Summary of Coursera's Recent Conference Call Company Overview - **Company**: Coursera - **Industry**: Online Education and Learning Platforms Key Points and Arguments Leadership Changes and Vision - **New Leadership**: Greg Hart joined as CEO in February 2023, focusing on accelerating growth through product innovation and addressing the skills needed in a rapidly changing global economy [2][6] - **Product Focus**: Patrick Suppes, the new Chief Product Officer, emphasizes the intersection of education and technology, aiming to build customer-focused technology products [3][4] Strategic Focus Areas - **Content Investment**: Coursera has historically underinvested in content but is now increasing investment to enhance the content engine, which is deemed essential for business growth [7][10] - **Go-to-Market Strategy**: The company aims to improve external marketing and customer retention, aligning marketing efforts with platform performance [8][10] Annual Conference - Connect - **Event Overview**: Connect is Coursera's annual event that gathers content creators, industry partners, and enterprise customers to discuss skills delivery and unveil new products [10][12] - **Feedback**: Positive feedback was received regarding new product announcements, including SkillTrack and improvements to CourseBuilder and Roleplay [10][12] Impact of AI on Education - **Generative AI**: The rapid adoption of AI technologies, such as ChatGPT, is reshaping job requirements and necessitating continuous learning [15][16] - **Skill Development**: Coursera is positioned to help individuals and businesses upskill and reskill in response to AI advancements, focusing on verifiable skills [16][17] New Partnerships and Content Strategy - **Anthropic Partnership**: The collaboration with Anthropic aims to enhance AI content offerings, with significant enrollment growth in GenAI courses [24][25] - **Content Personalization**: AI will enable more personalized learning experiences, allowing learners to start at appropriate skill levels and progress at their own pace [20][21] SkillTrack Launch - **SkillTrack Overview**: A new enterprise offering designed to align modular content with specific skills needed in the workplace, featuring interactive, AI-powered experiences [38][39] - **Verified Assessments**: SkillTrack includes assessments that validate the application of skills in realistic scenarios, enhancing employer confidence in credentialed learners [40][41] Growth Metrics and Future Outlook - **Performance Metrics**: Coursera tracks top-of-funnel metrics, conversion rates, retention, and average revenue per user (ARPU) to assess growth [44][45] - **Revenue Guidance**: The company increased its revenue guidance to $742 million and EBITDA margin to 8%, indicating confidence in future growth [51][52] Long-term Vision - **Future Expectations**: In three years, Coursera aims to be the leading platform for skill discovery, mastery, and verification, leveraging AI to create a more personalized and interactive learning experience [56][58] Additional Important Insights - **Customer-Centric Approach**: Emphasis on understanding learner needs and adapting offerings accordingly, including region-specific pricing and enhanced course previews [47][48] - **AI Integration**: Continuous investment in AI-driven products to improve course creation efficiency and learner engagement [27][30][36] This summary encapsulates the key discussions and strategic directions outlined during Coursera's recent conference call, highlighting the company's commitment to innovation and responsiveness to market demands.

Group 1: Company Overview - Coursera, Inc. (NYSE:COUR) is a California-based global provider of online educational services, founded in 2011, operating through three segments: Consumer, Enterprise, and Degrees [4] Group 2: Investment Potential - AlphaQuest LLC has increased its holdings in Coursera by 164.5% in the first quarter, acquiring 26,147 shares, bringing its total to 42,039 shares valued at $280,000 [1] - Coursera has surpassed 10 million total enrollees in its generative AI courses and certifications, indicating strong growth potential in this segment [2] - The company is leveraging AI to dub course content into various languages, aiming to capture international growth opportunities [3]

Core Insights - Coursera, Inc. has launched Skill Tracks, a new learning solution designed to guide learners from foundational knowledge to expert proficiency in specific occupations [1] - Skill Tracks is powered by Coursera's Career Graph, which utilizes millions of labor market data points, third-party competency frameworks, and a proprietary skills taxonomy [1] Company Overview - Coursera is a leading global online learning platform, indicating its significant position in the education technology industry [1] - The introduction of Skill Tracks reflects Coursera's commitment to providing data-driven educational solutions tailored to market needs [1] Product Details - Skill Tracks offers verified skill paths that are mapped to specific occupations, enhancing the relevance of the learning experience for users [1] - The solution aims to bridge the gap between foundational knowledge and expert proficiency, addressing the skills gap in the labor market [1]

