Good afternoon, my name is John and I will be your conference operator today. I would like to welcome everyone to Thinkific Fourth Quarter and Full Year 2023 Conference Call and Webcast. As a reminder, this conference call is being broadcast live on the internet and recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. I would now like to turn the conference call over to Joo-Hun Kim. Investor Relations, please go ahead. Thank you, and good afternoon, everyone. Welcome to Thinkific's Q4 and Full Year 2023 Results Earnings Call. Joining me today are Greg Smith, Co-Founder and CEO, 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. Additionally, 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 our earnings call. Thank you for joining us. Thinkific is focused on ensuring that our customers succeed, and as they succeed and grow, so do we. That statement has never been more true than it is today. Over the past year, we have made significant investments in the success of our customers and aligning our growth with theirs. We're now seeing the fruits of these investments. On the call today, I will provide highlights and key accomplishments from our Q4 and Full Year 2023 and elaborate on how we believe that will translate into accelerated revenue growth in 2024. After that, Corinne will provide a financial overview of the quarter, the past year, and expand on two important investments we are making to achieve our financial goals in 2024. Thinkific delivered a solid Q4 to end what was truly a milestone year for the company. We had our second consecutive quarter of positive Adjusted EBITDA and cash flow from operations and grew total quarterly revenue 13% year-over-year to $15.6 million, beating the guidance we provided on our last earnings call. The solid results were driven by continued strength in Thinkific Commerce and Thinkific Plus, which saw revenue growth of 96% and 31% respectively. We believe that our overall revenue growth rate has stabilized at current levels, and with targeted incremental investments, we are in a good position to accelerate our growth as we move through 2024. We ended the year with the introduction of a significant number of new products and features to help our customers. One of the most exciting launches was The Leap in October, an AI-powered product that enables our customers with just a few clicks to generate comprehensive drafts for digital products like mini courses, guides, downloads, tutorials, and other digital products, all designed to be consumed quickly on mobile devices and distributed through social channels. Within 30 days of launch, The Leap had over 6,500 active accounts. Active accounts have doubled since then, growing to 13,000 users to date. That includes a well-known public speaker who, in under two hours, was able to produce mini courses that earned her over $8,000. It's extremely exciting to see how much this has accelerated the path to success for our customers. Typically, building out a digital product and monetizing can take weeks or more, so to see this happen in a few hours is a huge step forward due to our AI innovations. Just in time for Black Friday, we added gifting to our commerce solution. Gifting allows someone at checkout to buy additional products for a friend, similar to buying a gift certificate to a course or other digital product. On Black Friday, average transaction sizes that included gifting were approximately 34% higher than normal. In Plus, we launched Learning Paths, a feature that provides a guided learning experience that offers learners a structured path to navigate through course content. At the end of December, we also added a suite of productivity features to Plus. These additions continue to add value to what we believe is already the most compelling next-generation LMS product on the market. In the quarter, Learning Paths was responsible for a significant Plus expansion deal with a state agency in the United States that will now use the new capabilities to unveil a program that looks to use the curated experience Learning Paths offers to improve course completion rates and expedite the learning journey for participants. The achievements of Q4 would not have been possible without the hard work we have been engaged in for the past 18 months. In 2023, we completed our restructuring plans, which allowed us to achieve our cost efficiency and productivity targets ahead of schedule, while continuing to grow the top line in double digits. Revenue grew 15% to $59.1 million from $51.5 million in 2022. Our Adjusted EBITDA for the year was a $-3 million, a $23 million improvement versus the prior year. In 2023, Thinkific released more new and innovative products and features than in any time in history. I couldn't be more proud of our dedicated team who rallied to make this happen. The Thinkific platform has never been easier for our customers to start and scale a business and create and sell digital products, and we're seeing evidence of the success of this in key performance metrics across the business. In August of 2023, we launched an automated sales tax solution and began offering multiple payment options, including Buy Now, Pay Later. These products have been instrumental in raising our payments take rate from an average of 3.6% to an average of almost 3.9% in 2023, the final two quarters benefiting from these features driving the end-of-year take rate to 4.2%, as well as helping to improve gross margins. More importantly, these features are making it easier for our customers to both sell more and manage their businesses more easily, automating the pain and complexity of sales tax and making it easier to sell larger ticket items with Buy Now, Pay Later. We also became SOC 2 security compliant early in the year, which, along with our upgraded analytics, has paved the