Thinkific Labs Inc. (TSX: THNC) sells software that companies use to build and sell online training. On September 23, 2026, Thinkific said it would cut 96 jobs and take about $19 million of annualized cost savings while targeting free-cash-flow margins of 25% or more in fiscal 2027. Colin King (@valuedontlie), a special-situations investor on X, first called Thinkific a potentially interesting turnaround and on October 10, 2026 wrote that after looking closer, "I like it."
This is journalism and commentary, not investment advice. We hold no position unless stated.
Key facts
- Ticker and exchange: Thinkific Labs Inc., THNC, Toronto Stock Exchange (Yahoo symbol THNC.TO).
- Situation type: Restructuring / free-cash-flow turnaround in a small software name.
- The call: Colin King (@valuedontlie) is long THNC after reviewing the September 2026 reorganization.
- Price: THNC.TO closed at 2.00 Canadian dollars on October 9, 2026.
- Savings target: About $19 million of gross annualized cost savings; about $5 million of restructuring charges, mostly in Q3 2026, per Thinkific's September 23, 2026 release.
- FCF goal: Free-cash-flow margins of 25% or more of revenue beginning in fiscal 2027.
- Cash: About $51.0 million of cash and short-term investments at June 30, 2026, against roughly 67.4 million shares outstanding.
- Main risk: Enterprise pivot fails, small-business customers churn, and the stock stays a value trap despite cuts.
Is THNC a good bet right now?
That depends on whether Thinkific can keep revenue stable while the cost base falls, and whether the enterprise "Plus" push offsets a pullback from smaller creators.
Colin King's math is that a roughly $100 million U.S. dollar market-cap company with large net cash and a path to mid-20% FCF margins is mispriced if the plan works. The bear case is that cutting 30% of staff damages the product and that competitors such as Teachable and Kajabi take share.
Why are investors bullish on Thinkific?
- The cut is large relative to the company. Thinkific said the reorganization eliminates 96 positions, about 30% of the workforce, according to BetaKit coverage.
- Management raised near-term profitability guidance. For Q3 fiscal 2026, Thinkific raised Adjusted EBITDA guidance to 7% to 10% of revenue from 2% to 5%, while keeping revenue guidance of $18.6 million to $18.9 million.
- Cash is a big part of the story. At June 30, 2026, Thinkific held about $51.0 million of cash and short-term investments, which is a large cushion versus a share price of 2.00 Canadian dollars.
- Colin King's screen. On September 27, 2026, he wrote that $19 million of savings on a roughly $100 million market cap "Should get them to 25% FCF margins or
5.5x FCF (3x ex-cash)" with "Half the market cap in net cash and stable revenue."
Who's making this call and why?
Colin King (@valuedontlie) is a special-situations and value investor with a large X following who often writes about CVRs, spin-offs and odd-lot setups. On October 10, 2026, quoting his earlier Thinkific post, he wrote, "Got around to looking at this one... I like it."
Track record. In our tracking of Colin King's public calls, he is 11-8 (a .579 win rate) on 19 calls scored at 180 days against the S&P 500, with an average edge of +35.1 percentage points. Five newer calls are 3-2 on a provisional basis.
Other voices:
- Credible stock-specific cheerleaders for THNC were scarce in recent X search results. Most mentions were product-comparison posts, not valuation work.
- A customer-side critic is clearer (see below).
Who disagrees?
- @JanTromp13 wrote that Thinkific "just decided to do the same" as other platforms shifting upmarket "Without even emailing me as a customer they decided to focus on large enterprise (had to read about this on LinkedIn from someone who was fired)."
- CEO framing vs. customer framing. CEO Greg Smith told BetaKit the move was about strategy, not only cost, and that Thinkific will still serve its roughly 35,000 small and midsize customers while leaning into Plus. Customers who feel deprioritized may leave anyway.
- Growth risk. If Thinkific Plus does not scale fast enough, the company could cut into a shrinking base rather than a stable one.
What are the key facts to verify?
- Thinkific's September 23, 2026 reorganization release: $19 million savings, $5 million charges, 25% FCF margin target, Q3 Outlook.
- Q2 2026 cash and short-term investments near $51.0 million and share count near 67.4 million.
- Upcoming Q3 fiscal 2026 results for evidence that Adjusted EBITDA margins actually rise after restructuring costs.
- Net revenue retention and Plus / enterprise bookings trends.
- Competitive moves from Teachable, Kajabi, Podia and homegrown tools (Noah Kagan publicly said AppSumo rebuilt a course platform after a Teachable price hike).
What would prove it right or wrong?
Signals the call is working:
- Free-cash-flow margins move toward the 25% fiscal 2027 target.
- Revenue stays near guided levels while costs fall.
- THNC.TO re-rates toward Colin King's rough 5.5x FCF framing if the cash flow appears.
Signals it is failing:
- Small-business churn accelerates after the layoffs.
- Plus growth misses and Adjusted EBITDA stays depressed after one-time savings.
- Cash is spent without a lasting margin step-up.
This is journalism and commentary, not investment advice. We hold no position unless stated.