Cover
Cover - shares | 9 Months Ended | |
Mar. 31, 2024 | May 20, 2024 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q3 | |
Entity Information [Line Items] | ||
Entity Registrant Name | Keypath Education International, Inc. | |
Entity Central Index Key | 0001865852 | |
Entity File Number | 000-56641 | |
Entity Tax Identification Number | 86-2590572 | |
Entity Incorporation, State or Country Code | DE | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | No | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Contact Personnel [Line Items] | ||
Entity Address, Address Line One | 1501 East Woodfield Road | |
Entity Address, Address Line Two | Suite 204N | |
Entity Address, City or Town | Schaumburg | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60173 | |
Entity Phone Fax Numbers [Line Items] | ||
City Area Code | (224) | |
Local Phone Number | 419-7988 | |
Entity Listings [Line Items] | ||
Title of 12(g) Security | Common Stock, par value $0.01 per share | |
Entity Common Stock, Shares Outstanding | 214,694,686 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
Current Assets | ||
Cash | $ 41,223 | $ 46,840 |
Accounts receivable, net of allowance | 10,497 | 10,947 |
Prepaid expenses and other current assets | 1,577 | 2,232 |
Total Current Assets | 53,297 | 60,019 |
Property and equipment, net | 707 | 1,007 |
Operating lease right-of-use assets | 173 | 392 |
Goodwill | 8,754 | 8,754 |
Intangible assets, net | 8,611 | 7,589 |
Contract acquisition costs | 2,523 | 3,023 |
Deferred tax asset | 253 | 1,103 |
Other assets | 362 | 420 |
Total Assets | 74,680 | 82,307 |
Current Liabilities | ||
Accounts payable | 6,738 | 6,991 |
Accrued liabilities | 12,355 | 12,704 |
Deferred revenue | 5,379 | 7,023 |
Income tax payable | 587 | 508 |
Operating lease liabilities | 426 | 553 |
Total Current Liabilities | 25,485 | 27,779 |
Deferred tax liabilities | 62 | 29 |
Long-term operating lease liabilities | 139 | 440 |
Total Liabilities | 25,686 | 28,248 |
Stockholders’ Equity | ||
Common stock | 2,147 | 2,140 |
Additional paid-in capital | 259,677 | 257,564 |
Accumulated deficit | (212,377) | (204,970) |
Accumulated other comprehensive loss | (453) | (675) |
Total Stockholders’ Equity | 48,994 | 54,059 |
Total Liabilities and Stockholders’ Equity | $ 74,680 | $ 82,307 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||||
Revenue | $ 35,699 | $ 32,866 | $ 102,608 | $ 91,554 |
Operating expenses: | ||||
Salaries and wages | 19,062 | 17,771 | 53,564 | 54,326 |
Direct marketing | 12,461 | 12,214 | 34,778 | 34,770 |
General and administrative | 4,248 | 4,050 | 13,620 | 12,071 |
Depreciation and amortization | 1,527 | 1,323 | 4,231 | 4,062 |
Stock-based compensation | 751 | 1,220 | 2,170 | 3,103 |
Total operating expenses | 38,049 | 36,578 | 108,363 | 108,332 |
Operating loss | (2,350) | (3,712) | (5,755) | (16,778) |
Interest expense | (50) | (50) | ||
Other expense, net | (197) | (370) | (398) | (558) |
Loss before income taxes | (2,597) | (4,082) | (6,203) | (17,336) |
Income tax benefit (expense) | 50 | (439) | (1,204) | (699) |
Net loss | $ (2,547) | $ (4,521) | $ (7,407) | $ (18,035) |
Loss per share: | ||||
Net loss per common share, basic (in Dollars per share) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.08) |
Weighted-average shares of common stock outstanding, basic (in Shares) | 214,694,686 | 213,630,891 | 214,515,117 | 212,778,578 |
Comprehensive loss: | ||||
Net loss | $ (2,547) | $ (4,521) | $ (7,407) | $ (18,035) |
Foreign currency translation adjustment | (153) | 74 | 222 | (39) |
Total comprehensive loss | $ (2,700) | $ (4,447) | $ (7,185) | $ (18,074) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||||
Net loss per common share, diluted | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.08) |
Weighted-average shares of common stock outstanding, diluted | 214,694,686 | 213,630,891 | 214,515,117 | 212,778,578 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Balance at Jun. 30, 2022 | $ 2,082 | $ 255,481 | $ (180,527) | $ (778) | $ 76,258 |
Balance (in Shares) at Jun. 30, 2022 | 208,223,105 | ||||
Net loss | (18,035) | (18,035) | |||
Currency translation adjustment | (39) | (39) | |||
Stock-based compensation | 3,103 | 3,103 | |||
CDI vesting, net of payments of taxes from withheld shares | $ 65 | (1,478) | (1,413) | ||
CDI vesting, net of payments of taxes from withheld shares (in Shares) | 6,524,159 | ||||
Employee stock repurchases | $ (10) | (506) | (516) | ||
Employee stock repurchases (in Shares) | (1,069,542) | ||||
Balance at Mar. 31, 2023 | $ 2,137 | 256,600 | (198,562) | (817) | 59,358 |
Balance (in Shares) at Mar. 31, 2023 | 213,677,722 | ||||
Balance at Dec. 31, 2022 | $ 2,136 | 255,406 | (194,041) | (891) | 62,610 |
Balance (in Shares) at Dec. 31, 2022 | 213,523,881 | ||||
Net loss | (4,521) | (4,521) | |||