way for strong growth in Plus in 2023. With these continued improvements, we were able to sign an innovative financial services marketing company as a new Plus customer in 2023. This company uses Thinkific to provide courses to its network of financial advisors. Beyond our ease of use, rapid deployment timeline, and commercial capabilities, it was our simple and seamless single sign-on or SSO capability that was cited as a key reason for signing with Thinkific. Armed with our upgraded analytics package, one of our larger Plus customers now no longer has to manually export data to monitor its students. With the innovations included in the upgraded analytics package, they can now automatically track individual students and are no longer burdened with this old clunky workaround. As a result, they can now focus on student success more easily, identifying roadblocks at the quiz level and offering targeted support. We continue to improve our analytics package, adding a ton of value to our larger customers across the board. We also signed a SaaS company that automated management of contractor spend. Despite their complex training requirements, they were able to use Thinkific's easy-to-start capabilities and launch within 16 days, leveraging our onboarding tools and launch specialist support. This ability for Thinkific Plus customers to implement our solution so rapidly has been a big win in our sales process. They are often surprised that the time to value is many months faster than they had budgeted for. Our upgraded analytics package was a key differentiator for the new customer, which is now looking to also leverage our SSO. These are just a few of the customer wins that would not have been possible without the achievements of our product teams in 2023. Their work is paving the way for success in 2024. We also just held our company kickoff in January and came away excited about continuing to drive customer success in 2024. A number of customers attended our kickoff to share their journeys, wins, and challenges with us. We listened to how they achieve success through Thinkific, as well as their suggestions on what we can do to help them grow even further. The team is energized and looking to apply these learnings to help all our customers achieve greater success this year. Thinkific will continue to focus on profitable growth in 2024. That said, we believe that given the nascent nature of our market and the large opportunity we see ahead of us, we will prioritize growth over expanding our Adjusted EBITDA margin and begin making targeted investments into the business to accelerate top-line growth. This will be done in a thoughtful manner, and incremental spend will depend on us achieving key milestones. We intend to invest in those areas that have already achieved solid ROI. We will double down on AI, which has already provided demonstrable results in The Leap with respect to activations and marketable products, and thoughtfully incorporate the power of AI throughout the entire platform. During 2023, we built our own AI service layer into the Thinkific platform. This serves to make the deployment of AI-related features throughout Thinkific easier and faster to build. With this in place, we'll see further AI innovation accelerate for Thinkific in 2024. There are many use cases where we can leverage AI to improve our customers' productivity. I plan to share more details on these in the coming earnings calls. AI and machine learning present a unique opportunity for Thinkific to accelerate the success of our customers by making many of the tasks they take on when starting and building a business easier and more impactful. We have our own view on the ethics and principles that guide our use of AI. One of these principles is respect for the unique genius of each customer. What this means to us is that each customer of Thinkific brings a unique brand and perspective on the topics they teach. This makes their learning products unique. We will always use AI to augment the expression of creators' unique genius, to bring it out but not replace it. We believe that operating with this and other core principles in mind will set us apart in our use of AI and ensure that we use it intelligently, responsibly, and for maximum impact. Another area of focus will be on partnerships and collaborations. One of the biggest requests we get from customers is help to grow their subscriber base once they've set up their course. Beyond the already significant and improving analytics, in order to help supercharge their efforts, we're looking to partnerships and collaborations within industry thought leaders, as well as larger brands and companies. One such collaboration is with Jon Youshaei, a renowned and respected educator with almost a decade of experience working with top creators inside YouTube and Instagram. Jon's Insider Accelerator is designed to propel aspiring and established creators going beyond the basics and instead offering a masterclass in content creation, covering everything from finding better content ideas to mastering social storytelling, on-camera confidence, frictionless filming, and beyond. Before I pass the call to Corinne, I want to thank the entire Thinkific team. Without their tireless efforts and passion in pursuing our goals and priorities and supporting our customers, these results would not be possible. Now over to you, Corinne. Thanks, Greg. Good afternoon, everyone. I'm pleased with our fourth quarter results and how we finished the back half of 2023. Our commitment to a strategy of profitable growth resulted in our second quarter of positive Adjusted EBITDA and cash flow from operations while still maintaining double-digit revenue growth. We have now comfortably returned to profitability and are focusing on the large opportunity ahead of us to