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]

Financial Performance - Coursera reported first quarter 2025 revenue of $179.3 million, a 6% increase from $169.1 million in Q1 2024[4] - The company achieved a net loss of $7.8 million, significantly improved from a net loss of $21.3 million in the same quarter last year, representing a 63% reduction[4] - Free Cash Flow for the quarter was $25.3 million, up 40% from $18.1 million in Q1 2024[4] - Adjusted EBITDA for the quarter was $18.7 million, a 125% increase from $8.3 million in Q1 2024[4] - Revenue for Q1 2025 was $179.3 million, a 6.5% increase from $169.1 million in Q1 2024[27] - Gross profit for Q1 2025 was $97.9 million, compared to $89.5 million in Q1 2024, reflecting an increase of 9.4%[27] - Non-GAAP net income for Q1 2025 was $19.7 million, up from $11.9 million in Q1 2024[32] - Adjusted EBITDA for Q1 2025 was $18.7 million, compared to $8.3 million in Q1 2024, indicating a strong improvement[32] - The company reported a net loss margin of (4.4)% for Q1 2025, improved from (12.6)% in Q1 2024[32] Learner Growth - Coursera welcomed a record 7.1 million new registered learners in Q1 2025, an increase from 6.6 million in Q1 2024[8] - The total number of registered learners reached 175.3 million, an 18% increase year-over-year[8] Future Outlook - The company updated its full year 2025 revenue expectations to a midpoint of $725 million following a solid first quarter performance[5] - The company plans to achieve an annual Adjusted EBITDA margin improvement of 100 basis points to 7.0% for the full year 2025[15] Customer Metrics - The net retention rate for paid enterprise customers decreased to 91% from 94% year-over-year[8] Asset Growth - Total current assets as of March 31, 2025, were $854.0 million, up from $830.7 million at the end of 2024[29] - Total assets increased to $951.2 million as of March 31, 2025, compared to $930.3 million at the end of 2024[29] - Total stockholders' equity rose to $610.5 million as of March 31, 2025, from $597.4 million at the end of 2024[29]

Core Viewpoint - Coursera (COUR) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4]. Business Improvement Indicators - The upgrade for Coursera signifies an improvement in the company's underlying business, which is expected to drive the stock price higher as investors respond positively to this trend [5][10]. - For the fiscal year ending December 2025, Coursera is projected to earn $0.36 per share, representing a 5.9% increase from the previous year, with a 13% rise in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [7]. - Only the top 20% of Zacks-covered stocks receive a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revisions and potential for market-beating returns [9][10].

Group 1 - The Value Lab focuses on long-only value investment ideas, aiming for a portfolio yield of about 4% and has performed well over the last 5 years by engaging in international markets [1][2] - Coursera (NYSE: COUR) is highlighted as an interesting investment opportunity, particularly due to its IPO during the COVID-19 pandemic when e-learning gained significant traction [2] - The Valkyrie Trading Society consists of analysts sharing high conviction investment ideas that are expected to generate non-correlated and outsized returns in the current economic environment [3] Group 2 - The Value Lab offers members real-time portfolio updates, 24/7 chat support, regular global market news reports, feedback on stock ideas, monthly new trades, quarterly earnings write-ups, and daily macro opinions [2]

Learner and Customer Growth - As of December 31, 2024, Coursera had approximately 168 million registered learners on its platform[324]. - The number of total registered learners increased to 168.2 million in 2024, reflecting a year-over-year growth of 19% from 141.9 million in 2023[395]. - The number of Paid Enterprise Customers rose to 1,612 in 2024, marking an 18% increase from 1,369 in 2023[400]. Revenue Performance - Total revenue for the year ended December 31, 2024 was $694.7 million, an increase of $58.9 million, or 9%, from $635.8 million in 2023[360]. - Consumer revenue increased by $32.9 million, or 9%, to $398.1 million, with new learners contributing $107.5 million[361]. - Enterprise revenue also rose by $19.3 million, or 9%, to $238.9 million, driven by new customer acquisitions[362]. - Degrees revenue increased by $6.7 million, or 13%, to $57.7 million, primarily due to an increase in the number of Degrees students[363]. - Total revenue for the year ended December 31, 2024, was $694.674 million, representing an increase of 9.3% from $635.764 million in 2023[454]. Cost and Expenses - Cost of revenue for 2024 was $323.3 million, a 6% increase from $306.0 million in 2023, with a gross profit of $371.4 million and a gross margin of 53%[364]. - Total operating expenses for 2024 were $484.6 million, a slight increase of 2% from $475.4 million in 2023[368]. - Research and development expenses decreased by 18% to $132.0 million, primarily due to lower personnel-related costs[369]. - Operating expenses increased slightly to $484.632 million in 2024 from $475.367 million in 2023, with research and development expenses at $132.048 million[454]. Profitability and Loss - The company reported a net loss of $79,530,000 for 2024, an improvement from a net loss of $116,554,000 in 2023[410]. - Adjusted EBITDA for 2024 was $41,507,000, compared to a loss of $10,000,000 in 2023, indicating a positive shift in profitability[413]. - Net loss for the year ended December 31, 2024, was $79,530,000, a decrease from the net loss of $116,554,000 in 2023 and $175,357,000 in 2022[464]. Cash Flow and Liquidity - Net cash provided by operating activities for 2024 was $95.4 million, a significant increase of $65.7 million compared to $29.6 million in 2023[387]. - Cash and cash equivalents as of December 31, 2024, were $726.125 million, up from $656.321 million in 2023[452]. - Total cash, cash equivalents, and restricted cash at the end of 2024 was $728,404,000, up from $658,086,000 in 2023[464]. Strategic Decisions and Future Outlook - The company anticipates a revenue decline in its Degrees segment for 2025 due to a strategic decision to be more selective in pursuing Degrees partnerships[330]. - Starting in 2025, Coursera will compensate educator partners based on learner engagement rather than completion rates, aiming to improve learner outcomes[337]. - Capital expenditures are expected to increase in 2025 relative to 2024, focusing on investments in content assets[384]. - The company plans to continue investing in marketing efforts to support international expansion and grow its customer and learner base[339]. Stock and Equity - The company completed a share repurchase program, purchasing 3,099,800 shares for $36.7 million during the year ended December 31, 2024[383]. - The balance of stockholders' equity as of December 31, 2024, was $597,420,000, a decrease from $616,194,000 in 2023[460]. - The company repurchased common stock worth $36,705,000 in 2024, compared to $58,453,000 in 2023[464]. Tax and Compliance - Income tax expense for 2024 was $1.0 million, a significant decrease of 81% from $5.4 million in 2023, due to the release of a reserve for an uncertain tax position[375]. - The company is subject to income taxes in the United States and various foreign jurisdictions, requiring significant judgment in determining income tax expense[513]. Financial Reporting and Controls - The company maintained effective internal control over financial reporting as of December 31, 2024, according to the independent auditor's opinion[434]. - The allowance for credit losses was not material for the years ended December 31, 2024, 2023, and 2022[476].