Udemy, Inc. (UDMY) shares ended the last trading session 6.7% higher at $7.45. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.6% loss over the past four weeks.Udemy is benefiting from the growing demand for AI-driven workforce reskilling and its subscription-based revenue model.This company is expected to post quarterly earnings of $0.12 per share in its upcoming report, which represents a year-over-year change ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Udemy, Inc. (UDMY) , which belongs to the Zacks Internet - Software industry, could be a great candidate to consider.When looking at the last two reports, this company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 31.43%, on average, in the last two quarters.For the most recent quarter, Udemy was exp ...

Udemy (UDMY) FY Conference Summary Company Overview - **Company**: Udemy - **CEO**: Hugo Sarazin - **Conference Date**: May 14, 2025 Key Industry Insights - **Industry**: EdTech - **Market Dynamics**: The EdTech space is undergoing significant changes, particularly with the integration of AI technologies, which are expected to reshape content creation and learning experiences [12][13][14]. Core Points and Arguments 1. **CEO Background**: Hugo Sarazin has 30 years of experience in tech, previously serving as president and chief product and technology officer at UKG, where he helped double the company's size [5][6]. 2. **Vision for Udemy**: Sarazin is focused on leveraging Udemy's platform to enhance social mobility and educational access, emphasizing the potential of AI to transform learning experiences [8][10]. 3. **Market Opportunity**: There is a growing demand for reskilling in organizations due to the overwhelming nature of AI advancements, with Udemy offering 4,000 AI-related courses to meet this new demand [14][15]. 4. **AI Integration**: Udemy aims to utilize AI to create personalized learning experiences, improving engagement and completion rates, which are critical for effective learning outcomes [17][18][19]. 5. **Product Roadmap**: The company is focused on enhancing its platform with AI tools for both learners and content creators, aiming to become a mission-critical resource for large enterprises [20][29]. 6. **Consumer Segment Shift**: Udemy is transitioning from a transaction-based model to a subscription model for its consumer segment, which currently accounts for just below $300 million in revenue [31][35]. 7. **Career Accelerators**: New offerings like career accelerators are designed to provide ongoing professional development, enhancing user engagement and outcomes [41][42]. 8. **Enterprise Business Growth**: The enterprise segment is growing at 9%, with significant room for penetration in the existing customer base, currently at only 10% [46][48]. 9. **Sales Strategy**: Udemy is revising its sales approach to better address different buying centers within large organizations and to demonstrate ROI effectively [54][58]. 10. **International Expansion**: 60% of Udemy's revenue comes from international markets, with significant opportunities for localized marketing and activation strategies [68][70]. Additional Important Insights - **AI Tools Feedback**: Early feedback on AI tools like skill mapping and learning assistants has been positive, indicating a strong initial reception from users [21][22]. - **Role Play Feature**: The introduction of AI-driven role plays has rapidly expanded, showcasing the platform's ability to scale content creation effectively [26][27]. - **Economic Context**: The company is taking a cautious approach to guidance due to mixed signals in the macroeconomic environment, although the pipeline for Q2 remains strong [60][62]. This summary encapsulates the key insights and strategic directions discussed during the conference, highlighting Udemy's commitment to leveraging technology for enhanced learning experiences and market growth.

Group 1 - Udemy experienced a significant stock price decline of nearly 12% in April, attributed to investor sentiment and external economic factors [1] - The company underwent a sudden CEO transition from Greg Brown to Hugo Sarrazin, which contributed to shareholder unease [2][6] - An analyst downgrade from Truist Securities reduced the price target for Udemy from $10 to $7, reflecting concerns about the company's positioning in a potential recession [4][6] Group 2 - The economic climate is causing fears of a recession, which typically leads consumers to cut back on non-discretionary spending, impacting Udemy's business model [5] - Despite reporting a more than tripled non-GAAP net income of nearly $17.9 million year over year, Udemy's revenue growth was only 2%, reaching slightly over $200 million [8] - Current guidance for the second quarter and full year was in line with analyst expectations, but the overall sentiment remains cautious regarding Udemy's potential for significant growth [8][9]

Market Performance - U.S. stocks closed higher on Friday, with the S&P 500 achieving its longest winning streak since November 2004, marking nine consecutive days of gains [1] - The S&P 500 increased by 2.9% for the week, while the Dow gained 3% and the Nasdaq rose by 3.4% [1] Analyst Insights - Wall Street analysts frequently update stock picks, but their track records can vary significantly, leading to confusion among investors [2] - Benzinga's Analyst Ratings API compiles high-quality stock ratings from major sell-side banks, providing insights that can serve as effective trading indicators [3] Top Analyst Picks - Benzinga offers access to the latest analyst ratings, allowing traders to sort by analyst accuracy [4] - Notable analysts and their recent ratings include: - Zachary Fadem from Wedbush with an 86% accuracy, maintaining an Outperform rating on Beazer Homes USA, Inc. with a price target cut from $45 to $41, indicating a 93% upside [5] - An analyst from JP Morgan with 85% accuracy, maintaining an Overweight rating on Amazon.com, Inc. and raising the price target from $220 to $225, suggesting a 20% surge potential [5] - An analyst from UBS with 85% accuracy, maintaining a Buy rating on Meta Platforms, Inc. and increasing the price target from $650 to $683, indicating a 16% upside [5] - An analyst from Cantor Fitzgerald with 84% accuracy, maintaining an Overweight rating on Udemy, Inc. and lowering the price target from $11 to $9, suggesting a 40% upside [5] - An analyst from Wells Fargo with 84% accuracy, maintaining an Overweight rating on Wingstop Inc. and raising the price target from $270 to $300, indicating an 11% upside [6]