reinvest our positive cash flow from operations back into the growth of our business. I'll start with going over the financial results for Q4 and full year 2023, and after, I'll discuss in more detail how Thinkific plans to take advantage of our strong financial position to make targeted investments in our most promising revenue segments like Thinkific Commerce, Thinkific Plus, Self-Serve, and The Leap that we believe will result in an acceleration of customer growth in the future. Q4 came in at $15.6 million, up 13% year-over-year and $300,000 ahead of the midpoint of guidance. The strong performance was driven by a combination of higher-than-expected commerce revenue, which benefited from higher take rates, and continued strength in our Plus business that helped improve our ARPU, or average revenue per user, which grew to $150 per month, up 9% from the prior year. Subscription revenue of $13.8 million was up 7% year-over-year, and ARR grew to $55.3 million, also up 7% from the prior year. Subscription and ARR benefited from the continued growth in our customer base, which rose to 34,800, up 4% year-over-year, and the strength in our Plus business, whose monthly ARPU is significantly higher at around $2,000 per month. Thinkific Commerce is designed to help customers sell more, and it's succeeding in doing just that. The exceptional growth we're seeing in Thinkific Commerce is tied directly to the success it's delivering for our customers. Commerce revenue of $1.8 million was up 96% year-over-year. The growth we saw in commerce revenue resulted from a combination of higher take rates, which is the percent of revenue we earn directly from GPV, and an increase in penetration, which we measured to the penetration rate of GPV to GMV. Take rates improved to 4.2% from the prior quarter's 4% and the prior year's blended average of 3.6%. We saw solid adoption of our sales tax solution and good usage of our alternative payment methods such as Buy Now, Pay Later, which were introduced late in Q3. GPV, or gross payments volume, the value of the commercial transaction that take place in our platform, grew to $39 million, up 70% year-over-year and 11% from the $35 million in the prior quarter. The increase in GPV reflects an increase in the total commercial transaction values on our platform, as shown by our growing GMV, which grew 9% to $115 million and a continued increase in our penetration rate at 34%, versus the 22% in the prior year and 32% in the prior quarter. In the geographies where it is generally available, over 80% of new customers choose Thinkific Commerce platform. Now on to revenue by customer group. Our Self-Serve segment, whose customers are primarily entrepreneurs and creators, saw revenue grow to $12.2 million, up 9% from the prior quarter, which is slightly better than the 8% growth we saw in the prior quarter. Thinkific Plus, whose customers are usually midsize businesses requiring more robust enterprise-class features and support, saw revenue grow 31% to $3.4 million, the growth rate accelerated from the 38% in the prior quarter, which benefited from an easier comparison point. We continue to see improving Net Dollar Retention metrics around Plus and are continuing to find greater efficiency opportunities. We are seeing healthy lead generation activities and improved sales cycles. New ARR continues to grow on an absolute dollar basis, giving us confidence that Plus growth rates will stabilize near this mark and start to accelerate through 2024 as we invest and go to market. Moving on to our P&L. Gross margin came in at 75%, down from 78% in the prior year and 77% in the prior quarter. The decline in total gross margin from the prior year and prior quarter is a function of mix and one-time costs. Subscription gross margin was 80% and is reasonably consistent, while Thinkific Commerce gross margin improved to 37% from 26% in the prior year and 33% in the prior quarter. Commerce gross margin improved as there is a more favorable mix of high-margin commerce features like our sales tax solution and alternate payment methods. Commerce gross margin has further room to expand as adoption of existing and new features increases. Going forward, we expect total gross margin to be impacted by the mix as we are expecting strong growth in Thinkific Commerce, which will grow as a percentage of total revenue. It's worth noting that because commerce revenue doesn't require incremental customer acquisition cost, we believe the EBITDA contribution to be similar to subscription revenue. Looking at operating expenses. Now that we have finished our cost reduction phase, we will remain disciplined and focus on efficiency, operational leverage, and focused execution. Total OpEx of $12.8 million was down 20% from the prior year and roughly flat to the prior quarter and reflects cost efficiencies and our commitment to profitability. Sales and marketing expense of $4.9 million was down 20% from the $6.1 million in the prior year and flat on a sequential basis. Research and development costs were down 9% to $4.8 million but increased $300,000 from Q3 due to one-time charges, including travel expenses. General and administrative costs decreased 22% and 4% to $3.2 million on a year-over-year and sequential basis, respectively. Adjusted EBITDA was $550,000, up almost $5 million from the prior year and down slightly, or $180,000, from the prior quarter. This decrease from the prior quarter is a result of one-time costs discussed earlier. Turning now to the balance sheet. Cash and cash equivalents balance at December 31st was $87 million, flat from the prior quarter. Cash flow from operations of $1 million was offset by an almost equivalent outflow of cash from our NCIB, or share buyback program, and seasonal changes in working capital. For full year 2023, revenue of $59.1 million was up 15% compared to the $51.5 million in the prior year. The increase in revenue is a result of solid ARPU growth, which resulted from increases in commerce revenue, on top of the monthly subscription and strong growth in Plus, which has subscription prices that are significantly higher than Self-Serve. GPV grew 100% to $134 million, while GMV grew 9% to $445 million. Average GPV penetration for 2023 was 30% of GMV versus 16% in 2022. Commerce revenue increased 92% to $5.8 million, while subscription revenue grew 10% to $53.3 million. Self-Serve revenue growth of 10% took us to $46.8 million, while Plus grew 36%, taking us to $12.2 million. Gross margin decreased slightly to 75% from 76% in the prior year due to the mixed shift dynamics of subscription and commerce revenue discussed earlier. Subscription gross margin remained strong at 80%, while commerce revenue decreased slightly from 36% to 35%. Net loss for the full year of 2023 was $9.8 million versus a loss of $36.4 million in 2022. In 2023, Adjusted EBITDA was a loss of $3 million, which improved by $23.4 million, which was a loss of $26.4 million in the prior year. Before turning to guidance, I want to spend some time expanding on the two near-term opportunities that are driving our optimism for 2024: commerce and Plus. Our commerce solution is a combination of our best-selling tools like order bumps, gifting, group selling, and much more, all backed by our Thinkific Payments tool and includes administration tools that help customers manage their business, like our sales tax solution and advanced analytics and dashboards. This solution is built on Stripe, and in working with them, we have a strong product roadmap ahead to help customers sell more. We see two growth levers driving commerce revenue. First is our penetration rate. In Q4, our penetration rate was 34%, which is solid progress for a product that was released just less than two years ago and ahead of our 30% initial goal. At 34%, we believe there is a lot of room for further growth as current cohorts have a 75% penetration, which grows to actually over 80% in those geographies where Thinkific Commerce is generally available. We believe we can increase GPV by continuing to grow our penetration of GMV, and in January, we began a project focused solely on encouraging existing customers to move over to Thinkific Payments. The driving force behind our Penetration Rate is the value our customers see in Thinkific Commerce. The more we help them grow their sales and manage their finances, the more likely they are to adopt this solution. The reception of our customers to the benefits of Thinkific Commerce continues to be exceptional as we drive growth in their business and save them time. For this reason, we are confident that we'll be able to see continued growth in commerce for the foreseeable future. Additionally, as we create more value for our customers, the Take Rate opportunity increases for Thinkific. As you have seen this quarter, we are having good success in improving our take rates as we add new value-added features like our sales tax solution and alternative payment methods, which have helped us increase our take rates from 3.6 in 2022 to 4.2 that we had exiting 2023. Our product group has the resources to execute on its product roadmap, and we believe we can see take rates improve to 5% in the near term. The impacts of success in these two initiatives will see our commerce revenue more than double in the future. Thinkific Commerce truly is the mechanism with which we unite Thinkific success with that of our customers. Next is Plus. We are seeing predictable success in Thinkific Plus, as demonstrated by our high growth rate. Unlike Self-Serve, Plus is a sales-driven business serving business customers. At present, the opportunities at the top of our sales funnel are significant, and we've only just recently started investing directly in marketing to our ideal customer persona. Given our strong LTV to CAC in Plus, we are confident that incremental investments and go-to-market will result in strong returns, and we plan on increasing headcount to advance this effort. As a result, we are excited at the prospect of being able to maintain Plus at current growth rates and perhaps accelerate them, though we expect a lag to the investment as the new marketing takes effect and our sales force ramps. We are also excited about our product roadmap for our business customers as we continue to build a differentiated product in the market focused on a strong time-to-value and features that help meet our customers' business goals. Now on to guidance. For the first quarter of 2024, the company expects revenue of $15.8 million-$16 million. We will continue to invest in the business to accelerate top-line growth. However, we are committed to maintaining positive Adjusted EBITDA. To wrap up, 2023 was a milestone year for us, and we look forward to the next phase of continued profitable growth both for ourselves and for our customers. This is an exciting time at Thinkific, and we are just getting started. We can now begin Q&A. Thank you. Ladies and gentlemen, we will now conduct a question-and-answer session. If you have a question, please press star followed by the number one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. If you would like to cancel your request, please press star two. Your first question comes from the line of Gavin Fairweather. Your line is now open from Cormark. Hey, good afternoon. Thanks for taking my questions. Lots of talk about reaccelerating revenue growth. Can you just discuss to what extent you think that applies to Self-Serve? I think you mentioned in the prepared remarks that it did. And do you think that's going to be driven by a better macro or improved execution or maybe some more