Posted on Tuesday, Feb 19th 2019
According to a Research and Markets report, the global education technology market is estimated to grow 15% annually during the period 2018 to 2024. The growth is expected to be driven by academic institutions who are providing off-campus licenses for software, repositories for courses and study materials, and online course catalogs. Cedar Valley, Utah-based EdTech company and Billion Dollar Unicorn Pluralsight (Nasdaq: PS) recently reported its fourth quarter results that surpassed market expectations.
Revenues for the quarter grew 42% over the year to $67.3 million, ahead of the Street’s forecast of $65.8 million. The quarter’s billings also grew 42% to $100.6 million. Despite the growing revenues, it continued to report losses and ended the quarter with a net loss of $31.9 million or $0.24 per share. On an adjusted basis, losses came in at $0.09 per share, ahead of the market’s forecast of a loss of $0.11 per share.
It ended the year with revenues growing 39% over the year to $232 million and a net loss of $83.7 million, or $0.65 per share.
For the current quarter, Pluralsight expects revenues of $68-$68.5 million with a loss of $0.09-$0.08 per share. It expects to end the year with revenues of $306-$314 million and a loss of $0.32-$0.26 per share. The Street had forecast revenues of $67.4 million for the quarter with a loss of $0.09 per share and revenues of $306.3 million for the year with a loss of $0.30 per share.
Pluralsight remains focused on the enterprise segment. The recently reported quarter was the seventh consecutive quarter of more than 50% growth in B2B billings for the company. During the quarter, not only did Pluralsight add more new business customers but also continued to sell more services to its existing customers. To help attract more customers, Pluralsight is working on its go-to-market strategy of building partnerships with leading technology companies. It already has strategic partnerships with the three largest cloud providers – Amazon, Alphabet, and Microsoft – and it continues to build on these relationships.
Last quarter, it completed the build-out of multiple Azure Role IQ including solution architect, developer, and administrator. It is currently in the process of creating additional roles and determining how to better support Azure customers to increase Azure adoption within their respective organizations. With Google, Pluralsight has integrated its courses with Google cloud content and is now piloting the experience for its customers. It is currently developing a deeper plan for curriculum and go-to-market alignment. With Amazon, Pluralsight is now building a B2B pipeline.
Pluralsight has been growing its business both organically and through acquisitions of smaller players. It may not have acquired any companies in the recent past, but it has acquired eight companies overall. Its last acquisition was in 2016 when it bought Connecticut-based Train Simple for an undisclosed sum. Founded in 2001, Train Simple was an Adobe Authorized Training Center specializing in self-paced training for creatives. It was a leading provider of Adobe online training and offered over 1,200 courses that covered the entire Adobe Creative Cloud suite and other Adobe flagship technologies. The acquisition has helped Pluralsight improve its creative learning experience. Train Simple’s funding and financial details prior to the acquisition are not known. But analysts estimate that it was trending at annual revenues of $7 million.
Prior to adding Train Simple, Pluralsight had made two acquisitions in 2015 – HackHands and Code School. New York-based HackHands instantly connected developers with a network of expert programmers to help them get expert advice on specific code related issues. The service helped developers write and debug their code faster. HackHands had raised $175,000 in funding and was trending at annual revenues of $3 million at the time of the acquisition. Pluralsight planned to integrate HackHands services to build its digital mentoring service beyond video tutorials and assessments. Terms of the acquisition were not disclosed.
Over the years, Pluralsight has successfully added smaller, bootstrapped players to its portfolio to expand to its Unicorn status. Plurasight itself was bootstrapped for nearly a decade before raising its first funding round in 2013. It had raised $192.5 million in venture funding before going public in May last year. It had raised $310 million through its IPO at a list price of $15 and was valued at $2 billion. Currently, its stock is trading at $29.99 with a market capitalization of $4 billion. It had fallen to a 52-week low of $17.88 in December last year and is yet to climb to its 52-week high levels of $38.37 that it had climbed to in September last year.
I would like to know from users about the other companies that they think Pluralsight should evaluate to add to its portfolio? What other training modules should the company be looking to add to get deeper into the enterprise segment?
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns.
This segment is a part in the series : Billion Dollar Unicorns
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