Financial Data and Key Metrics Changes - For the full year 2025, the company reported revenue of $757 million, a 9% increase year-over-year, exceeding the initial growth outlook of 4% [4] - The company generated record free cash flow of $78 million, up 32% from the prior year [4] - Adjusted EBITDA margin expanded by 240 basis points year-over-year to 8.4% [5] - In Q4, total revenue was $197 million, up 10% from the prior year [18] - Gross profit for Q4 was $109 million, representing a 55% gross margin, an increase of approximately 90 basis points year-over-year [19] - Net income for Q4 was $11 million, or 5.6% of revenue, while adjusted EBITDA was also $11 million, or 5.7% of revenue [21] Business Line Data and Key Metrics Changes - Consumer revenue in Q4 was $132 million, up 12% year-over-year, driven by growth in core consumer subscription and courses [24] - Enterprise revenue was $65.4 million, up 5% from a year ago, with a net retention rate for paid enterprise customers at 93% [26] - The total number of paid enterprise customers increased to 1,730, up 7% from a year ago [26] Market Data and Key Metrics Changes - The company added over 29 million new registered learners in 2025, growing the total cumulative learner base by 17% year-over-year [8] - In Q4, the company welcomed a record 6.8 million new learners, the highest fourth quarter additions in its history [8] - The demand for career-focused learning remains strong, particularly for AI-related skills, with learners enrolling in the generative AI catalog at a rate of 15 enrollments per minute, up from 8 enrollments per minute in 2024 [10] Company Strategy and Development Direction - The company announced an agreement to combine with Udemy, aiming to accelerate its strategy and enhance its ability to invest, innovate, and execute at scale [5][6] - The focus is on evolving from a content catalog to a leading technology platform for skills, addressing the global skilling and talent transformation opportunity [6] - The company plans to continue investing in product features and tools to better meet the needs of enterprise customers [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial strength and growth potential, despite uncertainties in the macroeconomic environment [18][30] - The company anticipates revenue growth of approximately 6%-8% for the full year 2026, with consumer segment growth expected to exceed 10% [30] - Management highlighted the importance of ongoing investments in R&D and sales and marketing to drive new learner acquisition and improve operational efficiency [41] Other Important Information - The company introduced a Platform Fee effective January 1, 2026, aimed at funding ongoing investments in its AI-native platform capabilities [15][16] - The anticipated annual run rate cost synergies from the Udemy transaction are expected to be $115 million within 24 months of closing [29] Q&A Session Summary Question: Can you provide more details on the Platform Fee structure and its expected impact on gross margins? - The Platform Fee is intended to enable ongoing investment in the platform, with expectations of a meaningful uplift in gross margin in the second half of 2026 [37][39] Question: Where are the incremental investments being made in the business for 2026? - The company plans to invest more in sales and marketing, as well as R&D, to drive new learner acquisition and enhance product development [41] Question: What are the main drivers for the expected growth in the consumer segment? - The consumer segment is expected to grow due to the continued strength in subscriptions and courses, with a focus on marketing and improved learner engagement [76] Question: What is the timeline for the Udemy merger and any potential regulatory hurdles? - The company is progressing with regulatory filings and anticipates the merger to close in the second half of the year, though timelines may vary [66] Question: How is the company addressing international growth and translation efforts? - The company plans to continue expanding the number of courses translated into various languages and is pleased with the results from geo-based pricing [55][58]