Losses at Thinkific Labs Inc. (TSX:THNC) continue to mount following a fiscal year that saw the Vancouver tech firm bleed $26 million.
The first three months of 2022 proved to be a tough period for the company specializing in online course creation. Quarterly financials released on Thursday reveal a loss of $12 million – up from just under $1 million during the same period one year earlier.
Meanwhile, revenue surged 42 per cent in the first quarter, growing on an annual basis from $8.3 million to $11.8 million.
Thinkific cut 20 per cent of its 500-person roster back in March after the company completed what it described as “a rigorous review of our organizational structure.”
Thinkific went public in April 2021, pricing 12.3 million shares at $13 each.
Shares were trading at $2.60 as of the close of markets Thursday. That’s down from the $2.98 they were valued at when the company revealed on March 29 it was laying off 100 workers.
“We just went through a very unprecedented time – not just for the company, but for the planet,” CEO Greg Smith told BIV shortly after the layoffs.
His tech firm saw growth explode in the immediate wake of the pandemic as people hunkered down and turned to the Vancouver company’s online course creation platform, which saw activity surge 200 per cent in early 2020.
“We've been growing and adding to our team as rapidly as we can to be able to support [growth], especially over the last couple of years, and it got to a point just coming into 2022 as we looked ahead and recognized it was prudent to control costs,” Smith said.
“It really came down to controlling costs, but doing it with a view to preserving our growth.”
Thinkific CEO Corrine Hua said she expects the first quarter to be the peak of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) loss for the company.
The company is forecasting EBITDA loss in the range of $7.7 million to $8.3 million in the second quarter of 2022 after posting a $9.2-million EBITDA loss in the first quarter.
"Our methodical approach to restructuring ensures that we have the appropriate cost structure for our business,” she said in a statement.
Thinkific’s not the only B.C. company in the innovation space to lay off workers this year.
B.C. biotech Zymeworks Inc. (NYSE:ZYME) cut 25 per cent of its staff in January following founder Ali Tehrani’s departure as CEO. Losses there had grown by US$40 million to US$212 million in 2021 – up from US$171 million a year earlier.
“It's perhaps also a signal of a post-pandemic market shift,” Beacon HR Inc. Nicole Davidson, whose firm specializes in recruiting tech talent, said in a March email to BIV.
“I expect to see more layoff activity in the coming months and the pendulum start to swing back from the ultra-tight, employee-centred market we've been experiencing these last few years.”