About Udemy Investor Contact: Dennis Walsh Vice President, Investor Relations dennis.walsh@udemy.com SAN FRANCISCO, July 12, 2024 (GLOBE NEWSWIRE) -- Udemy (Nasdaq: UDMY), a leading online skills marketplace and learning platform, today announced it will report its second quarter 2024 financial results after the close of market on Wednesday, July 31, 2024. Udemy will host a live conference call and webcast to discuss the results that afternoon at 2 p.m. PT / 5 p.m. ET. Udemy (Nasdaq: UDMY) transforms lives ...

SAN FRANCISCO, July 12, 2024 (GLOBE NEWSWIRE) -- Udemy (Nasdaq: UDMY), a leading online skills marketplace and learning platform, today announced it will report its second quarter 2024 financial results after the close of market on Wednesday, July 31, 2024. Udemy will host a live conference call and webcast to discuss the results that afternoon at 2 p.m. PT / 5 p.m. ET. A link to the live webcast and recorded replay of the conference call will be available on the "Quarterly Results" section of Udemy's Inves ...

Maskot/DigitalVision via Getty Images Summary I give a Buy rating for Udemy (NASDAQ:UDMY), as I am a firm believer that online education has a long growth runway ahead of it, and UDMY is well positioned to take advantage of this secular tailwind. Its biggest competitive advantage stems from its two-sided marketplace model, which creates a strong flywheel effect. While recent financials have shown some weakness in growth, I believe that as the macro environment recovers, demand will recover accordingly, and ...

Company to webcast sessions from the William Blair Annual Growth Stock Conference on June 5 and the BofA Securities Global Technology Conference on June 6 SAN FRANCISCO, May 23, 2024 (GLOBE NEWSWIRE) -- Udemy (Nasdaq: UDMY), a leading online skills marketplace and learning platform, today announced that Udemy leadership will participate in two June investor conferences, including: Live webcasts will be available through the "Events & Presentations" section of Udemy's investor relations website at https://in ...

[Summary of Risk Factors](index=4&type=section&id=Summary%20of%20Risk%20Factors) The company faces diverse risks including stock price volatility, historical losses, market competition, and operational challenges in attracting and retaining users and content - The company faces numerous risks, including volatile common stock price, a history of losses, operating in an emerging and dynamic market, and significant fluctuations in results of operations[6](index=6&type=chunk) - Key operational risks include the ability to attract and retain learners, instructors, and organizations, reliance on a limited number of popular content instructors, and the need to maintain and expand relationships with Udemy Business (UB) customers[6](index=6&type=chunk) - Other risks involve operating in a highly competitive market, potential for the online learning market not to grow as expected, and challenges related to privacy, data protection, cybersecurity, and intellectual property enforcement[6](index=6&type=chunk) [Special Note Regarding Forward-Looking Statements](index=5&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section highlights that the Form 10-Q contains forward-looking statements about future performance and strategy, which are subject to risks and may differ from actual results - This Form 10-Q contains forward-looking statements regarding future results, business strategy, and management objectives, which are subject to risks, uncertainties, and assumptions[7](index=7&type=chunk)[8](index=8&type=chunk) - Key forward-looking statements include expectations for financial and operating performance (revenue, costs, UB customers, ARR, NDRR, EBITDA), ability to execute growth strategy, attract/retain users, and manage industry trends and macroeconomic environment[9](index=9&type=chunk) - Actual events or results may differ materially from those expressed in forward-looking statements, and investors should not place undue reliance on them[8](index=8&type=chunk)[10](index=10&type=chunk) [PART I. Financial Information](index=7&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, revenue recognition, investments, and other financial components [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $256,807 | $305,564 | | Marketable securities | $173,883 | $171,372 | | Total current assets | $603,426 | $632,328 | | Total assets | $708,454 | $741,196 | | Total current liabilities | $408,285 | $380,132 | | Total liabilities | $411,960 | $384,304 | | Total stockholders' equity | $296,494 | $356,892 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement outlines the company's financial performance over a period, presenting revenue, cost of revenue, operating expenses, and net loss | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :--------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenue | $196,846 | $176,430 | | Cost of revenue | $76,282 | $76,701 | | Gross profit | $120,564 | $99,729 | | Sales and marketing | $87,301 | $79,657 | | Research and development | $31,223 | $30,887 | | General and administrative | $24,769 | $26,334 | | Restructuring charges | — | $10,128 | | Total operating expenses | $143,293 | $147,006 | | Loss from operations | $(22,729) | $(47,277) | | Net loss | $(18,339) | $(44,544) | | Net loss per share (Basic and diluted) | $(0.12) | $(0.31) | [Condensed Consolidated Statements of Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This statement details the company's net loss and other comprehensive income or loss components, leading to the total comprehensive loss for the period | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net loss | $(18,339) | $(44,544) | | Foreign currency translation loss, net of tax | $(52) | $(11) | | Change in unrealized gain (loss) on marketable securities, net of tax | $(102) | $148 | | Total other comprehensive income (loss) | $(154) | $137 | | Comprehensive loss | $(18,493) | $(44,407) | [Condensed Consolidated Statements of Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This statement presents the changes in the company's stockholders' equity, including net loss, stock-based compensation, and share repurchases | Metric | Balance—December 31, 2023 (in