Announced in the earnings release was a strategic partnership between Mindbody and Under Armour Photo by Mindbody

Announced in the earnings release was a strategic partnership between Mindbody and Under Armour. (Photo by Mindbody.)

Mindbody Revenue Grows to $33.6 Million in Q2; Partnership with Under Armour Announced

Mindbody reported second quarter revenue of $33.6 million, marking a 36 percent increase over the second quarter of 2015, and it saw subscriber growth with end of period subscribers growing 22 percent year over year in the second quarter to 55,771. 

Mindbody, San Luis Obispo, California, reported second quarter revenue of $33.6 million, marking a 36 percent increase over the second quarter of 2015, according to financials released Thursday. The $33.6 million came in at the high end of Mindbody's previously announced second quarter expectation of a revenue range between $32.7 million and $33.7 million.

The company's subscription and services revenue was $20.1 million, and payments revenue was $12.9 million in the second quarter. Subscription and services quarterly revenue increased 35 percent, and payments revenue increased 39 percent over the second quarter of 2015.

"The second quarter produced excellent results, highlighted by consistently strong revenue growth and substantial improvement on the bottom line," said Rick Stollmeyer, co-founder and chief executive officer of Mindbody. "In particular, we are pleased with our traction among higher value subscribers. These businesses range from independent practitioners to multi-location enterprise businesses. These are the subscribers most likely to grow, producing increasing future transaction volumes and meaningful inventory for our consumer app and our API partners."

Mindbody also saw subscriber growth with end-of-period subscribers growing 22 percent year over year to 55,771. The average monthly revenue per subscriber grew 9 percent year over year to approximately $202, and payments volume increased 29 percent year over year to approximately $1.6 billion.

In the conference call with analysts, Stollmeyer noted people around the world attended more than 445 million class and appointment sessions and made nearly $8 billion in purchases through the Mindbody Marketplace.

"This scale of activity is attracting a new wave of exciting partnerships," Stollmeyer said.

Announced in the earnings release was a strategic partnership between Mindbody and Under Armour, Baltimore, Maryland. The partnership will enable Under Armour's health and fitness community of 175 million total registered users to Mindbody's inventory of fitness activities. On Tuesday, Under Armour reported year-over-year net revenues in its fitness segment increased 73.3 percent to $23.5 million in the second quarter.

Stollmeyer told analysts to expect a joint announcement between the two brands "very soon" with further details, adding it was dangerous to preannounce release dates.

"I think what excites us about Under Armour the most is their focus on technology and digital apps," Mindbody Chief Financial Officer and Chief Operating Officer Brett White told analysts. "They own MyFitnessPal, they have Under Armour Record, MapMyFitness and a significant user base that you can probably imagine correlates to the folks that are target audience for the businesses we serve. So that kind of tells you why we're getting into a relationship together. There's ways that we can be mutually beneficial to each other, and I think I'm not allowed to say any more than that."

Wednesday's release also announced that White was appointed chief operating officer, adding to his responsibilities as chief financial officer.

"We had a successful second quarter highlighted by robust growth in both brick and mortar subscribers and payments volume," White said in a statement. "These results demonstrate the ongoing strength of the wellness services market we serve, and we look forward to continuing to extend our market leadership."

Mindbody expects to report full-year revenue in a range between $137 million and $139 million, which would represent a 35 percent to 37 percent growth over 2015. Third quarter revenue is projected between $34.5 million and $35.5 million, which would represent a 32 percent to 36 percent growth over the third quarter of 2015.

Mindbody (NASDAQ:MB) closed Wednesday at $17.26 per share. Its stock price is trading in a 52-week range between $9.14 and $18.39.

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