BlackJack3D/E+ via Getty Images The small cap growth market fared well in the third quarter, but the biggest gainers were speculative companies with weak fundamentals. We expect the rally will broaden out going forward. Please see below for a discussion of the Osterweis Opportunity Fund’s recent performance and our near-to-medium term market outlook. Performance data quoted represent past performance; past performance does not guarantee future results. The investment return and principal value of an ...

Core Insights - Chegg Inc. is cutting approximately 45% of its workforce, equating to around 388 employees, due to significant declines in traffic and revenue attributed to generative AI and reduced Google search traffic [1][7][9] - The company plans to reduce non-GAAP expenses by $100 million to $110 million by 2026, with expected charges of $15 million to $19 million primarily for cash severance [2] - Chegg will remain an independent public company after evaluating options for sale or going private, as the Board believes this offers the best opportunity for long-term shareholder value [5][7] Financial Impact - The layoffs are expected to lead to a reduction in expenses, with a projected $100 million to $110 million decrease in non-GAAP expenses by 2026 [2] - Chegg anticipates generating approximately $70 million in revenue from new business segments focused on skills training by 2025, with double-digit growth expected in 2026 [11] Strategic Direction - The company is shifting its focus from traditional study help to a "skilling-focused business-to-business organization," which will include programs in language learning, workplace readiness, and AI-related skills [11] - Executive Chairman Dan Rosensweig is returning as CEO to lead the company through this transition, expressing confidence in Chegg's future and commitment to enhancing shareholder value [4][5] Market Context - Chegg's restructuring is a response to the evolving landscape of AI and its impact on content publishers, which has led to a notable decline in traffic and revenue [7][9] - The company aims to adapt by streamlining operations and investing in the growing $40 billion-plus skilling market [9]

Financial Data and Key Metrics Changes - The company reported revenue of $194 million, reflecting a 10% year-over-year increase [7] - Free cash flow reached $27 million, up 59% from the prior year [7] - The company raised its full-year revenue guidance to a range of $750 to $754 million, representing 8% to 9% growth from the prior year [8][25] - Gross profit was $108 million, maintaining a gross margin of 56% [29] - Net income was $17 million, or 8.6% of revenue, with adjusted EBITDA of $16 million, or 8% of revenue [30] Business Line Data and Key Metrics Changes - Consumer segment revenue was $130 million, up 13% year-over-year, driven by 7.7 million new registered learners [31] - The Coursera Plus subscription offering now accounts for more than half of consumer segment revenue [7] - Enterprise segment revenue was $64 million, up 6% year-over-year, with a 10% increase in the total number of paid enterprise customers [34] Market Data and Key Metrics Changes - The total number of registered learners reached 191 million, with 7.7 million new learners added in the quarter [32] - The company reported 14 enrollments per minute in its generative AI courses, up from eight enrollments per minute last year [14] Company Strategy and Development Direction - The company is focused on product-led innovation and enhancing customer experiences to drive long-term growth [6] - There is a commitment to leveraging data insights to improve product offerings and learner engagement [11] - The introduction of SkillsTracks aims to address skill gaps and provide tailored learning paths for enterprises [63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's growth trajectory, citing strong top-of-funnel metrics and the success of Coursera Plus [48] - The company anticipates a seasonal decline in Q4 revenue, which is typical based on historical trends [49] - Management highlighted the importance of adapting to changing corporate spending environments and the need for upskilling in response to AI advancements [62] Other Important Information - The company announced the appointment of Anthony Salcedo as the new general manager of the enterprise segment [8] - The catalog has expanded by 44% to over 12,000 courses, with a focus on job-aligned micro-credentials [13] Q&A Session Summary Question: Insights on OpenAI embedded app and its impact - Management expressed excitement about the partnership with OpenAI, noting it as a top-of-funnel opportunity to attract new learners [40][41] Question: Sales and marketing investment priorities - The company highlighted the efficiency of its sales and marketing efforts, particularly in driving subscription growth [43] Question: Q4 revenue outlook and consumer growth durability - Management indicated that consumer growth is supported by strong marketing and product enhancements, despite typical seasonal impacts [48][49] Question: Trends in enterprise segment and budgetary challenges - Mixed trends were noted across different verticals, with Coursera for campus performing well while government segments faced challenges [61][62] Question: AI skills initiatives and Coursera's role - Management confirmed ongoing dialogues with partners like Google and Microsoft to enhance collaboration on AI skills training [73][74] Question: AI certifications and course offerings - The company sees potential in developing AI certifications in collaboration with partners, emphasizing the importance of verified skills [80][81] Question: Shifts in search and user engagement - Management discussed the integration with OpenAI as a way to enhance user engagement and improve course discovery through AI [86][87]

