The online learning company gets most of its revenue from consumers, but the company is growing quickly
The pandemic was a boon for online learning: In fall 2020, around 75%, or 11.8 million, undergraduate students were enrolled in at least one distance education course, and 44%, or 7 million, of all undergraduate students took exclusively distance education courses. Not only that, but the number of undergraduate students enrolled in at least one distance education course was 97% higher in 2020 than in fall 2019, while the number of undergraduate students enrolled exclusively in distance education courses it was 186% greater. .
One of the companies that benefited from this was Coursera. Founded in 2012, the company, which gives people access to online courses and degrees from top universities, saw its revenue grow 59% in 2020 to $293 million, up from $184.4 millions of dollars.
“We believe that education is the source of human progress. In today’s economy where the skills needed to succeed are rapidly evolving, education is more important than ever. As automation and digital disruption are at point to replace an unprecedented number of jobs worldwide, giving workers the opportunity to improve skills and retrain will be crucial to raising global living standards and increasing social equity. Education in line will play a pivotal role, enabling anyone, anywhere to gain the valuable skills they need to make a living in an increasingly digital economy,” the company wrote in its Presentation S-1 with SEC.
“We have built a global platform that connects learners, educators and institutions, providing world-class educational content that is affordable, accessible and relevant. We partner with more than 200 leading educational institutions and industry partners to deliver quality higher education to a wide range. of people, academic institutions, organizations and governments”.
The company divides its revenue into three arms, the largest of which is its consumer segment, which targets individual students looking to gain hands-on learning, acquire job skills, receive professional-level certifications, and increase their knowledge to advance your professional career.
“Coursera’s consumer offerings are aimed at individuals looking to gain hands-on learning, gain valuable job skills, receive professional-level certifications, and otherwise increase their knowledge and advance their careers. We’ve built our broader business model from our original consumer offering Our large learner base attracts top educator partners, enables us to gain business and degree contacts, provides data and insights, increases operational scale, improves performance of search engine optimization and produces favorable economics,” the company wrote.
Consumers often start engaging with the platform through its freemium offering by taking one of over 4,500 free courses; paying customers can access graded assignments and assessments and can receive a certificate of completion after completing a course. They can pay once for a single course or project or per subscription for multi-course offerings. For example, a guided project costs $10 one time, while specializations, which are a series of related courses offered by the same teaching partner where students have access to those courses for a monthly subscription, cost between 39 and $99 per month. Coursera Plus, the company’s consumer subscription offering, costs $399 a year.
At its peak recent quarterly results, consumer revenue was $69.7 million, up 12% year-over-year, and represented 56% of Coursera’s total earnings for the quarter. The company added 5 million new registered students during the quarter for a total of 107 million.
The second largest source of revenue is Coursera’s Enterprise segment, in which it sells subscription licenses to business, government and university customers that offer users the ability to enroll in courses and specializations and receive certifications upon completion.
Business revenue comes from three main offerings: Coursera for Business, which helps businesses improve and retrain their teams; Coursera for Campus, which enables academic institutions to deliver job-relevant online education to students, faculty and staff; and Coursera for Government, which helps federal, state and local governments and organizations deliver workforce reskilling programs.
Operating income for the second quarter was $43.7 million, up 55% from a year earlier and accounting for 35% of total revenue. The total number of paying business customers increased to 958, up 64%.
Finally, the company makes money from its degree segment, in which it partners with universities around the world to develop and offer fully online bachelor’s and master’s degrees to a global student audience.
“After a degree program is published on our platform, universities admit students and pay us a percentage fee based on the students’ online enrollment in a given period. Our degree partner contracts typically have initial terms of “between two and ten years in length. We continue to offer all the degrees we have launched since the beginning,” the company wrote.
Second-quarter undergraduate revenue was $11.4 million, down 4% and totaling 9% of revenue. The total number of Degree Students reached 17,460, 19% more year-on-year.
Coursera went public in May 2021, closing up 36% in its market debut, giving the company a market capitalization of $5.9 billion. It raised $520 billion in its offering. The company is now trading at $11.57 per share, down 65% from its IPO price of $33.
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