Coursera, Inc. (NYSE:COUR) is one of the best EdTech stocks to buy now. On October 24, 2025, Wall Street started weighing in on Coursera following its Q3 print. Needham’s Ryan MacDonald reiterated a Buy with a $14 price target, staying constructive after the quarter and framing Coursera’s performance and reinvestment as supportive of the bull case. Needham Reiterates Buy on Coursera, Holds $14 Price Target ESB Professional/Shutterstock.com Coursera reported Q3 2025 results on October 23. Coursera’s Q3 ...

Core Insights - Ariel Sokol has over twenty years of experience in corporate finance, focusing on both established companies and startups [1] - Sokol founded Kolari Consulting, which specializes in strategy consulting for subscription and edtech businesses [1] - He previously held significant roles at Pearson, including VP of strategy and finance and General Manager of Institutional Business [1] - Sokol has experience as an equity research analyst on Wall Street, covering sectors such as education, software, and media [1] - He has served on the board of a for-profit university, indicating a strong background in the education sector [1]

Core Insights - Ariel Sokol has over twenty years of experience in corporate finance, focusing on both established companies and startups [1] - Sokol founded Kolari Consulting, which specializes in strategy consulting for subscription and edtech businesses [1] - He previously held significant roles at Pearson, including VP of strategy and finance and General Manager of Institutional Business [1] - Sokol has experience as an equity research analyst on Wall Street, covering sectors such as education, software, and media [1] - He has served on the board of a for-profit university, indicating a strong background in the education sector [1]

Financial Performance - Total revenue for Q3 2025 was $194.2 million, representing a 10% increase from $176.1 million in the same period last year[109]. - Gross profit was $106.0 million, compared to $96.2 million a year ago, with non-GAAP gross profit at $108.0 million, up from $98.1 million[109]. - Net loss narrowed to $(8.6) million from $(13.7) million a year ago, while non-GAAP net income remained stable at $16.7 million[109]. - Adjusted EBITDA increased to $15.6 million, compared to $13.3 million in the prior year[109]. - Revenue for the three months ended September 30, 2025 was $194.2 million, an increase of $18.1 million, or 10%, compared to $176.1 million for the prior-year quarter[123]. - Consumer revenue for the three months ended September 30, 2025 increased by $14.6 million, or 13%, primarily driven by growth in subscription revenue from Coursera Plus[124]. - Enterprise revenue for the three months ended September 30, 2025 increased by $3.5 million, or 6%, due to an increase in new customers[125]. - Gross profit for the three months ended September 30, 2025 was $106.0 million, representing a gross margin of 54.6%[131]. - Revenue for the nine months ended September 30, 2025 was $560.6 million, an increase of $45.1 million, or 9%, compared to $515.5 million for the same period in 2024[126]. - Gross margin for the nine months ended September 30, 2025 was 54.7%, an increase from 53.5% for the same period in 2024[135]. - Consumer revenue for the three months ended September 30, 2025, was $130.3 million, representing a year-over-year growth of 13% compared to $115.7 million in 2024[171]. - Enterprise revenue for the same period was $63.9 million, with a year-over-year growth of 6% from $60.4 million in 2024[171]. - Total revenue for the three months ended September 30, 2025, reached $194.2 million, reflecting a 10% increase from $176.1 million in 2024[171]. - Non-GAAP net income for the three months ended September 30, 2025, was $16.7 million, compared to $16.6 million in 2024[175]. - Free Cash Flow for the nine months ended September 30, 2025, was $80.5 million, an increase from $51.9 million in 2024[181]. - The net loss for the three months ended September 30, 2025, was $(8.6) million, an improvement from $(13.7) million in 2024[178]. Operational Metrics - The platform had approximately 191 million cumulative registered learners as of September 30, 2025[99]. - Total Registered Learners increased to 191 million as of September 30, 2025, representing an 18% year-over-year growth from 162 million[162]. - Paid Enterprise Customers grew to 1,724 as of September 30, 2025, reflecting a 10% year-over-year increase from 1,564[165]. - Net Retention Rate for Paid Enterprise Customers was 89% for both the three months ended September 30, 2025 and 2024, indicating stable customer retention[168]. - Operating expenses are incurred in local currencies, including British pound sterling, Canadian dollar, and Indian rupee[189]. - The company maintained a net retention rate for paid enterprise customers at 89% for both 2025 and 2024[169]. Expenses and Investments - Total operating expenses for the three months ended September 30, 2025 were $121.6 million, an increase of $3.7 million, or 3%, compared to $117.9 million for the prior-year quarter[136]. - Research and development expenses for the three months ended September 30, 2025 were $30.0 million, a decrease of $1.6 million, or 5%, compared to the prior-year quarter[137]. - Total stock-based compensation expense for the three months ended September 30, 2025 was $23.0 million, compared to $25.2 million for the prior-year quarter[121]. - Research and development expenses for the nine months ended September 30, 2025 were $88.8 million, a decrease of 11.1% from $99.9 million in the prior year[138]. - Sales and marketing expenses for the nine months ended September 30, 2025 increased to $187.8 million, up 7.8% from $174.7 million in the prior year, driven by higher performance marketing and advertising expenses[140]. - General and administrative expenses for the nine months ended September 30, 2025 decreased to $76.0 million, down 7.2% from $81.9 million in the prior year, primarily due to non-recurring expenses in the prior year[142]. - Net cash used in investing activities for the nine months ended September 30, 2025 was $22.4 million, primarily due to capitalized internal-use software costs and purchases of content assets[156]. Strategic Initiatives - The company reduced its global workforce by approximately 9% to create capacity for targeted investments and incremental profitability[108]. - The Enterprise segment is expected to drive growth through direct sales and data-driven insights from the Consumer platform[102]. - The company plans to expand its international operations and has tailored pricing and checkout options for local markets[118]. - New product innovations include AI-powered features such as Coach, Role Play, and Course Builder to enhance learning experiences[100]. - The shift to compensating content creators based on learner engagement rather than enrollment rates aims to incentivize the development of more engaging content[116]. Liquidity and Cash Flow - Cash and cash equivalents totaled $797.7 million as of September 30, 2025, serving as the principal source of liquidity[146]. - Net cash provided by operating activities for the nine months ended September 30, 2025 was $102.9 million, an increase of 35.1% from $76.2 million in the prior year[154]. Foreign Exchange Impact - The company has not entered into foreign currency hedging arrangements, but may consider it in the future[190]. - A hypothetical 10% increase in foreign exchange rates would impact loss before income taxes by $0.2 million, while a 10% decrease would impact it by $0.1 million for the three months ended September 30, 2025 and 2024[190].

