My name is Ina, and I will be your conference operator today. I would like to welcome everyone to Thinkific's First Quarter 2025 Financial Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this conference is being recorded. I would now like to turn the conference call over to Joo-Hun Kim, Head of Investor Relations. Please go ahead.
Thank you, and good afternoon, everyone. Welcome to Thinkific's First quarter 2025 financial results earnings call. Joining me today are Greg Smith, CEO and co-founder of Thinkific, and Corinne Hua, 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 we 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. 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 and co-founder of Thinkific.
Hello and welcome to Thinkific's Q1 Fiscal 2025 earnings call. Thinkific's unwavering commitment to customer success continues to drive both innovation and solid financial performance. I'm happy to announce that our Q1 results slightly exceeded the top end of our revenue guidance range. Upside was driven by strong subscription revenue, particularly in self-serve, which benefited from improvements we made to our marketing strategy, website, and onboarding processes. We continued to expand the adoption of Thinkific Commerce and Thinkific Plus, where we saw record new bookings. The level of innovation remains high at Thinkific, and we continue investing in making our platform easy for our customers to create and sell well-designed and impactful learning experiences. Our focus continues to be an obsession with helping our customers grow their businesses.
This commitment to customer success and great customer support was recognized by G2 in its 2025 Best Software Awards this quarter, placing us among the top global companies for education and customer service. We were also recognized by Waterstone Human Capital as one of the most admired corporate cultures of 2024 in their growth category for building and enhancing a culture that drives performance. Looking ahead, we recognize this is a year of transformation for Thinkific, and we're working hard on executing the focus strategy we outlined last call. As part of this strategy, we are gearing up for some important product launches and will roll out new marketing and messaging this summer focused on attracting and serving our ideal customers. Although it's early in our transition, I'm already seeing strong positive signs that the approach we're taking will yield stronger results.
The additions we made to our team have begun to pay off, and I expect we'll continue to see that improve. Before I get into specifics in the quarter, I want to discuss the recent conversion of all of our multiple voting shares into common shares, where every share now has one vote per share. This was a significant step for us. The dual-class structure was established to support the company's early growth as a public entity. However, with a four-year track record as a public company and confidence in our team, strategic vision, and our path forward, I felt the extra voting provisions were no longer necessary. While common among tech IPOs at the time, we acknowledge that the approach may have constrained the stock's attractiveness to investors, hindering the float and liquidity of our shares.
Simplifying our capital structure better aligns the interests of all of our shareholders, improves corporate governance, and is a first step to increasing our public float and liquidity of our shares. Most importantly, this change demonstrates our confidence in Thinkific's new strategy and ability to execute on a profitable growth trajectory that will maximize long-term value. Now on to the quarter. We had a solid Q1 driven by ARR growth, which grew $1.8 million this quarter. This was tempered by the anticipated softness in GMV growth. Plus, we had record new bookings. However, the upside in ARR was largely generated by better-than-anticipated growth in self-service ARR. The combination of our new strategy and team additions is paying off directly in both the efficiency of our marketing dollars and volume of new business being generated both from improvements to our go-to-market motions and our product onboarding flows.
The gains in marketing efficiency and top new business generation were in part permanent fixes that will continue to help our future results. Some of these gains in Q1 were also one-time wins. This means we'll see more normalized growth in Q2. I'm proud of the team both for the permanent fixes and the one-time wins they took for this quarter. If we can combine more improvements like this through future quarters, we'll see a stronger growth path in our future. With our current team and strategy, I'm confident we'll be able to do exactly this. Plus, we saw record new bookings in Q1, and it is confirmation of the substantial underserved market opportunity in Plus we identified last summer. Most of our sales force is now delivering ahead of quota, and we are now closing on larger and longer-term deals.
This quarter, we continued to release impactful functionality to the product. In February, we added advanced customer analytics capabilities. This is a feature that was highly anticipated as it helps our customers better engage with their students and helps to predict buying intent. This advanced customer analytics was the deciding factor in winning a global software company that is at the forefront of AI. This company was looking to scale its education business and switched to Thinkific this quarter from a well-known competitor whose product lacked the scalability and ease of use offered by Thinkific. We are also standing up a new truly world-class support and customer success program that can meet the demands of our more sophisticated customers. In the first months, we achieved record customer satisfaction, or CSAT, scores of 97% for Plus, and they've already begun making an impact on growing ARR.
