Chegg, K12 earnings show growth in online-education spending

Chegg Inc.’s results and outlook topped Wall Street estimates Monday.


Chegg Inc.

Quarterly earnings from online-education companies Chegg Inc. and K12 Inc. topped Wall Street expectations Monday, showing growth as distance-learning initiatives have endured in many places for more than half a year, but their after-hours share performance diverged.

Chegg
CHGG,
-0.08%

shares declined in the extended session Monday after the digital textbook and scholastic services company’s results and outlook topped Wall Street estimates following a year when its share price has more than doubled.

On the other hand, shares of K12
LRN,
-1.63%

rose in the extended session on better-than-expected results; for the year, shares have risen 39%.

Chegg shares declined 2% after hours, following an initial 10% drop after the earnings report hit, and a 0.1% decline in the regular session to close at $86.69. As of Monday’s close, Chegg shares are up 129% for the year, compared with a 5.3% rise by the S&P 500 index
SPX,
-1.85%
.

The company reported a third-quarter loss of $37.1 million, or 29 cents a share, compared with a loss of $11.5 million, or 10 cents a share, in the year-ago period. Adjusted earnings were 17 cents a share.

Revenue rose to $154 million from $94.2 million in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 10 cents a share on revenue of $143.9 million.

Chegg expects fourth-quarter revenue of $188 million to $190 million, while analysts had forecast revenue of $183.4 million. For 2021, the company expects revenue of about $775 million, while analysts had forecast $758.5 million.

K12 shares rose 11% after hours, following a 1.6% decline to close the regular session at $28.23, as the online education company reported a surprise profit.

For the fiscal first quarter, K12 reported net income of $12.7 million, or 30 cents a share, versus a loss of $9.7 million, or 25 cents a share, in the year-ago quarter. Revenue rose to $371 million from $257.1 million in the year-ago period.

Analysts surveyed by FactSet had forecast a loss of 32 cents a share on revenue of $362.6 million.

K12 forecast fiscal 2021 revenue of $1.45 billion to $1.47 billion, while analyst expect $1.42 billion.

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K-12 Online Tutoring Market | Growing Importance of STEM Education to Boost Market Growth

The global K-12 online tutoring market size is poised to grow by USD 80.18 billion during 2020-2024, progressing at a CAGR of about 14% throughout the forecast period, according to the latest report by Technavio. The report offers an up-to-date analysis regarding the current market scenario, latest trends and drivers, and the overall market environment. The report also provides the market impact and new opportunities created due to the COVID-19 pandemic. Download a Free Sample of REPORT with COVID-19 Crisis and Recovery Analysis.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20201023005232/en/

Technavio has announced its latest market research report titled Global K-12 Online Tutoring Market 2020-2024 (Graphic: Business Wire)

The ability to deliver clear content within a short period is one of the key drivers for the K-12 Online Tutoring Market. The knowledge delivered by microlearning is easy to comprehend and understand. Microlearning splits broad topics into small units comprising of videos, audios, texts, or infographics. Microlearning also involves the use of bite-sized learning modules, short-term learning activities, quizzes, games, and just-in-time content delivery. The conventional long-duration tutoring programs are further enhancing the popularity of K-12 online tutoring. This is further expected to increase as the demand for K-12 online would be increasing during the forecast period.

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Report Highlights:

  • The major K-12 online tutoring market growth came from the structured tutoring segment. This report provides an accurate prediction of the contribution of all the segments to the growth of the K-12 online tutoring market size.

  • North America was the largest K-12 online tutoring market in 2019, and the region will offer several growth opportunities to market vendors during the forecast period. This is attributed to factors such as the growing demand for test preparation and standardization of competitive tests.

  • The global K-12 online tutoring market is fragmented. Ambow Education Holding Ltd., Chegg Inc., Club Z! Inc., iTutorGroup, K12 Inc., Pearson Plc, Providence Equity Partners LLC, TAL Education Group, Think & Learn Pvt. Ltd., and Vedantu Innovations Pvt. Ltd. some of the major market participants. To help clients improve their market position, this K-12 online tutoring market forecast report provides a detailed analysis of the market leaders.

  • As the business impact of COVID-19 spreads, the global K-12 online tutoring market 2020-2024 is expected to have positive impact. As the pandemic spreads in some regions and plateaus in other regions, we continue to revaluate the impact on businesses and update our report forecasts.

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The rising competition in STEM competitive examinations will be a Key Market Trend

In countries such as India, students must have basic STEM (science, technology, engineering, and mathematics) education to prepare for competitive examinations. Also, the increasing job opportunities in this field have bolstered the demand for STEM education. As

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Aurora Institute Calls on State Leaders to Dismantle K-12 Education as We Know It and Commit to a Learner Promise to Ensure Equity for All

Aurora Institute Calls on State Leaders to Dismantle K-12 Education as We Know It and Commit to a Learner Promise to Ensure Equity for All

PR Newswire

WASHINGTON, Oct. 22, 2020

WASHINGTON, Oct. 22, 2020 /PRNewswire/ — The Aurora Institute (@Aurora_Inst) today released A Promise for Equitable Futures: Enabling Systems Change to Scale Educational and Economic Mobility Pathways, a book that calls for the systematic dismantling of the traditional time- and place-bound structures that mark our current K-12 education system. 

