Twiik continues to grow. In total, the company's turnover rose during the second quarter by 6% compared to the same period last year. For the first half of the year turnover increased by 16%.
The average number of active users continues to increase on an annual basis by 4%. At the same time, the number of users is 11% lower than the first quarter, which was our biggest ever. This follows normal seasonal variations.
Twiik's recurring revenue from licenses and subscriptions (ARR) increased by 10% compared to the previous year and amounted to 4,619 (4,202) KSEK.
Turnover from digital training plans and services to consumers through the platform increased by 7% during the quarter compared to the same period last year.
Sales of Twiik's digital corporate wellness challenge Teamboost were 14% lower than the same period last year. On a six-month basis, however, the growth is 17% compared to the first half of 2022.
The operating profit for the quarter amounted to -2,920 (-3,421) KSEK. The company has continued an increased focus on products and services with a higher margin, such as the license business and its own content products.
Development of the platform and the new content concepts Twiik Premium and 100 Days, which are expected to be launched in the autumn, continued during the quarter.
During the quarter, Twiik's management and board conducted an analysis of the company's business and decided to create a clearer structure both internally and externally. Going forward, the company will work based on three business areas: Gym & Trainers, which develops and distributes Twiik's platform for trainers and gyms, Workplace, which develops company-specific offers, and Originals, Twiik's own content concept.
SECOND QUARTER IN NUMBERS
THE FIRST HALF OF THE YEAR IN NUMBERS
SIGNIFICANT EVENTS DURING THE SECOND QUARTER
SIGNIFICANT EVENTS AFTER THE END OF THE PERIOD
CEO COMMENTS
As we close the books for the second quarter, we do so with continued confidence in the future. Our turnover is increasing and so is the number of active users. We also see a continued improvement in operating profit by 15% compared to the previous year. Important steps on the way to positive cash flow.
During the spring and summer, we have continued to follow our strategy with an increased focus on digital training experiences and content concepts. 100 Days and Twiik Premium are approaching launch. Together they form the pillars of Twiik Originals, our portfolio of content-based services for gyms, businesses and consumers.
Developed towards the consumer, Twiik Premium will provide a clear starting point for new users, with the potential to lead to the purchase of personal coaching or digital bootcamps. At the same time, we see a clear interest from employers to offer digital training options to employees, as a complement to training challenges and other health investments. The product is interesting in several ways as it is very scalable and is a potential channel for additional sales of additional high-margin products and can be sold to both consumers and businesses.
During the end of the second quarter and the beginning of the third, we have already secured several agreements where Twiik Premium is included. The recently communicated agreement with Stadium is the first company agreement that entirely relates to Twiik Premium for employees. Although it is early in the product life cycle, it bodes well for the future.
Prior to the launch of 100 Days, during the spring and early summer, we have carried out pilots where several of us at Twiik have carried out the program together with external users. The results are strong, all participants' metabolic health has significantly improved based on accepted markers, but also regarding perceived health. We also see that all participants state that they would recommend 100 Days to others. This forms a good starting point for an initial commercial launch this autumn.
We see continued great interest in our platform for trainers and gyms. As competition increases and the digitization of the fitness industry spreads, so does the importance of a strong digital customer experience. This applies to both large gym chains and individual trainers. It is a healthy and scalable business, our ARR is growing and amounted to SEK 4.6 million at the end of the second quarter.
We are making clear progress, but we are also in challenging times. The analysis we made after the first quarter still applies: Consumers are more cost-conscious and companies are increasingly cautious when it comes to new investments. On the corporate side, this is primarily noticeable in lower demand for larger development projects, but also in the fact that negotiation and onboarding of enterprise customers in the gym sector takes longer. Overall, this affects our growth rate negatively, even if we continue to grow.
During the second quarter, we also had slightly weaker sales of the Teamboost business challenge. However, the first quarter was very strong and since several deals take place at the break point between quarters one and two, you should look at the whole when analyzing the deal. Looking at the first half of the year as a whole, we increased by 17% compared to the previous year.
The market landscape requires us to remain adaptive and innovative even in our way of working. During the quarter, together with the company's other management and board, I analyzed our business and how we organize ourselves. Through clearer division into business areas, we also see more clearly where we have profitability, where we should invest and what we should opt out of.
In connection with clarifying the organization, we have also reduced the staff on the market and product side. Tough but necessary decisions. Thus, we have adapted our suit further on our way to profitability. The organizational change has begun and is expected to have an effect during the fourth quarter.
Despite the challenges, there is reason for optimism and faith in the future. The market for digital training continues to grow and is predicted to turn over close to 150 billion USD in 2027 compared to just under 95 billion in 20231. We also see a growing market for digital bootcamps where we have very good conditions to become a powerful player, both in Sweden and internationally , not least through our established network of possible digital distributors in our trainers and gyms.
With the upcoming launches of 100 Days and Twiik Premium for consumer and business, along with major upcoming updates to our tool for gyms and trainers, we are taking further steps in our journey to create engaging digital training experiences - regardless of time, place or screen.
I am very thankful for my team's hard work and desire to always make us better, as well as for the continued trust of our customers and shareholders - together we make a real difference!
Anders Gran, CEO
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Twiik's financial reports can be downloaded here.