3P Learning Faces Churn Headwinds Amid Profit Turnaround
3P Learning Limited has reported a modest profit of $0.4 million for the half year ending December 2025, reversing last year’s loss despite a slight revenue decline. The education technology company is navigating higher churn in its school segment while maintaining a solid cash position and focusing on operational efficiencies.
- Half-year profit of $0.4 million, reversing prior loss
- Revenue down 1.4% to $51.8 million due to higher churn in B2B segment
- Underlying EBITDA declined primarily in Business-to-School segment
- Net cash position of $7.5 million with $10 million undrawn bank facility
- Pending $5.5 million Digital Games Tax Offset claim awaiting government approval
Profit Reversal Despite Revenue Pressure
3P Learning Limited has posted a half-year profit of $0.4 million for the period ending 31 December 2025, a notable turnaround from a $0.7 million loss in the same period last year. This improvement comes despite a slight 1.4% dip in revenue to $51.8 million, primarily driven by increased customer churn in its Business-to-School (B2B) segment.
Segment Performance and Operational Focus
The B2B segment, which serves schools, saw revenue decline by $1.1 million to $29.8 million, reflecting challenges in customer retention across all regions. Underlying EBITDA in this segment fell by $0.8 million, impacted by both lower revenue and reduced capitalisation of employee costs related to product development. The company is actively pursuing operational efficiencies and scaling initiatives, particularly focusing on key markets in the Asia-Pacific, Europe, Middle East and Africa, and the USA.
Conversely, the Business-to-Consumer (B2C) segment, targeting parents and the homeschool market, reported a slight revenue increase and stable underlying EBITDA of $3.7 million. The launch of a premium product for the US homeschool market is a strategic highlight, with disciplined cost management helping to maintain profitability.
Financial Position and Liquidity
3P Learning maintains a net cash position of $7.5 million, including $3.1 million in restricted cash held as security for merchant banking arrangements. The company also has access to a $10 million undrawn bank loan facility, providing financial flexibility. Despite a net current liability position, management affirms the business is not highly seasonal and expects positive cash flow from operations in the coming periods.
Strategic Developments and Outlook
The Group continues to invest cautiously in product and technology development while focusing on profitable growth. Notably, 3P Learning has submitted a $5.5 million Digital Games Tax Offset claim to the Australian government, aimed at supporting its digital game development activities. This claim is pending approval and has not yet been recognised in income.
Goodwill impairment testing showed no indicators of impairment, supporting the company’s confidence in its core assets and long-term strategy. No dividends were declared for the half year, reflecting a focus on reinvestment and balance sheet strength.
Bottom Line?
3P Learning’s modest profit and stable cash position signal cautious progress, but upcoming government approvals and churn trends will be key to watch.
Questions in the middle?
- Will the Digital Games Tax Offset claim be approved, and how will it impact future earnings?
- Can 3P Learning reduce churn in its B2B segment to stabilize revenue?
- How will the company balance investment in product development with cost discipline going forward?