The strong new bookings were tempered by a decline in Plus' net revenue retention, as we saw an uptick in Plus customers who reverted back to self-serve. While not ideal, this is also not surprising and is a natural part of our shift to focus on our ideal customers and the shift in strategy to focus on serving these customers. Corinne will discuss this more later, but needless to say, as part of our execution on our new customer profiles, we are realigning our sales force to target businesses that fit our new strategy and are most likely to succeed and grow with Thinkific. We believe these adjustments will further strengthen our new customer acquisition motion as well as help improve net revenue retention. One exciting growth lever we want to capitalize on is Plus-driven commerce revenue.
Later this year, Thinkific Commerce will unveil several highly requested features, including some specific to the commerce needs of larger, more successful customers. I'm confident these additions will significantly enhance Thinkific's commerce value for our Plus customers who demand more from our commerce engine. While self-serve currently drives the lion's share of our commerce revenue, these important releases will unlock a powerful new growth lever, accelerating adoption of Thinkific Commerce and Plus, fueling our next phase of GMV expansion and commerce revenue growth. For the remainder of 2025, our entire team is fully engaged driving our new strategy. Adjustments continue to our website that align with our new customer profiles, and there is to be a significant refresh in the summer that will ensure we resonate with those customers who drive the most value.
Enhancements to our marketing campaigns, onboarding, and activation processes have already delivered results in Q1, and we want to build upon that success through the year. Research and development is busy executing on their product roadmap. We continue to integrate AI throughout our product, automating tasks, making life easier and more productive for our customers, and leveraging our data to help them succeed. With our new strategy and senior management in place, we are in a position to build on our company culture, empowering and supporting our teams to drive results for our customers and for Thinkific. With that, let me hand the call over to Corinne.
Thanks, Greg. Good afternoon, everyone. I'm pleased with the start of our year. The upside in the quarter was primarily driven by the changes we've made in our sales and marketing team's execution, which led to improved ARR growth and an increase in adjusted EBITDA. Furthermore, we generated strong cash flow from operations, underscoring the strength of our financial model. For the first quarter, revenue was $17.8 million, up 12% from the prior year. Revenue slightly exceeded the high end of our guidance range, driven by timing benefits that resulted in better-than-expected self-serve revenue growth. ARR was $60.1 million, up 6% year-over-year, and on an absolute dollar basis, up $1.8 million sequentially. As Greg discussed earlier, our ARR performance was driven by a combination of factors, including enhancements to our marketing strategy and website and onboarding processes that led to better conversion rates of visitors within self-serve.
However, a large part of our Q1 upside resulted from one-time and seasonal factors. We strategically shifted from a freemium to a trial-based model, which led to stronger conversion rates. The switch to trials was completed late in Q1, so retention remained high. However, we are expecting typical attrition to show up beginning in Q2. Q1 also benefited from a full quarter of seasonally stronger Black Friday and holiday season promotions. We are therefore expecting ARR growth to normalize closer to the trend of the past year as we are still early in the execution of our new strategy. Nevertheless, the upside in the quarter is further proof in our belief that the demand for Thinkific solutions is substantial, and we are well-positioned to capture it as we refine our go-to-market motion throughout the year. ARR growth led to subscription revenue of $14.6 million, which was up 6% year-over-year.
Commerce revenue of $3.3 million was up 52% year-over-year. Commerce revenue growth resulted from the continued growth in GPV of $65 million, which grew 46% year-over-year, as Thinkific Commerce penetration rate, which is measured as GPV as a percentage of GMV, grew 400 basis points to 56%. We expect continued adoption of our commerce solution and believe further penetration rate increases will be driven by the release of highly anticipated Thinkific Commerce features planned for later in the summer. The take rate remains steady at 4.5%. As we discussed previously, given the functionality we currently have available in Thinkific Commerce, we expect take rates to remain around this level. GMV of $116.7 million was down 4.5% year-over-year. We outlined the primary driver of the GMV headwinds last call.
