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Pluralsight Growing Through Large Partnerships

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About: Pluralsight, Inc. (PS)
by: Sramana Mitra
Summary

For the quarter, Pluralsight's revenues grew 34% to $82.6 million, ahead of the Street's forecast of $79.75 million.

Net loss was $0.32 per share, compared with $0.26 per share a year ago.

Pluralsight is looking to drive billing by focusing on its sales strategy.

A Global Markets Insight report published earlier this year estimates the global e-learning market to grow 7% annually to over $300 billion by 2025. The academic sector is expected to grow at over 50% CAGR and the corporate or enterprise segment is expected to grow at 8%. Cedar Valley, Utah-based Pluralsight (NASDAQ:PS), a leading player in the market recently reported its stellar third-quarter results.

Pluralsight's Financials

For the quarter, Pluralsight's revenues grew 34% to $82.6 million, ahead of the Street's forecast of $79.75 million. The quarter's billings grew 28% to $92.1 million. Net loss was $0.32 per share, compared with $0.26 per share a year ago. On an adjusted basis, net loss was $0.08 per share which was better than previous year's adjusted net loss of $0.10 per share and the market's estimated loss of $0.14 per share.

Pluralsight expects to end the current year with revenues of $314-316 million with a loss of $0.37-0.35 per share. The Street is forecasting revenues of $315.25 million for the year with a loss of $0.37 per share.

Pluralsight's Growth Focus

During the last few months, Pluralsight has lost nearly half of its market value as the market reacted to the slowdown of its billings statistics. But things appear to be picking back up. Compared with last quarter's billings growth rate of 21% over the year, Q3 billings grew to 28% over the year. It is still a far cry from the earlier quarters that delivered growth rates of more than 40% year over year.

Pluralsight is looking to drive billing by focusing on its sales strategy. It recently announced the addition of former Salesforce (NYSE:CRM) executive Ross Meyercord as its Chief Revenue Officer. It is also driving its sales energies towards enterprise customers. During the quarter, enterprise customer billings came in at 88% compared with 85% a quarter ago.

To further strengthen enterprise offerings, Pluralsight recently released Flow, a service that gives engineering teams access to detailed metrics and data for their departments. Flow analyzes data from git repositories, code reviews, and issue trackers, and packages them in easy-to-understand reports. It delivers visualized work patterns to engineering leaders, so that they can debug development process and help their teams work more efficiently. When combined with its core offering, IT teams will be able to use Skills to upskill their teams based on the prevailing trends and gaps and Flow will allow them to leverage workflow data to better manage and enable their teams.

Besides its own sales force, Pluralsight is also banking on growth through partner ecosystem and content creation. It has deepened its relationship with Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG) (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN). It now has more than 35 Google Cloud authored courses on its skills platform and has more than 1,700 business customers access these courses. Google is also helping sell targeted content to their community. It is also seeing similar results from AWS where it is investing in the sales collaboration by aligning cloud initiatives and expanding to new customers. Pluralsight believes that by continuing to build on its content partnerships, it will become the leader within the Cloud skills segment.

Pluralsight has had a turbulent year so far. Its stock had climbed to a 52-week high of $35.70 in April this year. In July, the stock started to tumble and fell to a 52-week low of $14.84 by August. It has recovered somewhat and is currently trading at $17.35 with a market capitalization of $2.6 billion. It is still higher than its 2018 IPO valuation when it raised $310 million at $2 billion.

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