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1Q 2025 Earnings Presentation April 30, 2025
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2 This presentation and any accompanying oral commentary include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements other than those of historical fact, including information concerning our future operating results and financial position, anticipated future expenses and investments, business strategies and plans, market growth, market position and potential market opportunities, and the impact of acquisitions and business alliances. These forward-looking statements are based on our current expectations, plans, and assumptions, which we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments, and other factors we believe are appropriate under the circumstances, taking into account the information currently available to us. These statements are only predictions based upon our current expectations and projections about future events. Various factors, including those identified in the "Risk Factors" section of our filings with the Securities and Exchange Commission ("SEC"), could cause our actual results, level of activity, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements. Additional factors that could cause actual results to differ materially from those expressed or implied in forward-looking statements can be found in our other filings with the SEC which are available, free of charge, on the SEC’s website at www.sec.gov. Any forward-looking statement made by us in this presentation speaks only as of the date of this presentation and is expressly qualified in its entirety by the cautionary statements included in this presentation. These statements are made as of April 30, 2025. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by any applicable laws. You should not place undue reliance on our forward-looking statements. This presentation contains “non-GAAP measures” that are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Among other non-GAAP measures, this presentation uses (1) non-GAAP gross profit, which we define as gross profit adjusted to exclude stock-based compensation expense and the amortization and acquired intangible assets; (2) non-GAAP gross margin, which we calculate as non-GAAP gross profit divided by revenue for the same period; (3) non-GAAP net income (loss), which we define as net loss adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, and restructuring charges; and (4) adjusted EBITDA (or AEBITDA), which we calculate as net loss adjusted to exclude interest income, interest expense, provision for income taxes, depreciation and amortization, other expense, net (including gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency), stock-based compensation expense, and restructuring charges. These measures have limitations as an analytical tool and should not be considered in isolation, or as a substitute for our results as reported under GAAP. These non-GAAP measures may also differ from non-GAAP measures used by other companies. See the appendix for a reconciliation of the non-GAAP measures used in this presentation to the most directly comparable GAAP financial measure. Unless otherwise noted, historical numerical figures and related graphics used in this presentation are accurate as of March 31, 2025. Numerical figures in this presentation have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. The Udemy design logo, “Udemy,” and our other registered or common law trademarks, service marks or trade names appearing in this presentation are our property. This presentation contains additional trademarks, trade names, and service marks of other companies that are the property of their respective owners. We do not intend our use or display of other companies’ trademarks, trade names, or service marks to imply relationships with, or endorsement or sponsorship of us by, these other companies. Safe Harbor Notice
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3 The AI-powered reskilling platform
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4 Udemy’s New CEO Hugo Sarrazin Hugo Sarrazin President & CEO “As I step in as CEO of Udemy, I am excited because our scale, speed of content delivery and the impact we provide will enable us to both redefine and lead this category.” ● 2021 - 2025: UKG, a leading global Human Capital Management (HCM) company, where most recently he served as President and Chief Product and Technology Officer, leading teams of more than 6,000 globally, supporting more than 80,000 organizations. During his tenure, Hugo successfully launched eight innovative AI-powered products and led many strategic acquisitions, while significantly scaling the business. ● 1995 - 2021: McKinsey & Co., where he worked with some of the most iconic companies in Silicon Valley to innovate, scale, and globalize their businesses. During that time, Hugo guided organizations through B2B and B2C commercial transformations, and played a key role in strategy setting, product development and large scale M&A. He also worked extensively with private equity firms investing in tech, including many EdTech and HCM companies that transacted in the past decade. ● Serves on the board of directors of Spencer Stuart, providing strategic guidance on corporate performance, governance, and cybersecurity. Hugo is a member of the board’s M&A advisory committee.
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5 Key takeaways Exceeded expectations on revenue and AEBITDA, with Q1 AEBITDA margin up 800 bps YoY and revenue surpassing $200M for the first time. Enterprise momentum building, with 120 net new Udemy Business customers and 40+ new business deals over $100K in ARR closed in the quarter. Subscription-led model driving scale and visibility, now representing 68% of total revenue and contributing to gross margin expansion. Executing global expansion through localized strategies, targeting high-potential international markets with tailored products and go-to-market models. AI innovation powering strategic differentiation, including the launch of Career Accelerators and Q2 rollout of AI-driven role-plays. Built for long-term value creation, with positive free cash flow, disciplined cost structure, and a clear strategy to lead in the reskilling era.