Specifically, the lower GMV of our most recent cohort of customers, and our new strategy and customer focus will help address this issue, and over time, we'll see improvements here. In Q1, however, we saw a small reduction in sales across all our cohorts, implying our customers are facing macro pressure. Our PU of $168 per month was up 10% versus the prior year's $152, but flat sequentially. The increase in our PU reflects the growth of Thinkific Plus and Thinkific Commerce. Now on to revenue by customer group. Self-serve revenue saw growth to $13.3 million, up 7% year-over-year from $12.4 million in Q1 of 2024, and relatively flat from the prior quarter. The increase year-over-year was driven by Thinkific Commerce, which has substantially higher penetration rates within our self-serve customer base.
Thinkific Plus, which is built for business customers who choose Plus to get access to higher levels of support and services, as well as enterprise features such as third-party integrations, advanced analytics, single sign-on, and SCORM. Plus revenue of $4.5 million was up 27% year-over-year from the $3.6 million in Q1 of 2024 and up 5% from the prior quarter's $4.3 million. The investments we have been making and the Plus sales team are delivering solid results. In Q1, we saw an improvement to both the length and size of contracts we closed and also saw an improvement in the win rates. This led to Plus having a record new bookings quarter in what traditionally is a seasonally slower quarter for business deal flow.
We believe these results confirm the research we did in the fall that shows that Plus addresses a large and underserved market that we can grow into. The strong activity in customer acquisition was tempered by an increase in downgrades as some Plus customers decided to move to self-serve plans. We believe that for the most part, these customers were unable to dedicate the appropriate resources and/or the effort to monetize their educational content and ultimately made the decision to move to self-serve as that feature set better suits their current needs. They do remain customers, and we plan to re-engage with them at the right time. We are refining our Plus go-to-market motion to prioritize customers that are a better fit for Thinkific and align more closely with our new strategic approach.
While early, the increase in the number of multi-year deals we signed in Q1 is an indication that our newest customers are committed to and are dedicating their resources to drive revenue from learning products like courses and communities. Moving on to the P&L, gross margin of 74% remains consistent with the prior year and quarter. Subscription gross margin of 82% was also consistent with the prior year and quarter. Commerce gross margin was 37% compared to 33% in Q1 of 2024 and 39% in the prior quarter. Worth noting that commerce gross margin tends to fluctuate between quarters depending on the utilization of high-margin features on Thinkific Commerce. Total operating expenses were $13.4 million in line with the prior year and quarter. We continue to make investments to accelerate top-line growth.
However, as we sharpen our focus on high-monetizing, ideal customer profiles, we are reallocating marketing spend to our most effective opportunities in keeping with our new strategy. This decrease in sales and marketing from the prior quarter did not slow the growth of ARR. As a reminder, we incurred approximately $400,000 in company kickoff expenses, which is included in G&A. Adjusted EBITDA was $922,000, or 5% of total revenue versus the $240,000 and 1.5% of revenue from the prior year and $895,000, or 5% from the prior quarter. We are committed to a strategy of profitable growth and will continue investing for growth, though we believe we can hold the adjusted EBITDA margins at the current level.
Cash flow from operations was a solid $3.2 million, and our ability to convert EBITDA into cash flow is again a testament to the quality of our earnings and the power of our financial model. Moving to the balance sheet, cash and cash equivalents as of March 31, 2025, was $51.4 million, an increase of $1.9 million from the prior quarter and as a result of our growing cash from operations. During the quarter, the company repurchased for cancellation approximately 315,000 shares for total cash considerations of $683,000. We continue to believe that at current prices, share repurchases represent a compelling opportunity to enhance shareholder value. As Greg addressed earlier, on April 24, all multi-voting shares were converted to single voting common shares. This transaction was done on a one-to-one basis and without any premium.