Visit the iNACOL website: https://aurora-institute.org/ (PRNewsfoto/iNACOL)
Visit the iNACOL website: https://aurora-institute.org/ (PRNewsfoto/iNACOL)

In its place, states would build systems of governance, policy, and infrastructure to certify that learners who demonstrate competencies in K-12, postsecondary, workforce, and community settings will have access to continuing education and a purposeful, living-wage career. 

The book urges states to establish a “Learner Promise,” a commitment that every learner will have access and support to pursue a certified pathway with system-wide opportunities that guarantee entry into a meaningful, chosen career that will build social and economic capital over the course of their lives. In addition, states would commit to taking the systemic action to specifically disrupt inequities in access, engagement, and attainment for Black, Latinx, Indigenous people, and people from low-income households. 

Moreover, states would let go of the notion that education should be a linear, time-bound sequence of learning that occurs within institutions of formal education. Rather, K-12 education can be reimagined as a “learning ecosystem.” A more aligned, coherent ecosystem would be an equitable, dynamic, and responsive system in which learners can customize their learning experiences. 

“As a nation, we have been taught to believe in a story that goes like this: success in college is the way to a good job. Success in high school is the way to a good college, and schools are equalizers where motivated, capable youth can achieve mobility along a certain and certified path,” said author Katherine Casey. “The problem with this story is that it is not true.”

Co-author Susan Patrick, President and CEO of the Aurora Institute, asks, “”How can we scale innovations with supportive policies and practices? A Promise for Equitable Futures is a call to action for states with policy recommendations to create aligned, coherent competency-based education and workforce development systems throughout K-12 education, postsecondary, and the workforce. It challenges policy leaders to fundamentally rethink the structure and design of education systems and makes a collective call to develop new equity-driven ecosystems for lifelong learning in the United States.”

The siloed, factory-model of today’s education system was designed more than 100 years ago to send some young people to college, send some to the trades, and to assimilate the rest into a dominant culture. Today, the evolving realities of work and learning demand that all learners receive some postsecondary education. It’s also clear that a four-year degree is not the sole pathway to social and economic mobility. The incredible costs of increasing inequality on our world make the inequitable outcomes of

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Rowden did not fully fund K-12 education for the first time in Missouri history

State Sen. Caleb Rowden is trying his best to keep Missouri’s 19th District red with campaign ads stretched across social media touting his efforts in office. Rowden and his opponent, Democrat Judy Baker, have stressed public education, which has been historically underfunded by the state.

A recent Facebook ad by Rowden’s campaign asks users to “like” his page “to help re-elect State Senator Caleb Rowden who fully funded Missouri K-12 education for the first time in state history.” 

What does it mean to “fully fund” public education? And does Rowden deserve credit?

A foundation to build upon

Missouri’s K-12 education is funded by a mix of local, state, and federal sources, with state sources accounting for about 40% of the total funds each year, according to the Missouri Budget Project. For decades, Missouri has been using what is called the foundation formula to determine the level of state funding for each of the more than 500 school districts in the state. This in turn provides a state funding target each fiscal year. 

According to the State & Regional Fiscal Studies Unit at the University of Missouri, the foundation formula has gone through many revisions due to changing economic circumstances, court rulings, and modifications in how real and personal property is taxed in the state. 

When the 1993 formula was deemed obsolete, a new foundation formula was adopted on July 1, 2006. It determines each district’s state aid by multiplying the weighted average daily attendance, which accounts for low-income, special education, and limited English proficiency students, by that of the minimum amount that will be spent on students in all districts to ensure all students receive an adequate education. That number is then adjusted based on local funding and local cost of living.

Kim Rueben, director of the State and Local Finance Initiative at the Urban-Brookings Tax Policy Center, told us that the legislature has to meet the total dollar amount determined by the formula for K-12 education to be considered fully funded.

“It isn’t necessarily uncommon for formulas or guarantees not to be fully funded,” Rueben said. 

The current formula wasn’t fully funded until 2017 for the 2018 fiscal year. It was again fully funded the following year. 

So what did Rowden do?

Rowden did not respond to our requests for evidence to support the claim in his Facebook ad.

But in April 2017, the Kansas City Star reported that a bipartisan group of senators voted on an amendment to fully fund K-12 education “for the first time in history.” 

Rowden did not sponsor the amendment. But the senator, who was sworn into office three months earlier, was among the 19 “yeas” to add $45 million and bring public education funding to a total of $3.4 billion, matching the formula’s yearly funding target. 

We wondered whether previous formulas had been fully funded. So we asked someone who helped draft the prior formula in 1993, Otto Fajen, the legislative director at the Missouri National Education Association. 

“There has been multiple, sustained

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