OpenLearning almost clears $1m receipts in June qtr

Special Report: Online education facilitator OpenLearning was kicking goals before the pandemic, but the last quarter has been exceptionally strong.

OpenLearning (ASX:OLL) almost cleared $1m in cash receipts in the three months to June and landed 29 new clients, in just its second quarter on the ASX.

OpenLearning reported record cash receipts of $945,000 in the June quarter, up 31 per cent on the prior period. It closed the month with a strong cash position of $5.9m which is underpinned by growth in revenue and a decreasing cash burn, which was reduced by 9.6 per cent.

The company’s annualised recurring revenue (ARR) grew to $1.143m, an increase of 71 percent year-on-year and it also grew its stable of platform software-as-a-service (SaaS) clients on its platform which rose to 116.

The biggest earner was the OpenLearning marketplace, followed by organisations paying to use its SaaS learning platform. Learning services came in at a close number three, the division which helps education providers design courses.

“We’re pleased to report another excellent quarter for the company, with continued growth across our key metrics,” said OpenLearning Group CEO and Managing Director Adam Brimo.

“Looking ahead, the third quarter is off to an exciting start with the signing of ground-breaking agreements with Open Universities Australia, and several top tier universities being onboarded to our platform.

“We are particularly focused on securing deals that generate significant medium to long-term value and align with our strategy to be the leader in the burgeoning micro-credentials market. As workers increasingly find themselves needing to upskill and re-skill in today’s challenging job market, micro-credentials have never been more important and demand for online education has never been greater.”

Kicking goals

OpenLearning had a strong debut when it listed in December, trading off a rising online learning thematic and supported by small cap investors such as Cyan Asset Management.

However, the company kicked up a gear in March when the COVID19 pandemic struck, forcing a rapid change in the higher education sector from face-to-face teaching to online remote learning.

It also rolled out lucrative deals with Alibaba Cloud in China to service educational institutions there moving online, DeakinCo and global not-for-profit High Resolves which has onboarded 36 Australia schools, set itself up in the new field of financial sector continuing education, and launched Australia’s first micro-credential framework, investment fund and marketplace alongside Open Universities Australia.

Unsurprisingly then, the company closed out June with close to 3.7m enrolments from over 2.5m registered learners and 3,872 active courses provided by 116 education providers, making it one of the world’s largest online education platforms.

OpenLearning said strong growth in SaaS customers was a result of new platform agreements with universities as well as the launch of new self-service SaaS plans, which enable smaller education providers to subscribe to OpenLearning’s platform for up to 250 learners for between $500 to $1,000 a year.

Strategy to capitalise on shift online

Brimo is open about disruptions caused by the COVID19 pandemic have created fundamental and long-lasting changes in the education sector.

The company has moved fast to capitalise on those disruptions and put itself at the forefront of this latest education evolution, focusing on three key areas to accelerate its revenue growth: platforms for delivering high-quality education, micro-credentials, and strategic partnerships such as the High Resolves and Alibaba.

Platforms allow the company to focus is on growing SaaS revenue by enabling education providers to deliver quality online education. Revenue is generated by SaaS fees and also by assisting organisations to move online.

The company is seeing rising demand for time-limited, high quality micro-credentials and short courses in Australia and Southeast Asia. It is positioning itself as an industry leader in this regard with the OpenCreds framework and the OpenCreds Investment Fund, along with agreements signed with Open Universities Australia.

OpenLearning is actively pursuing partnerships with companies that offer complementary products that fit into its ecosystem, resellers in new markets or sectors in which the company does not currently operate and with higher education providers themselves.

This article was developed in collaboration with OpenLearning, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.