Coursera (COUR) Conference Call Summary Company Overview - **Company**: Coursera (COUR) - **Date of Conference**: August 11, 2025 - **Key Speaker**: Ken Corso, CFO Industry and Business Segments - **Industry**: Online Education and Learning Platforms - **Business Segments**: - Consumer Segment - Enterprise Segment Key Points and Arguments Business Performance - The consumer segment faced operational and executional headwinds leading to slowed growth since the IPO in March 2021, but has recently rebounded with double-digit growth in the last quarter [6][8] - The enterprise segment also experienced a slowdown due to uncertainty in capital spending across the market [6][20] - The appointment of the new CEO, Greg Hart, has led to a renewed focus on operational improvements, particularly in the consumer segment [7] AI and Course Demand - There has been a significant increase in interest in AI-related courses, with enrollments rising from 8 to 12 per minute over the past year [11] - The company has expanded its offerings to include 5,000 courses in 26 languages, resulting in increased revenue from these courses [12] - A shift in demand is noted, with more mid-level professionals seeking reskilling in AI rather than just entry-level courses [14] Subscription Model - The Coursera Plus subscription model has seen strong adoption, particularly in annual subscriptions, which enhances cash flow and deferred revenue visibility [17] - The focus on improving key metrics such as conversion and retention has yielded positive results, contributing to overall growth [17][18] Enterprise Segment Insights - The enterprise segment is experiencing a slowdown, but there is optimism for recovery as companies seek to reskill their workforces in response to AI advancements [19][21] - The campus segment, while smaller, is performing well, offering accredited courses to universities, which is beneficial for both students and institutions [25][27] Financial Performance - The company reported strong second-quarter results, raising its full-year revenue guidance by $17 million and increasing EBITDA guidance [36][40] - The consumer business model reacts quickly to improvements, leading to immediate payback on strategic initiatives [35] - There is a focus on maintaining a balance between growth and operational efficiency, with improvements in gross margin due to content initiatives and partnerships [44] Future Outlook - The company is transitioning towards a more platform-oriented approach, enhancing the value of its offerings through AI and product improvements [49][51] - There is an expectation of creating more value with existing content, which will drive revenue growth [53] Additional Important Insights - The synergy between Coursera's consumer and enterprise segments is significant, with approximately 30% of enterprise leads coming from former students [32] - The company emphasizes the importance of brand recognition and the value of certificates in enhancing the learning experience [49] - The management is focused on long-term platform investments and capabilities to drive future growth [51] This summary encapsulates the key insights from the conference call, highlighting Coursera's current performance, strategic initiatives, and future outlook in the online education industry.

