Good afternoon, everyone, and welcome to this next session of the 26th Annual Needham Growth Conference. I'm Ryan MacDonald, and I lead our edtech research efforts here at Needham. In this session, I'm pleased to be joined by the team from Thinkific. We have the CEO, Greg Smith, and the CFO, Corinne Hua, joining us. Thanks for attending the conference.
Thanks, Ryan. Pleasure to be here.
This session is gonna be a company presentation. We'll have about 30 minutes for presentation. We'll try to save about 10 minutes at the end for audience Q&A. For those of you who are logged in, if you do have questions for management, you can put those in the chat, and we'll make sure to get those asked and answered. With that, I'll hand it over to Greg and Corinne.
Great, thanks. I'll just make sure everyone can see our slides there. All good? Great. Okay. There's Corinne and I. We'll be your presenters, as you just learned. So just a quick snapshot before I dive in at where we're at. We are profitable and growing. That's last 12 months revenue. All of the numbers here, obviously, are of, as of September 30, so end of Q3 is the last quarter we reported. And so profitable or EBITDA positive and growing our revenue nicely there with solid cash balance. And a couple of other numbers I'd highlight beyond the revenue growth. We have an annual recurring subscription is our primary business model. So you see that on the far left, the CAD 54.2 million recurring subscription revenue.
We also have a payments business, where the two numbers in the middle, the 118, is what's processed on our payments platform. I'll get more into the detail on that with some really healthy growth there. And then the growth of the overall sales of our customers at the $436 million. But let me dive in and tell a little bit more of the story and how we got here. So this is actually just gonna take you back before we started Thinkific. So 2012, we started Thinkific, but let me go way back to 2005, where it, the story gets started. I was going to school, going to law school at UBC.
I was teaching and tutoring the LSAT, the Law School Admissions Test, in person, and saw an opportunity to reach more people by taking it online. We did go looking for a software solution to help us do this but couldn't find anything that worked for us. We did look at LMS, learning management systems. The challenge there is they are generally designed for a corporation teaching its employees or a school teaching its students, and what we really wanted is we wanted our content, our courses on our own website, under our own brand, and we wanted to be able to sell it. So that meant branding and design, and the commerce component and selling tools were important to us. And so the LMS was much higher cost.
You needed a team to run it usually, harder to implement and update, and also designed for kind of a different audience. We then looked at marketplaces, so things like Coursera, MasterClass, Udemy. Didn't exist at the time, but there were other similar marketplaces, and the challenge there is it meant we'd have to put our content into their website and kind of lose control and ownership over building our own business. So with no solution in sight, we mashed together a bunch of technology solutions, and built sort of a version of our own, and that ran as a side project. I went on to finish law school, practice as a lawyer. It was successful in selling courses. The students were happy with it.
But over time, as it grew, we saw more and more people reaching out to us, saying: "We wanna do what you're doing. We wanna launch our own courses on our own website, under our own brand, and we wanna sell them." And so in 2012, we set out to build Thinkific to do exactly that. Now it's a platform that lets anyone with knowledge, passion, and expertise, be it an individual or a company, create their own learning products and go and actually sell them out to their customers. So, just to look at the overall marketplace, and we can talk a bit about this. We talked about the LMS and how that's quite different, different use case. The marketplace...
Although we do bump up against the LMS occasionally competitively, especially with our larger customers, the marketplaces is actually something we encourage our customers to use, and although it's in the same space, we encourage them to use it. It can often be a bit of a marketing channel for them, where they get some exposure in a marketplace, but they build their base of operations, their core business on Thinkific. Similarly, social media, even platforms like Spotify, YouTube, they're starting to have paid content by creators, which allows creators to monetize in a similar way that Thinkific does. But big difference there is with social platforms, you don't really own the algorithm, and so you're putting your content into someone else's site again, where you lose some of that control.
We encourage our customers to do this, but then they bring the traffic back to their Thinkific site, where they get to actually own that engagement with the audience. So we kind of sit at, in a differentiated place from all of these different offerings in our overall industry. Fast-forward to today, our customers really are diversified across topics and verticals. They teach everything from hula hooping to corporate finance to Hawaiian languages, fashion and beauty, career development, entrepreneurship, marketing, so a wide range of topics, and have created over 1 million courses on the platform, and each of those is hosted on their own websites under their own brand. So often, you don't even know Thinkific is involved.
