Coursera (NYSE:COUR) Q3 2025 Earnings Call October 23, 2025 05:00 PM ET Company ParticipantsRishi Jaluria - Managing Director of Software Equity ResearchGreg Hart - CEO and PresidentBryan Smilek - Equity Research AssociateKen Hahn - CFOCam Carey - VP of Investor RelationsRyan Griffin - Senior Equity Research AssociateClaire Gerdes - Director of Equity ResearchConference Call ParticipantsStephen Sheldon - Equity Research Analyst of TechnologyNafeesa Gupta - VP and Equity Research AnalystJoshua Baer - Executi ...

Coursera (NYSE:COUR) Q3 2025 Earnings Call October 23, 2025 05:00 PM ET Company ParticipantsRishi Jaluria - Managing Director of Software Equity ResearchGreg Hart - CEO and PresidentBryan Smilek - Equity Research AssociateKen Hahn - CFOCam Carey - VP of Investor RelationsRyan Griffin - Senior Equity Research AssociateClaire Gerdes - Director of Equity ResearchConference Call ParticipantsJosh Baer - Executive Director and Software Equity Research AnalystStephen Sheldon - Equity Research Analyst of Technology ...

Coursera (NYSE:COUR) Q3 2025 Earnings Call October 23, 2025 05:00 PM ET Speaker6Ladies and gentlemen, thank you for standing by and welcome to Coursera's third quarter 2025 earnings call. All participants are in a listen-only mode, and this call is being recorded. Following the prepared remarks, we'll hold a question and answer session. To ask a question, please click the raise hand button and be prepared to unmute your line when prompted. I would now like to turn the call over to Cam Carey, Vice President ...

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]

Financial Data and Key Metrics Changes - The company reported revenue of $187 million, representing a 10% year-over-year growth [6][25] - Free cash flow increased by 68% year-over-year to $29 million [6] - Gross profit was $105 million, up 13% year-over-year, with a gross margin of 56%, an increase of 180 basis points from the previous year [25] - Net income was $19 million, or 10.3% of revenue, while adjusted EBITDA was $18 million, or 9.6% of revenue [26] Business Line Data and Key Metrics Changes - Consumer segment revenue reached $123 million, also up 10% year-over-year, driven by increased learner engagement and Coursera Plus subscriptions [30] - Enterprise segment revenue was $64 million, reflecting a 10% year-over-year growth, with a net retention rate of 93% [32][34] - The number of paid enterprise customers increased by 12% year-over-year to 1,686 [34] Market Data and Key Metrics Changes - The total number of registered learners grew by 18% year-over-year to 183 million, with 7.5 million new learners added in the second quarter [7][8] - The generative AI course catalog expanded to over 925 courses, with more than 10 million enrollments [10][11] Company Strategy and Development Direction - The company is focused on product-led growth, enhancing platform capabilities, and accelerating content production to meet the rapid pace of skills development [21][22] - New appointments in leadership positions aim to drive innovation and operational rigor [9] - The company is expanding its catalog of industry micro-credentials and collaborating with universities to broaden access to job-relevant education [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to the changing labor market and the growing demand for new technologies and skills [7][11] - The company raised its full-year revenue guidance to a range of $738 million to $746 million, reflecting a midpoint increase of $17 million [7][35] - Management acknowledged macroeconomic uncertainties affecting the enterprise segment but remains optimistic about consumer growth [40][86] Other Important Information - The company has a strong balance sheet with approximately $775 million in unrestricted cash and no debt [28] - The catalog now includes over 10,500 courses, having expanded by more than 36% over the past year [10] Q&A Session Summary Question: What is driving the guidance for Q3 and Q4? - The guidance reflects strong performance in the consumer segment, with macro trends in enterprise remaining uncertain [39][40] Question: How is Coursera positioned in the context of big tech prioritizing AI skills education? - The company is well-positioned with trusted content and an AI-enabled learning platform, recognizing the need for reskilling and upskilling in the workforce [44][46] Question: Can you elaborate on consumer outperformance and future growth? - The consumer segment saw broad-based growth across regions, with ongoing improvements in product development and marketing strategies [55][56] Question: What trends are observed across government, business, and campus in the enterprise segment? - The enterprise segment showed strong performance in business and campus verticals, with ongoing monitoring of budgetary trends [60][64] Question: How sustainable are the improvements in consumer gross margins? - Improvements are driven by better revenue share agreements and investments in content, with expectations for continued positive trends [72][74] Question: What are the key metrics being monitored to assess business performance? - Key metrics include traffic conversion rates, learner engagement, and retention, all of which are essential for revenue growth [102][104]