Core Insights - The article emphasizes a strong foundation in fundamental analysis and the identification of undervalued companies with long-term growth potential [1] Investment Approach - The investment strategy combines value investing principles with a focus on long-term growth, advocating for the purchase of quality companies at a discount to their intrinsic value [1] - The approach encourages holding investments for an extended period to allow for compounding of earnings and shareholder returns [1]

Core Insights - Udemy, Inc. reported revenue of $200.3 million for Q1 2025, reflecting a year-over-year increase of 1.8% and an EPS of $0.12, up from $0.03 a year ago, exceeding the Zacks Consensus Estimate of $197.04 million by 1.66% [1] - The company achieved an EPS surprise of 20.00%, with the consensus EPS estimate being $0.10 [1] Financial Performance Metrics - The Enterprise Segment's Annual Recurring Revenue reached $519 million, surpassing the estimated $512.99 million [4] - The Consumer Segment had an average of 1.41 million monthly buyers, slightly above the estimated 1.4 million [4] - Total customers in the Enterprise Segment were 17,216, exceeding the average estimate of 17,111 [4] - Revenue from the Enterprise Segment was $127.70 million, compared to the average estimate of $125.84 million, marking a year-over-year increase of 8.6% [4] - Revenue from the Consumer Segment was $72.60 million, which is below the average estimate of $70.79 million, representing a year-over-year decline of 8.3% [4] Stock Performance - Udemy's shares have returned -12.2% over the past month, contrasting with the Zacks S&P 500 composite's -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Udemy, Inc. reported quarterly earnings of $0.12 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, and showing an increase from $0.03 per share a year ago, representing an earnings surprise of 20% [1] - The company posted revenues of $200.3 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.66%, and an increase from $196.85 million year-over-year [2] - Over the last four quarters, Udemy has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Future Outlook - The sustainability of Udemy's stock price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $195.94 million, and for the current fiscal year, it is $0.41 on revenues of $791.3 million [7] - The estimate revisions trend for Udemy is mixed, resulting in a Zacks Rank 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Industry Context - The Internet - Software industry, to which Udemy belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, suggesting that the industry's outlook can significantly impact Udemy's stock performance [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]

Business Overview - Udemy's consumer marketplace has attracted 79 million learners across over 180 countries, with a network of 85,000 instructors offering over 250,000 courses in 75 languages[117]. - Udemy generates a majority of its revenue outside North America and sees significant opportunities for expansion in underserved regions[128]. - The company is actively investing in growth, focusing on larger enterprise customers and strategic partnerships, while anticipating operating expenses to decrease as a percentage of revenue over time[129]. Revenue and Financial Performance - Revenue for the three months ended March 31, 2025, was $200.3 million, representing a 2% increase from $196.8 million in the same period of 2024[152]. - Enterprise revenue increased by $10.1 million, or 9%, to $127.7 million, accounting for 64% of total revenue, while Consumer revenue decreased by $6.7 million, or 8%, to $72.6 million[153][154]. - Gross profit for the three months ended March 31, 2025, was $129.4 million, with a gross margin of 65%, up from 61% in the prior year[155][158]. - Total operating expenses decreased by $9.4 million, or 7%, to $133.9 million, driven by reductions in sales and marketing and research and development expenses[158]. - Udemy Business Annual Recurring Revenue (ARR) grew by 8% to $519.0 million, up from $479.4 million in the prior year[170]. - Adjusted EBITDA improved significantly to $21.1 million in Q1 2025 from $6.5 million in Q1 2024, reflecting operational efficiency initiatives[184]. Cost Structure and Efficiency - The revenue mix is shifting towards the higher-margin Enterprise segment, which is expected to grow faster than the Consumer segment, benefiting overall margins[127]. - Cost of revenue is primarily driven by content costs, which are expected to decrease as the company increases revenue from its Enterprise offering[138]. - Operating expenses are expected to decrease as a percentage of revenue over time, driven by operational efficiency and high-growth opportunities[139]. - Stock-based compensation expense totaled $18.0 million for the three months ended March 31, 2025, down from $22.7 million in the prior year[149]. Instructor Revenue Share Changes - The company plans to reduce the instructor revenue share for subscription offerings from 25% to 15% by 2026, with adjustments to 20% effective January 1, 2024, and 17.5% effective January 1, 2025[136]. - Net loss decreased to $1.8 million in Q1 2025 from $18.3 million in Q1 2024, driven by reduced instructor revenue share and lower operational costs[184]. Customer Metrics - Udemy Business customers increased by 1,146, or 7%, to 17,216 as of March 31, 2025, reflecting the company's global expansion strategy[168]. - Monthly average buyers decreased by 2% year-over-year, totaling 1,412,000 in Q1 2025 compared to 1,442,000 in Q1 2024[176]. - Udemy Business net dollar retention rate decreased to 96% in Q1 2025 from 104% in Q1 2024, while the large customer net dollar retention rate fell to 100% from 111%[174]. Cash Flow and Investments - As of March 31, 2025, the company had cash, cash equivalents, and restricted cash totaling $190.7 million, along with marketable securities of $167.4 million[186]. - Cash provided by operating activities was $12.2 million in Q1 2025, down from $21.0 million in Q1 2024, primarily due to changes in operating assets and liabilities[195]. - Net cash used in investing activities was $7.4 million for the three months ended March 31, 2025, primarily due to $78.6 million in purchases of marketable securities[198]. - Net cash used in financing activities was $5.9 million for the three months ended March 31, 2025, primarily driven by taxes paid related to net share settlement of employee equity awards[200]. Tax and Accounting Policies - The company has a full valuation allowance against U.S. federal and state deferred tax assets due to uncertainty in realizing these assets, maintaining this allowance until consistent taxable income is achieved[147]. - There have been no material changes to the company's critical accounting policies and estimates compared to the previous year[203]. - The company did not have any relationships with unconsolidated entities or financial partnerships during the periods presented[201]. Market and Economic Factors - The pace of adoption for cloud-based skill development solutions is expected to increase as technology becomes critical to business operations, although customer adoption rates remain uncertain[130]. - A hypothetical 100 basis points change in interest rates would not result in a material increase or decrease in the market value of the company's portfolio of cash equivalents and marketable securities[206]. - The company's reporting currency is the U.S. dollar, and fluctuations in foreign currency exchange rates may cause transaction gains and losses[207]. - The company has not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments[207].