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The company presents its unaudited financial statements, showing revenue growth and a significantly reduced net loss - Effective February 3, 2025, Gregory Hart was appointed as the new President and Chief Executive Officer (CEO)[24](index=24&type=chunk) - Following the CEO transition, the company simplified its business model and now operates under two reporting segments: **Consumer** and **Enterprise**[25](index=25&type=chunk)[83](index=83&type=chunk) Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $775.1 | $726.1 | | Total current assets | $881.9 | $830.7 | | Total assets | $979.9 | $930.3 | | **Liabilities & Equity** | | | | Total current liabilities | $346.2 | $327.5 | | Total liabilities | $352.9 | $332.9 | | Total stockholders' equity | $627.0 | $597.4 | Condensed Consolidated Statements of Operations Highlights (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $187.1 | $170.3 | $366.4 | $339.4 | | Gross Profit | $102.7 | $90.2 | $200.6 | $179.7 | | Loss from operations | $(15.1) | $(31.2) | $(29.5) | $(61.0) | | Net loss | $(7.8) | $(22.9) | $(15.6) | $(44.2) | | Net loss per share | $(0.05) | $(0.15) | $(0.10) | $(0.28) | Condensed Consolidated Statements of Cash Flows Highlights (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $69.0 | $48.3 | | Net cash provided by (used in) investing activities | $(15.1) | $52.8 | | Net cash used in financing activities | $(6.5) | $(48.7) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q2 2025 results, detailing revenue growth, segment performance, and key business metrics [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Revenue grew 10% YoY in Q2 2025, driven by growth in both segments and improved gross margins Revenue by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Consumer | $122.8 | $111.6 | 10% | $240.4 | $223.2 | 8% | | Enterprise | $64.3 | $58.7 | 10% | $126.0 | $116.2 | 8% | | **Total Revenue** | **$187.1** | **$170.3** | **10%** | **$366.4** | **$339.4** | **8%** | - Gross margin for Q2 2025 increased to **54.9%** from 53.0% in Q2 2024, driven by lower content cost rates in both Consumer and Enterprise segments[132](index=132&type=chunk)[133](index=133&type=chunk) - Total operating expenses for Q2 2025 **decreased by 3% YoY** to $117.8 million, primarily due to lower personnel-related expenses from 2024 expense reduction initiatives[138](index=138&type=chunk)[139](index=139&type=chunk)[143](index=143&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $775.1 million in cash and increased operating cash flow - The company's principal source of liquidity as of June 30, 2025, was cash and cash equivalents totaling **$775.1 million**[148](index=148&type=chunk) - Net cash provided by operating activities **increased by $20.7 million to $69.0 million** for the six months ended June 30, 2025, compared to the same period in 2024[156](index=156&type=chunk)[157](index=157&type=chunk) - The share repurchase program, authorizing up to $95.0 million, was completed in May 2024, with no repurchases made in 2025[152](index=152&type=chunk)[153](index=153&type=chunk) [Key Business Metrics and Non-GAAP Financial Measures](index=33&type=section&id=Key%20Business%20Metrics%20and%20Non-GAAP%20Financial%20Measures) Key metrics show growth in learners and enterprise customers, with improved non-GAAP profitability Key Business Metrics as of June 30 | Metric | 2025 | 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | Total Registered Learners (millions) | 183 | 155 | 18% | | Paid Enterprise Customers | 1,686 | 1,511 | 12% | | Net Retention Rate for Paid Enterprise Customers | 93% | 93% | 0% | Non-GAAP Financial Measures Reconciliation (in millions) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Non-GAAP Gross Profit** | $104.7 | $92.3 | $204.8 | $184.0 | | **Non-GAAP Net Income** | $19.3 | $13.8 | $39.0 | $25.7 | | **Adjusted EBITDA** | $18.0 | $10.4 | $36.7 | $18.7 | | **Free Cash Flow** | N/A | N/A | $53.9 | $35.1 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate and foreign currency fluctuations - The company's primary market risks are **interest rate changes** and **foreign currency fluctuations**[186](index=186&type=chunk) - A hypothetical **100 basis point** increase or decrease in interest rates would result in a **$7.8 million** change in annualized interest income as of June 30, 2025[189](index=189&type=chunk) - Foreign currency risk from operating expenses would have had a **negligible impact** on pre-tax loss for Q2 2025 based on a 10% change in exchange rates[190](index=190&type=chunk)[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal controls over financial reporting were effective - The CEO and CFO concluded that as of the end of the period, the company's disclosure controls and procedures were **effective** at the reasonable assurance level[194](index=194&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[195](index=195&type=chunk) [PART II. OTHER INFORMATION](index=40&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company details legal proceedings, including a $4.5 million settlement for privacy arbitration matters - The company refers to Note 9 in Part I, Item 1 for information on legal proceedings[199](index=199&type=chunk) - In May 2025, the company entered into settlement agreements with the majority of remaining claimants in the Privacy Arbitration Matters for **$4.5 million**[59](index=59&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks related to industry growth, competition, regulation, AI, and its PBC status - The company's growth may be adversely impacted by macroeconomic conditions, and its limited operating history makes future results difficult to predict[201](index=201&type=chunk)[207](index=207&type=chunk) - The business depends on partnerships with content creators, with the top five generating approximately **24% of total revenue** in the first six months of 2025[212](index=212&type=chunk) - The use of AI presents risks related to inaccurate content, academic integrity, and evolving regulations, which could damage the company's reputation[245](index=245&type=chunk)[246](index=246&type=chunk) - Degree programs rely on the DOE's non-codified "bundled services exception" guidance, which could be altered or removed, impacting revenue-sharing models[298](index=298&type=chunk)[300](index=300&type=chunk) - As a Public Benefit Corporation (PBC), the board must balance stockholder interests with its public benefit purpose, potentially impacting short-term financial results[372](index=372&type=chunk)[374](index=374&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities during the reporting period - None[381](index=381&type=chunk) [Item 5. Other Information](index=81&type=section&id=Item%205.%20Other%20Information) Two company officers adopted Rule 10b5-1 trading arrangements during the quarter - On May 15, 2025, Michele M. Meyers, VP, Accounting and Chief Accounting Officer, entered into a Rule 10b5-1 trading arrangement for the sale of up to **21,000 shares** of common stock[383](index=383&type=chunk) - On May 30, 2025, Marcelo C. Modica, SVP and Chief People Officer, entered into a Rule 10b5-1 trading arrangement for the sale of up to **51,720 shares** of common stock[384](index=384&type=chunk) [Item 6. Exhibits](index=82&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including certifications and charter documents - Lists the exhibits filed with the report, including charter documents, officer certifications required by the Sarbanes-Oxley Act, and Inline XBRL documents[390](index=390&type=chunk)