investment? Thanks, Gavin. Yeah, the intent really is to accelerate across the board. And so, on the macro front, well, I'd say that no, not so much a macro factor, although we're seeing good signs there, but more so that the work we're doing in each of the different areas. So, combination of opportunity and growth, which at its or sorry, in Plus, where its current growth rate will pull up our average growth rate. Opportunity in commerce to even accelerate the already quite significant growth rate there and to continue to put more there. And the beautiful thing is the commerce side also drives the success for our customers. And one of the reasons we're most excited about it is we see that it's actually helping our customers succeed and earn more and sell more, and so wanting to continue to invest there. And then also growth in Self-Serve. So really, it's across the three levers that we have to pull there. And then on the macro side, what we're seeing in GMV and customers continuing to sell well and grow there, I think, is an encouraging factor of sort of continued and resurging growth there in overall sales from our customers. That's great. And maybe relatedly, I mean, Leap, nice to see the user base basically double there since November. I know it's kind of early days, but is your view on that being kind of a funnel for potential new customer adds into the Self-Serve business change? Yeah, I think we're excited about it. You're right. It's still relatively early, but excited about it in a number of ways, one of which is just simply that it does allow us to reach more customers. It's reaching a slightly different type of customer here of social first, right? So, these are people who it's a very large and fast-growing market, and it's allowing to tap into that in a way that we haven't been able to in the past. It's an easier place to get started, solves one of the biggest problems our customers face of really, how do I get started and launched and earn that first dollar? And then lots of monetization options in the future, including, as you mentioned, potentially an upgrade path to Thinkific. So see it as a mid- to long-term, real significant future growth opportunity, but with a number of different growth drivers built into it. That's great. And then just some Plus and the new investments. So is it fair to read through your comments that this is kind of building up more of an outbound, well, marketing plus an outbound motion? And maybe just kind of walk us through your thoughts around building up the team and investment there. Sure. I'm happy to take that one. We have seen strong growth in Plus, and this quarter, ending at 30% growth rate kind of gives us a stable rate from which to grow in the future. We are seeing the opportunity for us to be able to add to our team and our go-to-market activities because we're seeing a lot of demand in the market, and we are a little bit capacity-constrained at this point. And so that drives opportunity. But like I said in the prepared remarks, there may be a lag between the investment before we get the return on the top-line revenue growth. Yeah. What kind of sales cycles do you see there for reference? Well, that should seem quite a significant improvement. For quite a while, they've been below 30 days in terms of cycle time. And so happy with that. We know that there are sometimes when the cycle time may increase as we move up from a dollar-price complexity perspective, but really happy being below 30 days right now. Okay. I'll pass on. Thank you. Thank you, Gavin. Thanks. Your next question comes from the line of Thanos Moschopoulos from BMO Capital Markets. Your line is now open. Hi. Good afternoon. So with respect to the Plus business, is it the case that a growing proportion of new Plus customers are coming straight to Plus rather than starting off on the lower-price plans and then upgrading? We are seeing a good amount of customers coming in for the first time. We have about 30% or a third of our customers on Plus coming through the Thinkific Self-Serve as a starting place. And we do see a lot of room to continue to grow in this market. It tends to be quite an open field for us in terms of where we're at from a price point. One of the reasons we win in the market is just ease of use and our focus on customers doing this for the first time. So that's a big part of where we're seeing new customers come in. Great. And then to what extent are customers who aren't necessarily monetizing courses and using your platform as more of just an LMS, to what extent is that becoming a meaningful chunk of the Plus business? That's an area we do see more customers really focus on customer education where they're selling education or sorry, they're including education along with another product. Oftentimes, they will start there and then add it as a monetizing opportunity for them in the future. And so, there's a bit of an expansion opportunity there. I don't have any metrics to share, but the majority of customers today continue to sell their products on the platform, but it's definitely a mix. We do have more growth coming from the customer education side, which tends to monetize less, but it'll depend that mix between those that are revenue-generating and those that are just focused on giving it away along with another product. Okay. And maybe one last one for me. Greg, when you alluded to improvement in macro, are you basing that primarily off of just the GMV trends you're seeing amongst customer cohorts? And also, what about churn? Is Is that been tracking steady or anything to call out there? On the retention side, sorry? Yeah, on the retention side. Well, I guess two aspects to my question. I guess first aspect being what specific metrics you're looking at to drive macro optimism, and then secondly, churn, whether that's