MindBody reports first-quarter revenue up 44 percent

MindBody’s headquarters is located on Tank Farm Road in San Luis Obispo.
MindBody’s headquarters is located on Tank Farm Road in San Luis Obispo.

Mindbody Inc., which sells business management software for clients in the health and wellness industry, on Tuesday reported first-quarter revenue of $32 million, up 44 percent from the previous year, and a net loss attributable to common stockholders of $6.6 million. It reported a net loss of $11.6 million attributable to common stockholders in the three months ended March 31, 2015.

Three months ago, the San Luis Obispo-based company said it expected first-quarter revenue in the range of $29.7 million to $30.7 million and a net loss ranging from $6 million to $7 million.

The fact that it exceeded predicted revenues prompted industry analysts to congratulate MindBody on its first-quarter performance during a Tuesday afternoon earnings conference call, scheduled after the stock markets closed.

MindBody has more than 53,000 local business subscribers in more than 130 countries and territories, providing wellness services to more than 29 million consumers.

During the call, co-founder and CEO Rick Stollmeyer noted that MindBody had an “excellent start to the year highlighted by accelerating revenue growth and record gross margins.”

“With subscribers and services revenue growing 43 percent and payments revenue growing 51 percent, our customer value continued to expand,” he said. Subscribers and services revenue was $19.3 million. Payments revenue was $12.2 million.

Together, this recurring revenue increased 46 percent from the same period a year ago and comprised 98 percent of the company’s total revenue in the first quarter, compared with 96 percent in the first quarter of 2015.

Stollmeyer also noted that the company’s multitiered subscriber pricing strategy is effective, allowing new subscribers to sign on at lower costs and, as they grow, access the company’s sophisticated capabilities — and higher prices.

Furthermore, he cited MindBody’s growing payments platform, which is signing on new merchants worldwide, and its technology partners’ revenue streams, which he said continue to accelerate rapidly thanks to the growing inventory of available classes and appointments.

“Last year, more than 390 million classes and appointment services were managed on our platform,” he said.

Given all of this, Stollmeyer said, the company has moved up its expected date of profitability to the second quarter of 2017.

“The wellness service industry we serve is strong,” he said, noting that same-store sales continued to show solid year-over-year growth in the first quarter, and new business creation continued at a robust pace across markets worldwide.

In addition, the company is seeing rapid growth of multiple large owner-operated businesses, including several that have grown to more than 100 locations and raised capital recently to accelerate their growth, he added.

Other business highlights the company noted:

▪  The average monthly revenue per subscriber grew 16 percent year over year to about $201.

▪  MindBody’s app earned the 2016 Webby Award and Webby People’s Voice Award from the International Academy of Digital Arts and Sciences in the category of Mobile App: Fitness and Recreation.

▪  MindBody was included in Inc. magazine’s second Founders 40 list, which recognizes companies that have gone public in the past 36 months with annual revenue between $50 million and $2 billion, and that have continued to maintain an entrepreneurial spirit and drive innovation while having at least one of the founders at the helm.

▪  Looking ahead, MindBody expects revenue for the second quarter ended June 30 to range between $32.7 million and $33.7 million and annual revenue to range between $135.7 million and $138.7 million. Both would represent growth in the mid-30 percent range over comparable periods in 2015.

Ahead of the report, shares of MindBody, traded under the symbol MB on Nasdaq, closed Tuesday at $12.75 per share, down 5.6 percent.