thousands) | Balance—March 31, 2024 (in thousands) | | :----------------------------------------- | :------------------------------------- | :------------------------------------ | | Total Stockholders' Equity | $356,892 | $296,494 | | Stock-based compensation | — | $25,066 | | Repurchases of common stock | — | $(55,511) | | Net loss | — | $(18,339) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities over the reporting period | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash provided by (used in) operating activities | $20,969 | $(19,895) | | Net cash used in investing activities | $(3,770) | $(19,319) | | Net cash provided by (used in) financing activities | $(66,465) | $1,180 | | Net decrease in cash, cash equivalents and restricted cash | $(49,316) | $(38,052) | | Cash, cash equivalents and restricted cash—End of period | $260,236 | $279,262 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies and specific financial components [1. Organization and description of business](index=13&type=section&id=Note%201%20-%20Organization%20and%20description%20of%20business) This note describes Udemy, Inc. as a global learning company providing an online platform for skill acquisition to individuals and organizations - Udemy, Inc. is a global learning company headquartered in San Francisco, California, founded in January 2010[29](index=29&type=chunk) - The company's online platform empowers organizations and individuals with flexible and effective skill acquisition, offering a learning marketplace and curated content for Udemy Business[30](index=30&type=chunk) [2. Summary of significant accounting policies](index=13&type=section&id=Note%202%20-%20Summary%20of%20significant%20accounting%20policies) This note outlines the company's significant accounting policies, including segment reporting, critical estimates, and customer concentration details - The company operates under two reportable segments: Enterprise and Consumer, with the CEO serving as the chief operating decision maker[32](index=32&type=chunk) - Significant estimates include allowance for credit losses, capitalized software, stock-based compensation, and income tax valuation allowance[34](index=34&type=chunk) - One reseller partner for the Enterprise segment accounted for over **10% of accounts receivable** as of March 31, 2024, but no customer accounted for over **10% of total revenue**[37](index=37&type=chunk) [3. Revenue recognition](index=15&type=section&id=Note%203%20-%20Revenue%20recognition) This note details the company's revenue recognition policies, including deferred revenue and the aggregate transaction price for remaining performance obligations | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Revenue recognized from deferred revenue | $143,200 | $134,600 | | Segment | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------- | :---------------------------- | :------------------------------- | :------------------------------- | | Enterprise | $255,886 | $220,127 | $219,030 | | Consumer | $62,017 | $62,287 | $59,249 | | Total | $317,903 | $282,414 | $278,279 | - As of March 31, 2024, the aggregate transaction price for remaining performance obligations was **$555.3 million**, with **72% expected to be recognized over the next twelve months**[46](index=46&type=chunk) [4. Investments and fair value measurements](index=16&type=section&id=Note%204%20-%20Investments%20and%20fair%20value%20measurements) This note describes the company's investment classifications and fair value measurements, including details on impairment losses and carrying values - The company's financial instruments are categorized into Level 1 (money market funds), Level 2 (U.S. government securities), and Level 3 (strategic investments) based on fair value hierarchy[49](index=49&type=chunk) - No impairment losses were recorded on strategic investments for the three months ended March 31, 2024, or 2023[51](index=51&type=chunk) - Cumulative impairment charges on strategic investments total **$4.7 million**, with the carrying value at **$10.3 million** as of March 31, 2024[52](index=52&type=chunk) [5. Consolidated balance sheet components](index=17&type=section&id=Note%205%20-%20Consolidated%20balance%20sheet%20components) This note provides a breakdown of key consolidated balance sheet components, including cash, capitalized software, intangible assets, and goodwill | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :----------------------------------------- | :---------------------------- | :------------------------------- | | Total cash, cash equivalents, and marketable securities | $430,690 | $476,936 | | Capitalized software, net | $32,096 | $31,388 | | Intangible assets, net | $4,268 | $5,223 | | Goodwill | $12,646 | $12,646 | - Amortization expense for capitalized software was **$4.8 million** in Q1 2024, and for intangible assets was **$1.0 million** in Q1 2024[57](index=57&type=chunk)[59](index=59&type=chunk) - Goodwill of **$12.6 million**, established from the CorpU acquisition, is allocated to the Enterprise segment with no adjustments as of March 31, 2024[60](index=60&type=chunk) [6. Leases](index=19&type=section&id=Note%206%20-%20Leases) This note details the company's lease arrangements, including operating and variable lease costs, and future minimum lease payments | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------- | :--------------------------------------------- | :--------------------------------------------- | | Operating lease costs | $1,550 | $1,670 | | Variable lease costs | $245 | $314 | - Future minimum lease payments under noncancellable operating leases total **$4.66 million** through 2026[63](index=63&type=chunk) [7. Commitments and contingencies](index=20&type=section&id=Note%207%20-%20Commitments%20and%20contingencies) This note outlines the company's noncancellable purchase commitments and ongoing legal proceedings, assessing their potential financial impact - The company has **$48.0 million** in noncancellable purchase commitments with remaining terms exceeding one year, expected to be paid through 2026[64](index=64&type=chunk) - The company is subject to legal proceedings and claims in the ordinary course of business, but the outcome is not expected to have a material