Our mission and what we believe in is creating a world where everyone, be it an individual or a company, is empowered to share their knowledge, passion, and expertise and actually grow revenue and build a business around doing it. That just makes it so much more scalable when you're actually generating revenue from educating others, and then you can create more products, better products, and reach more people. This is what we're doing, turning knowledge into vibrant digital products that people can sell. We start by giving them the tools to create. They get to create their own website, design it, create their own courses and other digital learning products. We've really branched beyond courses. We started with just courses.
Now they can use our tools to create live learning lessons, coaching, digital downloads, boot camps, and other digital products they can sell to share their knowledge. Then we give them the tools to market and sell it, be it our payments platform, our email marketing tools, our tax solution, our funnels. These allow them to go out and sell their products to others, and then, of course, to engage with their customers and their students. So that can include the fact that we offer membership sites, communities, and these live lessons, and a lot of analytics to see how that engagement is going.
Another way that we've branched out from the original idea is with our Plus offering, and so this is, through our existing marketing channels, we started to see more and more larger companies coming in, where they had the same needs as our smaller companies. They wanted to educate their employees. Or sorry, they wanted to educate their customers, they wanted to do it under a branded offering, and often they wanted to sell those educational products alongside their existing products and services. So with Thinkific Plus, we allow larger companies to educate their customers, often with a branded... well, always with a branded component on their own websites, but often also with a commerce component, where they're making revenue from this as well. And so that's our larger offering.
A lot of opportunity here on the customer education space, where they're just packaging education up and offering it alongside their products. A great example of this would be Cricut. They do a crafting device that helps people do their own crafting, and they offer courses alongside of that to help with engagement within their own product. Moving more to our self-serve, these are the smaller customers, people like Lola, who's built an amazing academy. This is the core of our customer base. The majority of our revenue and customers are more solopreneurs to micro entrepreneurs five employees or less, down to being the individual operator building their own business, and forms the core and basis of our company and the people we serve. A quick, simple look at our go-to-market.
So three big buckets of how we go to market. There's paid, which is largely paid advertising on various channels; organic, which is largely search engine optimization, where people are searching on Google or YouTube, finding us through our blog and coming to our site, a very efficient channel for us; and then referrals and partners. So referrals take many forms, could be a customer of ours that's referring a friend.
It could be a student who sees that they're taking a course on a site that's powered by Thinkific, and also partners, things like design agencies or web agencies, where someone says, "I want you to build me a course site or a learning site," and they say, "Thinkific's my platform of choice, let me get you set up on it." Those leads come in, we qualify them. The majority of them go into our free product, play around with the product, select a price point, and go under our self-serve, where the average price point is about $99, $100 a month. For the highly qualified leads that are larger companies, where they have more employees, usually is the measure for us.
We qualify them, and then they speak with our sales team and end up on our Thinkific Plus at a higher price point of about CAD 2,000 a month. Looking forward, a lot of opportunity in front of us and some of our strategic priorities. What we're focused on is really making it as easy as possible for people to get started. A lot of work on AI here and generative AI, and we're seeing already this unlock a much faster activation rate for our customers and getting them up and running, having a product to sell, and making that first sale. Then we focus on making it as easy as possible for them to sell.
We've done a lot of work here with our own payments engine that has on built on top of it various features that help people sell more, like better checkout to abandoned carts, buy now, pay later, or the ability to gift courses to others. And then a smaller project I'm excited to say, but this is just working with our top customers to make sure once they're successful on their platform, they're not only here because we're a sticky platform where all of their revenue and customers live, but also they just feel they have a relationship with the company, and they're excited to actually promote us to others. And then our growth up market is that focus on the more enterprise side of the business and, and bringing in those larger customers. We have an amazing culture.
We actually, Corinne and I just finished a week together in Vancouver with our whole company and team, brought together to talk about the plans for 2024. The energy was electric. We brought in a couple of customers to tell their stories, and it's always really emotional. A few teary eyes in the audience as we hear the stories of the difference it makes in their lives. But also, the really amazing thing about working here is we get to see the stories of how it impacts our customers, but also, although we have thousands of customers with their own sites on Thinkific, each one of them goes in turn and affects thousands of students, and they get to change lives that way.
