Mr. Greg Smith reports

THINKIFIC REORGANIZES TO FOCUS INVESTMENTS ON GROWTH OPPORTUNITIES AND MAXIMIZE FREE CASH FLOW

Thinkific Labs Inc. is implementing a strategic realignment of its work force and operating model designed to accelerate growth in Thinkific Plus, Thinkific's offering for mid-market and enterprise organizations, while improving operational discipline, and maximizing profitability and free cash flow.

The reorganization will allow Thinkific to invest more in products serving its highest value-customers, continue growing its upmarket customer base and business, and focus R&D (research and development) efforts on building new enterprise-first innovation, while maintaining support for all of Thinkific's valued customers.

As part of these changes, Thinkific eliminated positions impacting 96 employees. The company expects these changes, along with a reduction in associated operating expenses, to generate approximately $19-million in gross annualized cost savings. The majority of these expense reductions is expected to be realized in the fourth quarter of 2026, with some non-head-count related savings realized in the first quarter of 2027. Thinkific expects to incur approximately $5-million in related restructuring charges, incurred primarily in the third quarter of 2026. Over all, this realignment in the company's overall cost structure is anticipated to yield a material improvement in Thinkific's free cash flow margin, which is targeted at 25 per cent or more of revenue, in fiscal year (FY) 2027.

The company expects to provide additional detail on the anticipated financial impact of these actions on its third quarter 2026 earnings conference call.

Aligning Investments with growth outlook: sharpening focus on markets served by Plus

"The changes announced today will allow us to continue to provide excellent support for our customers, while investing in innovative product enhancements and new AI-first products that will fuel our next stage of growth," said Greg Smith, co-founder and chief executive officer of Thinkific. "I am encouraged by what we are seeing in our strategic move upmarket and believe it is time to lean fully into that success. By aligning our efforts towards Plus, we will be in a position to reaccelerate growth and operate the remainder of the company with greater discipline and higher margins. While it is the right decision for the business, it was not one we made lightly. Everyone at Thinkific has played a role in the success we've had to date and we are immensely grateful for their contributions."

Update to outlook

Based on the financial performance of the quarter to date, the company is also updating its outlook for the third quarter of 2026, as follows:

1. The Company is reaffirming its previously disclosed outlook for revenue of $18.6-million to $18.9-million and is tracking to the high end of the guided range.
2. The company is raising its previously disclosed outlook for adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) to a range of 7 per cent to 10 per cent of revenue, from a range of 2 per cent to 5 per cent of revenue. This calculation excludes related restructuring costs incurred with the reorganization.

Non-IFRS (international financial reporting standards) measures

The information presented within this news release includes adjusted EBITDA and free cash flow margin. Adjusted EBITDA and free cash flow margin are not recognized measures under IFRS as issued by the International Accounting Standards Board, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable with similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the company's results of operations from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the company's financial information reported under IFRS. The non-IFRS measures are used to provide investors with supplemental measures of the company's operating performance and thus highlight trends in the company's core business that may not otherwise be apparent when relying solely on IFRS measures. The company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses the non-IFRS measures in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management compensation.

About Thinkific Labs Inc.

Thinkific is an award-winning learning platform built for scale. Thinkific gives companies everything they need to build, distribute and sell on-line learning programs -- and connect those programs directly to business results and stronger customer outcomes. More than 35,000 customers -- including companies like GoDaddy, Nasdaq and ActiveCampaign -- have generated billions in revenue using Thinkific, impacting more than 200 million people worldwide.

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