Twiik continues its transition towards positive cash flow.
While revenue remains at the same level as the previous year for this quarter, in total year-to-date revenue has increased by 11%. The slightly lower growth rate is largely attributable to Twiik's increased focus on products with higher margins over top line revenue growth.
Usage of the platform continues to grow. Average monthly active users have increased by 4% annually.
Twiik's recurring revenue from licenses and subscriptions (ARR) increased by 4% compared to the previous year, totaling 4,687 (4,511) KSEK.
Revenue from digital training plans and services for consumers through the platform increased by 3% during the quarter compared to the same period last year.
Sales of Twiik's digital corporate challenge, TeamBoost, for the quarter were 2% lower than the same quarter last year. This is due to the postponement of some recurring larger corporate challenges to the fourth quarter. Overall, growth remains at 7% for the first three quarters compared to the same period in 2022.
Quarterly Financial Highlights
- Net Revenue: 2,878 (2,848) KSEK
- Operating Income: -1,871 (-2,237) KSEK
- Net Income: -2,079 (-1,838) KSEK
- Earnings per Share (Diluted): -0.07 (-0.13) SEK
Financial Highlights for the First Nine Months of the Year
- Net Revenue: 9,845 (8,834) KSEK
- Operating Income: -7,105 (-8,864) KSEK
- Net Income: -7,525 (-7,299) KSEK
- Earnings per Share (Diluted): -0.26 (-0.80) SEK
Key Events During the Third Quarter
- Twiik signed an agreement with Stadium Group AB, Sweden's largest sports and sportswear chain, allowing all of its over 3,500 employees access to Twiik Premium, digital training content, and the training community via Twiik's app for two years.
- Twiik launched Twiik Premium, a subscription providing access to hundreds of digital training sessions and ready-made training plans. This subscription, offering various types of training from high-intensity circuit workouts to yoga and running, targets both consumers and businesses.
- Twiik entered into an agreement with Eleiko AB, a supplier of training equipment and complete gyms, to utilize Twiik's digital training platform as part of their offering to corporate clients and explore collaborations with consumers.
- In July, the company secured loans totaling approximately 2.8 MSEK from members of its board and management. The loan terms are market-based, with a maturity date of July 15, 2024, and the company has the option to repay the loans with interest ahead of schedule.
The third quarter involved continued efforts to clarify and scale up the parts of the business that generate the best short- and long-term potential. Implementation of our three business areas – Gyms & Trainers, Workplace, and Originals – has commenced.
The increased focus on products with higher margins means that our revenue is expected to consist less of trainer sales to consumers and more of license and project revenues, as well as sales of our own digital fitness products. This is reflected in the marginal increase in total revenue for the quarter in combination withimproving results. Over the year, we have reduced our operating loss by 20%.
Our investments in developing our own products is expected to drive growth in both revenue and results over time. We are currently testing our metabolic health product 100 Days on a small commercial scale and are seeing positive participant results, as well as a willingness to pay, which strengthens our position for a broader launch.
In the last quarter, we launched our own digital fitness subscription, Twiik Premium. This project, which we have been working on for some time, opens up many new business opportunities for us. The product is aimed at both individual consumers and businesses looking to offer digital wellness options to their employees. Interest from businesses is high, and in most corporate challenges sold, customers choose to include Twiik Premium content for their employees.
During the third quarter, we focused on activating existing resellers of corporate challenges and attracted new ones. This work is expected to yield results in the first quarter of 2024, as corporate challenge sales are highly seasonal. By combining TeamBoost with Premium, we see new possible product packages that rely heavily on existing technology and introduce a SaaS model for our corporate clients, ultimately reducing seasonal variations in this segment.
I am proud to see how our Gym & Trainers product area has become well-established in the Swedish market, with recurring revenues continuing to grow. This product area generates positive cash flow and offers opportunities for growth through new customers and expanded business with our existing customer base.
We continue to feel the effects of the current market conditions, with larger development project tenders taking longer to finalize. However, we do not see any decrease in interest in our product. We anticipate that most of the projects we expected in the third quarter will instead occur in the fourth quarter or the first quarter of 2024.
Our internal projects for a major update of Twiik's coaching system have also made significant progress during the third quarter, and we are now ready to roll out parts of it in the fourth quarter. This much-awaited update will be a significant enhancement for the entire platform for Gyms and Trainers.
In summary, the third quarter has been a period of preparation for growth in many ways. We have restructured and refined internal processes while launching new scalable services that can now start contributing to our business. I would like to thank my colleagues for their hard work and Twiik's shareholders for their continued trust. Step by step, we are moving forward and upward!
Anders Gran, CEO
The full report (in swedish) is available here.