We believe this greatly simplifies our capital structure and is a first step in enhancing shareholder value. I'll end with a few comments on guidance. For Q2 of 2025, the company expects revenue between $17.7 million and $18 million, which represents a growth rate of 9%-11% year-over-year. The guidance reflects continued strength in Plus and good commerce revenue growth driven by higher penetration rates of Thinkific Commerce. We continue to expect headwinds on GMV, which will impact overall commerce revenue growth, and this guidance contemplates continued macroeconomic uncertainty. We remain committed to profitable growth and believe we can execute this focused strategy by reprioritizing existing resources and driving operational efficiency and maintaining adjusted EBITDA margins at the current levels. We are now happy to take your questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session.
If you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised. Should you wish to cancel your request, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys, please. One moment, please, for your first question. Your first question comes from the line of Gavin Fairweather from Cormark . Please go ahead.
Oh, hey, good afternoon. Thanks for taking my questions and congrats on the results. Maybe just to start on self-serve, we've talked in the past about activation rates versus perhaps the pre-COVID era. Nice to hear that you're seeing some permanent gains from the changes to your website and onboarding. Maybe you can just update us on how much more upside you see on that in the coming quarters and how kind of the refocus in strategy will play into that metric as well.
Yeah, it's a great question, and we look really closely at it. Thanks, Gavin. There's sort of two stages or two or three stages in the way I look at this. The first is the early activation onboarding, and really the core metric that comes out of that is their conversion through the initial funnel from a visitor website through to choosing us as their platform of choice, making some investments in using the product and converting to paid. That conversion through the early stage, we've gotten a lot of the low-hanging fruit. There's more we can do there for sure, but a lot of the low-hanging fruit we've captured there.
The next steps are start to move them further through in terms of long-term value, which drives things like expansion revenue, upgrades, improved retention, and in the long run as well, getting the right people through that funnel drives GMV and GPV. We're through that first phase with the low-hanging fruit, and now we're working on making sure we attract the right people through and give them all the tools they need to get all the way through to retention, expansion, and GMV improvement. Lots more to come from the overall funnel, but we've extracted the easy stuff out of that first activation bit.
That's very helpful. Maybe just moving on to Plus, just on that dynamic of self-serve clients kind of upgrading to Plus and then moving back down. I mean, it sounds like that's mostly a function of just not a great product fit at the time. As part of your targeting, are you shifting who you're targeting in self-serve? Are you looking for more logos kind of outside of the current business, and how will that kind of impact, I guess, sales cycles and the sales cadence?
Yeah, so there's been a shift, and it's ongoing both for self-serve and Plus to our new ideal customer, which is generally a little bigger, more up-market, more likely to be successful on every metric we look at for these customer profiles. What we should see is more success even within the self-serve base, the opportunity for more of them to move to Plus. In fact, we've done a bunch of work and are continuing to do work to make it easier for self-serve customers who are a fit for Plus to move to Plus and then a better fit at Plus, which should mean better expansion and retention on the Plus side.
I think what we're seeing now, and it's sort of natural, and I highlighted that there will be some bumps along the way in that with the new targets already, we're seeing a better fit in the customers we're approaching in Plus. I think the multi-year deals is one sign of that. We've got further to go there, but we're starting to see that. In the process of making that switch, it's natural to see some churn of people who we had had on Plus in the past that maybe were not an ideal fit for it, but they're still happy to be on Thinkific. A lot of that looks like, say, a much smaller customer. If that helps answer your question, or if there's more I can get into, happy to.
No, yeah, that's very helpful. It sounds like the deal mix in the quarter for Plus kind of skewed up-market. Can you just maybe discuss the profile of deal sizes in the quarter? Maybe on a related point, as you're getting into these kind of bigger deals, assuming that there's maybe a bit more competition at the table, are you seeing any competitive response around pricing?
Corinne, I'm sure you can add more to it, but I think I just highlight it was a strong new booking quarter for Plus, strong new ARR on the new additions there. My belief, and Corinne maybe can confirm that we did see higher average revenue per user or higher deal size. On the multi-year deals, that just means the overall commitment to the deal is for a longer number of years. That was strong as well there. Yes, I think that's an early indication of our shift in who we're approaching and who we're reaching out to in terms of the type of customer profile there. Maybe Corinne can add to it. Gavin, I think there was a second part to your question I missed.