effect on financial position, results of operations, or cash flows[66](index=66&type=chunk) [8. Income taxes](index=20&type=section&id=Note%208%20-%20Income%20taxes) This note covers the company's income tax details, including the effective tax rate, valuation allowance, and a tax notice from India | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------ | :------------------------------ | :------------------------------ | | Effective tax rate | (5.93)% | (2.43)% | - The company maintains a valuation allowance against U.S. federal and state deferred tax assets due to uncertainty of realization[69](index=69&type=chunk) - Udemy India LLP received a tax notice from the India Income Tax Department for FY2021, challenging its transfer pricing methodology, with the amount of proposed assessment not reasonably estimable[71](index=71&type=chunk) [9. Related party transactions](index=21&type=section&id=Note%209%20-%20Related%20party%20transactions) This note discloses transactions with related parties, including revenue and expenses with major investors and board members | Related Party | Three Months Ended March 31, 2024 (in millions) | Three Months Ended March 31, 2023 (in millions) | | :-------------- | :-------------------------------------------- | :-------------------------------------------- | | Naspers/Prosus | $0.4 (revenue) | $0.3 (revenue) | | Insight Partners | $0.2 (revenue), $0.2 (expense) | $0.0 (revenue), $0.2 (expense) | - Certain members of the Board of Directors also serve as executive officers for Enterprise subscription offering customers, generating **$0.1 million** in revenue for both Q1 2024 and Q1 2023[74](index=74&type=chunk) [10. Stockholders' equity](index=21&type=section&id=Note%2010%20-%20Stockholders'%20equity) This note details changes in stockholders' equity, including the share repurchase program, stock-based compensation, and equity incentive plan shares - The Board of Directors approved a share repurchase program for up to **$100 million** of common stock on February 14, 2024, with **$55.5 million** repurchased in Q1 2024[77](index=77&type=chunk)[78](index=78&type=chunk) | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Total stock-based compensation expense | $22,705 | $26,283 | - Shares available for future grants under the 2021 Equity Incentive Plan automatically increased by **7,858,318** on January 1, 2024[82](index=82&type=chunk) [11. Net loss per share](index=25&type=section&id=Note%2011%20-%20Net%20loss%20per%20share) This note presents the basic and diluted net loss per share, along with the weighted-average shares and excluded anti-dilutive securities | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------------- | :------------------------------ | :------------------------------ | | Net loss per share (Basic and diluted) | $(0.12) | $(0.31) | | Weighted-average shares used in computing net loss per share | 156,570,426 | 145,737,709 | - Potentially dilutive securities totaling **20.1 million** in Q1 2024 and **27.9 million** in Q1 2023 were excluded from diluted net loss per share calculation due to their anti-dilutive impact[95](index=95&type=chunk) [12. Segment and geographic information](index=25&type=section&id=Note%2012%20-%20Segment%20and%20geographic%20information) This note provides a breakdown of revenue and gross profit by operating segment and geographic region, highlighting key market contributions | Segment | Q1 2024 Revenue (in thousands) | Q1 2023 Revenue (in thousands) | Q1 2024 Gross Profit (in thousands) | Q1 2023 Gross Profit (in thousands) | | :-------- | :----------------------------- | :----------------------------- | :---------------------------------- | :---------------------------------- | | Enterprise | $117,640 | $95,242 | $84,642 | $62,375 | | Consumer | $79,206 | $81,188 | $43,208 | $43,692 | | Total | $196,846 | $176,430 | $127,850 | $106,067 | - Enterprise revenue increased by **24%** year-over-year, while Consumer revenue decreased by **2%** year-over-year, leading to a total revenue increase of **12%**[98](index=98&type=chunk) - North America, Europe, Middle East, Africa, and Asia Pacific are the primary revenue-generating regions, with the United States and Japan each exceeding **10% of total revenue** in Q1 2024[99](index=99&type=chunk) [13. Restructuring charges](index=27&type=section&id=Note%2013%20-%20Restructuring%20charges) This note details restructuring charges incurred in Q1 2023 due to workforce reduction, with no such charges in Q1 2024 - The company recognized **$10.1 million** in restructuring charges in Q1 2023, primarily due to personnel expenses and stock-based compensation from a global workforce reduction[102](index=102&type=chunk) - No restructuring charges were recorded during the three months ended March 31, 2024[102](index=102&type=chunk) [14. Subsequent events](index=27&type=section&id=Note%2014%20-%20Subsequent%20events) This note discloses subsequent events, including share repurchases in April and an additional authorization for the repurchase program - In April 2024, the company repurchased **757,068 shares** of common stock for **$8.1 million** under its repurchase program[104](index=104&type=chunk) - On May 2, 2024, the Board of Directors authorized an additional **$50 million** for the share repurchase program[104](index=104&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and future outlook, including key factors impacting performance, components of results of operations, and a comparison of financial results for the three months ended March 31, 2024, and 2023 [Overview](index=28&type=section&id=Overview) This overview introduces Udemy's mission to enhance lives through learning, highlighting its global platform, extensive learner base, and course offerings - Udemy's mission is to improve lives through learning by providing an online platform for flexible and effective skill acquisition and development[107](index=107&type=chunk)[108](index=108&type=chunk) - The platform serves nearly **71 million learners** in over **180 countries** and offers Udemy Business (UB) for corporate learning, with over **75,000 instructors** and **220,000 courses**[109](index=109&type=chunk) [Share repurchase](index=28&type=section&id=Share%20repurchase) This section