Udemy(US:UDMY)2022-05-08 00:04Financial Data and Key Metrics Changes - Revenue grew by 22% year-over-year in Q1, reaching $152 million [9][41] - Gross profit was $87.4 million, up 31% year-over-year, with a gross margin of 57%, an increase from 54% in Q1 2021 [43] - Net loss for the quarter was negative $11.2 million, or negative 7% of revenue [49] Business Line Data and Key Metrics Changes - Udemy Business revenue was $64.9 million, up 77% year-over-year, with an annual recurring revenue (ARR) of $280 million, up 80% [41][52] - Consumer business revenue was $87.3 million, down 1% year-over-year, with approximately 1.4 million monthly average buyers, a decrease of 2% [41][50] - Udemy Business customer base grew to over 11,600, reflecting a 49% increase year-over-year [41][52] Market Data and Key Metrics Changes - 53% of Udemy's revenue currently comes from outside North America, indicating strong international growth potential [16] - The company achieved nearly $500,000 in ARR in South Korea in its first quarter of selling Udemy Business [16] Company Strategy and Development Direction - The company aims to continue expanding its international footprint and enhance its platform and technology [10] - Udemy is focused on building world-class partnerships to penetrate new markets and provide accessible education [19] - The company is investing in innovation, including new assessments, labs, and a Learning Paths API to enhance user engagement [22][47] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong demand for Udemy Business driven by digital transformation and the need for upskilling in the workforce [8][20] - The company expects Udemy Business to surpass consumer business revenue in Q3 2022, earlier than previously projected [9][52] - Management remains optimistic about the resilience of Udemy Business in a potential recession, citing strong tailwinds from the skills-based economy [67] Other Important Information - The company is committed to ESG initiatives and has partnered with nonprofits to provide free access to courses for underrepresented professionals [30][32] - Udemy has been recognized as a great workplace, emphasizing its commitment to equity and inclusion [34] Q&A Session Summary Question: Insights on new functionality utilization in Udemy Business - Management noted engagement with new products is gaining traction, with preset ways for customers to utilize new features [60][61] Question: Consumer gross margins and future expectations - Management explained that consumer gross margins typically increase in Q1 due to revenue recognition timing and expect a small step-up over the year [62][64] Question: Performance of Udemy Business and market fit - Management emphasized strong performance across all geographies and segments, with new partnerships contributing to growth [66] Question: Impact of macroeconomic conditions on Udemy Business - Management believes Udemy Business will perform well in tougher economic conditions due to ongoing digital transformation and employee retention needs [67] Question: Market penetration and opportunity in enterprise learning - Management indicated that Udemy is in the early stages of market penetration, with only 10% of enterprises currently using their learning products [70][72] Question: Trends in consumer buyers and retention - Management reported that over 50% of transaction-side buying comes from returning buyers, with increased engagement compared to the previous year [73][74] Question: Competitive pressure in emerging markets - Management noted limited competition in Japan and a growing presence in South Korea and China, with strong local content development [77] Question: Marketing strategies and customer acquisition - Management is continuously testing various marketing channels, including TV and social media, to optimize customer acquisition [81]