Currency translation adjustment | 74 | 74 | |||
Stock-based compensation | 1,220 | 1,220 | |||
CDI vesting, net of payments of taxes from withheld shares | $ 1 | (26) | (25) | ||
CDI vesting, net of payments of taxes from withheld shares (in Shares) | 153,841 | ||||
Balance at Mar. 31, 2023 | $ 2,137 | 256,600 | (198,562) | (817) | 59,358 |
Balance (in Shares) at Mar. 31, 2023 | 213,677,722 | ||||
Balance at Jun. 30, 2023 | $ 2,140 | 257,564 | (204,970) | (675) | 54,059 |
Balance (in Shares) at Jun. 30, 2023 | 213,971,128 | ||||
Net loss | (7,407) | (7,407) | |||
Currency translation adjustment | 222 | 222 | |||
Stock-based compensation | 2,170 | 2,170 | |||
CDI vesting, net of payments of taxes from withheld shares | $ 7 | (57) | (50) | ||
CDI vesting, net of payments of taxes from withheld shares (in Shares) | 723,558 | ||||
Balance at Mar. 31, 2024 | $ 2,147 | 259,677 | (212,377) | (453) | 48,994 |
Balance (in Shares) at Mar. 31, 2024 | 214,694,686 | ||||
Balance at Dec. 31, 2023 | $ 2,147 | 258,926 | (209,830) | (300) | 50,943 |
Balance (in Shares) at Dec. 31, 2023 | 214,694,686 | ||||
Net loss | (2,547) | (2,547) | |||
Currency translation adjustment | (153) | (153) | |||
Stock-based compensation | 751 | 751 | |||
Balance at Mar. 31, 2024 | $ 2,147 | $ 259,677 | $ (212,377) | $ (453) | $ 48,994 |
Balance (in Shares) at Mar. 31, 2024 | 214,694,686 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating activities: | ||
Net loss | $ (7,407) | $ (18,035) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization | 4,231 | 4,062 |
Stock-based compensation | 2,170 | 3,103 |
Deferred compensation liability | 1,825 | |
Deferred income taxes | 874 | 552 |
Other, net | 207 | 86 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 420 | (7,177) |
Prepaids and other | 599 | 923 |
Accounts payable and accrued liabilities | (434) | (6,106) |
Deferred revenue | (1,574) | 4,851 |
Income tax payable | 65 | (370) |
Net cash from operating activities | (849) | (16,286) |
Investing activities: | ||
Capitalized software and website development costs | (4,172) | (3,324) |
Purchases of property and equipment | (232) | (630) |
Net cash from investing activities | (4,404) | (3,954) |
Financing activities: | ||
Payments of taxes from withheld shares | (50) | (1,413) |
Employee stock repurchases | (516) | |
Net cash from financing activities | (50) | (1,929) |
Effect of exchange rate changes on cash | (314) | (162) |
Net change in cash | (5,617) | (22,331) |
Cash at beginning of period | 46,840 | 59,179 |
Cash at end of period | 41,223 | 36,848 |
Supplemental cash flows information: | ||
Income taxes paid | $ 242 | $ 390 |
Principal Business Activity and
Principal Business Activity and Significant Accounting Policies | 9 Months Ended |
Mar. 31, 2024 | |
Principal Business Activity and Significant Accounting Policies [Abstract] | |
Principal business activity and significant accounting policies | 1. Principal business activity and significant accounting policies Description of business Keypath Education International, Inc.’s principal activity is OPM primarily serving the postgraduate education market of traditional universities. The Company enables universities in Australia, the U.S., Canada, the U.K., Malaysia and Singapore to deliver technology-enabled online degrees and programs driven by market demand. Through end-to-end technology and data-driven service, the Company and its subsidiaries partner with universities to design, launch, and grow online programs that deliver career-relevant skills to address global, social and economic challenges and prepare busy professionals for the future of work. The suite of services the Company provides to its university partners includes program design and development, marketing, management, student recruitment, student support, clinical placement services and faculty recruitment. Additionally, we continue to develop and improve KeypathEDGE, which offers data-informed insights to improve the experiences of both universities and students. The Company enters into long-term contracts with universities and earns revenue through an agreed revenue share with the relevant university during the contracted term. Keypath has over 700 employees spanning five countries (U.S., Canada, U.K., Australia and Malaysia). Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of all intercompany accounts and transactions. The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. All amounts are reported in U.S. dollars, unless otherwise noted. The accompanying unaudited condensed consolidated financial statements as of March 31, 2024 and for the nine months ended March 31, 2024 and 2023, have been prepared pursuant to the rules and regulations of the SEC for interim reporting and, therefore, do not include all information and footnote disclosures normally included in audited financial statements prepared in conformity with U.S. GAAP. In the opinion of management, however, all adjustments, consisting of normal recurring adjustments necessary to present fairly the results of operations, financial position and cash flows have been made. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Registration Statement on Form 10-12G, filed with the SEC on February 26, 2024, as amended. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year or any other period. Segment The Company’s chief operating decision maker is its CEO, who reviews the financial results of the Company on an aggregate basis when making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment, which is OPM. While the Company operates in different geographies, the OPM business offered by the Company in each geography is fundamentally the same. The CEO evaluates revenue by geography as an important measure of operating performance and growth. However, the costs of the Company are assessed by the CEO on a consolidated basis as many costs are centralized on cross geographic boundaries, and accordingly any measure of profitability by geography is not considered meaningful. Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. Estimates and assumptions are inherent in the analysis and the measurement of impairment of accounts receivable, the recoverability of long-lived assets, amortizable intangibles, goodwill, deferred tax assets, and stock-based compensation expense. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The Company evaluates its estimates and assumptions on an ongoing basis. |
Revenue
Revenue | 9 Months Ended |
Mar. 31, 2024 | |
Revenue [Abstract] | |
Revenue | 2. Revenue The following table presents revenue disaggregated by geographical regions for the three and nine months ended March 31, 2024 and 2023: Three Months Ended Nine Months Ended 2024 2023 2024 2023 Americas & Europe $ 21,060 $ 18,584 $ 59,376 $ 50,545 APAC 14,639 14,282 43,232 41,009 Total revenue $ 35,699 $ 32,866 $ 102,608 $ 91,554 Our Americas & Europe region includes the U.S., Canada and the U.K. Our Asia-Pacific (“APAC”) region currently includes Australia, Malaysia and Singapore. Contract Acquisition Costs The Company’s incremental direct costs of obtaining a contract, which consist of sales commissions, are capitalized and amortized over the term of the contract life, which usually ranges from seven to ten years. The following table represents amortization of the sales commissions for the three and nine months ended March 31, 2024 and 2023, recognized within depreciation and amortization in the condensed consolidated statement of operations and comprehensive loss: Three Months Ended Nine Months Ended 2024 2023 2024 2023 Amortization of capitalized sales commissions $ 191 $ 142 $ 517 $ 405 Contract acquisition costs consisted of the following: March 31, June 30, Gross carrying amount $ 4,884 $ 4,902 Accumulated amortization (2,361 ) (1,879 ) Net contract acquisition costs $ 2,523 $ 3,023 Contract liabilities Contract liabilities consist of deferred revenue. The following table presents the changes in the Company’s deferred revenue for the nine months ended March 31, 2024: Balance as of June 30, 2023 $ 7,023 Additional amounts deferred 4,272 Revenue recognized (5,916 ) Balance as of March 31, 2024 $ 5,379 Allowance for Doubtful Accounts The following table presents the changes in the Company’s allowance for doubtful accounts for the nine months ended March 31, 2024: Balance as of June 30, 2023 $ 575 Charged to expenses 10 Write-offs (405 ) Balance as of March 31, 2024 $ 180 |
Amortizable Intangible Assets
Amortizable Intangible Assets | 9 Months Ended |
Mar. 31, 2024 | |
Amortizable Intangible Assets [Abstract] | |
Amortizable intangible assets | 3. Amortizable intangible assets Finite-lived intangible assets consisted of the following as of March 31, 2024 and June 30, 2023: Gross Carrying Accumulated Net Value Capitalized course development costs $ 13,833 $ (9,191 ) $ 4,642 Capitalized software and website development costs 7,147 (4,305 ) 2,842 Customer relationships 1,910 (1,340 ) 570 Trade names 205 (144 ) 61 Work in progress – course development 496 - 496 Balance as of March 31, 2024 $ 23,591 $ (14,980 ) $ 8,611 Gross Carrying Accumulated Net Value Capitalized course development costs $ 11,582 $ (7,382 ) $ 4,200 Capitalized software and website development costs 5,388 (3,238 ) 2,150 Customer relationships 1,910 (1,220 ) 690 Trade names 205 (131 ) 74 Work in progress – course development 475 - 475 Balance as of June 30, 2023 $ 19,560 $ (11,971 ) $ 7,589 The changes in the carrying amount of intangible assets were as follows: Balance as of June 30, 2023 $ 7,589 Additions 4,172 Amortization during the period (3,120 ) Changes due to foreign currency fluctuations (30 ) Balance as of March 31, 2024 $ 8,611 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Mar. 31, 2024 | |