details the Board's approval of a $100 million share repurchase program and the various methods for executing these repurchases - On February 14, 2024, the Board of Directors approved a share repurchase program authorizing up to **$100 million** of common stock repurchases[110](index=110&type=chunk) - Repurchases can occur through open market purchases, privately negotiated transactions, or Rule 10b5-1 trading plans, with timing and amount dependent on market conditions and other factors[110](index=110&type=chunk) [Key factors impacting our performance](index=28&type=section&id=Key%20factors%20impacting%20our%20performance) This section identifies critical performance drivers, including user acquisition and retention, content sourcing, segment mix shifts, and strategic investments in AI and learning - Growth is dependent on attracting and engaging new learners and Udemy Business customers, as well as retaining and expanding existing relationships[113](index=113&type=chunk)[114](index=114&type=chunk) - The ability to source in-demand content from instructors and the shifting mix between Enterprise and Consumer segments (with Enterprise expected to grow faster and improve margins) are crucial[118](index=118&type=chunk)[120](index=120&type=chunk) - The company is actively investing in sales, marketing, course catalog expansion, immersive learning, and generative AI, with success also tied to the pace of adoption of cloud-based skill development solutions[123](index=123&type=chunk)[124](index=124&type=chunk) [Components of results of operations](index=30&type=section&id=Components%20of%20results%20of%20operations) This section explains the recognition methods for Enterprise and Consumer revenue, details cost of revenue components, and outlines operating expense expectations - Enterprise revenue is recognized ratably over the subscription term, while Consumer revenue from single course purchases is recognized over an estimated four-month service period, and subscriptions are recognized ratably over the contractual term[126](index=126&type=chunk)[127](index=127&type=chunk) - Cost of revenue primarily consists of instructor payments, with the instructor revenue share for subscription offerings reduced from **25% to 20%** effective January 1, 2024[129](index=129&type=chunk)[130](index=130&type=chunk) - Operating expenses (sales and marketing, research and development, general and administrative) are expected to increase in absolute dollars, and the company maintains a full valuation allowance against U.S. federal and state deferred tax assets[133](index=133&type=chunk)[141](index=141&type=chunk) [Results of operations](index=33&type=section&id=Results%20of%20operations) This section analyzes the company's financial results, highlighting changes in revenue, gross profit, gross margin, and net loss for the reporting period | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change ($) | Change (%) | | :----------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | :--------- | | Revenue | $196,846 | $176,430 | $20,416 | 12% | | Gross profit | $120,564 | $99,729 | $20,835 | 21% | | Gross margin | 61% | 57% | 4% | | | Loss from operations | $(22,729) | $(47,277) | $24,548 | 52% | | Net loss | $(18,339) | $(44,544) | $26,205 | 59% | - The increase in revenue was primarily driven by a **24% growth** in the Enterprise segment, partially offset by a **2% decrease** in Consumer revenue[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) - Gross margin improved to **61%** from **57%**, mainly due to the reduction in instructor revenue share for subscription offerings and the continued shift in revenue mix towards the Enterprise segment[149](index=149&type=chunk)[151](index=151&type=chunk) [Certain key business metrics and non-GAAP financial metrics](index=36&type=section&id=Certain%20key%20business%20metrics%20and%20non-GAAP%20financial%20metrics) This section presents key business metrics and non-GAAP financial metrics, including Udemy Business customer growth, ARR, NDRR, and Adjusted EBITDA | Metric | March 31, 2024 | March 31, 2023 | Change (%) | | :------------------------------------ | :------------- | :------------- | :--------- | | Udemy Business customers | 16,070 | 14,359 | 12% | | Udemy Business annual recurring revenue | $479,401 | $396,049 | 21% | | Monthly average buyers (in thousands) | 1,442 | 1,393 | 4% | | Metric | March 31, 2024 | March 31, 2023 | Change (%) | | :------------------------------------ | :------------- | :------------- | :--------- | | Udemy Business net dollar retention rate | 104% | 112% | (7)% | | Udemy Business Large Customer net dollar retention rate | 111% | 120% | (7)% | | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :---------------- | :--------------------------------------------- | :--------------------------------------------- | | Adjusted EBITDA | $6,459 | $(6,288) | | Adjusted EBITDA margin | 3% | (4)% | [Liquidity and capital resources](index=40&type=section&id=Liquidity%20and%20capital%20resources) This section details the company's liquidity sources, including cash and marketable securities, and analyzes cash flows from operating, investing, and financing activities - As of March 31, 2024, principal liquidity sources included **$260.2 million** in cash, cash equivalents, and restricted cash, and **$173.9 million** in marketable securities[179](index=179&type=chunk) | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :----------------------- | :--------------------------------------------- | :--------------------------------------------- | | Operating activities | $20,969 | $(19,895) | | Investing activities | $(3,770) | $(19,319) | | Financing activities | $(66,465) | $1,180 | - Net cash provided by operating activities increased by **$40.9 million** year-over-year, driven by revenue growth outpacing operating expenses and continued growth in deferred revenue[190](index=190&type=chunk) [Off-balance sheet arrangements](index=42&type=section&id=Off-balance%20sheet%20arrangements) This section confirms that the company did not have any material off-balance sheet arrangements during the reported periods - The company did not have any material off-balance sheet arrangements during the periods