Udemy, Inc. (UDMY) came out with quarterly earnings of $0.07 per share, beating the Zacks Consensus Estimate of $0.01 per share. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 600%. A quarter ago, it was expected that this company would post a loss of $0.01 per share when it actually produced a loss of $0.04, delivering a surprise of -300%. Over the last four quarters, the company has surpa ...

Financial Performance - Total revenue increased 6% year-over-year to $195.4 million, with a negative impact of 2 percentage points from foreign exchange rates[5]. - Udemy Business Annual Recurring Revenue (ARR) surpassed $500 million, increasing 14% year-over-year to $504.6 million[2][5]. - Enterprise segment revenue rose 16% year-over-year to $126.1 million, also impacted by a 2 percentage point decline from foreign exchange rates[5]. - Consumer segment revenue decreased 8% year-over-year to $69.3 million, with a 3 percentage point negative impact from foreign exchange rates[5]. - Adjusted EBITDA increased 41% year-over-year to $11.6 million, with an adjusted EBITDA margin of 6%[3][5]. - Net loss for the quarter was $25.3 million, a 51% increase compared to the previous year[3]. - Udemy reported Q3 2024 revenue of $195,417,000, a 5.5% increase from $184,722,000 in Q3 2023[19]. - Gross profit for Q3 2024 was $123,055,000, up 14.5% from $107,458,000 in Q3 2023[19]. - Total operating expenses in Q3 2024 were $152,514,000, compared to $128,954,000 in Q3 2023, reflecting an 18.2% increase[19]. - Udemy's net loss for Q3 2024 was $25,271,000, compared to a net loss of $16,767,000 in Q3 2023[19]. - Net loss for the nine months ended September 30, 2024, was $75,424,000, compared to a net loss of $87,046,000 for the same period in 2023, representing a 13.5% improvement[23]. - Gross profit for the nine months ended September 30, 2024, increased to $364,735,000, up from $309,489,000 in 2023, reflecting an 18% year-over-year growth[24]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $23,480,000, compared to $3,817,000 for the same period in 2023[26]. - The company reported a non-GAAP net income of $8,843,000 for the nine months ended September 30, 2024, compared to a loss of $1,909,000 in the same period last year[25]. Cash and Assets - The company had cash and cash equivalents of $204,563,000 as of September 30, 2024, down from $305,564,000 at the end of 2023[22]. - Total current assets decreased to $508,012,000 from $632,328,000 at the end of 2023[22]. - Cash and cash equivalents at the end of the period decreased to $205,778,000 from $331,503,000 at the end of September 30, 2023[23]. Liabilities and Deferred Revenue - Udemy's total liabilities rose to $412,648,000 as of September 30, 2024, compared to $384,304,000 at the end of 2023[22]. - Deferred revenue increased to $299,955,000 in Q3 2024 from $279,414,000 in Q3 2023, indicating growth in future revenue recognition[22]. - Deferred revenue increased to $19,906,000 for the nine months ended September 30, 2024, compared to $3,887,000 in 2023, indicating growth in future revenue recognition[23]. Strategic Initiatives - The company raised its full year 2024 adjusted EBITDA outlook, focusing on operational efficiencies and strategic initiatives[4]. - The company anticipates continued market growth and plans to enhance operational efficiency in future periods[17]. - The company plans to continue investing in new product development and market expansion strategies to drive future growth[24]. Shareholder Returns - Udemy returned approximately $51 million to shareholders through a share repurchase program, buying back 6.3 million shares[7]. Market Demand - Udemy Business serves notable clients including Fender, Glassdoor, and The World Bank, indicating strong enterprise demand[18]. Other Financial Metrics - Monthly average buyers in the consumer segment decreased by 7% year-over-year to 1.31 million[4]. - Non-GAAP gross margin improved to 63% for the nine months ended September 30, 2024, compared to 59% for the same period in 2023[24]. - Stock-based compensation expense for the nine months ended September 30, 2024, was $70,424,000, slightly down from $71,720,000 in 2023[26].

Core Insights - Udemy will report its third quarter 2024 financial results on October 29, 2024, after market close [1] - A live conference call and webcast will be held on the same day at 2 p.m. PT / 5 p.m. ET to discuss the results [1] Company Overview - Udemy is a leading online skills marketplace and learning platform that provides access to a wide range of technical and professional skills [3] - The platform features the Udemy Intelligent Skills Platform and a diverse community of instructors, offering thousands of courses in various languages [3] - Udemy Business offers on-demand learning solutions for enterprises, including immersive learning for tech teams and cohort learning for leaders [3] - Notable Udemy Business customers include Fender®, Glassdoor, On24, The World Bank, and Volkswagen [3] - The company is headquartered in San Francisco with additional hubs in Austin, Denver, Türkiye, Ireland, Australia, and India [3]

