Quarterly report Q2 2022: Continued growth for Twiik. Begins transition towards positive cashflow

The second quarter has meant continued growth in accordance with Twiik's strategy making it the best quarter in the company's history in terms of turnover. In total, the company's turnover increased by 19% compared to the same period last year and by almost 10% compared to the previous quarter.

Twiik's recurring revenue from licenses and subscriptions (ARR) increased by nearly 46% compared to the previous year and amounted to 4,202 (2,884) KSEK.

Consumer sales increased during the period by 125% compared to the previous year. The average order value of consumer purchases increased by 99%, which is a clear result of the company's investment in products in higher price segments, e.g. PT online.

During the quarter, Twiik's technical platform has been further developed in several areas, including financial management for trainers and gyms, which means a greater opportunity to streamline the company's handling of a growing customer base, as well as a completely newly developed statistics page for users that makes it easier for them to follow their results. Both are widely launched in the third quarter.

Second quarter in numbers

• Net sales: 3 132 (2 634) KSEK 
• Operating profit: -3 421 (-2 713) KSEK 
• Profit after tax: -2 873 (-2 209) KSEK 
• Earnings per share before dilution: -0,42 (-0,40) SEK 
• Earnings per share after dilution: -0,42 (-0,40) SEK 
• ARR: 4 202 (2 884) KSEK 

The first half of the year in numbers 

• Net sales: 5 986 (4 972) KSEK 
• Operating profit: -6 627 (-5 013) KSEK 
• Profit after tax: -5 460 (-4 108) KSEK 
• Earnings per share before dilution: -0,80 (-1,02) SEK 
• Earnings per share after dilution: -0,80 (-1,02) SEK

Significant events during the second quarter

  • In April, the board decided on an issue of units with preferential rights for existing shareholders. The issue was carried out during the month of June and provided the company with approximately SEK 8.5 million before issue costs.
  • The exercise period for the warrants of series TO1 ran during the period May 4-25. Since the price for exercising the warrants during the entire period exceeded the current share price, no warrants were exercised.
  • Twiik launches an API for digital training. The launch made it possible to build Twiik's functionality into other apps.
  • Friskis Go, Friskis & Svettis training app, was launched in Norway where Friskis has 43 facilities. The app was launched in Sweden in the spring of 2022.
  • Trygg-Hansa extends its enterprise agreement with Twiik, which means that Twiik supplies a Pregnancy and mother training app based on Twiik's platform and ecosystem for digital training.

Comments from CEO Anders Gran

It is with enthusiasm we close the second quarter of 2022. We see the results of our investments in growth and Q2 is our biggest quarter ever in terms of turnover. As a result, we believe we can begin to shift our focus to cash flow rather than growth in the short term.

We see that our product delivers and we are becoming an increasingly important player in exercise and wellness industry. Through individual coaches and large wellness players, we influence thousands of people every day.

The landscape for exercise and wellness is continuing to change, with an overall trend that points to digital wellness becoming an increasingly integrated part of the offerings of the industry's various players. Health awareness is increasing in society as a whole, and we see how wellness is becoming a more important part of improved public health as lifestyle diseases form an increasingly large part of society's challenges. According to the WHO, healthy lifestyles can prevent 80 percent of all coronary heart disease and stroke, and 30 percent of all cancer. It is also known that diet and exercise have a great potential to influence Type 2 diabetes. The need for lifestyle changes at an early stage is something that the private sector and the wellness industry have a very good chance of meeting. Digital coaching, support and inspiration will be a key to reversing the trend on a large scale.

Gyms, training concepts, corporate wellness and personal trainers offer both fully digital and hybrid services that combine on-site workouts with digital tools and instructions. Globally, at the same time, there is a reaction to the aggressive growth of online and home training that took place during the pandemic. Many services have scaled up very quickly and are forced to act when a more balanced training behavior emerges. As a result, continued consolidation of the online fitness market is to be expected. The macroeconomic climate also makes the consumer market difficult to predict. Rising inflation and higher costs for households demand more from everyone who supplies consumer products and services.

Twiik is very well positioned to benefit from the development. Our technical platform is strong and has an opportunity to meet the demands of several different target groups and market segments, both to consumer and business-to-business. A strength that is becoming increasingly clear. We have deliberately worked with the platform to add value both for pure online services and as support for those who workout at the gym or meet their personal trainer physically.

While more and more people find their way back to the gym and physical meetings with personal trainers, we continue our strong development. We more than doubled our consumer sales in the second quarter compared to the previous year and have also increased our average order value significantly thanks to our focus on products in higher price segments such as PT-online.

"We more than doubled our consumer sales in the second quarter and have also increased our average order value significantly thanks to our focus on more exclusive products such as PT-online."

The growth is important for us to achieve a positive cash flow at the right time. The significantly tougher climate on the stock exchange affects our conditions to invest as aggressively in growth as planned. We are adjusting our strategy slightly and in the coming quarters will focus more on products and services that promote cash flow rather than those who provide largest scale. At the same time, we are keen not to lose important momentum in our technology development in order to continue to stay at the forefront of the industry.

An important component on the road to positive cash flow is our enterprise collaborations. We continue to work closely with Actic and during the second quarter our collaboration with Friskis & Svettis has been established and I see good opportunities to develop the collaboration further with more products in the autumn.

During the quarter, an enterprise solution was also launched with Health & Training Academy AB (HTA). HTA is an example of a customer segment within our enterprise offering with great potential. These are strong, entrepreneur-driven concepts where Twiik today works with other successful players such as 16 Weeks of Hell and Twitch Health Capital, who all serve different parts of the end customer market.

A continuous dialogue with our enterprise customers and progressive training concepts is the key to continuing to drive the development of the platform forward in harmony with the market. Speed combined with being responsive to both the customer and the end user becomes key in creating the world's best fitness platform.

There are several reasons for us to be positive about the future. Tens of thousands of people use Twiik's technology every day and our growth is strong. The team is sharpened and our focus clear.

It will be an exciting autumn!

Anders Gran, CEO