OPENLEARNING LIMITED — Interim / Quarterly Report 2021

Jul 29, 2021

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Investor Update

OpenLearning Limited (ASX: OLL) June quarter FY21 results 30 July 2021

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Targeting Australia’s $7.5b online lifelong learning market

$7.9b Australian online education market (2021)

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$7.5b online lifelong learning market
Non-accredited courses Accredited courses
($245m) ($7.2b)
OpenLearning is expanding into the accredited segment
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Source: Online Education in Australia - Market Size 2007–2027: https://www.ibisworld.com/au/market-size/online-education

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A leading lifelong learning platform in Australia and Southeast Asia

• Complete solution for education providers to build a lifelong learning business

2.9m

Learners[1]

• Next generation learning platform

• Easy to use course setup tools

• Digital credentialing and portfolios

• Robust assessment system

• 'Know Your Learner' to identify academic misconduct

184

Education providers[2]

• Integrated marketing tools and payment gateway

• Scalable, modern cloud application (no IT required)

• Differentiated by technology, learning philosophy, brand and geography

• Proprietary platform recognised for in-depth, high quality learning

50m

Learner interactions

• Critical mass in two large lifelong learning markets

• With inherent network effects

• Single global platform where everyone has an OpenLearning account

• Consistently increases learner engagement/satisfaction by 20+ points

• Total unique registered learners since the start of the OpenLearning platform. Last 12 months unique active users of 0.424m from 1 July 2020 to 30 June 2021. 2. Education providers subscribed to OpenLearning with ARR in excess of $500/year

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Offers a suite of products to enable education providers to operate in the online lifelong learning market

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•
Providing an innovative learning platform and tools
Platform
on a SaaS model to enable education providers to
Subscription deliver courses online
•
Partnering with top institutions to deliver programs
Program
on the OpenLearning platform with capabilities
Delivery
across full spectrum of program delivery
•
Providing a marketplace and learning design
Value-add
services to clients to drive network effects and
services
accelerate platform adoption
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Note: Platform Subscription revenue includes: OpenLearning platform subscription, BEST Network; Program Delivery revenue includes: UNSW Transition Program Online, CS101 (pending); Valueadded services revenue includes: marketplace, learning services and OpenCreds

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A step change in Platform revenue growth from Platform Subscription and Program Delivery

• Platform revenue increased by 162% YoY, (75% QoQ growth) to $0.721m

Platform revenue (AUD, $m, unaudited)

• Platform revenue is comprised of:

• $0.353m of Platform Subscription

• $0.368m of Program Delivery

• Successful commencement and

• completion of the 1[st] intake of UNSW Transition Program Online (TPO) with majority of revenue was accrued in Q2

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$0.721
+162% YoY
$0.412
$0.323
$0.275 $0.288
Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21
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Continued growth in Platform Subscription

• Continued strong YoY growth in Platform Subscription:

• 59% increase on platform SaaS customers;

• 27% increase in annualise recurring revenue (ARR)

• Transition of customers to usage-based pricing and away from legacy fixed price contracts is well underway

• Usage-based pricing expected to have positive impact on revenue and gross margin over the medium term

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Platform SaaS Customers SaaS ARR [1] (AUD, $m)
(ARR > $500 per year)
+59% YoY +27% YoY
184 $1.449
$1.143
116
Q2 FY20 Q2 FY21 Q2 FY20 Q2 FY21
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1. Annualised recurring SaaS revenue, calculated by utilising the generally accepted industry standard, which involves multiplying the monthly accrued SaaS revenue in the month at the end of the quarter by 12 (months). The ARR calculation does not take into account the future expiry of the term of any contract under which SaaS revenue is generated or any customers lost during the relevant month. SaaS ARR includes platform subscriptions from both the OpenLearning Platform and BEST Network.

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A new growth engine from Program Delivery

Overview

A different approach to Online Program Delivery (OPM)

• Partnerships with top institutions to deliver programs on its platform.

• Capabilities across full spectrum of program delivery, including learning design, technology, learning platform, teaching, online facilitation, support and assessment.

• Demonstrated by UNSW TPO

• CS101 currently under development

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OpenLearning Traditional OPM [1]
#$%
Xyz
• Different learning platform for
each program
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Learning platform • Same learning platform used quality for all programs

• Student-centric delivery model for higher learner engagement and satisfaction

• Delivery quality and student experience vary

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• Ability to scale • One program accepted by multiple institutions, more scalable

• One program to only one institution, difficult to scale

• OPM stands for Online Program Management, OPM providers work with education institutions to take their academic programs online.