Investment Thesis - Udemy operates in a growing learning marketplace aimed at bridging the skills gap for individuals and organizations, with a focus on enterprise reskilling and training [2] - The consumer segment faces challenges due to a weaker macroeconomic environment and increased competition, while the enterprise segment shows double-digit growth and better profitability [2][3] - Management aims to improve overall profitability by prioritizing the enterprise segment, expecting adjusted EBITDA margins to reach 20% by 2027, up from 3% this year [2][6] Q2 Earnings Performance - The strategic shift towards the enterprise segment is a key takeaway from Q2 earnings, as management seeks to capture future market opportunities and improve profitability [3] - Despite rising gross margins in the enterprise segment, the Net Dollar Retention Rate (NDRR) has been declining, indicating potential challenges in customer retention [4] - The consumer segment experienced a 4% year-over-year revenue decline, attributed to a decrease in the number of monthly average buyers [4] Future Expectations - The revenue decline in the consumer segment is expected to hinder overall revenue growth, which accounted for 38% of total revenue in Q2 [5] - Management's guidance suggests only 4% overall revenue growth in H2 2024 compared to H2 2023, a significant drop from the 10% growth in the first half of the year [5] - Overall revenue growth is estimated to average around 7% in 2025 and 2026, lower than analyst expectations of 9% [5] Margin Improvements - Gross margin improvements are anticipated due to a gradual reduction in the revenue share for instructors in the enterprise segment, expected to decrease to 15% by 2026 [6] - Management plans to reduce operating expenses by cutting marketing spend and reallocating resources to lower-cost regions, with incremental margins estimated at close to 35% [6] - Margin improvement may be slower than management's target, with expectations of reaching closer to 15% rather than 20% by 2027 [6] Capital Management - With a net cash position of $420 million, management announced a $150 million share repurchase program, indicating a commitment to returning excess capital to shareholders [7] - The expectation of improved profitability suggests a significant portion of cash will be used for buybacks, especially in light of high stock-based compensation [7] Valuation Insights - Current valuation metrics indicate shares trade at EV to Sales and EV to adjusted EBITDA multiples of 0.8 and 27, respectively, suggesting the stock is undervalued [8] - Despite the attractive valuation, similar-sized peers exhibit comparable valuations, indicating sector-wide multiple compression due to increased competition and macroeconomic challenges [8] - Future earnings forecasts are conservative, with expected revenue of $891 million and adjusted EBITDA margins close to 12% by 2026, leading to an adjusted EBITDA of $107 million [8] Conclusion - The outlook for Udemy indicates weak topline growth but significant potential for margin improvement, supported by a large net cash position [12] - The current rating is a Hold until there is evidence of margin improvement and a reacceleration in revenue growth [12]

Core Viewpoint - Udemy's stock price has significantly declined following the release of its second-quarter financial results, primarily due to lowered full-year revenue guidance despite achieving revenue targets for the quarter [1][4]. Financial Performance - For the second quarter, Udemy reported revenue exceeding $194 million, aligning with management's expectations and reflecting a 9% year-over-year increase [2]. - The company has adjusted its full-year revenue guidance to a range of $776 million to $782 million, down from the previous estimate of $795 million to $805 million [4]. Business Model and Revenue Streams - Udemy operates as a two-sided education marketplace, where third-party contributors create courses, and learners can purchase them without needing accreditation [3]. - In the second quarter, Udemy Business, which provides a catalog of courses for enterprises, accounted for 62% of total revenue, contributing to an annual recurring revenue of $493 million [3]. Future Outlook - Management anticipates only 5% top-line growth in the upcoming third quarter and has outlined plans to restructure the business to focus on higher growth opportunities [4]. - For 2026, Udemy expects to report adjusted EBITDA between $130 million and $150 million, with an enterprise value of approximately $980 million, suggesting a potentially attractive valuation if profit goals are met [5]. Customer Metrics and Profitability - Customer metrics for Udemy continue to improve, and the company is expected to achieve profitability as it implements changes to the payout structure for instructors [6]. - Maintaining a balance of instructors and buyers is crucial for enhancing the stock's outlook in the coming years [6].

U.S. stock futures were mixed this morning, with the Dow futures falling around 0.1% on Thursday. Shares of Western Digital Corporation WDC fell in today's pre-market trading after the company reported its fourth-quarter financial results. Western Digital reported quarterly earnings of $1.44 per share, which beat the analyst consensus estimate of $1.18 by 22.03%. The company reported quarterly sales of $3.76 billion, which beat the analyst consensus estimate of $3.747 billion and is a 40.72% increase over s ...

Udemy, Inc. (UDMY) reported $194.36 million in revenue for the quarter ended June 2024, representing a yearover-year increase of 9%. EPS of -$0.04 for the same period compares to -$0.01 a year ago. The reported revenue represents a surprise of +0.10% over the Zacks Consensus Estimate of $194.17 million. With the consensus EPS estimate being -$0.01, the EPS surprise was -300.00%. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to deter ...

Udemy, Inc. (UDMY) came out with a quarterly loss of $0.04 per share versus the Zacks Consensus Estimate of a loss of $0.01. This compares to loss of $0.01 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -300%. A quarter ago, it was expected that this company would post a loss of $0.01 per share when it actually produced earnings of $0.03, delivering a surprise of 400%. Over the last four quarters, the company has surpassed c ...

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 ...