Core Insights - The Q3 earnings season is starting, with high expectations due to record stock market levels, indicating that even strong earnings reports may not sustain market rallies [1] Group 1: Market Context - Stock markets are reaching new records, leading to heightened expectations for Q3 earnings [1] - The phrase "beat and raise" may not be sufficient to maintain market momentum during this earnings season [1] Group 2: Analyst Background - Gary Alexander has extensive experience in technology sectors, both on Wall Street and in Silicon Valley, and has been advising startups [1] - He has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications [1]

Core Insights - Coursera significantly outperformed Wall Street's Q3 targets, posting adjusted earnings per share of $0.10 on sales of $194.2 million, exceeding analyst estimates of $0.08 and $190.3 million respectively [4] - Despite the positive sales performance and an increase in full-year sales guidance to between $750 million and $754 million, the stock price fell by 12.9% due to disappointing guidance on profitability metrics [2][4] Financial Performance - Coursera's revenue increased approximately 10% year over year in Q3, prompting the company to raise its full-year sales target [4] - For Q4, Coursera is targeting revenue between $189 million and $193 million, which is above Wall Street's expectation of $187.5 million [6] - The company's guidance for adjusted EBITDA in Q4 is between $7 million and $10 million, which is below Wall Street's target of approximately $10.2 million, raising concerns about weaker margins despite revenue growth [7] Market Reaction - The stock experienced a significant sell-off, dropping 12.9% in a day when the broader market indices, such as the S&P 500 and Nasdaq Composite, were up by 0.8% and 1.1% respectively [1][5] - The current market capitalization of Coursera is approximately $2 billion, with a current stock price of $9.18 [6]

Core Insights - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] Group 1 - The article suggests that users may face blocks if ad-blockers are enabled, indicating a need to disable them for proper access [1]

