LifeGuides® is Beating 2022 Revenue Plan
REVENUE SCALING MEMO
With our focus on revenue and scaling the business, LifeGuides® is excited to report that it has exceeded its revenue plan in 6 Core Ways.
And, to further expand our revenue acceleration, LifeGuides® has now hired an Executive Search Firm to recruit our next 3 senior enterprise sales people. These hires are core to the use of proceeds from current funding. Today, our Sales Team is solely three people, so this will double our size, plus we will be adding much greater marketing team depth.
1) EXCEEDING 2022 REVENUE GOALS
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LifeGuides® is well on its way to surpass its $2.85M goal of newly signed ARR for 2022. We have already exceeded our $350K Q2 goal by 20%+, after also beating Q1’s goal. And, Total Contracted Value (TCV) for Q2 exceeded our Business Plan by 400%!
2) NEW 3-YEAR “STRATEGIC PARTNER” SIGNED WILL SCALE TO $3M+ OF ARR
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In Q2, LifeGuides® signed a distribution partnership with Four Points, Inc., which is one of the many “middle tier” insurance broker enterprises in our pipeline. Please read this related Press Release:
- 3-Year Agreement – The 3-year contract is with Four Points, Inc., which offers a Wellbeing & Wellness Portal. They provide employees with a simple all-in-one digital benefits portal, for the voluntary benefits portion of an employee’s package, yet now this features LifeGuides® as “the star” (along with unlimited Telemedicine) in its pre-tax design.
- 100% Built Into all Their Products – Four Points is now contractually obligated to build LifeGuides® into 100% of their business for the next 3.25 years. The LifeGuides® Service is fully integrated into 100% of Four Points Wellbeing Portal sales, sold via 150+ brokers and their internal direct sales team.
- $3M+ in expected ARR Reaching 70K+ Families – We reasonably expect $3M+ in ARR over the period of the contract (adding $1M+ per year), and total contracted value (TCV) exceeding $6M. This relationship can readily grow to 70,000 covered employee families, and very realistically over 100,000. The gross margin on this book of business will be 70% to 75% – representing $2M+ in gross margins. The minimum initial commitment is 10,000 families per year, representing a minimum of $1.3M in TCV ($435K/yr) over the 3-year period, before the requirement for LifeGuides being built-into all future sales.
- Opening a New Sales Channel in The “Small Group” Market – The Four Points partnership provides LifeGuides® with a more profitable (low-to-no costs) model to sell to the small group market, specifically under 100 employees, opening up a new channel of sales. Additionally, it also provides LifeGuides® an opportunity to offer its customers a complementary Wellbeing & Wellness Portal, and do all of the above with significant IRS approved tax benefits, which makes the net cost to the employer negative (cash flow positive!) and the net cost to the employee is zero.
3) SCALING THE “10X SCALABLE MODELS & ACCOUNTS”
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The Four Points partnership represents one example of many identical, or similar, partnerships in our sales pipeline. LifeGuides® is currently scaling multiple partnerships.
The “10X Scalable Models & Accounts” one-page presentation, with clients or partners expected to scale revenue by 10X from initial launch (click to see 1-page presentation):
SEE PRESENTATION OF “10x’ ACCOUNTS
- Mattel – After a successful launch, including 19 physical and online launch events, Mattel is looking to expand to more divisions, with a potential of 32,000 employees, as compared to 1,500 families at launch.
- Kaiser Permanente – After a successful pilot and initial launch, Kaiser Permanente is expected to buy for a Phase 2 with its 800 most-senior executives, prior to expanding to a potential of 220,000 employees (as much as $15,000,000 of ARR).
4) FURTHER PRICING VALIDATION
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LifeGuides® continues to get pricing validation across multiple customers. We have underestimated what the market will pay for our services. And, this does not consider new offerings just released like the “Empathetic Leadership Framework” services upgrade, or the “Vitality & Inspiration for Performance” upgrade, offered at an additional $2.00 PEPM (a 50% price increase). Proof of pricing validation and traction include:
- Mattel was signed at the full $4.00 PEPM vs. our Business Plan being $2.85 through year end 2023;
- In Q2 2022, 95% of new contracts are Pre-paid Annual versus our budgeted 65%.
- The Four Points deal is great pricing validation. We are charging $3.60 PEPM, which is 26% above our business model (which is $2.85 PEPM, plus they signed a three-year deal, which is our longest-ever contract.
5) HIGHER TOTAL CONTRACT VALUE PER CLIENT THAN EXPECTED
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The Total Contract Value (TCV) per client (contracted ARR over the length of the signed agreement) is dramatically higher than expected in our Business Plan.
As a simple example, a new $300K ARR/year contract, over 3 years, is $900K of TCV (3-years times the ARR of $300K).
- Our Business Plan forecasts 60% of contracts signing for 2 years, and 40% signing for one year;
- For Q2, 95% of signed contracts, by contract value, were signed for a period of 2 years (or more);
- For Q2, the Total Contract Value of new agreements was $2.6M in TCV, versus our budgeted plan of $560K. This is 400%+ higher than planned!;
- The value of our SaaS contracts is of the highest quality, since they are hard to terminate, and unlike many other SaaS businesses, which often sign month-to-month contracts, or for one-year, our contracts are typically signed for a period of 2 years (or more);
- LifeGuides® revenue scaling model is fueled and supported by our compelling product and Unique Value Proposition, which is unparalleled in the HR or L&D ecosystems. Outstanding metrics include: 4.75+ Member Star Ratings (out of 5.00), Average sessions with your Guides of 7 and an 85%+ Rebook Rate
6) BETTER CASH FLOW TERMS THAN EXPECTED
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Our Business Plan forecasts 65% of enterprises pre-paying for the Services for a full year, and 35% paying monthly. At this juncture, we are seeing 80% of clients pre-paying annually, which dramatically enhances our operating cash flows, plus improves “revenues quality.”
Given our LTV:CAC ratio which is above 6.00 (Lifetime Value of Revenues compared to: Cost of Acquisition), and gross margins above 70%, the combination of these positive factors make our business model a rocketship toward profitability.
For more information, please contact Matthew Sheridan: Matthew@SpotlightFamilyOffice.com.