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Strong momentum from UNSW TPO

Significant revenue uplift in Q2

Attracting international students across the globe

• Successfully completed the 1[st] intake of UNSW TPO, resulting in the Program Delivery revenue increasing to $0.368m in Q2 from $0.04m in prior quarter, with majority of the revenue accrued in Q2

• August intake (2[nd] intake) has already exceeded that in March. Early interest seen in Sept. and Nov. intakes

Further scalability

• ~25K[1] international students in Australian university pathway programs before Covid, while continuous border closures potentially impact the attractiveness of Australian universities in short-term

• Discussions underway with four overseas universities to accept students who complete the TPO into their universities, diversifying destination country risk and creating greater scalability

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Including students who have paid or received offers

1. 2019 international students in Australia enrolling in undergraduate diploma as a proxy for university pathway courses, https://internationaleducation.gov.au/research/international-studentdata/Pages/default.aspx

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Exciting new program under development targeting fast-growing technology upskilling market

• CS101 (Computer Science 101) is under development and the first cohort starts on 18[th] October 2021

• Target the growing demand for technology skills among corporates and working professionals

• Comprises three courses, developed as OpenCreds and priced at $1,500 course with introductory discounts

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Tech industry experts

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Leading tech companies

• Brings together OpenLearning’s in-house expertise, industry experts and leading tech companies

• Once operating, revenue from CS101 will be categorised under Program Delivery

• For more information: https://www.cs101.com/

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Tertiary education providers

Australian tech workforce to grow 2x faster than other occupations, resulting in 809k tech workers by 2024, an increase of 113k from 2019.

Source: 1. Australian Government Labour Market Portal, 2. Deloitte ACS Australia’s Digital Pulse 2020

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Summary

• Key components of the Company’s growth strategy are now in place, cementing its position as a leading lifelong learning platform in Australia and Southeast Asia.

• Focusing on the Platform Subscription and Program Delivery offerings.

• Step change in Platform revenue, with 162% YoY growth to $0.721m in Q2 (75% QoQ).

• Continuous growth in Platform Subscription, reaching ARR of $1.449m, 27% YoY growth.

• New SaaS agreements signed with Afterpay and the University of Wollongong in Q2.

• TPO bolstered Program Delivery revenue. Three more intakes in FY21: August, September and November.

• Late stage discussions with four overseas universities to accept students from the TPO before the end of 2021.

• Exciting new program targeting technology up-skilling is under development, and will commence on 18 Oct 2021.

• Cash on hand of $5.744m as at 30 June 2021.

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Q&A

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Disclaimer

This presentation has been prepared by OpenLearning Limited ( The Company ). It does not purport to contain all the information that a prospective investor may require in connection with any potential investment in the Company. You should not treat the contents of this presentation, or any information provided in connection with it, as financial product advice or advice relating to legal, taxation or investment matters.

This presentation and the information contained herein and all electronic and/or hard copy documentation which comprise it are being provided to you solely for your information and may not be copied, reproduced, distributed, disclosed or published, in whole or in part, to any other person for any purpose whatsoever at any time without the prior written consent of the Company. This presentation is not an offer to any person nor is it a prospectus.

The Company has prepared this document based on information available to it at the time of preparation. No representation or warranty (whether express or implied) is made by the Company or any of their officers, advisers, agents or employees as to the accuracy, completeness or reasonableness of the information, statements, opinions or matters (express or implied) arising out of, contained in or derived from this presentation or provided in connection with it, or any omission from this presentation, nor as to the attainability of any estimates, forecast or projections set out in this presentation.

This presentation is not investment or financial product advice (nor tax, accounting or legal advice) and is not intended to be used for the basis of making an investment decision. The information contained in this presentation has been prepared without taking into account the objectives, financial situation or needs of individuals.

This presentation is provided expressly on the basis that you will carry out your own independent inquiries into the matters contained in the presentation and make your own independent decisions about the affairs, financial position or prospects of the Company. The Company reserves the right to update, amend or supplement the information at any time in their absolute discretion (without incurring any obligation to do so).

The Company, nor their related bodies corporate, officers, their advisers, agents and employees accept any responsibility or liability to you or to any other person or entity arising out of this presentation including pursuant to the general law (whether for negligence, under statute or otherwise), or under the Australian Securities and Investments Commission Act 2001, Corporations Act 2001 (Cth), competition and any such responsibility or liability is, to the maximum extent permitted by law, expressly disclaimed and excluded.

Nothing in this material should be construed as either an offer to sell or a solicitation of an offer to buy or sell securities. It does not include all available information and should not be used in isolation as a basis to invest in the Company.

This presentation contains reference to certain intentions, expectations, future plans, strategy and prospects of the Company.

Those intentions, expectations, future plans, strategy and prospects may or may not be achieved. They are based on certain assumptions, which may not be met or on which views may differ and may be affected by known and unknown risks. The performance and operations of the Company may be influenced by a number of factors, many of which are outside the control of the Company. No representation or warranty, express or implied, is made by the Company, or any of their directors, officers, employees, advisers or agents that any intentions, expectations or plans will be achieved either totally or partially or that any particular rate of return will be achieved.

Given the risks and uncertainties that may cause the Company actual future results, performance or achievements to be materially different from those expected, planned or intended, recipient’s should not place undue reliance on these intentions, expectations, future plans, strategy and prospects. The Company does not warrant or represent that the actual results, performance or achievements will be as expected, planned or intended.

This document does not constitute any part of any offer to sell, or the solicitation of any offer to buy, any securities in the United States or to, or for the account or benefit of any “US person” as defined in Regulation S under the US Securities Act of 1993 (Securities Act). The Company shares have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to any US person without being so registered or pursuant to an exemption from registration including any exemption for qualified institutional buyers.

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https://solutions.openlearning.com/ investors@openlearning.com

Authorised by: Adam Brimo, Group CEO & Managing Director