Group 1: Core Insights - Several tech stocks are gaining attention for their affordability and strong buy ratings, supported by positive earnings estimate revisions [1][2] - The Zacks Internet-Software Industry is in the top 32% of over 240 Zacks industries, highlighting the potential for growth among its companies [3] Group 2: Company Highlights - Udemy (UDMY) has shown increased profitability, with annual earnings expected to rise 194% in fiscal 2025 to $0.47 per share, and projected EPS growth of 24% in FY26 [5][6] - StoneCo (STNE) is trading under $15 per share with a forward earnings multiple of 8.5X, and is expected to see EPS growth of 10% this year and 16% in FY26 [7][8] - Hewlett Packard (HPE) is trading under $20 per share with a forward earnings multiple of 10X, and has surpassed $1 billion in AI systems revenue, with projected top-line growth of over 14% in FY25 and FY26 [9][10] Group 3: Financial Metrics - Udemy's EPS estimates for FY25 and FY26 are $0.47 and $0.58 respectively, with a year-over-year growth estimate of 193.75% for FY25 [6] - StoneCo's annual sales exceed $2 billion, with EPS expected to rise to $1.73 in FY26 [7] - Hewlett Packard's annualized revenue run rate for AI systems reached $2.2 billion, with EPS projected to rebound to $2.30 in FY26 [10][13]

Core Viewpoint - Udemy, Inc. (UDMY) shows a significant improvement in earnings outlook, making it an attractive investment option as analysts continue to raise earnings estimates for the company [1][3]. Earnings Estimate Revisions - The trend in estimate revisions indicates growing analyst optimism regarding Udemy's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, Udemy is projected to earn $0.10 per share, reflecting a 42.9% increase from the previous year [6]. - Over the last 30 days, the Zacks Consensus Estimate for Udemy has risen by 20%, with one estimate moving higher and no negative revisions [6]. - For the full year, Udemy is expected to earn $0.47 per share, representing a 193.8% increase from the prior year [7]. - The consensus estimate for the current year has increased by 90.85% due to four estimates moving higher and no negative revisions [8]. Zacks Rank - Udemy currently holds a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts in raising earnings estimates [9]. - The Zacks Rank system has a proven track record, with Zacks 1 Ranked stocks averaging a 25% annual return since 2008 [3]. Stock Performance - Udemy shares have increased by 8.3% over the past four weeks, suggesting investor confidence in the company's earnings growth prospects [10].

Core Viewpoint - Udemy, Inc. (UDMY) shows potential for upside with a mean price target of $9.75, indicating a 34.1% upside from its current price of $7.27 [1] Price Targets and Analyst Consensus - The average price target consists of 10 estimates ranging from $6.50 to $12.00, with a standard deviation of $1.65, suggesting variability in analyst predictions [2] - The lowest estimate indicates a potential decline of 10.6%, while the highest suggests a 65.1% upside [2] - A low standard deviation indicates strong agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Analyst Optimism - Analysts have shown increasing optimism about UDMY's earnings, with a positive trend in earnings estimate revisions [4][11] - Over the last 30 days, the Zacks Consensus Estimate for the current year has increased by 17.7%, with two estimates moving higher and no negative revisions [12] - UDMY holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates [13] Caution on Price Targets - While price targets are often sought after, they can mislead investors, and reliance solely on them may lead to poor investment decisions [3][7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

Group 1: Company Highlights - Celestica (CLS) is one of the largest electronics manufacturing services companies globally, serving various industries, with a 9.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - SB Financial Group (SBFG) is a financial services holding company providing a full range of services for consumers and small businesses, also experiencing a 9.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - HomeTrust Bancshares (HTB) focuses on attracting deposits and investing in loans secured by mortgages, with a 7.9% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3] - Houlihan Lokey (HLI) is a global investment bank specializing in mergers and acquisitions, with a 6.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [4] - Udemy (UDMY) offers online courses across various subjects, with a 4.7% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [5]

