Financial Data and Key Metrics Changes - The company reported quarterly revenue surpassing $200 million for the first time, with adjusted EBITDA exceeding expectations [32][37] - Udemy Business annual recurring revenue (ARR) was $519 million, up 8% year over year, with ARR from large customers increasing by 9% [32][33] - Total company gross margin improved to 65%, a 300 basis point increase from Q1 2024, driven by changes in content costs and a shift towards Udemy Business [37][38] Business Line Data and Key Metrics Changes - Udemy Business revenue was $128 million, a 9% year-over-year increase, despite a one percentage point headwind from foreign exchange rates [33] - Consumer segment revenue was $73 million, down 8% year over year, impacted by a negative three percentage point effect from foreign exchange [35] - Subscription revenue across both segments now accounts for 68% of total revenue, representing a 500 basis point expansion year over year [36] Market Data and Key Metrics Changes - The company added approximately 120 net new Udemy Business customers, increasing the global customer base by 7% year over year to over 17,200 [33] - Consolidated net dollar retention at quarter end was 96%, with a rate of 100% for large customers [34] - The company expects potential headwinds in North America and EMEA, while maintaining a more optimistic outlook for APAC and Latin American markets [40] Company Strategy and Development Direction - Udemy is transforming from a content provider to an AI-powered reskilling platform, focusing on enterprise value creation and operational efficiency [12][15] - The company aims to increase emphasis on consumer subscriptions, which saw revenue rise nearly 40% year over year in Q1 [16] - A full-stack localization strategy will be implemented across high-potential markets to enhance market-specific product experiences [17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the top line due to external uncertainties, particularly in the consumer segment [31][39] - The company is focused on operational efficiency and has implemented $50 million in annualized cost savings to navigate potential headwinds [41] - Despite a conservative outlook, management remains optimistic about long-term growth opportunities and margin expansion [43] Other Important Information - The company appointed its first Chief Customer Experience Officer to enhance customer retention and expansion efforts [34] - AI trends are seen as a significant opportunity, with the company positioning itself as a leader in AI reskilling [19][26] - The introduction of AI-powered capabilities is expected to enhance the learning experience and improve ROI for customers [22][25] Q&A Session Summary Question: Key observations from the first 45 days and near-term priorities - Management highlighted the need to better package and merchandise AI offerings and emphasized the importance of consumer ownership in career development [45][50] Question: Contribution from new career accelerators and RFP activity - Management expects career accelerators to contribute positively but remains cautious due to macroeconomic uncertainties affecting consumer sentiment [61][63] Question: Changes in enterprise customer conversations - Conversations have evolved to focus more on ROI and consolidation, with an increased emphasis on AI fluency across organizations [70][74] Question: Impact of consumer subscriptions on revenue - Management acknowledged the potential for immediate payback from consumer subscriptions but noted possible delays in revenue from transactional models [78][80] Question: Changes in consumer subscription strategy - The company plans to reimagine its consumer subscription model, including pricing, packaging, and marketing efforts [83][86] Question: AI opportunity and upsell potential - AI is central to many conversations with existing customers, and the company is exploring targeted packages for different organizational personas [90][92]

Financial Data and Key Metrics Changes - In Q1 2025, Udemy's quarterly revenue surpassed $200 million for the first time, with adjusted EBITDA exceeding expectations [32][38] - Udemy Business annual recurring revenue (ARR) was $519 million, up 8% year over year, with ARR from large customers increasing by 9% [33] - Total company gross margin improved to 65%, a 300 basis point increase from Q1 2024, driven by changes in content costs and a shift towards Udemy Business [38] Business Line Data and Key Metrics Changes - Udemy Business revenue was $128 million, a 9% year-over-year increase, despite a one percentage point headwind from foreign exchange rates [33] - Consumer segment revenue was $73 million, down 8% year over year, with a negative three percentage point impact from foreign exchange [36] - Subscription revenue across both segments now accounts for 68% of total revenue, representing a 500 basis point expansion year over year [37] Market Data and Key Metrics Changes - Approximately 60% of Udemy's revenue comes from outside the U.S., indicating a strong global presence [16] - The company added approximately 120 net new Udemy Business customers, increasing the global customer base by 7% year over year to over 17,200 [33] Company Strategy and Development Direction - Udemy is transforming from a content provider to an AI-powered reskilling platform, focusing on large enterprises in key verticals [11][14] - The company aims to increase emphasis on consumer subscriptions, which saw revenue rise nearly 40% year over year in Q1 [15] - A full-stack localization strategy will be implemented across high-potential markets to enhance market-specific product experiences [17] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the top line outlook due to external uncertainties, particularly in the consumer segment [40] - The company is focusing on operational efficiency and has implemented $50 million in annualized cost savings to navigate potential headwinds [42] - Management remains optimistic about long-term growth opportunities, particularly in AI and enterprise reskilling [28][45] Other Important Information - The company introduced Career Accelerators, which are curated role-specific learning paths aimed at enhancing personalized learning experiences [22] - Udemy's AI innovations are reducing program creation time by 80% on average, enabling targeted development journeys [22] Q&A Session Summary Question: Key observations from the first 45 days of tenure - Management highlighted the need for better packaging and merchandising of AI offerings and the opportunity to support consumer learners in their career growth [47][51] Question: Contribution from new career accelerators - Management expects career accelerators to be exciting for learners but remains cautious due to macroeconomic uncertainties affecting consumer sentiment [62][64] Question: Conversations with enterprise customers - Management noted increased questions about consolidation and ROI, indicating a shift towards demonstrating value from Udemy's offerings [75][76] Question: Changes in consumer subscription focus - Management confirmed that changes in pricing, packaging, and marketing efforts are underway to enhance consumer subscriptions [87][90] Question: AI opportunity and upsell potential - Management indicated that AI is central to conversations with existing customers, with plans to package targeted AI offerings for different organizational personas [94][95]

Financial Performance - Udemy's Q1 2025 revenue reached $200.3 million, a 2% year-over-year increase, despite a negative foreign exchange impact of 2 percentage points[16] - The company's gross margin was 65%, up 400 basis points year-over-year, while non-GAAP gross margin was also 65%, up 300 basis points[16] - Udemy reported a net loss of $1.8 million, a 90% improvement year-over-year, and a non-GAAP net income of $17.9 million, a 236% increase[16] - Adjusted EBITDA for Q1 2025 was $21.1 million, a 227% increase year-over-year, with an adjusted EBITDA margin of 11%, up 800 basis points[16] Enterprise Business - Udemy Business Annual Recurring Revenue (ARR) reached $519 million at the end of Q1 2025, an 8% year-over-year increase[16] - The company added 120 net new enterprise customers in Q1 2025, a 7% year-over-year increase[12,28] - Udemy closed over 40 new business deals exceeding $100,000 in ARR during the quarter[12] Subscription Model - Subscription revenue accounted for 68% of total revenue in Q1 2025, a 500 basis points year-over-year expansion[12,20] - Consumer subscriptions revenue now accounts for 13% of the segment's revenue mix, a 400 bps YoY expansion[16] Future Outlook - Udemy projects Q2 2025 revenue between $195 million and $199 million, with an adjusted EBITDA between $22 million and $24 million[43] - The company anticipates full-year 2025 revenue between $772 million and $794 million, and adjusted EBITDA between $77 million and $87 million[43]