So it's, it's really fun to see the exponential impact that we get to make by helping people take their dreams and go build a business around it and educate others while doing that. With that, I'll turn it over to Corinne for a little more on the financial and overall how the business works and how we make money.
Thanks, Greg. Hi, I'm the CFO here at Thinkific, and I'm just gonna walk you through a few of our financial metrics and some reasons for why we're excited for the future. We are more excited than ever, as we just came off of one of our best quarters or the best quarter as a public company. One of the reasons for that is we had been chasing a return to profitability, and in Q3, we were able to announce that we had achieved not only profitable EBITDA growth, 5% of revenue, but also able to see positive cash from operations. So really feel like there's an acceleration of the business here. Let me just walk you through a few of reasons why we're excited and where we see the growth coming.
As Greg mentioned, total revenue last twelve months is $57.3 million. There are two components that make that up, the bigger component being our recurring revenue, subscription licenses, and that's the ARR of $54.2 million. And the other part is commerce business, which is our transaction fee, the variable component of our pricing, really allows us to share in the success of our customers, and the total payment processing on our platform was $118 million at September thirtieth. As Greg mentioned, a big driver for our pricing is what is our customers process in total? And for the GMV, what we look at is $436 million, and overall, the combined gross margin on these two businesses is 77%.
The gross margin on our ARR is over 80%, and on payments is in the mid-30s%, and so combined, that gives us a 77% gross margin. When you look at the combined revenue of, subscription and commerce, gives us our ARPU, which is at $145 a month, and that's been growing quite readily. Historically, in our company, a ARPU has been flat, and we've been excited to see over the last couple of years, quite significant growth here. Most of that's coming from our commerce business as we add that variable component to our pricing, but also as we see growth at market and plus. Lastly, cash growing based on us seeing some generating of positive cash from operations, and the ending cash was $87 million with no debt.
If we look back a little bit on the business, it sometimes helps to see where we're going forward, and we think through where we've been as a company. For the early part of years, really bootstrap business, healthy, capital, efficient growth. And, during the pandemic, we saw just a super growth of new customers coming to our platform and significant growth in GMV. And that led to our IPO in April of 2021, where we raised about CAD 200 million, and just really started to increase both the size of our team and our go-to-market function.
Shortly after that, we did see a little bit more of a slowdown in revenue growth and quickly thought, "Hmm, is this the right cost structure for us?" I'm proud of our team and our board of helping us make the tough decisions to be able to, to bring back our team size. We had doubled our team two years in a row and, and then went through the very hard process, like many other businesses, of, of doing a round of layoffs in March of 2022, and then another one early in 2023. So happy to have that behind us. Like I mentioned, achieve profitability at the end of Q3, and it feels great to be able to have done that early and, and behind so we can really focus on growth going forward.
As you can see, we've got really a focus on growth as we move forward, but also continuing to maintain and even the positive business, really focus on that capital-efficient growth and a place where we're most comfortable managing the business and follows where we've been in the past. With that behind us, if we look forward, two ways to look at our revenue. We've got what we consider more of a product-centric view, which is that subscription revenue I was mentioning to you and commerce revenue. Another way to look at it is by the customer type, our self-serve customer versus our plus customer. I want to get into the numbers now as we get to the next slide. It helps us see where we're seeing a big growth to see why we're so excited.
Subscription revenue is growing 18%-- or 8%, apologize, 8%, but our commerce revenue growing 86% really speaks to where we're seeing some momentum. That's what's driving that great ARPU growth, giving us total revenue of $15 million in the quarter. If we look at it on a customer basis, self-serve is growing 8%, $11.8 million, and then it's this plus side of the business that's seeing some really healthy momentum. We haven't put a lot of capital allocation there in the past, and the opportunity is for us to continue to not only see growth, but also put some capital there to help us differentiate the product and really accelerate our go-to-market efforts. So if we dig into our self-serve plans, like I mentioned, 8% growth here. This is a very low-touch motion.