Core Insights - The current market is experiencing high valuations, with the S&P 500 up approximately 35% since mid-April, indicating a need for caution in investment strategies [1][4][6] - Speculative investments, such as low-priced stocks and sports betting, are discouraged at this stage of the market cycle, emphasizing a focus on risk reduction [1][3][6] - The potential of artificial intelligence (AI) is acknowledged, but there are concerns about overvaluation and competition within the sector [2][9][10] Market Valuation Analysis - The VIX, a measure of market volatility, is currently low, suggesting a calm market that may precede increased volatility [3] - The P/E ratio of the S&P 500 is over 25, which is historically high, indicating that the market may be overvalued [4] - The NASDAQ is trading at about 6.5 times sales, while the S&P is at approximately 3.3 times sales, both of which are near peak valuations [4] Investment Strategy Recommendations - The company does not advocate for selling stocks but suggests adjusting portfolios to account for rich valuations [5][6] - Investors are encouraged to focus on companies with strong financial management and innovative capabilities, particularly in AI [10][11] - A cautious approach is recommended, with a shift towards risk management in investment strategies [12][13] Stock Recommendations - IBM is highlighted as a cautious investment due to its advancements in quantum computing and strong financial management [14] - Progressive Insurance is noted for its technological advancements in the insurance sector, making it a solid cautious investment [15] - Stride, an online learning company, and Sterling Infrastructure, involved in data center construction, are recommended as moderate investments [15][16] - Rocket Lab is presented as a riskier investment opportunity, appealing due to its innovative nature despite high valuations [16] Long-term Outlook - The company suggests a five-year holding period for the recommended stocks, indicating a focus on long-term growth potential [17] - The market may experience fluctuations, but the selected stocks are expected to perform well over time [17]

Core Insights - Duolingo, Inc. (DUOL) shares have increased by 22% over the past month, significantly outperforming the broader industry and the S&P 500 composite [1][2][7] - In contrast, competitors Coursera (COUR) and Chegg (CHGG) have seen declines of 9% and 6%, respectively, indicating a shift in investor sentiment within the online learning sector [2] AI and Data Utilization - Duolingo's strength lies in its integration of artificial intelligence and proprietary learner data into its product development and monetization strategy, setting it apart from competitors [3] - The company has leveraged its extensive learner dataset to rapidly design and deploy new verticals, such as Music and Chess, enhancing its competitive edge in personalization and scalability [4] Financial Performance - Duolingo has raised its full-year outlook, with gross margin expanding by 130 basis points to 72.4%, indicating that innovation is enhancing profitability [5][7] - The company projects fiscal 2025 revenues between $1.011 billion and $1.019 billion, with adjusted EBITDA margins nearing 29%, reflecting a strong balance between innovation and profitability [11] Content Expansion and User Engagement - Duolingo added 148 new language courses in April, marking its largest single expansion ever, which fosters higher engagement and brand loyalty [8] - The introduction of new subjects like Chess has already attracted over a million daily active users, demonstrating the company's ability to replicate its teaching model across different domains [10] Revenue Growth and Monetization Strategy - The shift towards premium tiers has driven a 6% year-over-year increase in average revenue per subscriber, indicating healthy monetization without compromising user experience [9] - The diversified revenue base, including premium subscriptions, advertising, and testing services, reduces concentration risk and enhances resilience [19] Capital Efficiency and Liquidity - Duolingo's return on equity (ROE) stands at 13.3%, exceeding the industry average of 7%, while its return on invested capital (ROIC) is 12.4%, significantly higher than the industry's 3.8% [12] - The company's current ratio of 2.81 indicates robust liquidity, positioning it well to meet short-term obligations [13] Earnings Outlook - The Zacks Consensus Estimate projects Duolingo's 2025 earnings at $3.16, representing a 68% year-over-year increase, with sales expected to grow by 36% in 2025 and 26% in 2026 [14][16][17] - The strong growth trajectory is supported by expanding product lines and operational leverage [14] Investment Recommendation - Duolingo is characterized as an innovation-driven growth story, with deep AI integration enabling faster rollouts and stronger cost control [18] - The company continues to present an attractive entry point for long-term investors, supported by strong liquidity and robust growth forecasts [19]