Accrued Liabilities [Abstract] | |
Accrued liabilities | 4. Accrued liabilities Accrued liabilities consisted of the following as of March 31, 2024 and June 30, 2023: March 31, June 30, Compensation $ 7,423 $ 7,446 Direct marketing 3,755 4,304 Professional fees 843 550 Other 334 404 Total accrued liabilities $ 12,355 $ 12,704 |
Deferred Compensation Liability
Deferred Compensation Liability | 9 Months Ended |
Mar. 31, 2024 | |
Deferred Compensation Liability [Abstract] | |
Deferred compensation liability | 5. Deferred compensation liability In conjunction with the Company’s IPO, the Legacy LTIP Cash Awards granted each eligible employee the right to receive a cash payment if the Company achieves certain market capitalization criteria within two years following the IPO, provided that the eligible employee remains in continuous employment with the Company on the payment date following the achievement of the applicable market capitalization criteria. The maximum contractual term of the liability award was $4,000. In August 2022, the Board of Directors approved termination of the Legacy LTIP Cash Awards in exchange for the payment of an amount equal to 50% of the maximum award. Subsequently, in September 2022, holders of the Legacy LTIP Cash Awards received a cash payment of $2,000. Accrued deferred compensation liability was $175 as of June 30, 2022. Legacy LTIP Cash Awards expense was $1,825 for the nine months ended March 31, 2023, and is recognized within salaries and wages in the condensed consolidated statement of operations and comprehensive loss. |
Loss Per Share
Loss Per Share | 9 Months Ended |
Mar. 31, 2024 | |
Loss Per Share [Abstract] | |
Loss per share | 6. Loss per share Basic loss per share is computed by dividing loss available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is the same as basic loss per share for the three and nine months ended March 31, 2024 and 2023 because the effects of potentially dilutive items were anti-dilutive, given the Company’s net loss. Accordingly, 4,894,462 options for CDIs and 10,578,569 RSUs have been excluded from the calculation of weighted-average number of shares for the three and nine months ended March 31, 2024. 5,634,396 options for CDIs, 412,610 CDI Rights and 5,651,208 RSUs have been excluded from the calculation of weighted-average number of shares for the three and nine months ended March 31, 2023. The following table summarizes the loss per share for the three and nine months ended March 31, 2024 and 2023: Three Months Ended Nine Months Ended 2024 2023 2024 2023 Numerator: Net loss $ (2,547 ) $ (4,521 ) $ (7,407 ) $ (18,035 ) Denominator: Weighted-average common shares, basic and diluted 214,694,686 213,630,891 214,515,117 212,778,578 Loss per share, basic and diluted $ (0.01 ) $ (0.02 ) $ (0.03 ) $ (0.08 ) |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Mar. 31, 2024 | |
Stock-Based Compensation [Abstract] | |
Stock-based compensation | 7. Stock-based compensation In November 2023, the Board of Directors of Keypath approved the issuance of RSUs to certain employees and members of the executive leadership team (“ELT”) granted under the 2021 Equity Incentive Plan. There are two plans under the RSU award agreement: ● Long-Term Equity (LTE) Plan – to ELT and certain employees ● Long-Term Incentive (LTI) Plan – to ELT The fair value of RSUs is based on the closing price of the Company's common stock on the date of grant and is amortized to expense over the service period. RSUs granted in November 2023 under the LTE Plan vest in equal, annual installments over a three-year period (a “tranche”) on September 1, 2024, September 1, 2025 and September 1, 2026, in each case, if the participant is continuously employed by, or maintains a service relationship with, the Company or any Affiliate through the applicable vesting date. 5,220,000 RSUs under LTE Plan were assigned a weighted-average fair value of $0.19 per award, for a total value of approximately $1.0 million. RSUs granted in November 2023 under the LTI Plan vest on September 1, 2026 (cliff vesting period of three years), if the participant is continuously employed by, or maintains a service relationship with, the Company or any affiliate through such date, and based on achievement of performance criteria in relation to revenue and Adjusted EBITDA for fiscal year 2026. Management believes that achievement of the performance criteria are probable as of the grant date and as of March 31, 2024. 1,250,000 RSUs under the LTI Plan were assigned a weighted-average fair value of $0.19 per award, for a total value of approximately $0.2 million. The following table presents stock-based compensation expense recognized within salaries and wages in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended March 31, 2024 and 2023: Three Months Ended Nine Months Ended 2024 2023 2024 2023 CDIs $ 50 $ 143 $ 210 $ 531 CDI Rights - 169 - 756 Options 284 513 1,019 1,288 RSUs 417 395 941 528 Stock-based compensation $ 751 $ 1,220 $ 2,170 $ 3,103 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies [Abstract] | |
