I have helped educate students for over a decade, first for five years at a prep-for-prep program in New York City and now as a private tutor with my own business. While the scope of subjects I tutor has broadened"In investing, what is comfortable is rarely profitable." - Robert Arnott I am a "Value" and "Growth" retail investor, looking for opportunities in emerging and undervalued stocks, often counter to conventional thought. I use fundamentals to back up my argument, and also like to highlight stocks wh ...

Financial Performance - Total revenue for Q1 2025 was $179.3 million, representing a 6% increase from $169.1 million in Q1 2024[96] - Gross profit for Q1 2025 was $97.9 million, compared to $89.5 million a year ago, with non-GAAP gross profit at $100.1 million, up from $91.7 million[96] - Net loss for Q1 2025 was $(7.8) million, significantly improved from $(21.3) million in Q1 2024, with non-GAAP net income of $19.7 million compared to $11.9 million[96] - Adjusted EBITDA for Q1 2025 was $18.7 million, an increase from $8.3 million in the prior year[105] - Consumer revenue increased by $6.0 million, or 5%, primarily driven by an increase in subscriptions to Coursera Plus[117] - Enterprise revenue increased by $4.2 million, or 7%, attributed to new customer acquisitions, despite a $4.9 million decrease from existing customer spend contraction[118] - Gross profit for the three months ended March 31, 2025, was $97.9 million, a 9% increase from $89.5 million in the prior year quarter, with a gross margin of 54.6%[119][121] - Total operating expenses decreased to $112.3 million from $119.3 million, a reduction of 6% year-over-year[122] - Research and development expenses decreased by 15% to $29.5 million, primarily due to lower personnel-related expenses[123] - Non-GAAP net income for the three months ended March 31, 2025, was $19.7 million, compared to $11.9 million in 2024[160] - Free Cash Flow for the three months ended March 31, 2025, was $25.3 million, up from $18.1 million in 2024[166] - Adjusted EBITDA for the three months ended March 31, 2025, was $18.7 million, compared to $8.3 million in 2024, with an Adjusted EBITDA Margin of 10.4%[163] Cash Flow and Liquidity - Net cash provided by operating activities was $33.5 million, up from $24.5 million a year ago, with free cash flow at $25.3 million compared to $18.1 million[105] - As of March 31, 2025, the company had cash and cash equivalents totaling $748.0 million, providing sufficient liquidity for at least the next 12 months[129][131] - Net cash provided by operating activities was $33.5 million for the three months ended March 31, 2025, compared to $24.5 million in the prior year[135] - For the three months ended March 31, 2025, net cash provided by operating activities was $33.5 million, an increase of $9.0 million compared to $24.5 million for the same period in 2024[137][138][139] Learner and Customer Metrics - As of March 31, 2025, Coursera had approximately 175 million registered learners on its platform[91] - Total Registered Learners reached 175.3 million as of March 31, 2025, representing an 18% year-over-year growth from 148.5 million in 2024[146][147] - Paid Enterprise Customers increased to 1,651 as of March 31, 2025, reflecting a 12% year-over-year growth from 1,480 in 2024[149] - Net Retention Rate for Paid Enterprise Customers decreased to 91% as of March 31, 2025, down from 94% in 2024, primarily due to customer attrition in North America[152][153] Strategic Initiatives - The company reduced its global workforce by approximately 9% to create capacity for targeted investments and incremental profitability[102] - Coursera's go-to-market strategy focuses on attracting learners through high-quality content and efficient marketing channels[93] - The company aims to expand its international footprint by investing in marketing and localized discovery efforts[111] - A shift in compensation for educator partners based on learner engagement rather than enrollment rates is expected to improve learner outcomes[109] Investment and Risk Management - Interest income, net, decreased by 19% to $7.8 million, attributed to lower interest rates and returns on investments[127] - The company invests in highly-rated securities, such as U.S. Treasury securities and U.S. government-backed money market funds, with maturities of one year or less[171] - The investment policy focuses on preserving capital and supporting liquidity requirements[171] - The company maintains foreign-currency denominated cash and cash equivalents in foreign entities to support ongoing operations, which may lead to transaction gains and losses[174] - The majority of the company's sales are denominated in U.S. dollars, minimizing exposure to foreign currency risk[173] - The company has not entered into any hedging arrangements regarding foreign currency risk but may consider doing so in the future[174] Accounting and Estimates - The company has not experienced any material changes to its critical accounting estimates compared to the previous fiscal year[168] - The company evaluates its estimates and assumptions on an ongoing basis, acknowledging that actual results may differ from these estimates[169] - A hypothetical 100 basis point increase or decrease in interest rates would have resulted in a $0.7 million and $0.5 million incremental decline or improvement in the fair value of the investment portfolio as of March 31, 2025 and 2024, respectively[172] - The annualized interest income could increase or decrease by $7.5 million and $7.3 million based on the balance of cash and cash equivalents for the periods presented[172] - A 10% increase or decrease in average foreign exchange rates relative to the U.S. dollar would have impacted the loss before income taxes by $1.1 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively[175]

