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Udemy Reports Third Quarter 2023 Results and Raises Full-Year Outlook

Udemy, Inc.
Udemy, Inc.

Increased Udemy Business revenue 30% year-over-year

Delivered second consecutive quarter of positive adjusted EBITDA

Committed to first full year of positive adjusted EBITDA ahead of plan in 2023

Achieved milestone of more than 100,000 paid Personal Plan subscribers

SAN FRANCISCO, Nov. 02, 2023 (GLOBE NEWSWIRE) -- Udemy (Nasdaq: UDMY), a company dedicated to transforming lives through learning, today reported results for the three- and nine-month periods ended September 30, 2023.

“Udemy delivered strong results that exceeded our expectations for top-line growth, and we delivered our second consecutive quarter of positive adjusted EBITDA and free cash flow,” said Greg Brown, Udemy’s President and CEO. “More than 15,000 customers around the world partner with Udemy to upskill and reskill their workforce to keep up with the rapid pace of change, which we believe will be a top priority for the foreseeable future. We will continue to invest in innovation that leverages generative AI to provide more personalized skills-development experiences, help enterprise customers achieve business outcomes and supercharge instructors’ ability to create highly effective content. Going forward, we are focused on delivering value for all stakeholders, while making high-growth investments, managing our cost structure efficiently and progressing toward our long-term profitability targets.”

Third quarter 2023 financial performance highlights include:

  • Total revenue increased 17% year-over-year to $184.7 million and exceeded the high end of the guidance range for the quarter by $4.7 million. Revenue growth includes a negative impact of 1 percentage point from changes in foreign exchange (FX) rates year-over-year.

  • Enterprise segment, or Udemy Business, revenue increased 30% year-over-year, including the negative impact of 2 percentage points from changes in FX rates year-over-year, to $109.1 million.

  • Udemy Business Annual Recurring Revenue (ARR) increased 26% year-over-year to $443.1 million.

  • Consumer segment revenue increased 1%year-over-year, including the negative impact of 0.5 percentage points from changes in FX rates year-over-year, to $75.6 million.

  • Ended the quarter with $483.0 million in cash, cash equivalents, restricted cash and marketable securities.

Third Quarter 2023 Financial Results and Key Operating Data Summary
(in millions, except customers, percentages and basis points)

 

 

Three Months Ended September 30,

 

% Change

 

Nine Months Ended September 30,

 

% Change

 

 

2023

 

2022

 

YoY

 

2023

 

2022

 

YoY

Revenue

 

$

184.7

 

 

 

$

158.4

 

 

 

17

 

%

 

$

539.4

 

 

 

$

463.8

 

 

 

16

 

%

Gross Profit

 

$

107.5

 

 

 

$

89.4

 

 

 

20

 

%

 

$

309.5

 

 

 

$

262.4

 

 

 

18

 

%

Gross Margin

 

 

58

 

%

 

 

56

 

%

 

200

 

bps

 

 

57

 

%

 

 

57

 

%

 

 

bps

Non-GAAP Gross Profit

 

$

110.0

 

 

 

$

91.7

 

 

 

20

 

%

 

$

316.8

 

 

 

$

268.1

 

 

 

18

 

%

Non-GAAP Gross Margin

 

 

60

 

%

 

 

58

 

%

 

200

 

bps

 

 

59

 

%

 

 

58

 

%

 

100

 

bps

Net Loss

 

$

(16.8

)

 

 

$

(46.7

)

 

 

(64

)

%

 

$

(87.0

)

 

 

$

(101.7

)

 

 

(14

)

%

Non-GAAP Net Income (Loss)

 

$

7.7

 

 

 

$

(20.7

)

 

 

(137

)

%

 

$

(1.9

)

 

 

$

(45.5

)

 

 

(96

)

%

Adjusted EBITDA

 

$

8.2

 

 

 

$

(12.9

)

 

 

(164

)

%

 

$

3.8

 

 

 

$

(28.4

)

 

 

(113

)

%

Adjusted EBITDA Margin

 

 

4

 

%

 

 

(8

)

%

 

1,200

 

bps

 

 

1

 

%

 

 

(6

)

%

 

700

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enterprise Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Customers

 

 

15,378

 

 

 

 

13,437

 

 

 

14

 

%

 

 

 

 

 

 

 

 

 

 

 

Annual Recurring Revenue

 

$

443.1

 

 

 

$

350.4

 

 

 

26

 

%

 

 

 

 

 

 

 

 

 

 

 

Net Dollar Retention

 