Commitments and contingencies | 8. Commitments and contingencies The Company is not aware of any pending or threatened legal proceedings that individually or in the aggregate would have a material adverse effect on the Company’s business, operating results, or financial conditions. The Company may in the future be party to litigation arising in the ordinary course of business. Such claims, even if not meritorious, could result in the expenditure of significant financial and managerial resources. In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provides for the potential of indemnification obligations. The Company’s exposure under these agreements is unknown because it involves future claims that may be made against the Company but have not yet been made. To date, the Company has not paid any claims or been required to defend any actions related to its indemnification obligations; however, the Company may record charges in the future as a result of these indemnification obligations. In addition, the Company has indemnification agreements with its directors and certain executive officers that require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service with the Company. The terms of such obligations may vary. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent events | 9. Subsequent events The Company has evaluated subsequent events and transactions for potential recognition or disclosure in the condensed consolidated financial statements through May 23, 2024, the date the condensed consolidated financial statements were available to be issued. On May 23, 2024, the Company entered into an Agreement and Plan of Merger with Karpos Intermediate, LLC, a Delaware limited liability company (“Parent”), and Karpos Merger Sub, Inc., a Delaware corporation and a wholly owned direct subsidiary of Parent (“Merger Sub”), providing for the merger of Merger Sub with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Parent is a newly formed entity that is an affiliate of Sterling Partners, which also indirectly controls AVI Mezz Co., L.P. (the “Majority Stockholder”), which holds its Company CDIs on behalf of Sterling Capital Partners IV, L.P. and SCP IV Parallel, L.P.. The Majority Stockholder currently holds approximately 66% of the outstanding CDIs. The proposed transaction constitutes a “going-private transaction” under the rules of the SEC and is expected to close by the first quarter of our fiscal year 2025, subject to customary closing conditions, including stockholder approval. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (2,547) | $ (4,521) | $ (7,407) | $ (18,035) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Modified [Flag] | false |
Rule 10b5-1 Arrangement Modified [Flag] | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Mar. 31, 2024 | |
Principal Business Activity and Significant Accounting Policies [Abstract] | |
Description of business | Description of business Keypath Education International, Inc.’s principal activity is OPM primarily serving the postgraduate education market of traditional universities. The Company enables universities in Australia, the U.S., Canada, the U.K., Malaysia and Singapore to deliver technology-enabled online degrees and programs driven by market demand. Through end-to-end technology and data-driven service, the Company and its subsidiaries partner with universities to design, launch, and grow online programs that deliver career-relevant skills to address global, social and economic challenges and prepare busy professionals for the future of work. The suite of services the Company provides to its university partners includes program design and development, marketing, management, student recruitment, student support, clinical placement services and faculty recruitment. Additionally, we continue to develop and improve KeypathEDGE, which offers data-informed insights to improve the experiences of both universities and students. The Company enters into long-term contracts with universities and earns revenue through an agreed revenue share with the relevant university during the contracted term. Keypath has over 700 employees spanning five countries (U.S., Canada, U.K., Australia and Malaysia). |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries after elimination of all intercompany accounts and transactions. The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. All amounts are reported in U.S. dollars, unless otherwise noted. The accompanying unaudited condensed consolidated financial statements as of March 31, 2024 and for the nine months ended March 31, 2024 and 2023, have been prepared pursuant to the rules and regulations of the SEC for interim reporting and, therefore, do not include all information and footnote disclosures normally included in audited financial statements prepared in conformity with U.S. GAAP. In the opinion of management, however, all adjustments, consisting of normal recurring adjustments necessary to present fairly the results of operations, financial position and cash flows have been made. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Registration Statement on Form 10-12G, filed with the SEC on February 26, 2024, as amended. The results of operations for any interim period are not necessarily indicative of the results of operations to be expected for the full year or any other period. |
Segment | Segment The Company’s chief operating decision maker is its CEO, who reviews the financial results of the Company on an aggregate basis when making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in one reportable segment, which is OPM. While the Company operates in different geographies, the OPM business offered by the Company in each geography is fundamentally the same. The CEO evaluates revenue by geography as an important measure of operating performance and growth. However, the costs of the Company are assessed by the CEO on a consolidated basis as many costs are centralized on cross geographic boundaries, and accordingly any measure of profitability by geography is not considered meaningful. |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience and on various other factors that it believes to be reasonable under the circumstances. Estimates and assumptions are inherent in the analysis and the measurement of impairment of accounts receivable, the recoverability of long-lived assets, amortizable intangibles, goodwill, deferred tax assets, and stock-based compensation expense. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in those estimates. The Company evaluates its estimates and assumptions on an ongoing basis. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
Revenue [Abstract] | |
Schedule of Revenue Disaggregated by Geographical Regions | The following table presents revenue disaggregated by geographical regions for the three and nine months ended March 31, 2024 and 2023: Three Months Ended Nine Months Ended 2024 2023 2024 2023 Americas & Europe $ 21,060 $ 18,584 $ 59,376 $ 50,545 APAC 14,639 14,282 43,232 41,009 Total revenue $ 35,699 $ 32,866 $ 102,608 $ 91,554 |
Schedule of Amortization of the Sales Commissions | The following table represents amortization of the sales commissions for the three and nine months ended March 31, 2024 and 2023, recognized within depreciation and amortization in the condensed consolidated statement of operations and comprehensive loss: Three Months Ended Nine Months Ended 2024 2023 2024 2023 Amortization of capitalized sales commissions $ 191 $ 142 $ 517 $ 405 |
Schedule of Contract Acquisition Costs | Contract acquisition costs consisted of the following: March 31, June 30, Gross carrying amount $ 4,884 $ 4,902 Accumulated amortization (2,361 ) (1,879 ) Net contract acquisition costs $ 2,523 $ 3,023 |
Schedule of Deferred Revenue | The following table presents the changes in the Company’s deferred revenue for the nine months ended March 31, 2024: Balance as of June 30, 2023 $ 7,023 Additional amounts deferred 4,272 Revenue recognized (5,916 ) Balance as of March 31, 2024 $ 5,379 |
Schedule of Allowance for Doubtful Accounts | The following table presents the changes in the Company’s allowance for doubtful accounts for the nine months ended March 31, 2024: Balance as of June 30, 2023 $ 575 Charged to expenses 10 Write-offs (405 ) Balance as of March 31, 2024 $ 180 |
Amortizable Intangible Assets (
Amortizable Intangible Assets (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
Amortizable Intangible Assets [Abstract] | |
Schedule of Intangible Assets | Finite-lived intangible assets consisted of the following as of March 31, 2024 and June 30, 2023: Gross Carrying Accumulated Net Value Capitalized course development costs $ 13,833 $ (9,191 ) $ 4,642 Capitalized software and website development costs 7,147 (4,305 ) 2,842 Customer relationships 1,910 (1,340 ) 570 Trade names 205 (144 ) 61 Work in progress – course development 496 - 496 Balance as of March 31, 2024 $ 23,591 $ (14,980 ) $ 8,611 Gross Carrying Accumulated Net Value Capitalized course development costs $ 11,582 $ (7,382 ) $ 4,200 Capitalized software and website development costs 5,388 (3,238 ) 2,150 Customer relationships 1,910 (1,220 ) 690 Trade names 205 (131 ) 74 Work in progress – course development 475 - 475 Balance as of June 30, 2023 $ 19,560 $ (11,971 ) $ 7,589 |