First, let me confirm, yes, we did see another increase in our average contract size during the quarter and continue to see really strong close rates and a quick time or kind of between 30-40 days of cycle. It is a good thing to see that we are not giving up on how quickly we can close deals to close higher price deals. I think there is some good story there. I believe the second question was around what kind of competitors are we seeing and is there some competitive pricing pressure? We are seeing a fair bit of competition, and a lot of customers are moving from other platforms to ours. Our release of SCORM, kind of like July of last year, has been helpful in affirming these customers.
It continues to be something that makes it easier for customers to migrate over to Thinkific.
Great. That's it for me. Thanks so much.
Thanks, Gavin.
Thank you. Your next question comes from the line of Stephen Machielen from BMO Capital Markets. Please go ahead.
Hey, thanks for taking my question. I just want to dig into the macro weakness bit. As you're bringing on a different type of customer to the platform, are you seeing any differences in terms of resiliency compared to your previous customer base? Are they more or less sensitive to macro shifts?
I mean, we only just started doing it, so that may be something we see over time. What I've seen before is that, well, the larger customer will have a bigger budget and typically stay longer, make a bigger commitment, and once they're successful, stay for the very long term and continue to expand. The bigger, more corporate customers, if we see a hit to corporate budgets, we can see macro factors of a hit, larger customers, just like you'd see in sort of even enterprise sales, I believe. We do see both sides of it there. I think generally our business has a bit more counter macro factors working for it in that even as things are changing in the economy, there's more people looking for more training, more education, more opportunities career-wise that may even be starting entrepreneurial ventures, training on Thinkific.
We do have factors that go both ways that are both cyclical and countercyclical, but I think a slight shift towards countercyclical is what I see out there. It's harder to say the long term in terms of your specific question of the resilience of the larger customers. I think generally they will be more resilient, but specifically to macro factors, I'm not sure yet.
Okay. Fair enough. Now, with the change in the targeting that you're doing for self-serve customers, are you seeing any differences in terms of commerce adoption for those customers?
Commerce adoption remains high, but Corinne, maybe you can share if we've got a specific current number on new sign-ups and percentage that are adopting commerce. I know typically that's been 80% plus.
You're right, Greg.
Yeah.
Okay. Very good. Finally, just in terms of the, you mentioned that customers are coming from other platforms. Are you seeing a lot of that? Are you seeing any changes in terms of the types of platforms that they're coming from?
Not lately, no. It is the same groups that we have targeted in the past. There is a set that are on the self-serve side and a different set to some extent on the Plus side. There is some overlap there, but I have not seen a big shift in terms of which ones lately. No.
All right. Great. Thanks for taking my questions.
Thanks, Stephen.
Thank you. Your next question comes from the line of Robert Young from Canaccord Genuity. Please go ahead.
Hey, good evening. I was curious. This may be a tough question to answer, but the customers that are moving from Plus back to self-serve, I think you said Thinkific Plus grew 27%. Is there any kind of a normalized growth? If you're to ignore that factor, just looking at net new growth, would you have maintained that 30% sort of growth profile?
Corinne, you might have more accuracy on this. I think if we pulled out everything that moved from Plus to self-serve, yes, we'd be well above that. I don't have that math in front of me right now.
Sure. Is this.
It depends on if you mean add back the revenue or if you mean count the self-serve revenue. Because the thing is when they switch from Plus to self-serve, the revenue does drop because they're going in at a lower price point. There is a revenue loss there. If you want to add that back in as if they never left Plus, then yes, it would definitely be well above. If you just hold the self-serve revenue, it would add some back, but not a huge amount.
I guess my assumption is that that's a temporal thing. It's not something that happens a lot. If that is a one-time or not a normal issue, then what's the underlying growth in Thinkific Plus? That's basically the question I'm trying to ask.