Core Insights - Udemy, Inc. reported revenue of $199.88 million for the quarter ended June 2025, marking a year-over-year increase of 2.8% and an EPS of $0.16 compared to -$0.04 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $196.56 million by 1.69%, while the EPS surprise was 33.33% against the consensus estimate of $0.12 [1] Financial Performance Metrics - The Enterprise Segment's Annual Recurring Revenue was reported at $520 million, surpassing the average estimate of $516.6 million from two analysts [4] - The Consumer Segment had a monthly average of 1.24 million buyers, slightly below the estimated 1.25 million [4] - Total customers in the Enterprise Segment were 17,107, which fell short of the average estimate of 17,330 [4] - Revenue from the Enterprise Segment was $129.3 million, exceeding the estimated $128.18 million and reflecting a year-over-year increase of 7.2% [4] - Consumer Segment revenue was reported at $70.6 million, above the average estimate of $68.44 million, but represented a year-over-year decline of 4.3% [4] Stock Performance - Udemy's shares returned +0.2% over the past month, compared to a +3.4% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Udemy, Inc. (UDMY) came out with quarterly earnings of $0.16 per share, beating the Zacks Consensus Estimate of $0.12 per share. This compares to a loss of $0.04 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +33.33%. A quarter ago, it was expected that this company would post earnings of $0.1 per share when it actually produced earnings of $0.12, delivering a surprise of +20%.Over the last four quarters, the company has surp ...

Revenue and Growth - As of June 30, 2025, subscription offerings across both Consumer and Enterprise segments accounted for approximately 70% of consolidated revenue[153]. - The company expects revenue from its Enterprise segment to continue growing faster than the Consumer segment, benefiting overall margins[157]. - Revenue for the three months ended June 30, 2025, was $199.9 million, representing a 3% increase from $194.4 million in the same period of 2024[182]. - Enterprise revenue for the three months ended June 30, 2025, was $129.3 million, accounting for 65% of total revenue, an increase of 7% from $120.6 million in the prior year[183]. - Consumer revenue for the three months ended June 30, 2025, was $70.6 million, a decrease of 4% from $73.8 million in the same period of 2024[185]. - For the six months ended June 30, 2025, total revenue was $400.2 million, a 2% increase from $391.2 million in the same period of 2024[186]. Profitability and Expenses - Gross profit for the three months ended June 30, 2025, was $132.0 million, a 9% increase from $121.1 million in the prior year, resulting in a gross margin of 66%[189]. - Total operating expenses for the three months ended June 30, 2025, were $128.1 million, down from $146.7 million in the same period of 2024[178]. - Net income for the three months ended June 30, 2025, was $6.3 million, compared to a net loss of $31.8 million in the same period of 2024[178]. - Cost of revenue for the three months ended June 30, 2025, was $67.8 million, a decrease of 7% from $73.2 million in the prior year[189]. - Adjusted EBITDA improved by $22.9 million for the three months ended June 30, 2025, reaching $28.4 million compared to $5.5 million in 2024[230]. Customer Metrics and Retention - The company reported a UB NDRR of 95% and a UB Large Customer NDRR of 99% as of June 30, 2025, indicating varying retention rates among customer segments[183]. - Udemy Business customers grew to 17,107 as of June 30, 2025, representing a 3% increase from 16,595 in the prior year[213]. - Udemy Business Annual Recurring Revenue (ARR) reached $520.0 million, a 6% increase from $492.6 million in the prior year[215]. - Udemy Business net dollar retention rate decreased to 95% from 101% in the prior year, while the Large Customer net dollar retention rate fell to 99% from 108%[219]. Operational Efficiency and Investments - The company anticipates operating expenses will generally decrease as a percentage of revenue over time due to investments in operational efficiency and high-growth opportunities[169]. - The company is investing in generative AI to enhance personalized learning experiences and improve skill development outcomes[145]. - The company aims to drive greater retention and expansion within its existing customer base, particularly among Udemy Business customers[149]. Cash Flow and Financial Position - Free cash flow increased to $39.0 million for the three months ended June 30, 2025, compared to $24.8 million in the same period of 2024[237]. - As of June 30, 2025, the company had cash, cash equivalents, and restricted cash totaling $231.4 million, along with marketable securities of $161.7 million[238]. - The company held $230.3 million in cash and cash equivalents and $161.7 million in marketable securities as of June 30, 2025[260]. - The company did not have any borrowings outstanding under its revolving credit facility as of June 30, 2025[262]. Credit and Financing - The company entered into a Credit Agreement in May 2025, establishing a revolving credit facility of $200 million, all undrawn as of June 30, 2025[146]. - The company may explore additional financing sources, including equity or debt financing, for future acquisitions or strategic investments[243]. Market and International Expansion - The company is focusing on expanding its international footprint, particularly in regions with large underserved adult and corporate learning populations[158]. - The instructor revenue share for subscription offerings is set to decrease to 15% by 2026, with adjustments to 20% and 17.5% effective on January 1, 2024, and January 1, 2025, respectively[166].

