The third quarter meant increased turnover and improved operating result. The quarter is normally characterized by the summer months, which generally means somewhat lower turnover in the fitness industry as a whole, compared to the first two quarters of the year.
Sales of our digital fitness plans and services through the platform have increased by 44% during the period compared to the previous year. Twiik's recurring revenue from licenses and subscriptions (ARR) increased by 78% year on year and amounted to 4,511 (2,539) KSEK. ARR also grows compared to the previous quarter (4,202).
In total, the company's turnover grew by 50% compared to the same period last year. The rate of increase has thus accelerated compared to the previous quarter (19%).
During the quarter, Twiik has focused on cash flow and partly worked with cost-saving measures and partly increased focus on products and services with greater contribution to cash flow. All in all, the measures mean a clear improvement in operating result, where the loss decreased from -3,421 KSEK for the second quarter to -2,237 KSEK for the third quarter.
Twiik's software platform has continued to evolve. During the quarter, a first version of an app specifically for coaches was developed. The app was launched as a beta after the end of the quarter. Additional improvements for the end consumer have been implemented with a focus on increasing conversions when purchasing exercise plans. The improvements include a reworked overall navigation in the Twiik app, as well as for the customer-specific apps that choose to upgrade. The update will be released in the fourth quarter.
Third quarter in numbers
• Net sales: 2,848 (1,902) KSEK
• Operating result: –2,237 (-2,587) KSEK
• Profit after tax: -1,838 (-2,105) KSEK
• Earnings per share before dilution: -0,13 (-0,31) SEK
• Earnings per share after dilution: – -0,13 (-0,31) SEK
• ARR: 4,511 (2,539) KSEK
The first nine months of the year in numbers
• Net sales: 8,834 (6,874) KSEK
• Operating result: -8,864 (-7,600) KSEK
• Profit after tax: -7,299 (-6,213) KSEK
• Earnings per share before dilution: -0,80 (-1,26) SEK
• Earnings per share after dilution: -0,80 (-1,26) SEK
Significant events during the third quarter
- Twiik launches an app for trainers and gyms who want to coach their clients directly from their mobile phone. The app is initially launched as a closed beta, which means that a limited group of trainers will test the app and give feedback before the public launch.
Comments from CEO Anders Gran
Our important work continues. Our mission is to help more people live their lives to the fullest potential. Our strategy is to put smart digital tools in the hands of the wellness providers who fight for public health every day.
When I read WHO's health report – Global Status Report on Physical Activity 2022, which was released during the month of October, it is clear that our work is becoming increasingly important – but also that the potential is accelerating. Physical activity combined with a healthy diet is the key to reducing a large part of society's costs, but also to increasing the quality of life for people. Health is now a focus of attentionfor entire countries and regions, but also for individual companies and individuals. The market for digital and hybrid fitness products is expected to continue to grow and become an increasingly important part of the everyday life of fitness and health entrepreneurs.
Our role as a platform and ecosystem is central to making fitness and lifestyle changes accessible to a wider audience – and we see that we are making a difference! This is not least noticeable in our numbers and KPIs.
Hundreds of thousands of users use our services. The third quarter is normally a quarter marked by the summer months, and even if seasonal variations are noticeable, during the third quarter of the year we have delivered on important points. We see increased recurring revenue (ARR) where we have increased both compared to the previous year, but also compared to the previous quarter. At the end of the third quarter, our ARR is 4,511 KSEK, an increase of 78% compared to the previous year. This is an important income to create stability in the long term.
We also see a continued increase in turnover overall, where both consumer sales and our SaaS business mainly contribute.
While we are following our growth plan, we have acted on the challenges that the current financial market climate presents. The outcome of the financing round that was carried out during the second quarter meant that we needed to increase our focus on cash flow. We have reviewed costs and the use of consultants and started a change on the business side as well, with an increased focus on the services that deliver the most to the bottom line. The measures are yielding results and we can see with confidence that our operating profit has improved significantly during the quarter.
“Overall, we see that the technical platform is getting stronger, our ability as a team increases and the business grows. Day by day, quarter by quarter.”
Twiik's technical platform and the know-how we have built in the organization around digital and hybrid workouts is a potent combination. During the quarter, we developed several new features and laid the foundation for further important improvements for both creators and consumers. We work closely with both large and small enterprise customers which make our platform stronger and keep it relevant. Several important processes in customer collaborations have come into place, which increases both the speed and quality of our platform development. This in turn enables us to develop the enterprise business and its contribution to the bottom line.
When we close the books for the third quarter, it is with determination and heads held high. We have proven to ourselves that we can combine growth with an improved operating result while we continue to develop the product. One of many reasons to look positively at the future.
Anders Gran, CEO