Yeah, actually, so maybe to clarify that a bit more, we do and have always seen some more downgrades from Plus to self-serve than to, say, a competitor, which I see as a good thing because they're saying, "We still like the software. We still like the platform, but we're maybe just not ready or big enough at this price point." I think the other thing too is our own pricing policies hurt us on that front in that we make it too easy to make the switch. There are some adjustments that we're looking at strategically for the future to make it a little more, create more incentive to move up as you're larger and you succeed, which makes it not as attractive to, say, take that step back down. This is kind of a known issue for us. It's not a one-time thing.
We saw more of it this quarter, but it's definitely something that we can fix over time. I would say it's baked into the historical growth rates in Plus. It just hit us a little bit more this quarter.
Okay. That's great color. I'm curious about, you said bookings are very strong, maybe record bookings. In the past, you said the funnel is pretty strong in Plus, particularly for larger customers. Do you think that you can continue to operate above the 30% level just in general, or would you change the expectation for that growth rate?
Yeah, that's certainly the goal. I think we're going to see fluctuations around 30% for the near term. If we saw it at 27%, 28%, 30%, 32%, I think in that range. It's still a small enough number of deals. This is still a fairly small overall business on the Plus side if you look at total volume of revenue. It's hard to predict with perfect accuracy because a couple of deals can move a quarter. Yeah, I think hovering around that range is what we're doing until we make significant improvements on product and pricing. I think there is an opportunity for us to do that. Long run, we want to be there or above. Near term, I think fluctuations within that range are appropriate.
Okay. And then just on the, you said higher win rates and the sales team operating above quota. I am curious about your plans for headcounts in the sales team. Are you expanding there? I think you suggested marketing spend was being reallocated, but some of that reallocation into quota sales.
Corinne, you probably have more specifics on that one.
Sure. We have seen really good performance of the team and have a strong enablement group that really drives a lot of that early performance, which we are really excited about. We do have continued plans to build and grow that team, but are following very typical metrics for when is a healthy time to add. One of the things that we saw this quarter was a strong pipeline. That sets us up well for continuing to add to the size of our sales team, and we are doing just that.
Last question.
Can you add something I want to add about? Robert, if you do not mind, one thing I want to add about that 30% growth for Plus. For us to achieve that, part of our plan is to be able to get a higher penetration rate of our commerce platform into that customer group. We have a fair bit of work to do. A lot of the features that are coming out in the summer are going to have a big impact on how close we can get to 30% or get above that. That is a part of the strategy that is important to note.
Okay. And then last question is just EBITDA margins. I think you've said that you expect EBITDA to remain at or near the current level. Should we be thinking of 5%? I think in the past, you might have guided us to a little lower than that, and then I'll pass you on.
We do see some fluctuations quarter by quarter, but the last four quarters have been really quite consistent with just small increases in overall dollar value. We do want to invest for growth. The key focus for us is staying on the profitable side of the line. I think 5% is reasonable to expect over the next couple of quarters that we're looking at. If we do see opportunities to invest that have a near-term return, we will make that decision, which is why we're not specifically giving guidance on EBITDA.
Okay. Thanks. I'll pass the line.
Thank you. Your next question comes from the line of RichardTse from National Bank Financial. Please go ahead.
Yes. Thank you. Just wonder if you maybe elaborate a bit more on the profile of your ideal customer in Plus. I think you talked about sort of bigger and up market, but if you can kind of dig in, are there common challenges that they're trying to address that you have an edge on relative to the competitors in the market?
Yeah. It's a great question. One of the challenges I think that we're quite strong at is really helping them sell. We've looked at, especially because we've got an inbuilt commerce engine and it's core to everything that we do and works its way through even the learning experience. That's one area where we're quite strong in terms of helping these customers actually generate revenue from their learning programs, which is something that is, when you look at, say, a more conventional LMS that they might compare us to, it's more of a bolt-on or an add-on that, yes, you can sell something sometimes, but it's not built right through the entire system. That's definitely one area where it makes it a lot more attractive. I would say the ease of use, depending on the competitor for us, ease of use can be a huge reason.