Schedule of Changes in Carrying Amount of Intangible Assets | The changes in the carrying amount of intangible assets were as follows: Balance as of June 30, 2023 $ 7,589 Additions 4,172 Amortization during the period (3,120 ) Changes due to foreign currency fluctuations (30 ) Balance as of March 31, 2024 $ 8,611 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of March 31, 2024 and June 30, 2023: March 31, June 30, Compensation $ 7,423 $ 7,446 Direct marketing 3,755 4,304 Professional fees 843 550 Other 334 404 Total accrued liabilities $ 12,355 $ 12,704 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
Loss Per Share [Abstract] | |
Schedule of Loss Per Share | The following table summarizes the loss per share for the three and nine months ended March 31, 2024 and 2023: Three Months Ended Nine Months Ended 2024 2023 2024 2023 Numerator: Net loss $ (2,547 ) $ (4,521 ) $ (7,407 ) $ (18,035 ) Denominator: Weighted-average common shares, basic and diluted 214,694,686 213,630,891 214,515,117 212,778,578 Loss per share, basic and diluted $ (0.01 ) $ (0.02 ) $ (0.03 ) $ (0.08 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Mar. 31, 2024 | |
Stock-Based Compensation [Abstract] | |
Schedule of Stock-Based Compensation | The following table presents stock-based compensation expense recognized within salaries and wages in the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended March 31, 2024 and 2023: Three Months Ended Nine Months Ended 2024 2023 2024 2023 CDIs $ 50 $ 143 $ 210 $ 531 CDI Rights - 169 - 756 Options 284 513 1,019 1,288 RSUs 417 395 941 528 Stock-based compensation $ 751 $ 1,220 $ 2,170 $ 3,103 |
Principal Business Activity a_2
Principal Business Activity and Significant Accounting Policies (Details) | 9 Months Ended |
Mar. 31, 2024 | |
Principal Business Activity and Significant Accounting Policies [Abstract] | |
Reportable segment | 1 |
Revenue (Details)
Revenue (Details) | Mar. 31, 2024 |
Minimum [Member] | |
Revenue [Line Items] | |
Capitalized and amortized term of contract | 7 years |
Maximum [Member] | |
Revenue [Line Items] | |
Capitalized and amortized term of contract | 10 years |
Revenue (Details) - Schedule of
Revenue (Details) - Schedule of Revenue Disaggregated by Geographical Regions - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Schedule of Revenue Disaggregated by Geographical Regions [Line Items] | ||||
Total revenue | $ 35,699 | $ 32,866 | $ 102,608 | $ 91,554 |
Americas & Europe [Member] | ||||
Schedule of Revenue Disaggregated by Geographical Regions [Line Items] | ||||
Total revenue | 21,060 | 18,584 | 59,376 | 50,545 |
APAC [Member] | ||||
Schedule of Revenue Disaggregated by Geographical Regions [Line Items] | ||||
Total revenue | $ 14,639 | $ 14,282 | $ 43,232 | $ 41,009 |
Revenue (Details) - Schedule _2
Revenue (Details) - Schedule of Amortization of the Sales Commissions - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Schedule of Capitalization and Amortization of the Sales Commissions [Abstract] | ||||
Amortization of capitalized sales commissions | $ 191 | $ 142 | $ 517 | $ 405 |
Revenue (Details) - Schedule _3
Revenue (Details) - Schedule of Contract Acquisition Costs - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
Schedule of Contract Acquisition Costs [Abstract] | ||
Gross carrying amount | $ 4,884 | $ 4,902 |
Accumulated amortization | (2,361) | (1,879) |
Net contract acquisition costs | $ 2,523 | $ 3,023 |
Revenue (Details) - Schedule _4
Revenue (Details) - Schedule of Deferred Revenue $ in Thousands | 9 Months Ended |
Mar. 31, 2024 USD ($) | |
Schedule of Deferred Revenue [Abstract] | |
Balance at beginning | $ 7,023 |
Balance at ending | 5,379 |
Additional amounts deferred | 4,272 |
Revenue recognized | $ (5,916) |
Revenue (Details) - Schedule _5
Revenue (Details) - Schedule of Allowance for Doubtful Accounts $ in Thousands | 9 Months Ended |
Mar. 31, 2024 USD ($) | |
Schedule of Allowance for Doubtful Accounts [Abstract] | |
Beginning Balance | $ 575 |
Ending Balance | 180 |
Charged to expenses | 10 |
Write-offs | $ (405) |
Amortizable Intangible Assets_2
Amortizable Intangible Assets (Details) - Schedule of Intangible Assets - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
Schedule of Intangible Assets [Line Items] | ||
Balance as of, Gross Carrying Amount | $ 23,591 | $ 19,560 |
Balance as of, Accumulated Amortization | (14,980) | (11,971) |
Balance as of, Net Value | 8,611 | 7,589 |
Capitalized course development costs [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Balance as of, Gross Carrying Amount | 13,833 | 11,582 |
Balance as of, Accumulated Amortization | (9,191) | (7,382) |
Balance as of, Net Value | 4,642 | 4,200 |