 

106

 

%

 

 

117

 

%

 

(1,100

)

bps

 

 

 

 

 

 

 

 

 

 

 

UB Large Customer Net Dollar Retention

 

 

114

 

%

 

 

123

 

%

 

(900

)

bps

 

 

 

 

 

 

 

 

 

 

 

Segment Revenue

 

$

109.1

 

 

 

$

83.9

 

 

 

30

 

%

 

$

306.0

 

 

 

$

223.4

 

 

 

37

 

%

Segment Gross Profit

 

$

74.3

 

 

 

$

56.4

 

 

 

32

 

%

 

$

204.4

 

 

 

$

149.1

 

 

 

37

 

%

Segment Gross Margin

 

 

68

 

%

 

 

67

 

%

 

100

 

bps

 

 

67

 

%

 

 

67

 

%

 

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly Average Buyers

 

 

1.41

 

 

 

 

1.32

 

 

 

7

 

%

 

 

1.38

 

 

 

 

1.33

 

 

 

4

 

%

Segment Revenue

 

$

75.6

 

 

 

$

74.6

 

 

 

1

 

%

 

$

233.4

 

 

 

$

240.4

 

 

 

(3

)

%

Segment Gross Profit

 

$

40.3

 

 

 

$

38.7

 

 

 

4

 

%

 

$

125.4

 

 

 

$

128.5

 

 

 

(2

)

%

Segment Gross Margin

 

 

53

 

%

 

 

52

 

%

 

100

 

bps

 

 

54

 

%

 

 

53

 

%

 

100

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business and Operational Highlights

  • Added new, or expanded existing, relationships with Udemy Business customers globally, including Assurant, Inc. (U.S.), Bosch Global Software Technologies (India), Compasso Tecnologia LTD (Brazil), Deutsche Telekom (Slovakia), DHL Express (Belgium), Elektrobit Automotive GmbH (Germany), Shell (UK), Sanofi (France), Sun Life Assurance Company (Canada), Schlumberger Limited (U.S.) and Vimeo, Inc. (U.S.).

  • Continued Udemy Business’s expansion in the Asia-Pacific region with new customer wins and expansions through strategic reseller partnerships, including The Bank of Yokohama, Ltd. (Japan), Daiwa Securities Group Inc. (Japan), Samsung Human Resource Development Center (S. Korea), and Tokyo Electric Power Company Holdings, Inc. (Japan).

  • Surpassed 100,000 paid monthly and annual subscribers for Udemy’s consumer subscription, Personal Plan.

  • Announced a new partnership with Docker that provides active Docker developers with access to dedicated learning paths and more than 350 real-time Docker training modules on emerging technologies.

  • Curated generative AI learning paths for Udemy Business customers to address four common use cases, consisting of more than 300 hours of learning content.

  • Revamped the instructors’ AI-powered Coding Exercise Practice Insights dashboard to include learner engagement insights. Also, expanded the AI-assisted coding exercise creation functionality for instructors to include new ChatGPT integrations for Spanish courses and Javascript.

  • Released functionality to allow learners to import verified Open Badges onto the Udemy Business platform to showcase their success, and providing useful insights for organizations to analyze the skills present in their organizations.

  • Launched a Badging Certification Tracker to motivate Udemy Business learners as they track their progress toward certifications in a goal-oriented preparation experience.

  • Enhanced the Udemy Business Leadership Academy learner transcript feature giving admins a simpler, more efficient way to view and download an individual learner’s performance.

  • For the third year in a row, Sustainalytics ranked Udemy in the first percentile for ESG risk ratings in the Internet Software and Services sub-industry as of September 2023.

  • Received recognition as a Fall 2023 Leader by software review company G2 in its Fall Grid Report for Learning Experience Platforms, based on receiving a high customer satisfaction score and having a large market presence.

Business Update
Udemy announced plans to adjust the content payment structure for its Udemy Business and consumer subscription offerings. Under the current payment structure, instructor partners earn 25% of subscription revenue, which is allocated to instructors pro rata based on consumption of their content. Udemy plans to reduce the instructor share from 25% today to 15% by 2026, with the first adjustment to 20% effective as of January 1, 2024. The adjustment is expected to improve future gross margin, which will allow the Company to make greater investments in brand initiatives and product innovation to accelerate growth in the business.

Financial Outlook
Udemy provides guidance based on current market conditions and expectations. Actual results may differ materially. Please refer to the comments below regarding forward-looking statements.

