Rising Losses Challenge OpenLearning Despite $3.6M New SaaS Contracts

Strong SaaS Momentum and International Expansion

OpenLearning Limited has delivered a robust performance in FY2025, with total revenue climbing 39.4% to $3.18 million. This growth was primarily fuelled by its AI-powered learning management system (LMS) platform, which continues to gain traction globally. The company’s SaaS annual recurring revenue (ARR) accelerated to $3.035 million, marking a 30% year-on-year increase and reflecting the 16th consecutive quarter of growth. With 252 active B2B customers spanning 19 countries, OpenLearning is steadily expanding its footprint, particularly in emerging education markets.

Key contract wins in the Philippines, Malaysia, Brazil, UAE, and Africa contributed over $3.6 million in new SaaS contract value during the year. Notably, partnerships with top universities such as the University of the Philippines Manila and National University have reinforced OpenLearning’s position as a competitive alternative to legacy LMS providers like Canvas and Moodle.

AI Integration as a Differentiator

The company’s strategic focus on embedding AI capabilities throughout its platform is a clear differentiator. Usage of AI tools surged by more than 150% in FY2025, with features such as AI-powered course building, automated assessment, and facilitation becoming core selling points. This native AI integration contrasts with standalone AI tools and appeals to institutions seeking comprehensive, modern LMS solutions that reduce operational complexity and cost.

OpenLearning’s platform also supports a virtuous cycle linking education providers, learners, and employers, with plans underway to launch a Talent Search feature that will connect learners directly with employers, further enhancing the platform’s value proposition.

Financial Performance and Accounting Changes

Despite revenue growth, OpenLearning’s net loss widened by 43.7% to $4.1 million. This increase largely stems from a change in accounting policy: from January 2025, the company ceased capitalising software development costs, instead expensing them as incurred. This shift, while impacting reported losses, aligns with a more conservative financial approach and provides clearer visibility into operating expenses.

Operating cash outflows improved slightly to $2.52 million, aided by cost reduction initiatives and improved operating leverage. The company ended the year with $2.1 million in cash, bolstered by a $2.6 million equity placement and the conversion of outstanding debt into equity, strengthening its balance sheet as it targets cash flow breakeven by early 2027.

Outlook and Risks

Looking ahead, OpenLearning is well positioned to capitalise on its growing pipeline of institutional LMS opportunities, particularly as it continues to displace incumbent providers with its AI-native platform. However, the company faces risks including customer retention, technology platform stability, and the need for ongoing capital to fund growth. Management has outlined mitigation strategies such as enhancing AI features, expanding into new markets, and maintaining agile development practices.

With a scalable SaaS model and a growing international presence, OpenLearning’s FY2025 results underscore both the promise and challenges of scaling a next-generation education technology platform in a competitive global market.