presented[194](index=194&type=chunk) [Critical accounting policies and estimates](index=42&type=section&id=Critical%20accounting%20policies%20and%20estimates) This section notes that there have been no material changes to the company's critical accounting policies and estimates since the last annual report - There have been no material changes to the company's critical accounting policies and estimates compared to those described in the 2023 Annual Report on Form 10-K[196](index=196&type=chunk) [Recent accounting pronouncements](index=43&type=section&id=Recent%20accounting%20pronouncements) This section directs readers to Note 2 of the financial statements for information regarding recently issued accounting pronouncements - Information regarding recently issued accounting pronouncements can be found in Note 2 to the condensed consolidated financial statements[197](index=197&type=chunk) [Item 3. Qualitative and Quantitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Qualitative%20and%20Quantitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, specifically interest rate sensitivity and foreign currency risk, and its current approach to managing these risks - As of March 31, 2024, the company held **$256.8 million** in cash and cash equivalents and **$173.9 million** in marketable securities, primarily U.S. government securities[199](index=199&type=chunk) - A hypothetical **100 basis point change** in interest rates would not materially impact the market value of the portfolio or interest income[200](index=200&type=chunk) - The company is exposed to foreign currency risk, with **29% of Q1 2024 sales** denominated in non-U.S. dollars, but does not currently engage in hedging activities[201](index=201&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the effectiveness of disclosure controls and procedures, concluding they were effective as of March 31, 2024, and reported no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of March 31, 2024, providing reasonable assurance for timely and accurate financial reporting[202](index=202&type=chunk) - There were no changes to internal control over financial reporting during the quarter ended March 31, 2024, that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[203](index=203&type=chunk) [PART II. Other Information](index=45&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal proceedings, including a Video Privacy Protection Act (VPPA) class action complaint and threatened arbitrations, and states that no current proceedings are expected to have a material adverse effect on the company's business - The company is a defendant in a putative class action complaint (Mohamed Saleh v. Udemy, Inc.) alleging violations of the Video Privacy Protection Act (VPPA) for sharing personally identifiable information[207](index=207&type=chunk) - A motion to compel arbitration was granted on March 21, 2024, staying the class action pending individual arbitration, and claims of approximately **6,000 purported learners** have been tentatively resolved for an immaterial amount[208](index=208&type=chunk)[209](index=209&type=chunk) - No current legal proceedings are expected to have a material adverse effect on the company's business, operating results, or financial condition[206](index=206&type=chunk)[210](index=210&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various risks that could materially affect the company's business, financial condition, and results of operations, categorized into risks related to business and operations, technology/privacy/cybersecurity, intellectual property, financial reporting/taxation/public company operations, and ownership of common stock [Risks related to our business and operations](index=46&type=section&id=Risks%20related%20to%20our%20business%20and%20operations) This section details risks associated with the company's business model, including profitability challenges, growth sustainability, reliance on key instructors, customer retention, and market competition - The company has a history of losses and may not achieve or maintain profitability, operating in an emerging and dynamic market with difficult-to-predict future results[213](index=213&type=chunk)[214](index=214&type=chunk) - Rapid growth may not be sustainable, depending on the ability to attract and retain learners, instructors, and organizations, and the business relies on a limited number of instructors for popular content[219](index=219&type=chunk)[223](index=223&type=chunk) - Failure to maintain and expand relationships with Udemy Business customers, intense competition, and the online learning market not growing as expected could adversely affect the business[224](index=224&type=chunk)[225](index=225&type=chunk)[229](index=229&type=chunk) [Risks related to technology, privacy, and cybersecurity](index=59&type=section&id=Risks%20related%20to%20technology,%20privacy,%20and%20cybersecurity) This section addresses risks concerning technology, privacy, and cybersecurity, including compliance with evolving laws, potential breaches, and reliance on third-party infrastructure - Changes in privacy, data protection, or cybersecurity laws (e.g., GDPR, CCPA, PIPL) or any failure to comply could adversely affect the business, leading to significant compliance burdens and potential fines[277](index=277&type=chunk)[279](index=279&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) - Cybersecurity attacks or other security breaches could delay or interrupt service, harm reputation, or subject the company to significant liability, with increasing sophistication of attacks using AI and machine learning[286](index=286&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) - Reliance on Amazon Web Services and third-party payment processors exposes the company to risks of disruption, increased costs, and compliance challenges with evolving payment regulations[296](index=296&type=chunk)[298](index=298&type=chunk)[299](index=299&type=chunk) [Risks related to our intellectual property](index=66&type=section&id=Risks%20related%20to%20our%20intellectual%20property) This section covers risks related to intellectual property, including challenges in protection and enforcement, potential litigation, and compliance with open-source software licenses - The