Mindbody, San Louis Obispo, California, reported first quarter revenue of $32 million, according to financials released Tuesday.
The first quarter revenue represented a year-over-year quarterly increase of 44 percent for the cloud-based business management software provider. Subscription and services revenue during the first quarter increased 43 percent to 19.3 million, and payments revenue increased 51 percent to $12.2 million.
"We had an excellent start to the year marked by accelerating revenue growth and record gross margins," Rick Stollmeyer, co-founder and chief executive officer, Mindbody, said in a statement. "These results demonstrate the ongoing success of all four components of our recurring revenue growth model, including new subscriber additions, our multi-tier subscriber pricing strategy, and our rapidly growing payments and technology partner revenue streams. Looking to the rest of the year, we expect to continue executing our growth strategy and leveraging the network effects rapidly taking hold in our business."
Mindbody has more than 53,000 subscribers in more than 130 countries and territories who provide services to 29 million active consumers. The company' payments volume increased 30 percent year-over-year in the first quarter to approximately $1.52 billion.
In the conference call with analysts, Stollmeyer noted that Mindbody is seeing rapid growth of multiple large owner-operated and franchise brands across its platform. He said many of those enterprise customers are multinational and several have over 100 store locations.
"Several [enterprise customers] have recently raised substantial capital specifically for the purpose of accelerating their growth further in the quarters ahead," Stollmeyer told analysts. "These exciting larger brands have seen particularly impressive success in recent years. The top 10 brands we serve, for example, saw 46 percent average increase in payments volume year-over-year in the first quarter."
Mindbody had 53,063 subscribers at the end of the first quarter, reflecting year-over-year quarterly growth of 26 percent. Average monthly revenue per subscriber increased 16 percent year over year to approximately $201, according to the release. There were 390 million classes and appointment services managed on Mindbody's platform in 2015.
Mindbody expects to report revenue in the range of $32.7 million to $33.7 million in the second quarter, which would represent growth of 32 percent to 36 percent over the second quarter of 2015. Full-year 2016 revenue is projected in the range of $135.7 million to $138.7 million, which would represent growth of 34 percent to 37 percent over 2015.
"Our strong first quarter results enable us to move up our expected day of profitability. We can now confidently predict that we will be adjusted EBITDA positive in the second quarter of 2017," Stollmeyer told analysts. "In addition, our positive results across the four quarters since IPO have enabled us to update our long-term model to improve our expected adjusted EBITDA margin at scale from approximately 20 percent to 30 percent."
Mindbody stock (NASDAQ:MB) was up over 17 percent in midday trading on Wednesday at $15 per share. The stock has traded in a range between $9.14 and $18.39 since its initial public offering in June 2015.