Financial Data and Key Metrics Changes - The company reported quarterly revenue surpassing $200 million for the first time, with adjusted EBITDA exceeding expectations [32][37] - Udemy Business annual recurring revenue (ARR) was $519 million, up 8% year over year, with ARR from large customers increasing by 9% [32][33] - Total company gross margin improved to 65%, a 300 basis point increase from Q1 2024, driven by changes in content costs and a shift towards Udemy Business [37][38] Business Line Data and Key Metrics Changes - Udemy Business revenue was $128 million, a 9% year-over-year increase, despite a one percentage point headwind from foreign exchange rates [33] - Consumer segment revenue was $73 million, down 8% year over year, impacted by a negative three percentage point effect from foreign exchange [35] - Subscription revenue across both segments now accounts for 68% of total revenue, representing a 500 basis point expansion year over year [36] Market Data and Key Metrics Changes - The company added approximately 120 net new Udemy Business customers, increasing the global customer base by 7% year over year to over 17,200 [33] - Consolidated net dollar retention at quarter end was 96%, with a rate of 100% for large customers [34] - The company expects potential headwinds in North America and EMEA, while maintaining a more optimistic outlook for APAC and Latin American markets [40] Company Strategy and Development Direction - Udemy is transforming from a content provider to an AI-powered reskilling platform, focusing on enterprise value creation and operational efficiency [12][15] - The company aims to increase emphasis on consumer subscriptions, which saw revenue rise nearly 40% year over year in Q1 [16] - A full-stack localization strategy will be implemented across high-potential markets to enhance market-specific product experiences [17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the top line due to external uncertainties, particularly in the consumer segment [31][39] - The company is focused on operational efficiency and has implemented $50 million in annualized cost savings to navigate potential headwinds [41] - Despite a conservative outlook, management remains optimistic about long-term growth opportunities and margin expansion [43] Other Important Information - The company appointed its first Chief Customer Experience Officer to enhance customer retention and expansion efforts [34] - AI trends are seen as a significant opportunity, with the company positioning itself as a leader in AI reskilling [19][26] - The introduction of AI-powered capabilities is expected to enhance the learning experience and improve ROI for customers [22][25] Q&A Session Summary Question: Key observations from the first 45 days and near-term priorities - Management highlighted the need to better package and merchandise AI offerings and emphasized the importance of consumer ownership in career development [45][50] Question: Contribution from new career accelerators and RFP activity - Management expects career accelerators to contribute positively but remains cautious due to macroeconomic uncertainties affecting consumer sentiment [61][63] Question: Changes in enterprise customer conversations - Conversations have evolved to focus more on ROI and consolidation, with an increased emphasis on AI fluency across organizations [70][74] Question: Impact of consumer subscriptions on revenue - Management acknowledged the potential for immediate payback from consumer subscriptions but noted possible delays in revenue from transactional models [78][80] Question: Changes in consumer subscription strategy - The company plans to reimagine its consumer subscription model, including pricing, packaging, and marketing efforts [83][86] Question: AI opportunity and upsell potential - AI is central to many conversations with existing customers, and the company is exploring targeted packages for different organizational personas [90][92]