Company Performance - Coursera's stock has increased by 41.4% over the past month and reached a new 52-week high of $12.49 [1] - Year-to-date, Coursera's stock has gained 45.5%, outperforming the Zacks Business Services sector's 2.6% gain and the Zacks Technology Services industry's 12.8% return [1] Earnings and Revenue - Coursera has consistently exceeded earnings expectations, reporting EPS of $0.12 against a consensus estimate of $0.09 in its last earnings report [2] - For the current fiscal year, Coursera is projected to achieve earnings of $0.35 per share on revenues of $726.86 million, reflecting a 2.94% increase in EPS and a 4.63% increase in revenues [3] - The next fiscal year forecasts earnings of $0.42 per share on revenues of $764.31 million, indicating a year-over-year change of 22.04% in EPS and 5.15% in revenues [3] Valuation Metrics - Coursera's current valuation metrics show a Price-to-Earnings (P/E) ratio of 35.6X for the current fiscal year, which is higher than the peer industry average of 21.3X [6] - The stock has a Value Score of D, a Growth Score of A, and a Momentum Score of F, resulting in a VGM Score of B [6] Zacks Rank - Coursera holds a Zacks Rank of 2 (Buy), supported by rising earnings estimates, making it a suitable choice for investors [7] Industry Comparison - The Technology Services industry is performing well, ranking in the top 34% of all industries, providing favorable conditions for Coursera and its peers [10] - JBT Marel Corporation, a competitor, also shows strong performance with a Zacks Rank of 2 (Buy) and has reported earnings that exceeded consensus estimates by 18.29% [8][9]

Core Insights - The S&P 500 is attempting to establish stability at new all-time highs, prompting a strategy shift towards overlooked small-cap stocks with better valuations [1] Group 1: Market Strategy - The current investment strategy involves rotating out of winning momentum trades and focusing on small-cap stocks that are undervalued [1] Group 2: Analyst Background - Gary Alexander has extensive experience in technology sectors, having worked on Wall Street and in Silicon Valley, and has advised seed-round startups [1] - He has been a contributor to Seeking Alpha since 2017 and has been featured in various web publications, with his articles reaching popular trading platforms like Robinhood [1]