Self-serve kind of speaks for itself in terms of how we go to market. And the driver for this business has come from customers expanding to unlock additional features, and then for us to build on that transaction fee that drives our variable growth. We have also launched some new products that accelerate our growth. Specifically, one that comes to mind is Branded Mobile. It was launched in Q3, and it drives additional ARPU growth, but also helps our customers reach their audience in a new and exciting way, which is on mobile. And I don't know if it's new so much, but it, it's a different way for us to go at the market and really speaks to the creators coming to us and being so used to doing things on a mobile device.
We've really embraced that and given people an opportunity not just to share our mobile, but also to have their own branded app in the app store, which is great. Things that accelerate us going forward are partnerships, and we're looking at how do we continue to find ways to help customers not only distribute their courses and earn more money, but also help them find the right integration points for them to be able to leverage social media sites, like Greg was mentioning, to expand their audience. And so that's a big part of our growth as we look into 2024, and will drive our customer count going forward.
Moving to Plus, this is tailored to businesses, often 25 or more employees who are looking to sell education as either a revenue driver for them, maybe their main business is training, or it's additional customer education. So they've got a product, and sold along with that license or product would be some training on how to use it, helps them engage the customer and their product, retain them, and also can be a revenue driver for them as they accelerate that growth. This is a slightly different go-to-market function of its sales lead and has a very healthy LTV to CAC, mostly driven by strong NRR.
The real driver for this business is getting customers who want to be able to engage, retain a customer, to be able to sell additional products and really see that B2B side of their business grow, and so that's how we help them structure that growth. As we see people unlock additional features, it's often as customer size grows, their number of students, as you can see here, and how they partner with us. This is a real white glove business approach. We help them launch their product.
We really help them build out their courses, some of their downloads, how they use our product in terms of building the experience they want, but also provides a customer success team that does quarterly business reviews and helps them figure out, how do I continue to grow my business and expand from the Thinkific platform? The one thing that we're really excited about as a near-term opportunity is commerce, and I've been talking about it a fair bit as the transactional or the variable component of our pricing, and that's really how we see it.
But to understand why we're so excited, it helps to be able to take a step back and understand what is happening behind the commerce platform. And so if we look at where are sales coming from, in many ways we're a digital e-commerce platform.
Total sales off of e-commerce products that are built on our platform is around $170 million, and that's an estimate. Some things happen off platform, invoicing, checks, things that we can't see through the platform. When we get a little bit closer, we look at our GMV, and that's growing 13% on a year-on-year basis, and we've seen that accelerate over the last few quarters. Gives us a lot of excitement for what's possible on the platform, and we see our creators continuing to have more success, and it's really the North Star of how we grow our business. And where we're excited is that GMV is a combination of Stripe, PayPal, and Thinkific Payments. But where we wanna see is, we wanna see customers moving over to Thinkific Payments. There's a few reasons for that.
One, they're able to sell more when they're on Thinkific Payments 'cause we can offer more tools that help them find success and be able to increase their, average dollar value that they're selling, but also because we can then build on one platform, one checkout, and so it really allows us to get that ROI as high as possible when we're investing dollars, in building out this side of the business. Also, it, it does help us grow our business, and so we're excited to see us grow along with our customers. The way that we wanna do this is, today, current customers that are coming to the site are automatically just put into Thinkific Payments, and they'd have to go to a higher price plan to access Stripe or PayPal.
It's existing customers that we need to move, and we think there's a big opportunity here. We actually think this GPV circle could be as big as the GMV circle, and so our target is to get to 80% because that's what we're seeing for new customers. That's a high-touch relationship process that we're focused on for the next year or two, and we think that's gonna be a big driver of growth in the near term. The opportunity is obviously to grow GPV too. T his, we'd love to see it at 80% of GMV or higher. The next opportunity there is, our commerce revenue. So within commerce is, first of all, Thinkific Payments. That has a take rate of 2.9% plus $0.30.
The take rate that we're seeing right now is at 4%, as we've got a few value-added features that allow us to earn a little bit more at a higher margin as well, and so those are things like multi-currency transacting across different borders allows us to own a little bit more. Our sales tax management solution allows us to calculate, collect, and remit sales tax for our creators. Can be a huge burden for them, and we have an additional charge for that with a high margin. And other things like buy now, pay later, order bumps, gifting, group orders, lots of different features that allow us to increase our take rate. Today, it's at 4%, and we think that could get up to 5% in the short term.