Core Insights - The CE 100 Index experienced a 5.9% increase over the week, influenced by the ongoing earnings season [1][2] Performance Overview - The CE 100 Index outperformed other indices in the 5-day period, with a 5.9% increase compared to Nasdaq's 6.42%, S&P 500's 4.60%, and Dow's 2.49% [2] - Year-to-date, the CE 100 Index is down 4.22%, while the Nasdaq is down 7.56%, S&P 500 down 6.05%, and Dow down 5.74% [2] - Over the past year, the CE 100 Index has risen 17.18%, outperforming Nasdaq's 11.33%, S&P 500's 9.38%, and Dow's 5.30% [2] Sector Performance - All pillars in the CE 100 Index saw gains, with the work segment leading at 8.6%, driven by Coursera's 19.8% increase in share price [4] - Coursera reported a 6% year-over-year revenue increase, reaching $179 million, with customer revenues up 5% to $102.1 million and enterprise revenues up 7% to $61.7 million [4] Company Highlights - Tesla reported a 71% drop in net income year-over-year, with total revenue falling 9% to $19.34 billion, and automotive revenues down 20% to $13.97 billion [5] - Despite disappointing financial results, Tesla's stock rose 18% due to market relief over Elon Musk's reduced involvement in DOGE-related activities [6] - Amazon shares increased by 9.5% after announcing a Rs 350 crore (approximately $41 million) investment in Amazon Pay India, aiming to increase market share in the UPI space [7] - Alphabet's shares rose 6.8% following better-than-expected earnings, with a nearly 10% increase in its core search business and a 28% gain in Google Cloud sales [8][9] - Google Search revenue increased by 10% to $50.7 billion, with YouTube advertising revenues also growing 10% to $8.9 billion [10] Financial Services Developments - The CE 100's Pay and Be Paid segment rose 6.6%, with PayPal announcing a new rewards program for its stablecoin, PYUSD, expected to offer a 3.7% annual rewards rate [11][12][13] - Mastercard's CEO noted that consumer spending remains strong despite economic concerns, leading to a 3.1% increase in Mastercard's stock [14] - Affirm's shares surged 16% after announcing it will report all pay-over-time loans to TransUnion, which may impact future credit scoring models [14][15]

Group 1 - The current economic environment is characterized by high volatility and low expectations as the Q1 earnings season approaches, particularly affecting small-cap companies [1] - There is a belief that overlooked small-cap companies may have the potential to perform well in this challenging economic landscape [1] - The analyst has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, which informs their perspective on industry trends [1]

Core Viewpoint - JPMorgan analyst Bryan M. Smilek maintains a Neutral rating on Coursera, Inc. and raises the price forecast from $7 to $8 following the company's first-quarter results, which showed a 6% year-over-year revenue increase to $179.3 million [1][2]. Group 1: Revenue and Financial Performance - Coursera's first-quarter revenues increased by 6% year over year, reaching $179.3 million [1]. - The analyst raised the revenue estimates for 2025 and 2026 by approximately 3% and adjusted EBITDA estimates by around 1 to 2% [5]. Group 2: Market Conditions and Strategic Initiatives - Consumer demand remains steady, potentially resilient in a downturn, but enterprise spending may face pressure due to reduced learning and development budgets amid macroeconomic uncertainty [2]. - Coursera is implementing strategic initiatives such as the rollout of tools like Coach, Course Builder, AI-powered translations, and expanded go-to-market efforts [2][4]. Group 3: Margin Outlook and Cost Management - Coursera is guiding for 7% adjusted EBITDA margins in 2025, indicating about 100 basis points of year-over-year margin improvement [3]. - The analyst views Coursera's 2025 margin outlook as conservative, with expected cost controls and over $30 million in savings potentially enhancing performance [4].