Core Insights - Coursera reported revenue of $194.2 million for the quarter ended September 2025, reflecting a year-over-year increase of 10.3% and surpassing the Zacks Consensus Estimate of $190.4 million by 2% [1] - The company's EPS remained stable at $0.10, matching the EPS from the same quarter last year, and exceeded the consensus estimate of $0.09 by 11.11% [1] Financial Performance Metrics - Paid Enterprise Customers reached 1,724, slightly above the average estimate of 1,715 [4] - Total Registered Learners increased to 191 million, surpassing the estimated 190.71 million [4] - Enterprise Revenue was reported at $63.9 million, exceeding the average estimate of $63.61 million, marking a year-over-year growth of 5.8% [4] - Consumer Revenue amounted to $130.3 million, significantly higher than the estimated $126.76 million, with a year-over-year increase of 27.4% [4] - Gross Profit from Enterprise was $44.5 million, slightly below the estimated $44.89 million [4] - Gross Profit from Consumer was reported at $79.7 million, exceeding the average estimate of $76.75 million [4] Stock Performance - Coursera's shares have declined by 11.4% over the past month, contrasting with a 0.2% increase in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Coursera reported quarterly earnings of $0.1 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, with an earnings surprise of +11.11% [1] - The company achieved revenues of $194.2 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 2.00% and showing a year-over-year increase from $176.09 million [2] - Coursera's stock has increased by approximately 22.9% since the beginning of the year, outperforming the S&P 500's gain of 13.9% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $186.95 million, and for the current fiscal year, it is $0.39 on revenues of $743.75 million [7] - The estimate revisions trend for Coursera was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which Coursera belongs, is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Coursera reported revenue of $194 million for Q3 2025, reflecting a 10% year-over-year increase [5][24] - Free cash flow reached $27 million, up 59% from the previous year [5][26] - The company raised its full-year revenue guidance to a range of $750 to $754 million, representing 8% to 9% growth from the prior year [6][22] Business Line Data and Key Metrics Changes - Consumer segment revenue was $130 million, up 13% year-over-year, driven by 7.7 million new registered learners [27][29] - Enterprise segment revenue was $64 million, up 6% year-over-year, with a 10% increase in the total number of paid enterprise customers [30][31] - Consumer segment gross profit was $80 million, with a gross margin of 61%, while enterprise segment gross profit was $45 million, maintaining a gross margin of 70% [29][31] Market Data and Key Metrics Changes - The total number of registered learners reached 191 million, indicating strong growth in user engagement [27] - The demand for generative AI courses has surged, with 14 enrollments per minute, up from eight enrollments per minute last year [11][12] Company Strategy and Development Direction - The company is focusing on product-led innovation and operational discipline to enhance customer experiences and drive long-term growth [5][6] - Coursera is expanding its catalog, which has grown by 44% to over 12,000 courses, and is enhancing its offerings in AI skills [10][11] - The introduction of SkillsTrax aims to address skill gaps and improve training impact for organizations [17][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the consumer business, citing strong top-of-funnel metrics and the success of Coursera Plus [42][43] - The enterprise environment remains muted, with no significant changes expected in corporate spending trends [54][82] - The company anticipates Q4 revenue in the range of $189 to $193 million, reflecting seasonal trends [21][82] Other Important Information - The appointment of Anthony Salcido as the new General Manager of the enterprise segment is expected to drive future growth initiatives [7][56] - Coursera's partnership with OpenAI to embed its platform in ChatGPT is seen as a significant opportunity for user engagement [36][37] Q&A Session Summary Question: Insights on OpenAI embedded app and its impact - Management is excited about the partnership with OpenAI, viewing it as a top-of-funnel opportunity to attract new learners [34][35] Question: Sales and marketing investment priorities - The company continues to see effective returns on sales and marketing investments, particularly in driving subscriptions [38][39] Question: Q4 revenue outlook and consumer growth durability - Management raised full-year revenue guidance, citing strong consumer growth and visibility from Coursera Plus [41][42] Question: Balancing free cash flow growth with content investments - The company is pleased with content investments, which have expanded the course catalog and improved gross margins [44][45] Question: Factors driving consumer acceleration and international pricing - Improved marketing strategies and localized pricing adjustments have contributed to consumer growth [48][50] Question: Trends in enterprise segment and corporate spending - Mixed trends were observed across different enterprise verticals, with Coursera for Campus performing better than Coursera for Government [53][54] Question: Future of AI certifications and partnerships - Management sees opportunities for AI certifications in collaboration with partners like OpenAI and Anthropic [68][71] Question: Shifts in search behavior and investment in AI search - The integration with OpenAI is expected to enhance user experience and improve course discovery through AI-driven search [72][76]