The following table reflects Udemy’s financial outlook for its fourth quarter and full year ending December 31, 2023.

 

Three Months Ending
December 31, 2023

 

Year Ending
December 31, 2023

Revenue

$184 - $187 million

 

$723 - $726 million

Adjusted EBITDA Margin*

0.0% - 1.0%

 

0.5% - 1.0%

Weighted Average Share Count (Basic)

154 million

 

150 million

Weighted Average Share Count (Diluted)

161 million

 

157 million

*Udemy has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) within this earnings release because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence.

 

The revenue guidance range above assumes historical changes in foreign currency exchange rates will negatively impact total revenue year-over-year growth by approximately 2 percentage points in the fourth quarter and 3 percentage points for the full year 2023. Udemy's revenue guidance also assumes FX rates will remain constant for the remainder of the year.

Webcast Information
Udemy will host a conference call and webcast at 2:00 p.m. PT / 5:00 p.m. ET today, Thursday, November 2 to discuss its third quarter 2023 financial results and outlook. A link to the live webcast and recorded replay of the conference call will be available on the “Quarterly Results” section of Udemy’s Investor Relations website at https://investors.udemy.com/. The live call may also be accessed via telephone at (833) 630-1963 domestically and (412) 317-5702 internationally. The archived replay of the webcast will be available for approximately one year.

Non-GAAP Financial Measures 
To supplement the consolidated financial statements prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures as defined below. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide useful information to investors and others in understanding and evaluating our operating results because our management team and board of directors use these non-GAAP financial measures for the purposes of assessing operating results and business planning. These non-GAAP financial measures also provide useful measures for period-to-period comparisons of our business by removing the effect of certain non-cash expenses and certain variable charges.

Adjusted EBITDA and Adjusted EBITDA Margin 
We calculate Adjusted EBITDA as net loss determined in accordance with GAAP, excluding i) interest income; ii) interest expense; iii) provision for income taxes; iv) depreciation and amortization; v) other expense, net, including gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency vi) stock-based compensation expense, and vii) restructuring charges. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue for the same period. We have not reconciled our expectations for Adjusted EBITDA and Adjusted EBITDA Margin to net loss and net loss margin, respectively, the most directly comparable GAAP measures, because certain items are out of our control or cannot be reasonably predicted and a reconciliation for the guidance for Adjusted EBITDA and Adjusted EBITDA Margin is not available without unreasonable effort.

Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per Share, Basic and Diluted 
We define non-GAAP net income (loss) as net loss, adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, and restructuring charges.

We define non-GAAP net income (loss) per share, basic, as non-GAAP net income (loss) divided by weighted-average shares used to compute net loss per share, basic. We define non-GAAP net income (loss) per share, diluted, as non-GAAP net income (loss) divided by weighted-average shares used to compute net loss per share, diluted, which adjusts for the potentially dilutive effects of our employee equity incentive plans.

Non-GAAP Gross Profit and Non-GAAP Gross Margin 
We define non-GAAP gross profit as gross profit, adjusted to exclude stock-based compensation expense and the amortization of acquired intangible assets. We calculate non-GAAP gross margin as non-GAAP gross profit divided by revenue for the same period.

Udemy’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented herein in conjunction with Udemy’s financial statements and the related notes thereto. Please refer to the non-GAAP reconciliations in this press release for a reconciliation of these non-GAAP financial measures to the most comparable financial measure prepared in accordance with GAAP.

Forward Looking Statements 
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding Udemy’s expectations relating to future operating results and financial position, including the second quarter of 2023, the full year 2023, and future periods; anticipated future expenses and investments; our business strategy and plans; market growth; and our market position and potential market opportunities. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance.

The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our filings with the Securities and Exchange Commission (“SEC”), including, without limitation, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed with the SEC on November 2, 2023. All information provided in this release is as of the date hereof, and we undertake no duty to update this information unless required by law.

Third Party Data

This press release contains information developed by Sustainalytics (www.sustainalytics.com). Such information and data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at https://www.sustainalytics.com/legal-disclaimers.

About Udemy

Udemy (Nasdaq: UDMY) transforms lives through learning by providing flexible, effective skill development to empower organizations and individuals. The Udemy marketplace platform, with thousands of up-to-date courses in dozens of languages, offers the tools learners, instructors and enterprises need to achieve their goals and reach their full potential. Millions of people learn on the Udemy platform from real-world experts in topics ranging from programming and data science to leadership and team building. Udemy Business enables employers to offer on-demand learning for all employees, immersive learning for tech teams and cohort learning for leaders. Udemy Business customers include FenderⓇ, Glassdoor, On24, The World Bank and Volkswagen. Udemy is headquartered in San Francisco with hubs in Ankara and Istanbul, Türkiye; Austin, Texas; Denver, Colorado; Dublin, Ireland; Melbourne, Australia; and New Delhi, India.