Financial Data and Key Metrics Changes - Udemy reported Q2 revenues of $200 million, a 3% year-over-year increase, exceeding guidance [6][32] - Positive GAAP net income of approximately $6 million was achieved for the first time since the IPO, a significant improvement from a loss of $32 million in Q2 of the previous year [34] - Adjusted EBITDA was approximately $28 million, representing 14% of revenue, marking a 1,100 basis point year-over-year expansion [34] - Free cash flow generated during the quarter was $39 million, or 20% of revenue [34] Business Segment Data and Key Metrics Changes - Revenue from the Udemy Business segment was $129 million, a 7% year-over-year increase [32] - Consumer segment revenue was $71 million, down 4% year-over-year, impacted by foreign exchange [33] - Annual Recurring Revenue (ARR) for Udemy Business reached $520 million, reflecting 6% year-over-year growth [32] Market Data and Key Metrics Changes - The company saw double-digit year-over-year ARR growth in key international markets, particularly in Japan, Brazil, and India [13][36] - Subscription revenue accounted for 15% of the consumer segment, up two percentage points from Q1 [9] Company Strategy and Development Direction - Udemy is focusing on increasing subscription products, expanding partnerships, and positioning itself as a leading AI-powered skill acceleration platform [7][14] - The company aims to grow consumer subscriptions to over 250,000 by year-end and double that next year [10] - New revenue streams are being explored, including programmatic advertising and reselling certifications [11][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Udemy's potential and highlighted the importance of AI in workforce reskilling [15][40] - The company anticipates revenue for Q3 to be between $190 million and $195 million, with consumer revenue expected to decline by 9% [41] - Positive indicators suggest an approaching inflection point in growth trajectory, driven by strong pipeline generation and improving win rates [42][43] Other Important Information - The company has a strong balance sheet with $393 million in cash and marketable securities [34] - Udemy's instructor community is rapidly responding to market demands, particularly in AI-related courses [16][19] Q&A Session Summary Question: Key observations from the CEO's first four months - The CEO noted a significant shift towards AI reskilling across various industries and emphasized the need for more integrated learning solutions [48][49] Question: Impact of COVID contracts on net dollar retention - Management acknowledged challenges with COVID contracts due to previous implementation capabilities but expressed optimism about improvements in customer success strategies [58][60] Question: Balancing headwinds on renewals with pipeline growth - Management highlighted strong momentum in pipeline development and expected substantial increases in net new ARR in the upcoming quarters [66][67] Question: Insights on programmatic advertising revenue stream - The CEO discussed plans to monetize the large audience through various advertising strategies, with experiments planned for Q3 [76][77] Question: Response to new AI readiness and growth packages - The reception of new AI-focused packages has been overwhelmingly positive, contributing significantly to the sales pipeline [82][84]

Financial Performance - Q2 2025 revenue reached $199.9 million, exceeding expectations, with a 3% year-over-year increase[9, 12, 15] - GAAP net income was $6.3 million, marking the first positive quarter since IPO, a 120% change year-over-year[9, 12] - Adjusted EBITDA stood at $28.4 million, representing a 14% margin, which is above the high end of the guidance range[9, 12] - Free cash flow for Q2 was positive $39.0 million, and year-to-date free cash flow was positive $46.1 million[10] Subscription and Customer Growth - Subscription revenue now accounts for 70% of total revenue, an increase of 200 basis points quarter-over-quarter[14, 16, 17] - The company surpassed 200,000 paid consumer subscribers, with subscription revenue increasing to 15% of the consumer segment's total mix[9, 13] - Udemy Business (UB) Annual Recurring Revenue (ARR) is $520 million, a 6% year-over-year increase[7, 11, 12] - Udemy Business has 17,107 total customers, including 5,799 large enterprise customers[19] Strategic Initiatives and AI Focus - Launched AI Readiness and AI Growth packages for enterprise customers, along with AI-powered Role Play simulations[10, 13] - AI Learning Assistant engagement increased to over 4 million unique inquiries[13] - The company offers over 4,500 AI-focused courses with over 11 million AI course enrollments[7] Future Outlook - Q3 2025 revenue is projected to be between $190 million and $195 million, with an adjusted EBITDA between $18 million and $20 million[24] - Full year 2025 revenue is projected to be between $784 million and $794 million, with an adjusted EBITDA between $84 million and $89 million[7, 24]

