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 200.3million,representinga2196.8 million in the same period of 2024[152]. - Enterprise revenue increased by 10.1million,or9127.7 million, accounting for 64% of total revenue, while Consumer revenue decreased by 6.7million,or872.6 million[153][154]. - Gross profit for the three months ended March 31, 2025, was 129.4million,withagrossmarginof659.4 million, or 7%, to 133.9million,drivenbyreductionsinsalesandmarketingandresearchanddevelopmentexpenses[158].−UdemyBusinessAnnualRecurringRevenue(ARR)grewby8519.0 million, up from 479.4millionintheprioryear[170].−AdjustedEBITDAimprovedsignificantlyto21.1 million in Q1 2025 from 6.5millioninQ12024,reflectingoperationalefficiencyinitiatives[184].CostStructureandEfficiency−Therevenuemixisshiftingtowardsthehigher−marginEnterprisesegment,whichisexpectedtogrowfasterthantheConsumersegment,benefitingoverallmargins[127].−Costofrevenueisprimarilydrivenbycontentcosts,whichareexpectedtodecreaseasthecompanyincreasesrevenuefromitsEnterpriseoffering[138].−Operatingexpensesareexpectedtodecreaseasapercentageofrevenueovertime,drivenbyoperationalefficiencyandhigh−growthopportunities[139].−Stock−basedcompensationexpensetotaled18.0 million for the three months ended March 31, 2025, down from 22.7millionintheprioryear[149].InstructorRevenueShareChanges−Thecompanyplanstoreducetheinstructorrevenueshareforsubscriptionofferingsfrom251.8 million in Q1 2025 from 18.3millioninQ12024,drivenbyreducedinstructorrevenueshareandloweroperationalcosts[184].CustomerMetrics−UdemyBusinesscustomersincreasedby1,146,or7190.7 million, along with marketable securities of 167.4million[186].−Cashprovidedbyoperatingactivitieswas12.2 million in Q1 2025, down from 21.0millioninQ12024,primarilyduetochangesinoperatingassetsandliabilities[195].−Netcashusedininvestingactivitieswas7.4 million for the three months ended March 31, 2025, primarily due to 78.6millioninpurchasesofmarketablesecurities[198].−Netcashusedinfinancingactivitieswas5.9 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].
Udemy(UDMY)2025-04-30 22:23