Introduction & Market Context
Qoria Ltd (ASX:QOR) released its March Quarter FY2025 presentation on April 28, 2025, highlighting continued growth across all business segments and reaffirming its trajectory toward positive free cash flow by the end of calendar year 2025. The online safety and student wellbeing company reported a 25% year-over-year increase in annual recurring revenue (ARR), reaching $137 million, despite the March quarter traditionally representing a cyclical low point in collections.
The company’s shares closed at $0.355 on April 24, representing a 2.9% increase and placing its market capitalization at approximately $462 million. This values the company at 3.3 times its ARR, a key valuation metric for software-as-a-service (SaaS) businesses.
Quarterly Performance Highlights
Qoria reported adding $5 million in gross ARR during the quarter, with contributions from new business and customer cross-sells. The company’s global footprint continues to expand, now protecting over 25 million children (up 14% year-over-year) and serving more than 7 million parents (up 17% year-over-year) across more than 100 countries.
As shown in the following chart of ARR growth components, Qoria experienced modest churn in its K12 (NYSE:LRN) business this quarter, which was mostly offset by favorable foreign exchange movements:
The company’s ARR growth remained strong across all regions:
- US K12: US$34.7 million, up 29% year-over-year
- UK K12: £22.8 million, up 7% year-over-year
- Qustodio (consumer): US$17.1 million, up 17% year-over-year
- ANZ K12: AUD$6.7 million, up 33% year-over-year
Qoria’s SaaS metrics demonstrate the strength of its business model, with over 99% recurring revenue, 93% service margin, and 105% net retention over the past 12 months. The company also reported impressive marketing efficiency at 8x return on investment and K12 churn below 5%.
The following image illustrates Qoria’s key SaaS metrics:
Detailed Financial Analysis
The March quarter represents a seasonal low point in Qoria’s cash collection cycle, reflecting the Northern Hemisphere’s education sales patterns. Despite this seasonality, March receipts were up 13% compared to the previous corresponding period, reaching over $22 million.
Qoria reported the following financial metrics for the quarter:
- YTD Operating Cash: $19.4 million; ($1.7 million) in the quarter
- YTD Free Cash: ($0.3 million); ($7.7 million) in the quarter
- Cash balance: $29.1 million
- Net Debt: ($22.4 million)
The company’s quarterly cash flow analysis reveals the seasonal nature of its business:
Qoria noted that its move away from multi-year cash upfront sales reduces short-term receipts but significantly improves ongoing margins. Management expressed confidence in delivering "strongly positive free cash flow for the calendar year," marking an important milestone in the company’s financial evolution.
The following chart demonstrates Qoria’s consistent ARR to cash to revenue conversion over time:
Strategic Initiatives
Qoria announced several strategic partnerships during the quarter that position the company for continued growth:
1. Multi-year extension of its partnership with Texas’ Technology Alliance for Statewide Initiatives (TASI), where Qoria now protects more than 20% of students in the second-largest U.S. state.
2. New partnership with the West Auckland Trusts in New Zealand to support student wellbeing across the region, initially launching to 30,000 students representing 50% of West Auckland schools. This includes integrating Te Ao Māori cultural elements into the Qoria brand and Pulse platform.
3. Launch of Qustodio in Japan in partnership with BBSS Corporation, a SoftBank (TYO:9984) Corp. Group Company, expanding the consumer offering to a new market.
The company also highlighted the launch of new products, including EdTech Insights and Cloud Scan, which have already generated over $3 million in pipeline opportunities.
Forward-Looking Statements
Qoria ended the March quarter with a record K12 pipeline of $43 million, with a weighted value of $19 million, positioning the company for a strong June quarter, which is seasonally the strongest in the U.S. education market.
The following chart illustrates the company’s weighted pipeline and historical conversion rates:
Management reiterated its expectation to achieve positive free cash flow for calendar year 2025, despite the seasonal nature of cash collections. The company’s pipeline suggests a strong quarter ahead, with the June quarter typically delivering the highest conversion rates of the year.
Qoria’s consumer business, Qustodio, added nearly $1 million in ARR during what is typically a slow quarter, with improving average revenue per user (ARPU) and churn metrics. The B2B2C offering School Connect continues to develop with nearly 100,000 connected accounts, helping to reduce customer acquisition costs.
With its expanding global footprint now reaching 16% of U.S. students and 38% of U.K. students, Qoria appears well-positioned to capitalize on growing demand for online safety and student wellbeing solutions across both educational and consumer markets.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.