It was certainly the reason why we won a number of customers this quarter, as well as some scalability and integration opportunity through our API. There's a lot you can do if someone comes along and says, "Thinkific's got 80-90% of the feature set that I need with our API." You can either build your own on top or integrate into other tools that you need. Those are a few of the things that are setting us apart. There are other things like we talk about SCORM, that's sort of a necessary element to get some of the larger customers. One of the things we become quite strong at is we have a real strength internally within Thinkific, within our data team and within analytics, and our finance team as well. We've applied that strength to building out some pretty amazing analytics for our customers.
We just keep—we've probably mentioned it many times over the last year, but we keep rolling out pretty significant improvements to it. More and more, we're seeing that our customers want to see the data of how their learning is working, what kind of—how it relates to their sales, how it relates to their customers, and us giving them that robust analytics is becoming a big selling point.
Okay. That's super helpful. If I sort of step back and sort of think about these companies or enterprises that are trying to sort of sell their learning programs, how do we size that? Do you have a sense of—I mean, I'm guessing you do in terms of the addressable market there? How many companies out there have those types of programs?
Yeah. We've broken this down a few different ways. It's not the easiest thing to perfectly break out, but we've worked with some external consultants a few times. Our most recent analysis of the market was midway through last year. I believe in this area, we got to about a $30 billion-$35 billion market opportunity in terms of what we could potentially address there. It is significant for us to go after and a lot of opportunity. I think there is continued growth in it in the future, as well as more and more companies—there are still plenty of companies out there that aren't doing anything with learning that could be. There are lots that are doing things with learning that could be selling it.
Okay. Great. And then just the last one for me. I know you do not sort of disclose the customer count anymore, but is there any way you can get a sense or order of magnitude of the number of customers that are on Plus?
Yeah. I mean, on the customer count, we added a little over 600 total this quarter. And the Plus count, Corinne, do you have that?
Yeah.
Or approximately?
Yeah. It's over 700.
Okay. Great. Thank you.
Thank you. Your next question comes from the line of Todd Coup land from CIBC. Please go ahead.
Yeah. Good evening, everyone. A couple of questions for me. With the pivot that you're anticipating in terms of product refresh, etc., can you imagine AI and feature sets helping your customers utilize it? Can that be a driver to actually raise your growth rate if you think if we look out a year or two? If so, just talk a little bit about that.
Yeah. I mean, AI, there are so many use cases and opportunities for us, obviously, within our overall team. I think there is a potential to drive our growth rate just through an efficiency in terms of our team using it, in terms of the pace that we can produce new features and code and functionality, even our ability. We have an amazing sales team that just keeps getting better and better, but there is an opportunity for them to use it more in a way that can help them hit larger and larger numbers and go after and help more customers that way, as well as on our success and support side. I know that is not directly where you were going. The other opportunity for growth certainly is in helping our customers.
The biggest challenge all of our customers face is in building their business, which really means building their content and selling their experiences. There is so much we can do to both save them time by analyzing, moderating, and taking on tasks for them, but also going out and even helping them find new business and new revenue. There is a lot of opportunity that we are looking at there that will save them time to go build their business and also actually just go build their business for them. Because our growth at Thinkific is so closely tied to the success of our customers, we are really focused on investing in AI that helps our customers succeed. If we do that well, then yes, that should in turn drive growth for us as well.
Yeah. But it's fair to say it's still in the exploration phase, isn't it?
Continuous exploration, I would say, is going to be our view of AI for years to come. Right now, we are actively rolling out new functionality and pushing harder and harder on using it as a team.
Okay. My second question had to do with the ARR growth comment. You talked about how you expect it to settle back. I mean, it's more or less been at this level for a few quarters. Were you actually talking about net dollars in terms of additions settling back? What was the point on that, if you could just clarify that? Thanks a lot.
I'll take that one. The comment was around net dollars. At $1.8 million adds of ARR this quarter, that was a higher number than we've had for a while. We do expect to go back to where we've seen the increase over the last year. Kind of like the average over 2024, that's closer to what we're expecting. Some of that's because we know that some of the gains that we had in self-serve were one time. That will take us back to a more normal level. While Plus is going to continue to grow, we've got some other headwinds that are hitting revenue from a GMV perspective, probably balancing those out a little bit.