been tracking steady. Yeah. So biggest one for us would probably be that I guess it's not macro, macro, whole world, but more just within our market, what we're seeing on the GMV front is positive there. And we also do look at your retention and slight but consistent steady improvements there. So that's good as well, and that's over multiple quarters. And then finally, just to give a little bit of color within that GMV, seeing some good growth within lots of industries, but in particular within health and fitness and career development, which tend to be healthy, solid industries for us. So those have been good as well. Great. I'll pass the line. Thanks. Thank you. Your next question comes from the line of Martin Toner from ATB Capital Markets. Your line is now open. Thanks so much for taking my call. Can you talk a little more about some of these Plus customers that are a little bit larger? Is there going to be a less of a are you going to make attempts to reach them via a direct sales force of sorts? And can you walk us through just plans there and thoughts on returns relative to your traditional go-to-market approach? Hi, Martin. The opportunity with Plus is different from Self-Serve in that it is fully a sales-driven process. And so, the sales team that we have is actually solely focused on our Plus business. As you know, that's a different structure where we bring in leads oftentimes from the same channels that we use for Self-Serve, but they're funneled towards a salesperson to help them understand the product and make sure we're able to best meet their needs with the price point that we're offering them. The opportunity there tends to be with customers that are looking for a more traditional LMS; the places where we tend to win is those that are doing it for the first time based on our fast deployment. We usually win deals for those that are generating revenue because we have a fully built-in commerce platform. Most LMSs don't have this feature, or they have it more like icing where we're fully baked into commerce, and that really differentiates us in the market. Some of the customer opportunities that we're seeing are kind of in that 25-300 employee range. It's SMB, and they are looking for a quick start time. So that's probably the main thing that differentiates us from others in the market. Yeah. I mean, that sounds like a wonderful value proposition, helps bring new customers in the door. Just wondered how you guys think philosophically about getting paid for that speed element. So, I'm not quite sure we might be getting paid for that speed element, but our price points are a significantly higher price ahead of where Self-Serve is. It's an average price point of about $2,000. And so that subscription price kind of takes care of the fact that we help customers launch, and we have a launch team that works alongside the customer to get them up and running as quickly as possible. So I think the subscription price is kind of where we see that. Is that what you were getting at? Well, yeah. I mean, a customer's alternative could involve significant expenditures in professional services, for example, and the ability to deploy the solution feels like it has value. Just wondered if there was any thoughts on how to monetize or charge for it or how to monetize, and just if it was any different than just the general strategy for monetizing Plus customers increasingly over time. One of the things that we have done recently is included a few additional features that would be around that professional services arena. So, at a higher price point, you're able to get a significantly higher level of service from our customer success team as well as much more customized analytics. There are things like that that are included at a higher price point, not professional services in terms of time and materials billing, but more in terms of a level of service and customization that you wouldn't expect at lower price points. That's great. Thanks. Over what time period do you expect to take the average take rate up of your commercial revenue? We have been looking at some pretty significant growth in take rate on payments over the last year. We were about 3.6 over the 2022 year and now exiting at 4.2. We would love to see this increasing to around 5% over the long term. Really, that's all around providing features that allow our customers to sell more and really have success on the platform. And so we have a great partner in Stripe, and so rolling out along with them of their product roadmap, features which allow customers to just earn more, and we're able to share in their success is really key for that. And so love to see us get to 5% over the midterm. And then we do think over the long term, there's even more opportunity. But on that case, we'd probably be looking at things that help them sell their product in different distribution channels. And so looking at what's available from a partnering perspective there to get past 5% into those higher rates. One thing I just. I appreciate it. Is Is it interesting? Thank you very much. I just add one thing on that that I think would be helpful to understand when we talk about the rising take rate. From a pure payment processing perspective for our customers, we're still highly competitive at the typically 2.9%. It's really as they add on a lot of these features we've been talking about that either save them a bunch of time, move money around for them, or actually increase their conversion rates or transaction sizes where we're introducing the option of adding something on that comes at a small percentage take rate. That's really what's driving a lot of the take rate there. So from a pricing of payment processing, we're still very competitive in the market. Thanks so much, Greg. Thanks. Your next question comes from the