Education market generates ‘exceptional quarter’ for Family Zone Cyber Safety

Family Zone Cyber Safety ASX FZO telcos schools students business development sales
Family Zone's services now support 839 contracted schools and 482,000 licenced students.

Technology company Family Zone Cyber Safety (ASX: FZO) is on course to extend its market footprint after declaring an “exceptional quarter”, despite June being seasonally the slowest quarter for education sales.

The company said it is now implementing a strategy to accelerate consumer growth by leveraging school influence and telco distribution.

One of the primary methods of escalating its existing market performance, Family Zone is focusing on its “freemium offer” product Insights and plants to support products aimed at “reducing friction and driving take-up”.

Family Zone achieved a 173% quarter-on-quarter growth in contracts signed with schools, in parallel to a 175% growth rate in the US within three months.

At the conclusion of Q2 2019, Family Zone said its footprint had grown to 839 schools, 482,000 licenced student users and has captured in excess of 220 school clients promoting Family Zone to their parent community.

In the US, it services 402 schools and says the US market is clearly the biggest contributor to its overall growth rate. As it stands, the US market contains in excess of 50 million students and 40 million parents which means Family Zone has a huge addressable audience within which it can market its products.

In further good news, Family Zone reported that it will soon pass through 500,000 students and by the end of the next financial year expects student licences to exceed 1 million globally.

Domestic progress

In Australia and New Zealand, Family Zone said it recorded a “solid quarter” on the back of its growing sales pipeline for the key end-of-year sales period.

Despite the strong company metrics overall, Family Zone did confirm that a small number of schools had delayed renewals which resulted in a slight reduction in its school footprint.

Looking forward, Family Zone expects strong growth in the remainder of this year, supported by the roll-out of SpotShield, the launch of Insights and other as yet unannounced products.

In order to make a success of its Insights product launch, Family Zone has facilitated a surge of telco-led sign-ups and has vowed to provide further clarity in the coming weeks.

As part of its commercial acceleration, Family Zone reported continuing strong acquisition of paying subscribers through ongoing trials with Telkomsel. The number of wholesale subscribers has now surpassed 71,000 which represents a 139% growth within three months and thereby capturing close to 0.5% of the addressable market.

Looking into Insights and SpotShield

One of the most high-profile developments on the horizon is the launch of Family Zone Insights – a means of providing valuable reporting, location tracking and alert services to parents. The product is a free service to be provided by telcos in schools and typically pre-loaded onto mobile phones used by children.

Another service also primed for market release is SpotShield, a means of controlling how children use their mobile devices.

SpotShield allows schools to simply enforce the installation of Family Zone’s applications on any device which connects to the school network. One of the unique selling points is that the service is not invasive and will not require extensive expertise to deploy, saving school IT staff and parents effort and time.

SpotShield is designed to empower schools with top-down controllability over its students including mitigating the problem of hot spotting, enforcing duty-of-care, enhanced cybersecurity and other ad-hoc features that deliver information to both children and their parents.

Given today’s increased availability of the internet to children, parents are clamouring for an effective tool that can protect children’s browsing activity during school hours, but also, to provide peace of mind when it comes to knowing their whereabouts.

The company’s application can remove adult content, restrict social media, manage screen time and create a seamless protective solution that includes both domestic and school internet use.

“Through the remainder of 2019, Family Zone will be purposefully rolling out Insights and SpotShield across our school clients. This program commences in Australia this quarter and then progresses to New Zealand and the US by year’s end,” the company said.

This morning’s news pushed Family Zone shares up by almost 20% to trade at $0.215.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.