company may be unable to adequately obtain, maintain, protect, and enforce its intellectual property and proprietary information, which is critical to its success and competitive advantage[305](index=305&type=chunk) - Intellectual property litigation, including claims related to content available on the platform, could result in significant costs, divert management attention, and adversely affect the business and reputation[312](index=312&type=chunk) - The platform uses third-party open source software components, and failure to comply with their licenses could restrict the ability to provide the platform or require proprietary software to be disclosed[313](index=313&type=chunk) [Risks related to financial reporting, taxation, and operations as a public company](index=69&type=section&id=Risks%20related%20to%20financial%20reporting,%20taxation,%20and%20operations%20as%20a%20public%20company) This section outlines risks concerning financial reporting, taxation, and public company operations, including internal control effectiveness, tax liabilities, and currency fluctuations - Failure to maintain an effective system of disclosure controls and internal control over financial reporting could impair the ability to produce timely and accurate financial statements and adversely affect investor confidence[314](index=314&type=chunk)[316](index=316&type=chunk) - Operating as a public company incurs substantial costs and administrative burdens, and unanticipated changes in the effective tax rate or additional tax liabilities could harm future results of operations[317](index=317&type=chunk)[319](index=319&type=chunk) - The ability to use net operating loss carryforwards may be limited, and results of operations could be adversely affected by currency exchange rate fluctuations and the effects of inflation[326](index=326&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk) [Risks related to ownership of our common stock](index=72&type=section&id=Risks%20related%20to%20ownership%20of%20our%20common%20stock) This section addresses risks for common stock owners, including price volatility, potential dilution, lack of dividends, insider control, and anti-takeover provisions - The trading price of the common stock may be volatile, and future sales or issuances of common stock could depress the market price and result in additional dilution to stockholders[333](index=333&type=chunk)[337](index=337&type=chunk)[339](index=339&type=chunk) - The company does not expect to pay dividends in the foreseeable future, and directors, executive officers, and principal stockholders beneficially own a substantial percentage of common stock, exerting significant control[342](index=342&type=chunk)[343](index=343&type=chunk) - The stock repurchase program cannot be guaranteed to be fully implemented or enhance long-term stockholder value, and Delaware law and anti-takeover provisions might delay or prevent a merger or proxy contest[344](index=344&type=chunk)[345](index=345&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides details on the company's share repurchase program, including the Board's authorization, the number of shares repurchased in Q1 2024, and the remaining approximate dollar value of shares that may yet be repurchased - The Board of Directors approved a share repurchase program on February 14, 2024, authorizing up to **$100 million** of common stock[352](index=352&type=chunk) | Period | Total number of shares purchased | Average price paid per share | Approximate dollar value of shares that may yet be repurchased under the program (in thousands) | | :--------------------------------- | :----------------------------- | :--------------------------- | :------------------------------------------------------------------------------------------- | | February 1, 2024 - February 29, 2024 | 1,589,106 | $10.97 | $82,560 | | March 1, 2024 - March 31, 2024 | 3,373,039 | $11.15 | $44,956 | | Total | 4,962,145 | $11.09 | $44,956 | [Item 3. Defaults Upon Senior Securities](index=77&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - This item is not applicable[355](index=355&type=chunk) [Item 4. Mine Safety Disclosures](index=77&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - This item is not applicable[356](index=356&type=chunk) [Item 5. Other Information](index=77&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading arrangements adopted by several executive officers during the last fiscal quarter, outlining the number of shares and trading periods - CFO Sarah Blanchard adopted a Rule 10b5-1 trading arrangement for up to **125,000 shares**, with sales permitted from May 25, 2024, to May 25, 2025[357](index=357&type=chunk) - CEO Greg Brown adopted a Rule 10b5-1 trading arrangement for up to **95,000 shares**, with sales permitted from June 24, 2024, to June 20, 2025[358](index=358&type=chunk) - CTO Venu Venugopal adopted a Rule 10b5-1 trading arrangement for up to **326,499 shares**, with sales permitted from June 17, 2024, to June 13, 2025[359](index=359&type=chunk) [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including various certifications and XBRL documents - The exhibit index includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) and Inline XBRL documents[364](index=364&type=chunk) - Certifications attached as Exhibits 32.1 and 32.2 are furnished, not filed, with the SEC[366](index=366&type=chunk) [Signatures](index=81&type=section&id=Signatures) This section formally concludes the report with the signatures of the President, Chief Executive Officer, and Chief Financial Officer - The report is signed by Greg Brown, President and Chief Executive Officer, and Sarah Blanchard, Chief Financial Officer, on May 6, 2024[370](index=370&type=chunk)

Udemy, Inc. (NASDAQ:UDMY) Q1 2024 Earnings Conference Call May 2, 2024 5:00 PM ET Company Participants Dennis Walsh - Vice President, Investor Relations Gregory Brown - Chief Executive Officer Sarah Blanchard - Chief Financial Officer Conference Call Participants Stephen Sheldon - William Blair Curtis Nagle - Bank of America Ryan MacDonald - Needham & Company Connor Passarella - Truist Josh Baer - Morgan Stanley Noah Herman - JPMorgan David Lustberg - Jefferies Devin Au - KeyBanc Operator Good day and welco ...