Udemy, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue

 

$

184,722

 

 

$

158,432

 

 

$

539,392

 

 

$

463,767

 

Cost of revenue (1) (2)

 

 

77,264

 

 

 

69,080

 

 

 

229,903

 

 

 

201,330

 

Gross profit

 

 

107,458

 

 

 

89,352

 

 

 

309,489

 

 

 

262,437

 

Operating expenses (1)(2)

 

 

 

 

 

 

 

 

Sales and marketing

 

 

76,492

 

 

 

77,490

 

 

 

233,520

 

 

 

212,789

 

Research and development

 

 

30,307

 

 

 

28,062

 

 

 

90,829

 

 

 

74,595

 

General and administrative

 

 

22,155

 

 

 

27,051

 

 

 

71,112

 

 

 

72,147

 

Restructuring charges

 

 

 

 

 

 

 

 

10,263

 

 

 

 

Total operating expenses

 

 

128,954

 

 

 

132,603

 

 

 

405,724

 

 

 

359,531

 

Loss from operations

 

 

(21,496

)

 

 

(43,251

)

 

 

(96,235

)

 

 

(97,094

)

Other income (expense)

 

 

 

 

 

 

 

 

Interest income

 

 

5,542

 

 

 

1,610

 

 

 

14,758

 

 

 

1,857

 

Interest expense

 

 

(124

)

 

 

(1,018

)

 

 

(464

)

 

 

(895

)

Other income (expense), net

 

 

122

 

 

 

(3,523

)

 

 

(2,181

)

 

 

(4,439

)

Total other income (expense), net

 

 

5,540

 

 

 

(2,931

)

 

 

12,113

 

 

 

(3,477

)

Net loss before taxes

 

 

(15,956

)

 

 

(46,182

)

 

 

(84,122

)

 

 

(100,571

)

Income tax provision

 

 

(811

)

 

 

(511

)

 

 

(2,924

)

 

 

(1,151

)

Net loss

 

$

(16,767

)

 

$

(46,693

)

 

$

(87,046

)

 

$

(101,722

)

Net loss per share

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.11

)

 

$

(0.33

)

 

$

(0.59

)

 

$

(0.73

)

Weighted-average shares used in computing net loss per share

 

 

 

 

 

 

 

 

Basic and diluted

 

 

151,307,963

 

 

 

140,951,605

 

 

 

148,392,636

 

 

 

140,116,156

 

 

(1) Includes stock-based compensation expense as follows (in thousands):

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

2022

 

2023

 

2022

Cost of revenue

 

$

1,788

 

$

1,611

 

$

5,130

 

$

3,440

Sales and marketing

 

 

7,646

 

 

9,372

 

 

23,022

 

 

18,516

Research and development

 

 

7,045

 

 

6,258

 

 

19,762

 

 

13,303

General and administrative

 

 

7,005

 

 

7,728

 

 

23,806

 

 

17,784

Restructuring charges

 

 

 

 

 

 

1,208

 

 

Total stock-based compensation expense

 

$

23,484

 

$

24,969

 

$

72,928

 

$

53,043

 

(2) Includes amortization of intangible assets as follows (in thousands):

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2023

 

2022

 

2023

 

2022

Cost of revenue

 

$

725

 

$

725

 

$

2,175

 

$

2,175

Sales and marketing

 

 

296

 

 

342

 

 

979

 

 

1,025

Total amortization of intangible assets

 

$

1,021

 

$

1,067

 

$

3,154

 

$

3,200

 

Udemy, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

 

 

September 30,

 

December 31,

 

 

 

2023

 

 

 

2022

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

327,974

 

 

$

313,685

 

Marketable securities

 

 

151,466

 

 

 

151,687

 

Restricted cash, current

 

 

100

 

 

 

 

Accounts receivable, net

 

 

82,857

 

 

 

104,530

 

Prepaid expenses and other current assets

 

 

18,364

 

 

 

14,878

 

Deferred contract costs, current

 

 

40,953

 

 

 

30,234

 

Total current assets

 

 

621,714

 

 

 

615,014

 

Property and equipment, net

 

 

4,984

 

 

 

7,012

 