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $179 million, a 6% increase year-over-year [9][51] - Free cash flow exceeded $25 million, representing a 40% year-over-year increase [9][54] - The full-year revenue expectation has improved to a range of $720 to $730 million, indicating a growth of approximately 4% to 5% year-over-year [70][71] Business Line Data and Key Metrics Changes - The combined consumer segment revenue was $118 million, up 5% from the previous year, with historical consumer product revenue at $102 million and degrees product revenue at $16 million, both growing 5% year-over-year [61][62] - The enterprise segment revenue was $62 million, a 7% increase from the prior year, driven by growth in business and campus verticals [66][67] Market Data and Key Metrics Changes - The company welcomed over 7 million new learners in Q1, bringing the total to 175 million registered learners [65] - The number of paid enterprise customers increased to 1,651, up 12% from a year ago [68][29] Company Strategy and Development Direction - The company is focused on product innovation, expanding its content engine, and enhancing go-to-market capabilities to drive growth [47][48] - A new integrated business model has been implemented, combining consumer and degree segments to simplify operations and enhance learner experience [17][57] Management's Comments on Operating Environment and Future Outlook - Management highlighted the accelerating pace of change in the market, with a significant need for upskilling and reskilling by 2030 [13][14] - The company is positioned to meet the growing demand for job-relevant skills and is committed to driving innovation and engagement across its platform [15][34] Other Important Information - The catalog now includes nearly 10,000 courses, growing by 37% over the past year, with a significant focus on generative AI content [20][21] - The company has launched nearly 700 AI courses, with enrollments in AI content increasing to 12 per minute, up from one per minute in 2023 [22][96] Q&A Session Summary Question: Where is the CEO spending the most time to drive improved growth? - The CEO is focused on unlocking innovation-led growth, emphasizing product innovation, content expansion, and enhancing go-to-market capabilities [80][81] Question: What drove the record number of registered learners in Q1? - The increase was attributed to successful marketing efforts and improvements in the platform, including enhanced learner experience features [86][87] Question: What are the opportunities for expanding content on the platform? - The company aims to expand its content portfolio across various subjects, including healthcare, and increase investment in Coursera-produced content for better control and engagement [92][100] Question: How does the company view the recategorization of consumer and degrees into one segment? - Management views degrees as another consumer product and believes the change aligns with internal management practices while ensuring transparency about performance expectations [113][115] Question: What are the assumptions behind the improved guidance for the year? - The guidance reflects observed improvements in consumer metrics and a cautious outlook on enterprise spending due to macroeconomic uncertainties [120][126]

Core Insights - Coursera reported revenue of $179.3 million for the quarter ended March 2025, reflecting a 6.1% increase year-over-year and a surprise of +2.58% over the Zacks Consensus Estimate of $174.79 million [1] - The company's EPS was $0.12, up from $0.07 in the same quarter last year, resulting in a surprise of +50.00% compared to the consensus estimate of $0.08 [1] Financial Performance Metrics - Paid Enterprise Customers totaled 1,651, slightly below the average estimate of 1,665 [4] - Total registered learners reached 175.3 million, exceeding the average estimate of 174.2 million [4] - Consumer revenues were reported at $117.60 million, significantly higher than the estimated $99.19 million, marking a year-over-year increase of +21.6% [4] - Degree revenues amounted to $15.50 million, surpassing the estimated $14.19 million, with a year-over-year change of +4.7% [4] - Enterprise revenues were $61.70 million, slightly above the average estimate of $61.30 million, reflecting a year-over-year increase of +7.3% [4] - Gross Profit for Consumer was $72.40 million, exceeding the estimated $53.48 million [4] - Gross Profit for Degrees was $15.50 million, compared to the average estimate of $14.18 million [4] - Gross Profit for Enterprise was $43.20 million, above the average estimate of $42.20 million [4] Stock Performance - Coursera's shares returned +4.5% over the past month, contrasting with the Zacks S&P 500 composite's -5.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1 - Coursera reported quarterly earnings of $0.12 per share, exceeding the Zacks Consensus Estimate of $0.08 per share, and showing an increase from $0.07 per share a year ago, representing a 50% earnings surprise [1] - The company achieved revenues of $179.3 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.58%, and up from $169.07 million year-over-year [2] - Coursera has consistently surpassed consensus EPS estimates over the last four quarters, indicating strong performance [2] Group 2 - The stock has underperformed the market, losing about 10.6% since the beginning of the year compared to the S&P 500's decline of 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $175.59 million, and for the current fiscal year, it is $0.35 on revenues of $715.16 million [7] - The Zacks Industry Rank places Technology Services in the top 25% of over 250 Zacks industries, suggesting a favorable outlook for the sector [8]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $179 million, a 6% increase year-over-year [6][30] - Free cash flow reached over $25 million, up 40% year-over-year [6][32] - Gross profit was $100 million with a gross margin of 56%, an increase from 54% in the prior year [31] Business Line Data and Key Metrics Changes - Consumer segment revenue was $118 million, up 5% year-over-year, driven by strong performance in Coursera Plus subscriptions [35][36] - Enterprise segment revenue was $62 million, up 7% year-over-year, with a net retention rate of 91% [39][40] - The degrees product revenue was $16 million, also growing 5% year-over-year, but is expected to decline in the future [35][42] Market Data and Key Metrics Changes - The company welcomed over 7 million new learners in Q1, bringing the total to 175 million [7][37] - The catalog now includes nearly 10,000 courses, growing by 37% over the past year [13][59] - The company serves 1,651 paid enterprise customers, a 12% increase from the previous year [18][40] Company Strategy and Development Direction - The company aims to simplify its business model by integrating consumer and degree segments to enhance learner experience [11][12] - Focus on product innovation, expanding the content engine, and enhancing go-to-market capabilities are key strategic priorities [27][28] - The company is positioned to capitalize on the growing demand for upskilling and reskilling, with a strong emphasis on AI and technology integration [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the education sector, driven by the need for job-relevant skills [9][10] - The company expects revenue growth of approximately 4% to 5% year-over-year for the full year 2025 [41][42] - Management acknowledged potential risks in the macroeconomic environment affecting enterprise spending [82] Other Important Information - The company has launched nearly 700 AI courses, with enrollments in AI content increasing significantly [14][59] - The introduction of AI-powered text translations has enabled access to over 5,000 courses in multiple languages [21][22] - The company plans to publish a micro-credentials impact report highlighting the value of micro-credentials in the job market [15] Q&A Session Summary Question: Where is the company focusing its efforts for growth? - The CEO highlighted product innovation, expanding the content catalog, and enhancing go-to-market capabilities as key focus areas [45][48] Question: What drove the strong performance in registered learners? - The CEO noted a mix of successful marketing efforts and improvements in the platform that enhanced the learner experience [52][53] Question: What are the opportunities for expanding content on the platform? - The CEO emphasized the importance of branded content from university and industry partners and the need for a diverse and nimble content catalog [58][60] Question: How does the company view the recategorization of consumer and degrees segments? - Management explained that degrees are considered a consumer product and that the change aims to streamline operations without hiding any weaknesses [71][75] Question: What assumptions are embedded in the company's guidance for the year? - The CFO mentioned observed improvements in consumer metrics and the expectation of single-digit growth for both consumer and enterprise segments [79][82]

