Coursera reports a decline in revenue in the graduate sector

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Short dive:

  • Although Coursera recorded overall revenue growth in the second quarter of 2022, the company’s graduation segment revenue fell 4% to $ 11.4 million, according to its latest earnings report.
  • Coursera, which is one of the world’s leading MOOC platforms, has partnered with colleges to launch dozens of online bachelor’s and master’s degrees. In return, those institutions give Coursera a share of their programs’ tuition revenue. The segment accounts for only about 9.1% of the company’s overall revenue, but it has grown rapidly until recently.
  • Jeff Maggioncalda, CEO of Coursera, said the decline in revenue from the graduate segment was due to lower-than-expected student enrollment, particularly programs offered by US and European institutions. The company’s net loss increased to $ 49.3 million in the second quarter, up 6.4 percent from a year ago.

Deepening on diving:

Coursera was launched ten years ago as one of the first MOOC providers, with the goal of bringing college-level courses to the masses. The platform has expanded its offering over the years, hosting its first master’s degree in 2015 and its first bachelor’s in 2018.

The company recorded significant revenue growth in the graduate segment in fiscal year 2021 and Maggioncalda he told analysts in February that Coursera is still in the early stages of building this part of its business. He doubled down on that strategy on Wednesday, saying the company plans to expand the types of degrees offered by new and existing partner colleges. This includes the launch of diplomas in a greater variety of languages.

Kenneth Hahn, Coursera’s chief financial officer, echoed those comments on a call with analysts. But Hahn said it will take some time for the new programs to pay off for the company, in part because international programs tend to have lower enrollment rates.

Nearly 17,500 students were enrolled in a degree program on the Coursera platform in the second quarter, up 19% from a year ago. However, the revenue from degrees has decreased slightly year after year.

This is because enrollment levels at Coursera have not reached the levels expected in some of the platform’s oldest US and European degree programs, where the company’s revenue is concentrated, according to Maggioncalda.

It is also due to the lesser activity of the students.

“The tuition paid depends on how many credit hours the students are learning,” Maggioncalda said. “Partly probably due to work, perhaps due to holidays, whatever that may be, the students have retired in the activity level.”

Maggioncalda also cited the strong job market in the United States, which has historically led to a drop in enrollment as people choose the workforce over college.

Despite declines in the graduate segment, Coursera reported that overall revenue rose to $ 124.8 million, up 22.2% from a year ago. The cost of revenue and operating expenses grew similarly, increasing 16.7% year-over-year to $ 172.6 million.

Coursera has also expanded its business segment, which focuses on providing its content libraries to colleges and employers. This segment includes Coursera for Campus, which allows colleges to use platform content in their classrooms.

Corporate revenue increased to $ 43.7 million in the second quarter, up 55 percent from a year ago. The company ended the quarter with 958 corporate customers, up 64% year-over-year.

Coursera plans to expand the enterprise segment by focusing on acquiring new customers and expanding existing relationships, Maggioncalda said. He drew attention to a new offer called Coursera Career Academya platform that colleges can offer to students who wish to learn skills directly related to work.

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