Udemy(US:UDMY)2025-07-30 22:16Revenue 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].