Financial Performance and Key Metrics - The company reported Q1 2025 revenue of $179 million, a 6% increase year-over-year, with free cash flow exceeding $25 million, up 40% year-over-year [7][31][34] - Gross profit reached $100 million, reflecting a gross margin of 56%, an increase from 54% in the prior year [33] - Net income was $20 million, representing 11% of revenue, while adjusted EBITDA was $19 million, or 10.4% of revenue [33] Business Line Performance - The consumer segment generated $118 million in revenue, up 5% year-over-year, driven by strong engagement with Coursera Plus subscription offerings [37] - The degrees product revenue was $16 million, also up 5% year-over-year, attributed to improved student persistence in North American programs [37] - The enterprise segment revenue was $62 million, a 7% increase year-over-year, with a net retention rate of 91% [40][41] Market Data and Key Metrics - The company welcomed over 7 million new learners in Q1, bringing the total to 175 million learners globally [8][39] - The catalog now includes nearly 10,000 courses, growing by 37% over the past year, with a significant increase in AI-related content [14][61] - The largest markets include the US, India, Mexico, and Brazil, contributing to the company's global reach [18] Company Strategy and Industry Competition - The company aims to simplify its business model by integrating consumer and degree segments to enhance the learner journey [12][13] - Focus areas include product innovation, expanding the content engine, and enhancing go-to-market capabilities [28][29] - The company is positioned to capitalize on the growing demand for upskilling and reskilling, with a strong emphasis on AI skills [10][94] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth trajectory, citing improvements in key metrics and a strong foundation for future innovation [28][30] - The outlook for Q2 2025 revenue is projected to be between $179 million and $183 million, reflecting a growth rate of 5% to 7% year-over-year [42] - The company anticipates single-digit growth in both consumer and enterprise segments, with a focus on stabilizing trends in consumer performance [43][86] Other Important Information - The company has launched nearly 700 AI courses, with enrollments in AI content increasing significantly [15][61] - The introduction of AI-powered text translations has enabled access to over 5,000 courses in 26 languages, enhancing the learning experience [22][23] - The company plans to publish a micro-credentials impact report, highlighting the increasing demand for micro-credentials among employers and students [17] Q&A Session Summary Question: Where is the company focusing its efforts for improved growth? - The CEO emphasized unlocking innovation-led growth, focusing on product innovation, expanding the content catalog, and enhancing go-to-market capabilities [49][50] Question: What drove the strong performance in registered learners? - The CEO noted a mix of successful marketing efforts and improvements in the platform that enhanced the learner experience [54] Question: What are the opportunities for expanding content on the platform? - The CEO highlighted the importance of branded content from university and industry partners, with a focus on expanding in areas like healthcare and entry-level certificates [60][62] Question: What is the rationale behind the recategorization of consumer and degrees into one segment? - Management explained that degrees are viewed as another consumer product, and the change aims to streamline operations while being transparent about performance [74][78] Question: What assumptions are embedded in the company's guidance for the year? - The CFO indicated that the guidance reflects observed improvements in consumer metrics and acknowledges potential risks in enterprise spending due to macroeconomic uncertainties [81][86]