Capitalized software, net

 

 

30,924

 

 

 

27,412

 

Operating lease right-of-use assets

 

 

7,164

 

 

 

11,377

 

Restricted cash, non-current

 

 

3,429

 

 

 

3,629

 

Deferred contract costs, non-current

 

 

35,415

 

 

 

35,411

 

Strategic investments

 

 

10,311

 

 

 

12,104

 

Intangible assets, net

 

 

6,177

 

 

 

9,331

 

Goodwill

 

 

12,646

 

 

 

12,646

 

Other assets

 

 

3,730

 

 

 

3,632

 

Total assets

 

$

736,494

 

 

$

737,568

 

Liabilities and stockholders' equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

5,663

 

 

$

14,529

 

Accrued expenses and other current liabilities

 

 

31,040

 

 

 

31,247

 

Content costs payable

 

 

37,816

 

 

 

37,310

 

Accrued compensation and benefits

 

 

25,313

 

 

 

22,882

 

Operating lease liabilities, current

 

 

6,974

 

 

 

7,002

 

Deferred revenue, current

 

 

279,646

 

 

 

273,937

 

Total current liabilities

 

 

386,452

 

 

 

386,907

 

Operating lease liabilities, non-current

 

 

1,657

 

 

 

6,545

 

Deferred revenue, non-current

 

 

2,520

 

 

 

4,342

 

Other liabilities, non-current

 

 

26

 

 

 

464

 

Total liabilities

 

 

390,655

 

 

 

398,258

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

Preferred stock

 

 

 

 

 

 

Common stock

 

 

2

 

 

 

1

 

Additional paid-in capital

 

 

1,045,349

 

 

 

951,946

 

Accumulated other comprehensive loss

 

 

(62

)

 

 

(233

)

Accumulated deficit

 

 

(699,450

)

 

 

(612,404

)

   Total stockholders’ equity

 

 

345,839

 

 

 

339,310

 

Total liabilities and stockholders' equity

 

$

736,494

 

 

$

737,568

 

 

Udemy, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(87,046

)

 

$

(101,722

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

 

18,069

 

 

 

15,616

 

Amortization of deferred sales contract costs

 

 

34,482

 

 

 

22,558

 

Stock-based compensation

 

 

72,928

 

 

 

53,043

 

Allowance for credit losses

 

 

1,309

 

 

 

467

 

Accretion of marketable securities

 

 

(5,323

)

 

 

(138

)

Non-cash operating lease expense

 

 

4,468

 

 

 

4,643

 

Unrealized loss on strategic investments

 

 

1,793

 

 

 

2,896

 

Other

 

 

931

 

 

 

460

 

Changes in operating assets and liabilities:

 

 

 

 

   Accounts receivable

 

 

20,363

 

 

 

1,132

 

   Prepaid expenses and other assets

 

 

(3,628

)

 

 

1,375

 

   Deferred contract costs

 

 

(45,205

)

 

 

(40,203

)

   Accounts payable, accrued expenses and other liabilities

 

 

(7,102

)

 

 

(14,257

)

   Content costs payable

 

 

505

 

 

 

(1,525

)

   Operating lease liabilities

 

 

(5,168

)

 

 

(5,012

)

   Deferred revenue

 

 

3,887

 

 

 

30,395

 

        Net cash provided by (used in) operating activities

 

 

5,263

 

 

 

(30,272

)

Cash flows from investing activities:

 

 

 

 

Purchases of marketable securities

 

 

(225,536

)

 

 

(66,128

)

Proceeds from maturities of marketable securities

 

 

231,300

 

 

 

 

Purchases of property and equipment

 

 

(435

)

 

 

(1,397

)

Capitalized software costs

 

 

(9,321

)

 

 

(10,652

)

Purchases of strategic investments

 

 

 

 

 

(5,000

)

Payments related to business combinations

 

 

 

 

 

(1,500

)

        Net cash used in investing activities

 

 

(3,992

)

 

 

(84,677

)

Cash flows from financing activities:

 

 

 

 

Net proceeds from exercise of stock options

 

 

8,277

 

 

 

5,785

 

Proceeds from share purchases under employee stock purchase plan

 

 

4,757

 

 

 

5,563

 

Payment of deferred offering costs

 

 

 

 

 

(1,586

)

        Net cash provided by financing activities

 

 

13,034

 

 

 

9,762

 

 

 

 

 

 

Effect of foreign exchange rates on cash flows

 

 

(116

)

 

 

(38

)

 

 

