In This Article:
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Revenue: $52.7 million, down 2% from the prior corresponding period.
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Underlying EBITDA: $6.8 million, up 98% from the prior corresponding period.
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Net Profit After Tax: $3.6 million underlying; statutory net loss after tax of $0.7 million.
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Annual Recurring Revenue (ARR): $64.4 million, including $2.2 million from LiteracyPlanet acquisition.
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B2C Billings: Increased 1% to $22 million.
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B2B Revenue: $30.9 million, down 4% due to US transition.
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Gross Margin: Maintained at 95%.
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Cash Generation: $1.4 million, an improvement of $3.8 million over the prior corresponding period.
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Contribution Margin: Improved to 52% for B2C and 51% for B2B.
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Net Cash Position: $1.9 million as of December 31, with $9 million in borrowings.
Release Date: February 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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3P Learning Ltd (ASX:3PL) has successfully transitioned to a new business model, integrating key learning programs into a unified interface for teachers and students.
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The company has seen early success with the 'three essentials' program, with over 200 schools signing up and an average increase in school revenue of 47%.
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The acquisition of LiteracyPlanet complements 3P Learning's product suite and is expected to be profitable and cash flow positive in its first year.
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The company achieved a 98% increase in underlying EBITDA, reflecting significant cost reductions and improved operational efficiency.
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Cash generation improved by $3.8 million over the prior corresponding period, with plans to repay borrowings in full by the end of March.
Negative Points
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Total revenue for the first half was down 2% compared to the prior corresponding period, primarily due to lower-than-expected transition of Reading Eggs school customers in the US.
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The B2B segment experienced a 4% decline in revenue, impacted by declining license numbers during the transition from the distributor Edmentum in the US.
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The schools market faced challenges due to budget cuts and uncertainty over US schools funding, affecting overall sales results.
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The transition from Edmentum in the US resulted in a lower-than-expected retention rate of 74% for billings.
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Despite improvements, the company reported a statutory net loss after tax of $0.7 million, although this was an improvement from the previous year's loss.
Q & A Highlights
Q: Can you elaborate on the progress and impact of the new business model transition? A: Matthew Sandblom, Executive Chairman, explained that 3P Learning has made significant progress in transitioning to a new business model, integrating key learning programs into a unified interface. This transition involved rolling over millions of student and teacher accounts, which has been largely completed. The new system aims to simplify access to all programs from a single homepage, enhancing user experience and potentially boosting future growth.