Core Insights - Duolingo's dominance in digital education is attributed to its integration of artificial intelligence and proprietary learner data, positioning it as both a product and a financial growth driver [1][5] Business Model and Strategy - The company utilizes one of the largest datasets of language learners to enhance personalization, user engagement, and expand into new learning areas like music and chess, creating a competitive moat [2] - AI not only improves learner outcomes but also drives operational efficiencies, reinforcing Duolingo's market position [2] Financial Performance - Duolingo's latest quarterly results showed lower-than-expected AI-related expenses, leading to an increase in full-year guidance and a gross margin rise of 130 basis points to 72.4% [3][7] - The company launched 148 new language courses in April, marking its largest expansion in a single year, showcasing its ability to scale content creation rapidly [4][7] Market Position and Competitiveness - Duolingo's combination of AI-driven personalization, proprietary data, and cost-efficient scalability positions it as a transformative force in education technology, appealing to the growing demand for accessible digital learning [5] - The stock has gained 4% over the past six months, while competitors like Coursera and Chegg have seen significant growth, indicating positive investor sentiment in the online learning sector [6] Valuation Metrics - Duolingo trades at a forward price-to-earnings ratio of 82X, significantly higher than the industry average of 30X, and carries a Value Score of D [8] - The Zacks Consensus Estimate for Duolingo's 2025 earnings has remained stable over the past 30 days, indicating consistent expectations from analysts [9]

Core Insights - Coursera has partnered with OpenAI to become one of the first applications integrated into ChatGPT, enhancing access to educational content for millions of learners globally [1][3][4] - The integration allows over 800 million ChatGPT users to access Coursera's educational videos and information during their conversations, transforming everyday chats into interactive learning experiences [2][3] - This collaboration aims to leverage generative AI to make learning more personalized, interactive, and scalable, helping users gain job-ready skills and pursue economic opportunities [3][4] Company Overview - Coursera, founded in 2012, is one of the largest online learning platforms with 183 million registered learners as of June 30, 2025, partnering with over 350 leading universities and industry partners [6] - The platform offers a wide range of content, including courses, Specializations, Professional Certificates, and degrees, focusing on high-demand fields such as GenAI, data science, technology, and business [6] - Coursera is a Delaware public benefit corporation and a B Corp, emphasizing its commitment to providing universal access to world-class learning [6]

DENVER, Oct. 06, 2025 (GLOBE NEWSWIRE) -- Scrum Alliance®, a global leader in agile certification and education, is teaming up with Coursera, a leading online learning platform, to make agile skills more accessible than ever. Scrum Alliance courses will be available on Coursera's trusted platform, giving learners worldwide the chance to grow their skills, advance their careers, and make an impact in their organizations. "Agile skills are essential for anyone hoping to boost collaboration, speed up delivery, ...

Core Insights - The online learning industry is evolving due to AI-driven personalization and changing workforce demands, with Udemy transitioning from a user-generated course marketplace to a subscription-based AI-enhanced model [1][2] - Udemy's enterprise segment revenue increased by 7% year-over-year, and the company achieved over 200,000 paid consumer subscribers [1][2] Company Overview - Udemy has been a significant player in the online learning space for 15 years, generating approximately $800 million in revenue, with $500 million from B2B and $300 million from B2C [1][2] - The company is pivoting its business model to focus on AI-driven personalized learning experiences for both consumers and enterprises [1][2] Business Model Transition - The shift from selling individual courses at large discounts to a subscription model is aimed at improving lifetime value and customer acquisition cost (CAC) ratios, resulting in a 40% year-over-year growth in subscribers [2][15] - Udemy plans to monetize certifications and introduce advertising, enhancing revenue per user significantly [2][15] Market Positioning - The company maintains a competitive advantage through its dynamic marketplace model, where 35% of the most used content is updated monthly, allowing for rapid adaptation to market changes [2][15] - Udemy is focusing on partnerships, such as with Indeed, to integrate its offerings into job-seeking processes, positioning itself similarly to a digital media company [2][15] Enterprise Strategy - The enterprise strategy involves targeting business leaders, including CTOs and heads of sales, to address ROI and workforce management challenges, particularly in the context of AI [8][10] - Udemy aims to reskill a significant portion of the workforce, with an estimated 92 million people needing reskilling in OECD countries over the next five years due to AI advancements [10][12] Financial Performance - The company reported a gross margin improvement of 300 to 400 basis points and generated $39 million in free cash flow in the second quarter [15][16] - With nearly $400 million in cash on the balance sheet, Udemy is positioned to invest in technology and product development to support its transformation [16][18]

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Coursera, Inc. (NYSE: COUR), a leading global online learning platform, today announced the appointment of Anthony Salcito as General Manager, Enterprise, effective October 6, 2025. "Anthony's global experience in education and proven track record in driving customer value make him an outstanding leader for our Enterprise business,†said Greg Hart, CEO of Coursera. "As our customers advance their skills-based workforce strategies, Anthony's leadership wil. ...