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01/11 09:55
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Coursera's earnings call reflects a positive sentiment with strong financial performance, increased revenue guidance, and strategic partnerships, including the OpenAI integration. While the Q&A highlighted some challenges, such as declining Enterprise NRR and muted corporate spending, the overall outlook remains optimistic due to growth in the Consumer segment, AI-driven initiatives, and international expansion. The company's strategic investments and raised guidance suggest a positive impact on the stock price, especially given the small-cap nature of the company, which typically reacts more strongly to such developments.
Revenue $194 million, up 10% year-over-year. Growth driven by increased Consumer revenue growth rate of 13% year-over-year, 7.7 million new registered learners, and strength in Coursera Plus subscription offering.
Consumer Revenue $130 million, up 13% year-over-year. Growth driven by 7.7 million new registered learners and strong reception to Coursera Plus subscription offering.
Enterprise Revenue $64 million, up 6% year-over-year. Growth driven by campus and business verticals, including a 10% increase in the total number of paid Enterprise customers to 1,724.
Gross Profit $108 million, up 10% year-over-year. Gross margin consistent at 56%, reflecting improvements in Consumer gross margin rate offset by other costs and mix of Consumer revenue.
Consumer Segment Gross Profit $80 million, up 16% year-over-year. Gross margin increased by 180 basis points to 61%, driven by increased learner demand and engagement with content created under more recent production arrangements.
Enterprise Segment Gross Profit $45 million, up 5% year-over-year. Gross margin at 70%, consistent with prior year, excluding a one-time revenue share benefit in the previous year.
Free Cash Flow $27 million, up 59% year-over-year. Growth attributed to operational discipline and strong financial performance.
Net Income $17 million, representing 8.6% of revenue. Reflects disciplined operating expense management and revenue growth.
Adjusted EBITDA $16 million, representing 8% of revenue. Reflects targeted investments in growth initiatives and disciplined operating expense management.
Generative AI courses: Coursera now offers over 1,000 generative AI courses, with enrollments increasing from 8 to 14 per minute year-over-year.
Skills Tracks: Introduced Skills Tracks for structured skill development in areas like data, IT, software, product, and generative AI.
AI-powered tools: Launched AI-powered tools like Coursera Coach, AI translations, and Course Builder to enhance learning experiences.
Global reach: Coursera expanded its learner base to 191 million, adding 7.7 million new registered learners in Q3 2025.
Localized pricing and promotions: Introduced geo-pricing and promotional capabilities to improve accessibility in emerging markets.
Partnerships: Formed partnerships with Anthropic and OpenAI to integrate AI-driven learning experiences and expand content reach.
Revenue growth: Achieved $194 million in Q3 revenue, a 10% year-over-year increase, and raised full-year revenue outlook to $750-$754 million.
Consumer segment performance: Consumer revenue grew by 13% year-over-year, driven by Coursera Plus subscriptions, which now account for over half of the segment's revenue.
Free cash flow: Generated $27 million in free cash flow in Q3, a 59% increase year-over-year.
Leadership changes: Appointed Anthony Salcito as General Manager of the Enterprise segment and announced the departure of CFO Ken Hahn.
AI-driven innovation: Focused on AI-driven innovations to enhance personalized learning and maintain leadership in the online education market.
Enterprise Segment Growth: Customer demand and budget trends continue to vary by vertical, region, and use case, leading to a net retention rate of 89%. This reflects challenges in maintaining consistent growth in the Enterprise segment, particularly in a dynamic corporate spending environment.
Competitive Pressures: The company faces competitive pressures in the rapidly evolving education technology space, particularly with the increasing demand for AI skills and the need to differentiate its offerings.
Economic Uncertainty: Economic uncertainties and budget constraints in corporate and institutional clients are impacting the Enterprise segment's growth and retention rates.
Regulatory and Compliance Risks: As a global platform, Coursera may face regulatory and compliance challenges in different regions, especially as it expands its offerings and partnerships.
Supply Chain and Content Costs: While the company has improved gross margins in the Consumer segment, there is ongoing reliance on content production arrangements, which could pose risks if costs increase or partnerships falter.
Strategic Execution Risks: The company is heavily investing in AI-driven innovations and personalized learning experiences. Failure to execute these strategies effectively could impact its ability to meet growth objectives.
Full Year Revenue Outlook: Coursera has raised its full year 2025 revenue outlook to a range of $750 million to $754 million, representing 8% to 9% growth from the prior year. This is an increase of $10 million from the previous quarter's guidance and $27 million from April's expectations.
Q4 Revenue Guidance: Revenue is anticipated to be in the range of $189 million to $193 million, representing 5% to 8% year-over-year growth, primarily driven by the Consumer segment.
Adjusted EBITDA Margin: Coursera continues to target an annual adjusted EBITDA margin improvement of approximately 200 basis points to 8%, reflecting an additional 100 basis points improvement from the initial full year target of 7%.
Consumer Segment Growth: The Consumer segment is expected to continue driving growth, supported by the Coursera Plus subscription offering, which now accounts for the majority of Consumer segment revenue. The company is also focusing on expanding its global reach and enhancing localized pricing and promotional capabilities.
Enterprise Segment Outlook: The Enterprise segment is experiencing a more muted environment with a net retention rate of 89%. However, Coursera is focusing on go-to-market positioning and product enhancements under new leadership to reignite long-term growth.
AI and Product Innovation: Coursera is investing in AI-driven innovations, including Coursera Coach, AI translations, and Course Builder, to enhance learner experiences and drive engagement. These innovations are expected to contribute to long-term growth and differentiation in the market.
Skills Tracks: The introduction of Skills Tracks, focusing on role-specific competencies and practical applications, is expected to better align learning objectives with business goals and improve ROI for organizations.
The selected topic was not discussed during the call.
Coursera's earnings call reflects a positive sentiment with strong financial performance, increased revenue guidance, and strategic partnerships, including the OpenAI integration. While the Q&A highlighted some challenges, such as declining Enterprise NRR and muted corporate spending, the overall outlook remains optimistic due to growth in the Consumer segment, AI-driven initiatives, and international expansion. The company's strategic investments and raised guidance suggest a positive impact on the stock price, especially given the small-cap nature of the company, which typically reacts more strongly to such developments.
The earnings call reveals mixed signals: a dividend cut, which is typically negative, is offset by a share buyback announcement, a positive move. Margins are resilient at Kounrad, but Sasa faces challenges. The Q&A highlights management's cautious approach to dual listing and mine life extension, providing limited specifics. The company's market cap indicates a moderate reaction, leading to a neutral sentiment.
The earnings call summary highlights several positive aspects: strong financial performance, impressive product development, and strategic focus on AI and content expansion. The Q&A section reveals some uncertainties, particularly around corporate spending and NRR in the Enterprise segment, but also emphasizes growth in consumer margins and learner engagement. The guidance is slightly weak, but the company is well-positioned in AI-driven markets. Considering the company's small-cap status, these factors suggest a positive stock price movement in the short term.
The earnings call showed strong financial performance with revenue and EPS exceeding expectations. The focus on AI integration, content expansion, and new partnerships is promising. Despite competitive pressures and regulatory concerns, the guidance remains optimistic with single-digit growth expected. The lack of share repurchase announcement is a minor negative, but overall, the positive financial results and growth initiatives suggest a positive stock price movement, especially given the small-cap nature of the company.
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