line of Richard Tse from National Bank. Your line is now open. Hi. Yes. It's James sitting in for Richard tonight. Good job on the results there. But I'm just wondering, beyond payments, could you just give us a sense of what you expect the next big growth drivers will be? Yeah. So, we look at it never just as one growth driver. We have a number in the bag, and so I can highlight a few. I like to look at our strategy as having near-term, definitive low-risk, high-confidence drivers, midterm, and then longer-term, bigger opportunities to really accelerate future growth. And so, starting at the near term, commerce is definitely a significant near-term driver, high confidence. Over the next 18-24 months, we can drive significant revenue growth there. And I think, as you've said, we've talked lots on that. And then near and midterm, obviously, Plus is a significant growth opportunity for us. And holding at those levels and even accelerating them, I think, continues to drive growth for us. And then finally, in the longer term, when we look at both opportunities like The Leap, a lot of what we're doing on AI and a lot of the unlock we can create there in overall self-serve growth, that unlocks a longer-term significant growth driver as well. So those are a few of the sort of the way I look at it strategically of short, mid, and long-term growth drivers. But we've got definitely a number of things in each one of those buckets. Okay. Great. Thanks. And just one more for me. I was just wondering, could you just give us a sense of what the ARPU looks like for Plus customers versus the non-Plus customers and maybe kind of what your mix is within the existing base today? Sure. I'll take that one. So, we have seen our ARPU increase to $250 a month at year-end here. I want to make sure that, first off, this isn't because we're increasing our prices, but really being driven by two key features, the first being the addition of commerce and really customers finding success on commerce. And as they're able to grow their business, that obviously pushes more transactions through our payment processor. Like Greg mentioned, it's the same pricing that they would get on Stripe, but we're able to increase our ARPU with that. The second one being new customers joining Plus. And so that's a significant driver. The ARPU on Plus is around $2,000 a month. And so, if you take a look at what is sitting on Self-Serve, it's on average about $99 a month, but then you add the commerce piece on, and you're well over $100. And so that gives you a sense of the breakdown between the two. We do think there's significant opportunity both to continue to attach commerce with our customers, but also to have more customers joining on Plus, which will just continue to drive up that ARPU. There is an opportunity for us to also get pricing, and we're constantly looking at what are the opportunities there. That may be something further out that we would be looking at to drive ARPU, but right now, it's really growth of commerce and Plus. Okay. That's great. Thanks. I'll pass the line. Your next question comes from the line of Daniel Chan from TD Cowen. Your line is now open. Hi. Good afternoon. The payments penetration, so GPV as a percentage of GMV, I think that growth has continued to decelerate from quarter to quarter over the last few quarters. Is there anything to call out there? I know you guys are putting in a program that you say you started in January. Just what are the next biggest opportunities that you're trying to target? Yeah. The opportunity to increase penetration is really exciting for us. We have seen good penetration, particularly in current or in new customers, and that's what's taken us to our initial target of 30% and then growing past that to 34% penetration at the end of the year. We think we can actually double that over the next 18-24 months. And why that's possible is we see both what's happening with current cohorts coming in over 75%. That gives us a good proof point that we can grow beyond that. But we're also putting on a specific project to be able to help customers sell more using Thinkific Payments. It's really all about how do we help customers find success. Our passion for that really means we want to have them on the commerce platform. We know they can just earn more and have higher transaction values. Thanks. Then, Corinne, when you talk about targeting positive EBITDA, but you also have these investments going on to drive more growth, do you have a target margin that you're thinking of? So right now, we're focused on really driving that top-line growth. While we don't see our OpEx growing significantly, it's definitely going to grow at a percentage that's lower than our revenue growth. We have, in the near term, kind of happy sitting right around break-even. But if we look out a few quarters, once we have more scale in the top line, we'd love to see our growth rates on the sorry, we'd love to see our margin, EBITDA margin, be kind of around that 15%-20%. That's not going to happen in the near and midterm. We really need to get scale in the top line first. But that's where we see the business going long term. Great. Thank you. Your next question comes from the line of Robert Young from Canaccord Genuity. Your line is now open. Hi. Maybe I'll just continue on that thread from Dan. Just a couple of comments on the call so far. Just I wanted to clarify. I think you said you're going to put a priority on growth over profitability, but you're targeting profitable growth. So, is there some targeted spend that might take you on a quarterly basis to negative EBITDA? Would you be looking at those selectively, or is it really the expectation here going forward is that every quarter is going to have positive EBITDA? We have lots of flexibility here because of our strong