 

 

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

14,189

 

 

 

(105,225

)

Cash, cash equivalents and restricted cash—Beginning of period

 

 

317,314

 

 

 

536,768

 

Cash, cash equivalents and restricted cash—End of period

 

$

331,503

 

 

$

431,543

 

 

 

 

 

 

Udemy, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except percentages, share and per share amounts)
(unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Gross profit

 

$

107,458

 

 

$

89,352

 

 

$

309,489

 

 

$

262,437

 

Stock-based compensation expense

 

 

1,788

 

 

 

1,611

 

 

 

5,130

 

 

 

3,440

 

Intangible asset amortization

 

 

725

 

 

 

725

 

 

 

2,175

 

 

 

2,175

 

Non-GAAP gross profit

 

$

109,971

 

 

$

91,688

 

 

$

316,794

 

 

$

268,052

 

Gross margin (1)

 

 

58

%

 

 

56

%

 

 

57

%

 

 

57

%

Non-GAAP gross margin (2)

 

 

60

%

 

 

58

%

 

 

59

%

 

 

58

%

(1) We calculate gross margin as gross profit divided by revenue for the same period.
(2) We calculate non-GAAP gross margin as non-GAAP gross profit divided by revenue for the same period.

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

 

$

(16,767

)

 

$

(46,693

)

 

$

(87,046

)

 

$

(101,722

)

Stock-based compensation expense

 

 

23,484

 

 

 

24,969

 

 

 

71,720

 

 

 

53,043

 

Intangible asset amortization

 

 

1,021

 

 

 

1,067

 

 

 

3,154

 

 

 

3,200

 

Restructuring charges

 

 

 

 

 

 

 

 

10,263

 

 

 

 

Non-GAAP net income (loss)

 

$

7,738

 

 

$

(20,657

)

 

$

(1,909

)

 

$

(45,479

)

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing net loss per share, basic

 

 

151,307,963

 

 

 

140,951,605

 

 

 

148,392,636

 

 

 

140,116,156

 

Effect of dilutive securities (3)

 

 

6,095,804

 

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing non-GAAP net income (loss) per share, diluted

 

 

157,403,767

 

 

 

140,951,605

 

 

 

148,392,636

 

 

 

140,116,156

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

 

$

(0.11

)

 

$

(0.33

)

 

$

(0.59

)

 

$

(0.73

)

Non-GAAP net income (loss) per share, basic

 

$

0.05

 

 

$

(0.15

)

 

$

(0.01

)

 

$

(0.32

)

Non-GAAP net income (loss) per share, diluted

 

$

0.05

 

 

$

(0.15

)

 

$

(0.01

)

 

$

(0.32

)

(3) For periods presented with a non-GAAP net loss, we have excluded the effect of potentially dilutive securities as their inclusion would be anti-dilutive.

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net loss

 

$

(16,767

)

 

$

(46,693

)

 

$

(87,046

)

 

$

(101,722

)

Adjusted to exclude the following:

 

 

 

 

 

 

 

 

Interest income

 

 

(5,542

)

 

 

(1,610

)

 

 

(14,758

)

 

 

(1,857

)

Interest expense

 

 

124

 

 

 

1,018

 

 

 

464

 

 

 

895

 

Income tax provision

 

 

811

 

 

 

511

 

 

 

2,924

 

 

 

1,151

 

Depreciation and amortization

 

 

6,183

 

 

 

5,416

 

 

 

18,069

 

 

 

15,616

 

Stock-based compensation expense

 

 

23,484

 

 

 

24,969

 

 

 

71,720

 

 

 

53,043

 

Other income (expense), net

 

 

(122

)

 

 

3,523

 

 

 

2,181

 

 

 

4,439

 

Restructuring charges

 

 

 

 

 

 

 

 

10,263

 

 

 

 

Adjusted EBITDA

 

$

8,171

 

 

$

(12,866

)

 

$

3,817

 

 

$

(28,435

)

Net loss margin (4)

 

 

(9

)%

 

 

(29

)%

 

 

(16

)%

 

 

(22

)%

Adjusted EBITDA margin (5)

 

 

4

%

 

 

(8

)%

 

 

1

%

 

 

(6

)%

(4) We calculate net loss margin as net loss divided by revenue for the same period.
(5) We calculate adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period.

Investor Contact
Dennis Walsh
Vice President, Investor Relations
dennis.walsh@udemy.com

Media Contact
Abby Welch
Senior Director, Corporate Communications
abby.welch@udemy.com





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