Thinkific Labs (TSX:THNC) Gross Margin % : 74.39% (As of Mar. 2024)

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What is Thinkific Labs Gross Margin %?

Gross Margin % is calculated as gross profit divided by its revenue. Thinkific Labs's Gross Profit for the three months ended in Mar. 2024 was C$16.08 Mil. Thinkific Labs's Revenue for the three months ended in Mar. 2024 was C$21.61 Mil. Therefore, Thinkific Labs's Gross Margin % for the quarter that ended in Mar. 2024 was 74.39%.

Warning Sign:

Thinkific Labs Inc gross margin has been in long-term decline. The average rate of decline per year is -1.4%.

The historical rank and industry rank for Thinkific Labs's Gross Margin % or its related term are showing as below:

TSX:THNC' s Gross Margin % Range Over the Past 10 Years
Min: 75.23 Med: 77.76 Max: 80.52
Current: 75.23

During the past 6 years, the highest Gross Margin % of Thinkific Labs was 80.52%. The lowest was 75.23%. And the median was 77.76%.

TSX:THNC's Gross Margin % is ranked better than
83.12% of 2631 companies
in the Software industry
Industry Median: 41.74 vs TSX:THNC: 75.23

Thinkific Labs had a gross margin of 74.39% for the quarter that ended in Mar. 2024 => Durable competitive advantage

The 5-Year average Growth Rate of Gross Margin for Thinkific Labs was -1.40% per year.

Thinkific Labs Gross Margin % Historical Data

The historical data trend for Thinkific Labs's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Thinkific Labs Gross Margin % Chart

Thinkific Labs Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Gross Margin %

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79.15

78.87

76.64

75.98

75.46

Thinkific Labs Quarterly Data
	Dec18	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Gross Margin %	Get a 7-Day Free Trial														75.25	74.80	76.86	74.92	74.39

Competitive Comparison of Thinkific Labs's Gross Margin %

For the Software - Application subindustry, Thinkific Labs's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Thinkific Labs's Gross Margin % Distribution in the Software Industry

For the Software industry and Technology sector, Thinkific Labs's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Thinkific Labs's Gross Margin % falls into.

Thinkific Labs Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Thinkific Labs's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )	=	Gross Profit (A: Dec. 2023 )	/	Revenue (A: Dec. 2023 )
	=	59.8	/	79.227
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(79.227 - 19.444)	/	79.227
	=	75.46 %

Thinkific Labs's Gross Margin for the quarter that ended in Mar. 2024 is calculated as

Gross Margin % (Q: Mar. 2024 )	=	Gross Profit (Q: Mar. 2024 )	/	Revenue (Q: Mar. 2024 )
	=	16.1	/	21.609
	=	(Revenue - Cost of Goods Sold)	/	Revenue
	=	(21.609 - 5.534)	/	21.609
	=	74.39 %

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.

Thinkific Labs (TSX:THNC) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Thinkific Labs had a gross margin of 74.39% for the quarter that ended in Mar. 2024 => Durable competitive advantage

Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.

Thinkific Labs Gross Margin % Related Terms

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Thinkific Labs (TSX:THNC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Thinkific Labs Inc (TSX:THNC) » Definitions » Gross Margin %

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THNCF:USA 5S0:Germany

Address

369 Terminal Ave, Suite 400, Vancouver, BC, CAN, V6A 4C4

Website

https://www.thinkific.com

Thinkific Labs Inc is a cloud-based software platform. The Company's primary business activity is to provide a platform that helps entrepreneurs and established businesses to scale and generate revenue by teaching what they know. The Company's platform provides its Creators with the functionality needed to launch, grow, and diversify their businesses by creating and selling learning products composed of customized courses, communities, membership sites, and other experiences that our Creators can create, sell and deliver using the Company's Platform.

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