We recently interviewed Adam Brimo, CEO of OpenLearning Limited (ASX: OLL). Based in Australia, OpenLearning, together with its subsidiaries, provides a platform to education providers for the delivery of online education courses. Mr. Brimo co-founded OpenLearning in 2012. We appreciate the time taken by him to answer our questions and would like to thank him for sharing his thoughts.

Simply Wall St: What changes have you seen in your industry since you co-founded OpenLearning in 2012 and what emerging trends are you most excited about?

Adam Brimo: The world has changed significantly since OpenLearning launched in 2012. Online education has gone from a nice to have to an indispensable segment of the higher education sector, and now, due to COVID-19, it is the primary mode of education delivery around the world.

However, the quality of most online education around the world is low and the outcomes dont always match up to expectations. Most online courses are made up of videos and quizzes testing memorisation and rote learning which does not provide learners with the skills needed to compete in the modern world.

OpenLearning solves this problem by providing a platform and a methodology for online education that focuses on collaboration and project-based learning. In addition, OpenLearning is a turn-key solution for education providers to move online, offering a platform, services, and a marketplace to increase brand awareness.

Today, were excited by the increasing importance of critical and analytical thinking for the future of work, which will increase demand for OpenLearnings approach and Platform.

SWS: Revenues have declined in the past year. What components of the business have caused this decline?

AB: In FY2019, the Company carried out a planned transition from a professional services business that provided a learning platform for free to a SaaS business. This change in strategy resulted in a decline in Services revenue in FY2019 as compared to FY2018 but led to strong growth in Platform SaaS and Marketplace sales, which grew by 91% and 108% respectively y-o-y.

As of the end of 31 st March 2020, OpenLearning has had over 3 million enrolments from 2.17 million registered learners across 8,000 courses provided by 76 education providers, making it one of the worlds largest online education platforms.

A strong result considering the Companys change in business model to focus on SaaS and its restructure.

SWS: You seem to have lowered your operating expenses in the past year as well. Was this directly the result of lower revenues? Whats the relationship between cost and revenue in your organization?

AB: As a result of the Companys transition from a services model to high margin SaaS business model, which accounted for 37% of gross sales in FY2019, the Company saw a 20.30% increase in operating cash receipts to $2.24m.

As a result of a restructuring carried in FY2019 to support this transition, the Company was able to reduce operational cash burn and operating costs significantly Q4 FY2019. This provided a strong tailwind to the Companys FY19 results.

OpenLearning is a highly scalable cloud platform and the Company saw its gross margin from platform SaaS fees increase from 4% in Q4 FY2018 to 57% in Q4 FY2019 as revenue grew at a faster rate than costs.

SWS: Based on the latest reports, the company has enough cash on hand to continue operating for almost 2 years. What according to you is the best use for this cash?

AB: OpenLearning had cash at bank of $6.6m at 31 st March 2020, ensuring that it is able to fully execute our growth strategy in FY20 and take advantage of the opportunities that present themselves as the world looks towards online education in the years to Come.

The Company is primarily investing these funds in sales and marketing to grow the number of education providers using the platform, accelerate the onboarding process for new clients and further develop its platform to ensure it stays at the forefront of online education.

SWS: Lastly, why do you enjoy your work?

AB: Every day we are delivering on our vision to increase access to quality education. This solves a significant challenge for learners, education providers, and society at large. I also enjoy working with the amazing team at OpenLearning, who are located in Australia, Malaysia, and distributed worldwide all passionate about improving education.

SWS: Thank you for your time, it was great to hear your thoughts about your industry & work, and were sure our readers will appreciate it, too.

Our team here at SWS had a great time putting together these questions. Readers who would like to know more about the company can visit ASX: OLL.

P.S: We are trialling company interviews for a limited time to gauge reader interest. If you are an executive or company representative and would like to organise an interview similar to this one, please contact us at editorial-team@simplywallst.com.

Our interview was conducted via email on June 24, 2020. Minor grammatical corrections have been made to the text. Simply Wall St was not compensated for the production of this interview and has no financial interest in any company mentioned. Company representatives are responsible for the answers provided to our questions.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation.

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The Future Of Online Education: An Interview With Adam Brimo, CEO of OpenLearning Limited (ASX: OLL) - Simply Wall St