Financial Performance - Total revenue increased 3% year-over-year to $199.9 million, with a negative impact of 1 percentage point from foreign exchange rates[6]. - Udemy Business revenue of $129.3 million increased 7% year-over-year, including a negative impact of 50 basis points from foreign exchange rates[6]. - Udemy Business Annual Recurring Revenue (ARR) rose 6% year-over-year to $520.0 million[6]. - Net income was $6.3 million, representing a 3% margin, while Adjusted EBITDA was $28.4 million, or 14% margin, reflecting a 1,100 basis point expansion year-over-year[6]. - The net income for the three months ended June 30, 2025, was $6,265,000, compared to a net loss of $31,814,000 in the same period of 2024[29]. - Non-GAAP net income for Q2 2025 was $24,211, compared to a loss of $6,543 in Q2 2024, indicating improved profitability[38]. - Adjusted EBITDA for Q2 2025 was $28,398, compared to $5,463 in Q2 2024, demonstrating strong operational performance[39]. Cash Flow and Liquidity - Free cash flow for the quarter was positive $39.0 million, with year-to-date free cash flow at positive $46.1 million[6]. - Free cash flow for Q2 2025 was $39,011, significantly higher than $24,785 in Q2 2024, indicating robust cash generation[41]. - Cash provided by operating activities for Q2 2025 was $44,203, compared to $28,592 in Q2 2024, showing improved operational efficiency[41]. - The company reported a net increase in cash of $40,641 for Q2 2025, compared to an increase of $13,343 in Q2 2024, highlighting improved liquidity[34]. - Total cash, cash equivalents, and restricted cash at the end of the period was $231,373, down from $273,579 at the end of Q2 2024[34]. Assets and Liabilities - The company’s cash and cash equivalents increased to $230,258,000 as of June 30, 2025, up from $190,592,000 at the end of 2024[32]. - Total current assets reached $547,496,000, an increase from $506,328,000 at the end of 2024[32]. - The total liabilities stood at $410,598,000 as of June 30, 2025, slightly up from $408,234,000 at the end of 2024[32]. Operational Efficiency - Operating expenses for the three months ended June 30, 2025, were $128,121,000, down from $146,662,000 in the same period of 2024, showing a reduction of 12.7%[29]. - Stock-based compensation expense for Q2 2025 was $17,420, down from $24,317 in Q2 2024, indicating a reduction in equity compensation costs[38]. - Non-GAAP gross margin for Q2 2025 was 67%, up from 64% in Q2 2024, reflecting better cost management[36]. User Engagement and Growth - Surpassed a milestone of 200,000 paid subscribers for Udemy's consumer subscription, Personal Plan[6]. - Udemy's Net Dollar Retention Rate (NDRR) for Udemy Business customers is a key metric for revenue growth, reflecting the company's ability to retain and expand revenue from existing customers[21]. - The company anticipates continued growth in user engagement and revenue, with expectations for future operating results and financial position outlined for Q3 and full year 2025[24]. Strategic Initiatives - Introduced new AI Packages aimed at enhancing AI fluency for organizations and professionals[6]. - Launched Role Play, an AI-powered offering for developing real-world soft skills through immersive simulations[6]. - Udemy's strategic focus includes enhancing its enterprise solutions and expanding its market presence, particularly in workforce development[27]. Future Guidance - Provided revenue guidance for Q3 2025 of $190 to $195 million and for the full year 2025 of $784 to $794 million[9].