Q1 2024 Earnings Overview Udemy reported strong Q1 2024 results, exceeding guidance with significant revenue growth and improved profitability across key segments [First Quarter 2024 Financial and Operational Highlights](index=1&type=section&id=First%20Quarter%202024%20Financial%20and%20Operational%20Highlights) Udemy's Q1 2024 exceeded expectations with 12% revenue growth, improved profitability, and key enterprise and GenAI initiatives [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) Udemy's Q1 2024 achieved 12% revenue growth to $196.8 million, exceeding guidance, with improved gross profit, positive Adjusted EBITDA, and a narrowed net loss | Metric | Q1 2024 (Millions) | Q1 2023 (Millions) | YoY Change | | :--------------------------- | :----------------- | :----------------- | :--------- | | Revenue | $196.8 | $176.4 | 12 % | | Gross Profit | $120.6 | $99.7 | 21 % | | Gross Margin | 61 % | 57 % | 400 bps | | Non-GAAP Gross Profit | $122.9 | $102.0 | 20 % | | Non-GAAP Gross Margin | 62 % | 58 % | 400 bps | | Net Loss | $(18.3) | $(44.5) | (59) % | | Non-GAAP Net Income (Loss) | $5.3 | $(8.3) | NM % | | Adjusted EBITDA | $6.5 | $(6.3) | NM % | | Adjusted EBITDA Margin | 3 % | (4) % | 700 bps | - Total revenue increased by **12% to $196.8 million**, exceeding Udemy's guidance range for the quarter, with a 2 percentage point negative impact from foreign exchange rate changes[9](index=9&type=chunk) - The company held **$434.1 million** in cash, cash equivalents, restricted cash, and marketable securities at the end of the quarter[9](index=9&type=chunk) [Business and Operational Achievements](index=1&type=section&id=Business%20and%20Operational%20Achievements) Udemy achieved robust growth in its enterprise business, with Udemy Business revenue up 24% and over 16,000 enterprise customers, while launching GenAI learning solutions and receiving industry recognition | Metric | Q1 2024 | Q1 2023 | YoY Change | | :----------------------------------- | :------ | :------ | :--------- | | Enterprise Segment Revenue | $117.6M | $95.2M | 24 % | | Enterprise Segment Gross Profit | $84.6M | $62.4M | 36 % | | Enterprise Segment Gross Margin | 72 % | 65 % | 700 bps | | Total Enterprise Customers | 16,070 | 14,359 | 12 % | | UB Annual Recurring Revenue (ARR) | $479.4M | $396.0M | 21 % | | UB Net Dollar Retention Rate | 104 % | 112 % | (800) bps | | UB Large Customer Net Dollar Retention Rate | 111 % | 120 % | (900) bps | | Consumer Segment Revenue | $79.2M | $81.2M | (2) % | | Consumer Segment Gross Profit | $43.2M | $43.7M | (1) % | | Consumer Segment Gross Margin | 55 % | 54 % | 100 bps | | Monthly Average Buyers | 1.44M | 1.39M | 4 % | - Enterprise segment (Udemy Business) revenue grew **24% to $117.6 million**, with Annual Recurring Revenue (ARR) increasing **21% to $479.4 million**[1](index=1&type=chunk)[9](index=9&type=chunk) - Total enterprise customers exceeded **16,000**, with new or expanded relationships including Ambev S.A., Axon Enterprise, and PepsiCo, Inc[1](index=1&type=chunk)[2](index=2&type=chunk)[9](index=9&type=chunk) - Launched GenAI skill packs and a "Leading GenAI Innovation" learning program to support rapid adoption and implementation of generative AI skills within organizations[9](index=9&type=chunk) [Share Repurchase Program](index=2&type=section&id=Share%20Repurchase%20Program) Udemy's board approved a **$50 million** increase to the existing share repurchase program, bringing the total authorization to **$150 million**, with approximately **$55 million** spent this quarter - The Board authorized an additional **$50 million** for the existing share repurchase program, increasing the total authorization to **$150 million**[1](index=1&type=chunk)[2](index=2&type=chunk)[6](index=6&type=chunk) - In Q1, the company spent approximately **$55 million** to repurchase nearly **5 million** shares of Udemy common stock[5](index=5&type=chunk) - Approximately **$45 million** remained under the previously announced **$100 million** share repurchase program, in addition to the new **$50 million** authorization[6](index=6&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Udemy provided Q2 and full-year 2024 financial guidance, projecting continued revenue growth and positive Adjusted EBITDA margins, while accounting for negative foreign exchange impacts [Q2 and Full Year 2024 Guidance](index=2&type=section&id=Q2%20and%20Full%20Year%202024%20Guidance) The company forecasts Q2 2024 revenue between **$192 million and $195 million**, full-year revenue between **$795 million and $805 million**, and an Adjusted EBITDA margin of **200 to 300 basis points** for the full year | Metric | Q2 2024 Guidance | Full Year 2024 Guidance | | :--------------------------- | :--------------- | :---------------------- | | Revenue | $192 to $195M | $795 to $805M | | Adjusted EBITDA Margin | (50) to 50 bps | 200 to 300 bps | | Weighted Average Share Count, Basic | 155M | 156M | | Weighted Average Share Count, Diluted | 158M | 162M | - The revenue guidance assumes a **1 percentage point** negative impact from historical foreign exchange rate changes on year-over-year revenue growth for both Q2 and the full year[10](index=10&type=chunk) Consolidated Financial Statements This section presents Udemy's condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows, highlighting key financial performance and position changes [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Udemy's Q1 2024 condensed consolidated statements of operations show a significantly narrowed net loss year-over-year, driven by revenue growth, improved gross profit, and reduced restructuring charges | Metric (in thousands) | Q1 2024 | Q1 2023 | | :-------------------- | :--------- | :--------- | | Revenue | $196,846 | $176,430 | | Cost of revenue | $76,282 | $76,701 | | Gross profit | $120,564 | $99,729 | | Total operating expenses | $143,293 | $147,006 | | Loss from operations | $(22,729) | $(47,277) | | Total other income, net | $5,417 | $3,790 | | Net loss | $(18,339) | $(44,544) | | Net loss per share, basic and diluted | $(0.12) | $(0.31) | - Stock-based compensation expense decreased from **$26.283 million** in Q1 2023 to **$22.705 million** in Q1 2024[29](index=29&type=chunk) - Amortization of intangible assets slightly decreased from **$1.067 million** in Q1 2023 to **$0.955 million** in Q1 2024[30](index=30&type=chunk) [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, Udemy's balance sheet indicates a decrease in total assets and stockholders' equity compared to December 31, 2023, primarily due to reduced cash and increased current liabilities | Metric (in thousands) | March 31, 2024 | December 31, 2023 | | :---------------------------- | :------------- | :---------------- | | Total assets | $708,454 | $741,196 | | Cash and cash equivalents | $256,807 | $305,564 | | Marketable securities | $173,883 | $171,372 | | Total current assets | $603,426 | $632,328 | | Total liabilities | $411,960 | $384,304 | | Total current liabilities | $408,285 | $380,132 | | Deferred revenue, current | $315,563 | $279,414 | | Total stockholders' equity | $296,494 | $356,892 | - Current deferred revenue significantly increased from **$279.414 million** at the end of 2023 to **$315.563 million** at the end of Q1 2024[32](index=32&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2024, Udemy's operating cash flow turned positive, a significant improvement year-over-year, while cash outflows from financing activities increased due to common stock repurchases

SAN FRANCISCO, April 12, 2024 (GLOBE NEWSWIRE) -- Udemy (NASDAQ:UDMY), a leading online skills marketplace and learning platform, today announced it will report its first quarter 2024 financial results after the close of market on Thursday, May 2, 2024. Udemy will host a live conference call and webcast to discuss the results that afternoon at 2 p.m. PT / 5 p.m. ET. A link to the live webcast and recorded replay of the conference call will be available on the "Quarterly Results" section of Udemy's Investor ...

SAN FRANCISCO, April 12, 2024 (GLOBE NEWSWIRE) -- Udemy (Nasdaq: UDMY), a leading online skills marketplace and learning platform, today announced it will report its first quarter 2024 financial results after the close of market on Thursday, May 2, 2024. Udemy will host a live conference call and webcast to discuss the results that afternoon at 2 p.m. PT / 5 p.m. ET. A link to the live webcast and recorded replay of the conference call will be available on the “Quarterly Results” section of Udemy’s Investor ...

The partnership seeks to help millions of current and aspiring developers upskill on key Kubernetes disciplines to enhance their level of cloud native proficiency PARIS, March 21, 2024 /PRNewswire/ -- KubeCon + CloudNativeCon Europe -- The Cloud Native Computing Foundation® (CNCF®), which builds sustainable ecosystems for cloud native software, has partnered with Udemy (Nasdaq: UDMY), a leading online skills marketplace and learning platform. Announced at KubeCon + CloudNativeCon Europe 2024, this new partn ...