
  • Net Income: $0.4 million (decrease of $0.6 million from Q2 2024).
  • Adjusted EBITDA: $1.0 million (6% of revenue), an improvement of $0.2 million or 20% from Q2 2024.
• Cash Position: Cash and cash equivalents stood at $52.5 million at June 30, 2025. Cash from operating activities was $2.3 million for the quarter.
• Operational Updates:
  • Launched enhancements to Commerce Capabilities including bulk license sales, B2B invoicing, and improved subscription management tools.
  • Released improvements to the Communities platform, including modernized UI, Private Spaces, Weekly Digest Emails, and rich text/multi-image posts.
  • Received a 2025 Top Rated Award from TrustRadius.
• Corporate Actions:
  • Eliminated dual-class share structure by converting multiple voting shares to single voting shares on a one-for-one basis.
  • Completed a secondary offering of approximately C$15 million of Rhino Group's shares (including over-allotment).
  • Named Russ Mann as Board Chairman, succeeding Fraser Hall.
• Outlook: For Q3 2025, the company expects revenue of $18.1 - $18.4 million while maintaining positive Adjusted EBITDA.

Notable Quotes

• "Q2 marked the official launch of our move upmarket and we are now well underway to executing on a strategy aligning Thinkific's differentiated learning commerce platform to support our ideal customers... We are confident that this approach, along with our continued commitment to driving customer success, will ultimately accelerate growth for Thinkific and lead to enhanced shareholder value." — Greg Smith, CEO and Founder
• "Our Q2 financial performance highlights our ability to execute through strategic change while still delivering on our goals... We are re-allocating our spend to focus more upmarket, which we believe will deliver strong and stable long term growth for Thinkific." — Corinne Hua, CFO