In the longer term, we think that can get to 10%, and that's as we add additional distribution channels to our part- or for our customers, as we find ways to find new audience for them, to sell additional ways for them to grow their business. There's no shortage of opportunities for us to get into our rev share opportunity, which would come in through our commerce platform, and we see that growing to 10% in the future. So to summarize, on the growth levers of the business, I just mentioned commerce. Increasing that penetration's the first step, and we're all over that right now. This is the big focus for us in the near term. And then increasing our take rate from about 4% today, 5% in the midterm, and then our long-term goal of 10%.
Together, that can probably double our commerce revenue, and it's a near-term opportunity highly within our control. On the self-serve side, Greg mentioned a number of the new things we're doing to help customers be more efficient and more productive in how they launch courses. We don't wanna take away that unique percentage of their unique personality and their training, but we wanna be able to make it faster for them to be able to get courses and learning products created and sold, and so AI is gonna be a big part of that.
And really reducing the time it takes for them to earn their first dollar, this is a big part of how we help retain them on the platform, get them engaged, and helping them find success, but also will drive our customer count, and that's a big long-term focus for us. And then lastly, Thinkific Plus, as we see, we're adding new features that differentiate our product, help us stand out in that customer-led market, which is new to us. We've got some go-to-market work to do. As I mentioned, this is an area we haven't devoted a lot of dollars to, and it's gonna be more of a focus as we go forward. And then lastly, maintaining that 30% growth with efficient capital invested and really focus on that LTV to CAC ratio. And that wraps up.
Greg, I'll hand it over to you for a summary.
Great, thanks. I'll stop the share there, and we can jump to questions, but as I think Corinne shared, a lot of really exciting growth drivers there. I'd highlight that commerce one, and I think there's the potential there to pretty quickly get us to a place where we've significantly grown the revenue opportunity just from that one revenue driver alone.
Excellent. Thanks for that presentation, Greg and Corinne. Just as a reminder for those who are listening in, if you do have a question for management, please put those in the chat, and we'll make sure to get those asked and answered. But I'll kick things off. Greg, within the core business there's been this maybe a period of transition in a lot of the content marketplaces. If you think about maybe companies that have been under some struggles, like a Skillshare or Udacity, or even some of the larger vendors like Udemy, which just changed their instructor fees, right fee structure.
How do you think you, or what ways can you, in your business, sort of maybe take advantage of some of this transition to maybe bring more content creators over to Thinkific over time?
... Yeah, I mean, it's interesting you mention that. All of those, Udacity, Skillshare, Udemy, sit in more in that marketplace where they have the one-
Mm-hmm
... website, where all of the courses, so they really own the relationship with the student. And the, and it's almost more of a publishing model, where the creator of the content puts it into their site . And so we sit in a really differentiated position from that, that puts us in a position of strength there, I think, especially as they do things like change revenue models. The nice thing is we can offer while growing our business at a very healthy rate, we can offer a far healthier revenue model for our customers. So, we're the number one reason why people may leave or, or use other tools than those kind of platforms.
and we actually encourage our customers to go and use them because we see it as a good either distribution channel or a way of actually building awareness for their brand. So, while we're quite actually happy for someone to go and stick some of their content on a marketplace and teach our customers there's a way to do this, as a way of building brand and building audience, and then they bring them back for their sort of flagship products on Thinkific. So it really has been a boon for us when they make some of those shifts.
Interesting. And it sounds like the opportunity is quite compelling on Thinkific Payments. I'd just be curious, as you're having those conversations with your customers, how do you incentivize them to sort of move over? What's sort of the value proposition of moving over to Thinkific Payments?
Yeah, it's been interesting. I've actually... So obviously, there's a team behind this, and a whole bunch of people are working on this project, but I really wanted to dig in and understand this. So over the last month, I've had calls with about 20 of our top customers who are not on our payments platform, just to find out the exact answer to this question. And we had spent the last couple of years really building the product of payments up to a point where if someone was switching over to us, they wouldn't be giving something up from a feature set perspective. So we're in a good position there now, and now that we're there, I wanted to have the calls with these largest sellers on the platform to say, "What do you think?
Mm-hmm.
