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Dive Brief:
- Although Coursera reported overall revenue growth in the second quarter of 2022, revenue from the company’s degree segment fell 4 percent to $11.4 million, according to Latest income report.
- Coursera, one of the world’s most popular MOOC platforms, has worked with colleges to launch dozens of online bachelor’s and master’s degrees. In return, those institutions give Coursera a share of tuition revenue from their programs. This segment accounts for only 9.1 percent of the company’s total revenue, but has been growing rapidly until recently.
- Coursera CEO Jeff Magioncalda attributed the drop in revenue for the degree division to lower-than-expected student enrollment, particularly in programs offered by US and European institutions. The company’s net loss widened to $49.3 million in the second quarter, a 6.4% increase from a year ago.
Dive Insight:
Coursera started over a decade ago as one of the first MOOC providers, aiming to bring college-level courses to the masses. The forum has expanded its offerings over the years, hosting the Bachelor in 2015 and the Bachelor in 2018.
The company has shown significant revenue growth in the degrees segment in fiscal 2021 and Magioncalda. Analysts said in February That said, Coursera is still in the early stages of building this part of its business. Wednesday doubled down on that strategy. While the company It plans to expand the range of degrees offered from new and existing partner colleges. This includes launching degrees in different languages.
Coursera’s chief financial officer, Kenneth Hahn, echoed the sentiments on a call with analysts. But Hahn said it will take time to see if new programs pay off for the company, partly because international programs have lower tuition rates.
In the second quarter, nearly 17,500 students enrolled in degree programs on the Coursera platform, a 19 percent increase from a year ago. Still, degree earnings are down slightly year over year.
That’s because Coursera’s enrollment levels haven’t reached expectations in some of the platform’s older US and European degree programs, where the company’s revenue is concentrated, Magioncalda says.
It is also the reason for low student activity.
“The fee charged depends on how many credit hours students are taking,” Magioncalda said. “Partly, maybe because of work, maybe because of the break – whatever – students are back on the activity level.”
Magioncalda cited the strong job market in the United States, which has historically led to lower enrollment as people choose the workforce over college.
Despite the decline in the degree segment, Coursera reported that total revenue rose to $124.8 million, an increase of 22.2% from a year ago. Revenue and operating expenses grew at a similar clip, rising 16.7% year over year to $172.6 million.
Coursera has been expanding its enterprise division, focusing on offering its content libraries to colleges and employers. This section includes Coursera for Campus, which allows colleges to use the platform’s content in their classrooms.
Enterprise revenue rose to $43.7 million in the second quarter, up 55 percent from a year ago. The company ended the quarter with 958 enterprise customers, up 64 percent year-over-year.
Coursera plans to expand its enterprise division by focusing on acquiring new customers and expanding existing relationships, Magioncalda said. He paid attention to the new offering Coursera Career AcademyStage colleges can offer students who want to learn skills directly related to work.
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