Group 1 - Coursera reported better-than-expected second-quarter results with earnings of 12 cents per share, surpassing the analyst consensus estimate of 9 cents, and quarterly revenue of $187.1 million, exceeding the Street estimate of $180.48 million [1][2] - The company attracted over 7 million new learners this quarter, indicating a growing market opportunity driven by global demand for new technology and skills [2] - Coursera raised its full year 2025 revenue outlook by $17 million to a range of $738 to $746 million [2] Group 2 - Analysts have adjusted their price targets for Coursera following the earnings announcement, with several maintaining or upgrading their ratings [3][5] - Needham analyst Ryan MacDonald raised the price target from $11 to $14 while maintaining a Buy rating [5] - B of A Securities analyst Nafeesa Gupta upgraded Coursera from Underperform to Neutral and increased the price target from $7 to $12 [5] - Telsey Advisory Group analyst Sarang Vora maintained an Outperform rating and raised the price target from $12 to $14 [5] - Keybanc analyst Bradley Thomas maintained an Overweight rating and boosted the price target from $11 to $12 [5] - Morgan Stanley analyst Josh Baer maintained an Equal-Weight rating and raised the price target from $11 to $12 [5] - Cantor Fitzgerald analyst Yi Fu Lee maintained an Overweight rating and lifted the price target from $10 to $13 [5]

Core Insights - Coursera reported strong Q2 2025 results, exceeding analyst expectations with GAAP revenue of $187.1 million and non-GAAP EPS of $0.12, leading to an optimistic outlook for the full year 2025 [1][5][14] Financial Performance - Q2 2025 GAAP revenue increased by 10% year-over-year, surpassing estimates by $6.6 million [5] - Non-GAAP net income rose 40% to $19.3 million, while adjusted EBITDA grew 73% to $18.0 million [5] - Free cash flow reached $28.6 million, up 68% from the previous year [5] - Operating cash flow for the quarter was $35.5 million, indicating improved operational efficiency [5] Business Focus and Strategy - Coursera focuses on expanding its network of educator partners, technological innovation, and global market penetration [4] - The company has nearly 10,000 courses available, with a significant emphasis on AI-related content [7] - Partnerships with institutions like Adobe and DeepLearning.AI are crucial for maintaining relevance in high-demand fields [10] Market Position and Growth - Coursera has 183 million registered learners globally, with nearly half of its revenue generated outside the US [12] - The Consumer segment generated $122.8 million in revenue, while the Enterprise segment brought in $64.3 million, both reflecting a 10% increase [6] - The company added 7.5 million new registered learners in the quarter [6] Technological Advancements - AI-powered features such as content translation and Coursera Coach have been introduced to enhance user experience [7][11] - The company is committed to linking course content with career outcomes through ongoing innovations [7] Financial Outlook - Management raised the full-year revenue guidance for FY2025 to $738-$746 million, up from the previous range of $720-$730 million [14] - For Q3 2025, expected GAAP revenue is between $188 million and $192 million [14] - Adjusted EBITDA margin target for the full year is set at 8.0%, indicating a planned improvement of 200 basis points [14]

Core Insights - Coursera reported revenue of $187.1 million for the quarter ended June 2025, reflecting a year-over-year increase of 9.8% and surpassing the Zacks Consensus Estimate by 3.38% [1] - The company's EPS for the quarter was $0.12, which is a 33.33% surprise compared to the consensus estimate of $0.09 [1] Financial Performance Metrics - Paid Enterprise Customers reached 1,686, exceeding the average estimate of 1,665 [4] - Total Registered Learners increased to 183 million, slightly above the estimated 182.27 million [4] - Enterprise Revenue was reported at $64.3 million, compared to the average estimate of $61.76 million, marking a year-over-year growth of 9.5% [4] - Consumer Revenue was $122.8 million, surpassing the average estimate of $119.25 million, with a significant year-over-year increase of 26.2% [4] - Gross Profit from Enterprise was $44.8 million, exceeding the estimated $43.06 million [4] - Gross Profit from Consumer was reported at $75.3 million, above the average estimate of $72.46 million [4] Stock Performance - Coursera's shares have returned +5.3% over the past month, slightly underperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]