And the interesting thing is, the majority of those calls have gone along the lines of, "Have you heard of our commerce offering? Are you interested?" And them saying: Yeah, I'd sort of heard about it. Tell me more. I explain a few things, and they go: Sounds good. Sign me up.
Mm-hmm.
So there hasn't been a lot of friction. There will be some that will come up, but they're really minor things. I'd say the biggest friction point at this point is they have to fill out a 15-minute form-
Mm-hmm
... in order for us to have the KYC, the know your client stuff, so that we can switch them over. The beautiful thing is, because it's all built on Stripe's rails and most of them are already on Stripe-
Mm-hmm
... they preserve all of their data, their payments, their customers, the stored credit cards. Everything just comes over with one button. So it's a relatively friction-free. The biggest thing really is getting them to fill out the form and the awareness factor of just letting them know it's a better option for them.
I see. So it seems like at least a fairly low bar to hurdle as you're kind of growing out after that growth opportunity. Interesting.
Yeah. We also have the benefit that we have the data now that people on our payments engine actually make more because of the-
Hmm
... features rolled out there, like, gifting, the ability to buy a course for a friend, buy now, pay later, some of those checkout features, things like that.
Yeah. Interesting. A nd then when we think about Thinkific Plus this has been a segment of the market that's I think seen some nice growth, especially if you think about relative to the evolution of maybe the LMS market, of moving away from sort of internal sort of training, employee training use cases, more to external customers, partner-facing. W hen does a customer typically engage with Thinkific Plus in terms of within their lifestyle? Is it... Or sort of as they're-- Is it more on the commercialization side, or if they're building out the go-to-market strategy, or is it a more established company that is looking to improve customer success or something along those lines?
I like that one. We actually do see it quite broadly across the whole spectrum.
Mm-hmm.
Probably at our higher price points is more established companies that really have someone who's doing this role on a full-time basis with a mandate of a number they want to improve: retention, engagement, expansion. And so they're coming with as mentioned, I have to tell you, those customers are the most motivated to move fast and really find time to value, which is where we can deliver the most success.
Mm-hmm.
But some are earlier in the process, and they're smaller, and maybe it's an additional revenue stream for them as they look to accelerate revenue in different ways. And they know they've already got a customer base that they could sell additional learning to, and so that can be a growth, a good growth opportunity for them.
Mm-hmm.
Key for us, is really around, helping them figure out how do we help you reach your goals, and what part of the platform do you need to unlock to be able to be successful, and how do we help you track that?
Mm-hmm.
It's amazing how budget-conscious people are today, and I know 'cause I'm the CFO, and I'm so budget-conscious here.
Yeah
... with how we're spending your dollars on SaaS. I can appreciate where our customers are coming from and really trying to help them figure, what is the business case to bring forward, that really helps them drive a meaningful impact to their business. And that's what they want to do. They need to be the heroes internally to be able to, to find success in the platform, and we want to help them do that.
Absolutely. And is it primarily the use case for customers today, or do you have any use cases for partner training at this point?
We do see a broad use case across everything from employee education, partner education, revenue generation. Our sweet spot really is on the revenue generation side. That's probably where we have the most success because of the selling tools that we've built on the platform. Customer ed is an area we're just starting to add new features on. We released 20 new features at the end of the year. A big one was some expansion to our learning paths, and so I think we're early days on the customer ed. So I'd say probably the most success is rev gen, but we do serve a very broad use case.
Interesting. Excellent. And then, I see you outlined a number of growth drivers and during the presentation. As you look at sort of the scale of what will definitely happen versus more inspirational or what maybe near term versus longer term, how would you kind of handicap the growth drivers there today? It sounds like payments might be towards the top of that list, but...
... Yeah, I love this, 'cause we actually just, I mean, this was part of the subject of our kickoff with the whole team in Vancouver together, is discussing this. I think we have a really good mix of both those things. We've got a few growth drivers that are, I mean, they're gonna take work they're not easy to do. It's gonna take the team buckling down, but we know exactly what to do. Some of it, a lot of it we've done before, and it's like a repeat process. We do these things, we get these results. It's just we've already done the put one in and get two out, now we just have to put 10 in or 100 in and get 200 out.