Right. Okay. So net new rather than percentage growth. I get it. Thanks very much. Appreciate it.
Thank you. Your last question comes from the line of Martin Toner from ATB . Please go ahead.
Thanks very much. Can you talk a little bit about the strength in bookings and how material is it to the overall business? Maybe any comments you can have on the pipeline, given your shift in strategy is going to become, I suspect, a little more pipeline-based.
Corinne, do you have more on the—do you want to jump in on that? I can speak to strategy and pipeline if you want, but I think.
I'll share why I'm speaking that part.
Yeah. Okay. Sorry. The first part, Martin, was around how mature the pipeline and the new bookings growth is.
Yeah. Correct.
Yeah. Look, I think the way that I see this is it's really good to see our team hitting above quota, especially a lot of them are quite new. It's a strong team. As we add to it, they're posting strong results. I think the flow through that we have to see in the flag of the shifts to self-serve is we have to increase the overall net dollar retention or net revenue retention there. We're seeing what we want to see in terms of new ads. What we need to shift next is that overall retention and expansion opportunity. Some of the shifts we're making in the type of customer we're selling to should drive that. The multi-year deals should drive that. I think it's essential and material to the overall success of the business going forward.
For it to really show up in our bottom line, we're going to need to show that retention and expansion over time. The new ideal customer we're focusing on should help, as well as some of the product features. Then, as Corinne highlighted, some of the shifts on more of a focus on commerce there as well should help as well with all of that. Overall, quite material in the future. Right now, we need to bring in those second metrics in order to see the impact on the top and bottom line be more significant and material in the near term.
Super. Corinne, can you maybe give me anything on pipeline, or did that cover the pipeline?
The story is probably the same on both sides. We do have a strong pipeline that we're quite excited about. I think the key focus here is that this market that we're going after that we're quite excited about does look to be able to see some early signs of success. The research that we completed told us there was an opportunity here. The results we're seeing from our team, including the pipeline that we're building, really does validate that. To what Greg said, we've really got to fix or improve our net revenue retention. That's kind of the second step of this. While we're proving out the size of this market, we've got to make sure we're doing the right things to keep the customers and help them find value fast.
Thank you. Last one for me. What were the unusuals that contributed to EBITDA margin that you do not think are repeating or recurring?
We did have a few things happen in the EBITDA that kind of were different from this quarter versus last. One of them was our kickoff expenses. We brought the whole team together to talk through strategy and the plans for the year. We also had some reductions in our sales and marketing costs. On the sales and marketing side, we do expect there to be some noise in terms of some ups and downs quarter by quarter as we're moving on to this new strategy. There's work we're doing around the website that we're excited to see launch shortly, kind of in the summertime frame, as well as Greg had mentioned some work we're doing around pricing and packaging. I think there's moments where we're going to see some ups and downs, which is why we haven't been giving guidance specifically on EBITDA.
However, we are very focused on maintaining positive profits there. It kind of speaks to why there's going to be some ups and some bumps as we go through the year.
Thank you very much. Appreciate it.
Thank you. There are no further questions at this time. I would now hand the call back to Mr. Greg Smith for any closing remarks.
Thank you, Ina. Appreciate it. Thank you, everyone, for attending. To wrap things up, I want to emphasize we rolled out very recently our new strategy and approach. It is a year 2025 very much as a year of transformation for Thinkific. From what we see, it is going well. We are starting to see things move in the right direction. We have seen some acceleration in some of the key metrics that we want to see. We are seeing our activation and onboarding working appropriately. You may hear in me that I am being a little cautious given the uncertain macro environment and making too many big future predictions. We started evolving our team and strategy late last year. Today, we are seeing the first signs that these changes are working. With any significant change like this, we expect to see some bumps along the way.
We have still got some work to do to fully transition to the new strategy. As we put these pieces in place, I expect it to yield much stronger results for both our customers and our shareholders. Thank you.
Thank you. This concludes today's call. Thank you for participating. You may all disconnect.