How Is OpenLearning Turning Philippines Contracts Into Growth Momentum?

Strong Revenue Growth Amid Strategic Expansion

OpenLearning Limited (ASX, OLL) has delivered a robust financial performance for the half-year ended 30 June 2025, reporting revenue growth of 30.2% to $1.39 million. This growth was primarily driven by an 18.5% increase in Platform SaaS fees and a growing international customer base spanning Australia, Southeast Asia, and beyond. Gross sales rose 10.8% to $2.14 million, underscoring the company's expanding footprint in the competitive AI-powered learning management system (LMS) market.

The company’s Managing Director, Adam Brimo, highlighted the significance of multi-year contracts secured in the Philippines, valued at over A$1.26 million. These agreements with leading universities represent a strategic foothold in a market with nearly 2,000 higher education institutions and over 3.4 million students, positioning OpenLearning to capitalize on the region’s digital transformation in education.

Navigating Losses and Operational Efficiency

Despite the encouraging top-line growth, OpenLearning reported a loss after tax of $2.05 million, a 23.3% increase compared to the prior corresponding period. This widening loss primarily reflects the cessation of capitalising platform development costs, which were previously deferred as intangible assets. However, when adjusting for this accounting change, the company’s EBITDA loss actually improved by 2.8%, signaling underlying operational progress.

Cash flow management also showed positive momentum, with net cash used in operating activities falling by 35% to $0.97 million. This improvement reflects both higher customer receipts and successful cost optimisation initiatives implemented throughout 2024. The company’s focus on expanding high-margin SaaS revenue and disciplined expenditure management is central to its stated pathway to break-even.

Innovation and Ecosystem Development

OpenLearning continues to enhance its AI-powered LMS platform, integrating generative AI tools such as the AI Course Builder and AI Assistant to streamline course design and improve learner outcomes. The platform’s evolution includes expanded support for on-campus and blended learning, an improved examination system, and course migration tools that lower barriers for institutions transitioning from legacy systems.

The company’s ecosystem strategy combines its LMS, a global marketplace for course discovery, and learner portfolios that showcase skills to employers. This integrated approach aims to create a virtuous cycle of student recruitment, engagement, and long-term value creation for education providers and learners alike.

Financial Position and Risks

At 30 June 2025, OpenLearning held cash and cash equivalents of $132,000 and had access to an undrawn $850,000 loan facility from its major shareholder, Education Centre of Australia. The Group’s net current liabilities increased to $3.35 million, reflecting ongoing investment in growth and platform development.

The company acknowledges key risks including customer retention, technology platform stability, capital requirements, and competitive pressures. Management has outlined mitigation strategies such as continuous platform innovation, cost control, and geographic diversification to navigate these challenges.

Outlook

With a solid pipeline of larger contracts, particularly in Southeast Asia and Australia, and sustained ARR growth reaching $2.65 million, OpenLearning is poised for continued expansion. The company’s disciplined approach to scaling SaaS revenue and improving operating leverage underpins management’s confidence in achieving break-even and delivering long-term shareholder value.