So that really is Commerce and Plus are more in those categories, right? Plus is a much more repeatable revenue business. We understand exactly the flow of, like, okay, there's more leads in the pipe, hire another account rep, set the commission. T hey'll be hitting that commission within a couple of months, and then we've continue that process and scale that up. And we have a really quick sales cycle there. And so that, that is a fairly repeatable revenue business, that should stay at that sustained sort of 30%+ growth rate. And then in the, And then Commerce as well is another one that is relatively certain for us. Again, hard work, and there'll be little bumps along the way, and lots we have to do there.
But we've already proven that when we have these, when we get the word out to customers, we show them what commerce can do for them, they switch over, and we know the revenue is there for us. So that's a good balance there. The places that are a little less a higher risk level, but actually higher return, those, those two alone can get us well back into Rule of Forty.
On the more risky, not sure the exact timeline when we'll hit them, is that's things like helping our customers really sell more, helping them activate faster, the tools that sort of unlock the power of our customers to be more successful than they've ever been before on the platform. We are seeing some really early signs of success. We've got a product out called The Leap.
It's at theleap.co if you want to play with it. You can sign up and really quickly create your own digital products. What we're seeing there is what used to take someone a month or two to build a course on Thinkific is now taking someone an afternoon on The Leap. So we're seeing much higher activation rates there very quickly. And that's using generative AI to get them up and running really quickly, and then they augment it with their own unique skills, genius, and, and expertise. But that's one of those areas that's exciting for the future, but yeah, a little more risk. So I love that question, by the way.
Yeah, it's a really fascinating actually, in terms of, like, just ability to generate faster comments or content faster time to value, in the near term. So-
Yeah
Interesting. Corinne, how do you think about, like, given there are a lot of some strong growth opportunity, you mentioned you recently achieved profitability. How do you think about the balance, balancing out appropriately growth versus margin expansion?
Yeah, we're so happy as a team to have that behind us and now can really focus on growth. I have to say, it's a big moment for the business because the mindset can change so dramatically. We are focused on efficient growth, don't plan to go back into losses.
Mm
... but really focused on how do we drive top line. I f anything, we're valuing, revenue growth in the short term significantly more than EBITDA growth. And the, the next, big target for us is gonna be $100 million of revenue. As we look long term, there is an opportunity for us to expand our EBITDA and, kind of set it in the high teens is, is an opportunity for us. But in the short term, very focused on revenue growth first and how do we get that accelerating and, and moving in a really healthy way without jeopardizing the bottom line. So probably staying not too far off of a, a break, a break-even place.
Maybe, piggybacking off of that, and in that sense, you've got a pretty strong balance sheet with, I think, what, CAD 87 million in cash. Obviously, won't be burning through that, but how do you think about uses of cash and, maybe the mix of growth of organic versus inorganic over time?
So, so happy to sit on this cash balance today. We're able to earn a very healthy interest rate on this. We're using some of that interest to do a share buyback. So, it's a great place to be in, interest rates like we have to be able to earn on this cash balance. We are looking carefully at capital allocation. Internally, very focused on, where do we get the right returns and a good balance of, some small bets that grow into bigger cannonball opportunities. But also, how do we allocate capital between, Commerce and sales, and subscription revenue between self-serve and Plus, always fun questions to look at, what are we doing from the short term and the long-term perspective.
If we look inorganically, lots of opportunities in the market-
Mm-hmm.
Don't want to acquire anything that would put us into a loss position. Really happy managing the business in a profitable way, but anything that can help us accelerate growth is interesting to us when we're looking at some things, but nothing immediately on the horizon for us. First step is really looking at what are those partnership opportunities that we should be looking at for our customers, getting them distribution channels? How do we help find the right ways for them to be able to share content, to drive additional traffic to their sites and really accelerate their growth?
Excellent. Excellent. Maybe just one more call from the audience to see if we've got any additional questions coming in. All right, I'm not seeing anything, so we'll leave it there and let everyone enjoy their Friday afternoon. But Greg, Corinne, thank you so much for taking the time. It was great to hear the Thinkific story and get your perspective on, I think, the very interesting segment of edtech. So have a great day, everyone.
Thank you, everybody. Thanks, Ryan.
Thank you. Thanks. Thanks, Ryan. Thanks, everyone, for coming.