Covid-19 revealed the ugly cracks in the global healthcare system, unveiling a need for better tech and more workers. Thankfully, many students have taken it upon themselves to be the flag bearers of change as EdTech company Keypath Education International (ASX: KED) reports a revenue growth of 17% on Q1FY22 within its healthcare offerings.
Overall, the Company reported a Q1 FY23 revenue of $49.2 million (US$31.4 million), which is 3.4% higher than Q1 FY22. In FY22, the Company’s quarter-on-quarter revenue comparability has been impacted in Australia by the COVID-related increase in enrollments due to lockdowns earlier in the year and by the expected softening of enrollments in some programs from mature vintages.
For Keypath, the upcoming year is a “transition year” that will set itself in the position for growth. As international students return (pushing enrolments to over 100k), online education takes off and demand for certain courses picks up, Keypath has plenty to benefit from. In fact, it added two new partners and seven new programs in its nursing, health and social services verticals in Q1 FY23.
Keypath’s Founder and CEO, Steve Fireng, said “Our significant progress in global Healthcare OPM continues with our market leading Healthcare platform delivering outstanding outcomes for our partners, students and society more broadly as we work to close the significant shortages of healthcare workers globally. We continue to transition our investments to vintages and programs where we see the strongest demand and, as expected, contribution margin and adjusted EBITDA have been impacted by this.”
Keypath is a global EdTech company founded in 2014, geared towards the online program management (OPM) market. It boasts over 40 university partners, and aims to deliver career-relevant, technology-enabled online higher education programs.
As of September 30, 2022, its program count stands at 185, which represents an increase of seven programs from June 30, 2022. The seven programs added in the quarter came from the North American region, with five coming from the nursing vertical and two coming from the health and social services vertical.
Fireng added, “We have already closed 18 programs from our FY24 vintage of which 17 are in Healthcare. With the unprecedented demand we are converting into our largest ever partner and program pipeline, Keypath is well positioned across the globe to expand its technology and services to continue to help universities provide quality access to education in a digital environment including by continuing to grow our programs in Southeast Asia.”
The Company will continue to invest into newer vintages comprising programs with improved growth, unit economics and returns profiles. It is using the strong growth performance of its FY21 vintage programs as its benchmark, comparing it to Keypath’s earlier “pre-KeypathEDGE” vintages. The Company is counting on the new programs to usher in profitability and close the healthcare workers gap.
It is confident in achieving its guidance for FY23, which comprises revenue of US$125 million – US$130 million ($195 million to $203 million) on a constant currency basis. Moreover, it plans on increasing its online footprint from 2% penetration in FY22 to 5% come 2025. Finally, the Company will make its attempt at a Southeast Asia market expansion, starting with Malaysia and Singapore. Can it disrupt the healthcare education systems of countries with the most successful healthcare institutions in the world?
Alinda is a Business Reporter for The Sentiment
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