Capitalized software and website development costs [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Balance as of, Gross Carrying Amount | 7,147 | 5,388 |
Balance as of, Accumulated Amortization | (4,305) | (3,238) |
Balance as of, Net Value | 2,842 | 2,150 |
Customer relationships [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Balance as of, Gross Carrying Amount | 1,910 | 1,910 |
Balance as of, Accumulated Amortization | (1,340) | (1,220) |
Balance as of, Net Value | 570 | 690 |
Trade names [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Balance as of, Gross Carrying Amount | 205 | 205 |
Balance as of, Accumulated Amortization | (144) | (131) |
Balance as of, Net Value | 61 | 74 |
Work in progress – course development [Member] | ||
Schedule of Intangible Assets [Line Items] | ||
Balance as of, Gross Carrying Amount | 496 | 475 |
Balance as of, Accumulated Amortization | ||
Balance as of, Net Value | $ 496 | $ 475 |
Amortizable Intangible Assets_3
Amortizable Intangible Assets (Details) - Schedule of Carrying Amount of Intangible Assets $ in Thousands | 9 Months Ended |
Mar. 31, 2024 USD ($) | |
Schedule of Carrying Amount of Intangible Assets [Abstract] | |
Balance at Beginning | $ 7,589 |
Additions | 4,172 |
Amortization during the period | (3,120) |
Changes due to foreign currency fluctuations | (30) |
Balance at Ending | $ 8,611 |
Accrued Liabilities (Details) -
Accrued Liabilities (Details) - Schedule of Accrued Liabilities - USD ($) $ in Thousands | Mar. 31, 2024 | Jun. 30, 2023 |
Schedule of Accrued Liabilities [Abstract] | ||
Compensation | $ 7,423 | $ 7,446 |
Direct marketing | 3,755 | 4,304 |
Professional fees | 843 | 550 |
Other | 334 | 404 |
Total accrued liabilities | $ 12,355 | $ 12,704 |
Deferred Compensation Liabili_2
Deferred Compensation Liability (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Mar. 31, 2024 | Sep. 30, 2022 | Jun. 30, 2022 | |
Deferred Compensation Liability [Abstract] | |||
Contractual term of the liability | $ 4,000 | ||
Legacy LTIP cash awards received by holders | $ 2,000 | ||
Accrued deferred compensation liability | $ 175 | ||
Legacy LTIP cash awards expense | $ 1,825 |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Options for CDIs [Member] | ||||
Loss Per Share [Line Items] | ||||
Weighted average number of shares | 4,894,462 | 5,634,396 | 4,894,462 | 5,634,396 |
RSUs [Member] | ||||
Loss Per Share [Line Items] | ||||
Weighted average number of shares | 10,578,569 | 5,651,208 | 10,578,569 | 5,651,208 |
CDI Rights [Member] | ||||
Loss Per Share [Line Items] | ||||
Weighted average number of shares | 412,610 | 412,610 |
Loss Per Share (Details) - Sche
Loss Per Share (Details) - Schedule of Loss Per Share - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||||
Net loss | $ (2,547) | $ (4,521) | $ (7,407) | $ (18,035) |
Denominator: | ||||
Weighted-average common shares, basic | 214,694,686 | 213,630,891 | 214,515,117 | 212,778,578 |
Loss per share, basic | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.08) |
Loss Per Share (Details) - Sc_2
Loss Per Share (Details) - Schedule of Loss Per Share (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Schedule of Loss Per Share [Abstract] | ||||
Weighted-average common shares, diluted | 214,694,686 | 213,630,891 | 214,515,117 | 212,778,578 |
Loss per share, diluted | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.08) |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - RSUs [Member] $ / shares in Units, $ in Millions | 1 Months Ended |
Nov. 30, 2023 USD ($) $ / shares shares | |
LTE Plan [Member] | |
Stock-Based Compensation [Line Items] | |
Number of awards granted in period | shares | 5,220,000 |
Weighted average fair value | $ / shares | $ 0.19 |
Total value of awards granted | $ | $ 1 |
LTI Plan [Member] | |
Stock-Based Compensation [Line Items] | |
Number of awards granted in period | shares | 1,250,000 |
Weighted average fair value | $ / shares | $ 0.19 |
Total value of awards granted | $ | $ 0.2 |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details) - Schedule of Stock-Based Compensation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | $ 751 | $ 1,220 | $ 2,170 | $ 3,103 |
Salaries and Wages [Member] | CDIs [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | 50 | 143 | 210 | 531 |
Salaries and Wages [Member] | CDI Rights [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | 169 | 756 | ||
Salaries and Wages [Member] | Equity Option [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | 284 | 513 | 1,019 | 1,288 |
Salaries and Wages [Member] | RSUs [Member] | ||||
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation | $ 417 | $ 395 | $ 941 | $ 528 |
Subsequent Events (Details)
Subsequent Events (Details) | May 23, 2024 |
Forecast [Member] | |
Subsequent Events (Details) [Line Items] | |
Percentage of capital partners | 66% |