cash balance. But the focus today is to focus on maintaining profitability while driving growth. And we believe we've got a plan that allows us to do just that. If an opportunity came up in the future, we're not going to turn away growth because we want to preserve unreasonable profitability. But that's not our plan right now. And we actually can see a path to significant growth in the top line while maintaining a profitable bottom line. Okay. Thank you. And then you had a comment about the pipeline around Plus. If you could maybe give a little more color around that. I think you suggested that the top of funnel is very strong. And so what is it that you need to do to move people through the funnel? Is it the SOC 2 certification that you just got that'll move people through, or is it something to do with the payments? Maybe just give a sense of what it is that if there is a bottleneck or something that could accelerate the pipeline for Plus. Yeah. Great question. There's probably a few things that we're excited to be able to invest in. One specifically is really being known in this space. And so today, we're highly known as a place for creators to be able to monetize their content and a great way for them to become an entrepreneur and build a business. The opportunity for people to know us is also a place for larger businesses to be able to both sell education or be able to educate customers, is newer. And so we need to invest in more branding around that. I think awareness is a key part of that. Most of the funnel that comes in today is overflow from self-serve. And it's customers that are coming in through our self-serve funnel that are larger employee count, bigger businesses, more complex use cases, which are finding their way to a sales team. The opportunity really is to go beyond what's coming in through self-serve and bring in some of our own leads on the Plus side specifically. And so that's probably the big opportunity. However, we do have a healthy funnel of leads. And so one of the constraints we have is just making sure we've got a sales team that's ramped and ready to help customers move through the process. Okay. Is it fair to say that the vast majority of Plus is unaided lead gen? Are they finding you organically, or is there any outreach at all? There is outreach for sure. We've recently put some investment into different sites to do comparisons, G2, Capterra, those types of places. And so, we're starting to build out the branding around the Plus opportunity, but it's newer. So, lots of it is overflow from self-serve, like you said. Okay. Okay. Thanks a lot for taking the questions. Your next question comes from the line of Todd Coupland from CIBC. Your line is now open. Good evening. I wanted to ask you about Plus a little bit, competitive landscape, questions along those lines. In that sizing of the market where you've been winning 25-300 employees, what do you think your win rate is in that segment of the market? That's a good question, Todd. I'm not really sure. I think most often, we're going at a customer that's doing this for the first time, often competitive, but not always an overly competitive bid. And so, it just tells us there's a lot of room in this space because we're not really fighting with other customers to move customers from one platform to another. I think that the opportunity that we see with others in this market having quite significant success really speaks to the opportunity it provides for us to be able to grow. And our price point is competitive. And so, I think there's an opportunity there for us to continue to expand. When we look at others, in many places, we're half of their price point. There's lots of opportunity for us to continue to move up market. Okay. And then second question is on the LMS opportunity. I know most of the business is coming from revenue generation, from the content creation. But what should the expectation be on the LMS side, let's say, in 2024? Today, we're kind of stabilized around a 30% growth rate, and we're quite happy there. We are making some investments like we've been talking about in go-to-market and then a few product differentiating features that we're excited to come out later in the year. And so that will help us grow beyond that but feel quite comfortable with a stabilizing rate around 30% and the opportunity for us to go in and get that to grow faster. Great. That's all for me. Thanks a lot. There are no further questions at this time. I will now hand the call over to Greg Smith for final comments. Thank you. I just wanted to take a moment here. Thank you, everyone, for coming to our call. Really appreciate all of your questions. I wanted to personally thank, on behalf of myself, Corinne, and the whole team, Steve Krenzer, a member of our board of directors who joined us as president for the last 18 months on his contract with us. Steve played a pivotal and significant role in enhancing our operational excellence. He helped instill a greater execution focus across the organization. He's going to continue to advise, coach, and add value to Thinkific from his role on our board. So thank you, Steve. Really appreciate all that you have put in so far and continue to. Building on what we've delivered in 2023, the stage has really been set for us for 2024, a year where we will move from cutting costs to incremental investing in those areas of the business that we have already seen significant momentum and focus on increasing customer growth by leveraging AI and expanding our partnership ecosystem. I'm confident in Thinkific's position and opportunities for growth, and I'm excited to seize the opportunity to accelerate our top-line growth while maintaining our commitment to remain profitable. Thank you, everyone. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.