Arco Platform, an educational software company that offers technology, services, and content from kindergarten to high school, has announced a third-quarter 2020 net loss of 27.5 million reais (£3.95 million), compared to a net loss of 108.5 million reais reported for the third quarter of 2019.

Net revenue for the quarter was 208.7 million reais, up from 70.6 million reais reported for Q3 2019.

The São Paulo-based company also announced results for the first nine months of 2020. Its net loss for the period was 7.4 million reais, compared to a net loss of 51.9 million reais reported for the first nine months of 2019. Net revenue for the period was 705.2 million reais, up from 325.2 million reais reported for the first nine months of 2019.

Arco founder and chief executive Ari de Sá Cavalcante Neto said: “The year of 2020 has been a testament to the resilience of our business, and we have planted seeds that will help us grow our company for years to come. As technology took a leading role in education overnight, we were able to quickly evolve to better serve existing clients and attract prospects, as well as deliver strong financial and operational results. As student, parent and educator habits changed drastically, we are excited at the opportunity to continue to disrupt our sector and shape the future of education.

“While mostly working remotely from the safety of their homes, our team has delivered strong results during the first nine months of 2020. Arco has recorded 117% year-on-year revenue growth for the period, 148% increase in adjusted EBITDA and confirms its adjusted EBITDA guidance of 35.5-37.5% for the 2020 fiscal year. We have achieved these results while continuing to invest in our team, our solutions and our brand equity, the ingredients of our virtuous cycle focused on long-term growth. During this period, there have been no layoffs or pay-cuts; on the contrary, we have continued to grow our team by recruiting talented professionals in technology, pedagogical, front line and management roles.

“Within days of the Covid-19 outbreak, we offered our partner schools a portfolio of technology tools, digital content and remote pedagogical support that helped them to continue providing high-quality education to students and perceived value to parents. As a result, we are experiencing high levels of user engagement and customer retention and satisfaction.

“Additionally, the change in our go-to-market strategy from in-person to digital-first has delivered a record number of leads at a lower cost per lead than past commercial cycles. Since September, when schools started to reopen and our sales team resumed travel, we have seen a strong rebound in new school intake. We expect to deliver solid annual contract value growth of 20-25% for the 2021 school year.

“The evolution in the way we operate and serve our clients has further reinforced our brand reputation, quality and distribution. While some companies perished and other benefited only in the short term, Arco emerges stronger with brighter long-term perspectives. With a 4% share in a 25 billion reais fragmented market in urgent need of high-quality education, today continues to be day one for us.”

Date published: 2 December 2020

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