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6 Financial results and highlights 1. Non-GAAP metric. Please see Appendix for reconciliation. ● Total revenue of $200.3M increased 2% YoY, including a negative impact of 2 percentage points from changes in FX rates ● Udemy Business Annual Recurring Revenue was $519.0M at quarter end, up 8% YoY ● Q1 2025 Adjusted EBITDA margin expanded 800 bps YoY, driven by disciplined approach to operational efficiency and changes to our content costs model ● Consumer subscriptions revenue now accounts for 13% of the segment’s revenue mix, a 400 bps YoY expansion Q1 2025 % Change YoY FX Impact Q1 2025 Guidance Revenue $200.3M +2% (2pts) $195M to $199M Gross Margin 65% +400 bps Non-GAAP Gross Margin1 65% +300 bps Net Loss ($1.8M) +90% Non-GAAP Net Income1 $17.9M +236% Adjusted EBITDA1 $21.1M +227% $17M to $19M Adjusted EBITDA Margin1 11% +800 bps 9%
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7 Majority of revenue is subscription-based Subscription Transactional Q1 2025 Revenue $200.3M 68% 32% ● Subscription revenue mix expanded to 68% of total (+500bps YoY) ● Creates enhanced earnings visibility, reduced quarterly volatility, and stronger unit economics and a more resilient business model
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8 Category leading enterprise software performance Annual Recurring Revenue ($M) $519M $443M $466M $479M $493M $505M $517M Net Dollar Retention Rate (NDRR)1 Large Customer NDRR2 Udemy Business Revenue %YoY Growth FX Impact on % YoY Growth Udemy Business Customers Udemy Business Adj. Gross Margin 1. NDRR is calculated as the total ARR at the end of a trailing twelve-month period divided by the total ARR at the beginning of a trailing twelve-month period for the cohort of all UB customers active at the beginning of the trailing twelve-month period 2. Large Customer NDRR is calculated as the total UB Large Customer ARR at the end of a trailing twelve-month period divided by the total Large Customer ARR at the beginning of a trailing twelve-month period for the cohort of UB customers with at least 1,000 employees active at the beginning of the trailing twelve-month period Udemy Business Q1 2025 ARR increased 8% YoY to $519M Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 $109M $115M $118M $121M $126M $130M $128M 30% 27% 24% 19% 16% 13% 9% (2pts) (2pts) (2pts) (2pts) (2pts) (2pts) (1pts) 15,378 15,726 16,070 16,595 16,848 17,096 17,216 68% 69% 72% 72% 74% 75% 75% 106% 106% 104% 101% 99% 98% 96% 114% 113% 111% 108% 104% 103% 100%
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9 Large and growing global enterprise customer base Key Q1 2025 Wins and Expansions Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 10,843 16,070 11,231 11,407 11,477 11,515 16,595 16,848 17,096 17,216 Large customers: SMBs: ● Added 120 net new enterprise customers in Q1 2025, up 7% YoY ● Large Customer cohort increased 9% YoY 5,7015,6195,4415,3645,227
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10 Y/Y:FX Impact: Note: Segment adjusted gross margins exclude stock-based compensation, depreciation, and amortization of intangible assets and capitalized software. Revenue Segment Adjusted Gross margin (in millions) 79M Learners Vibrant consumer marketplace supports enterprise growth 250k Total Courses 5k+ Courses added per month 85k Instructors 75 Languages Q1'24 Q2'24 Q3'24 Q4'24 Q1'25 (2%) (4%) (8%) (7%) (8%) (2pts) (3pts) (3pts) (2pts) (3pts) 56% $69.8 53% $69.3 $73.8 54%56% $79.2 55% $72.6 % of Consumer Revenue from Subscribers 9% 10% 12% 12% 13%
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11 ➔ First group live with more launching throughout the year ➔ Supercharge career discovery in the marketplace ➔ Personalized curriculums powered by skills-based learning ➔ Builds learner confidence towards career outcomes Curated course collections designed to help learners get the most in-demand skills needed to transform their careers. Introducing Career Accelerators
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12 Role-play scenarios expand the soft skills learning experience Role Play Prep Simulated Call Role Play Summary Empower learners with tailored, immersive role play scenarios designed by instructors, for real-world impact. Soft skills require a different kind of practice. Unlike technical skills, they thrive through dynamic, hands-on interaction. Udemy’s platform lets learners develop confidence through realistic role play, not just passive content.
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13 Reallocating resources upmarket toward large enterprises Expanding indirect channels B2C/B2B Key initiatives to drive revenue growth Position Udemy as the AI reskilling platform for enterprises and individuals Emphasizing subscriptions across both segments Pursuing strategic growth opportunities
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14 ($48.7M) $7.8M $43.0M ~$82.0M Guidance midpoint* 2023 20242022 2025 Adjusted EBITDA Q1 results reinforce clear path to FY25 Adjusted EBITDA guidance $21.1M YTD *Based on the midpoint of AEBITDA guidance issued on April 30, 2025
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15 Revenue* YoY growth at midpoint* FX impact* Adjusted EBITDA Margin at midpoint $195 to $199 million 1.0% (1.5 pts) $22 to $24 million 12% $772 to $794 million (0.5)% (1.0 pt) $77 to $87 million 10% Q2 2025 Full Year 2025 *Revenue guidance assumes FX rates will remain unchanged from the end of the first quarter of 2025. *Udemy has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) within this presentation because the company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. Q2 and full year 2025 outlook
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16 Key takeaways Exceeded expectations on revenue and AEBITDA, with Q1 AEBITDA margin up 800 bps YoY and revenue surpassing $200M for the first time. Enterprise momentum building, with 120 net new Udemy Business customers and 40+ new business deals over $100K in ARR closed in the quarter. Subscription-led model driving scale and visibility, now representing 68% of total revenue and contributing to gross margin expansion. Executing global expansion through localized strategies, targeting high-potential international markets with tailored products and go-to-market models. AI innovation powering strategic differentiation, including the launch of Career Accelerators and Q2 rollout of AI-driven role-plays. Built for long-term value creation, with positive free cash flow, disciplined cost structure, and a clear strategy to lead in the reskilling era.
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Appendix
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18 Key Business Metrics Definitions Monthly Average Buyers A buyer is a consumer who purchases a course or subscription through our direct-to-consumer offering. We first determine the number of monthly buyers by taking the total buyers of single courses during a given month plus the total active, paid consumer subscribers at any point in that month, adjusting for duplicate buyers that may be present in both totals. We then calculate monthly average buyers by taking an average of the monthly buyer totals over a particular period, such as a fiscal year. Udemy Business Customers We count the total number of UB customers at the end of each period. To do so, we generally count unique customers using the concept of a domestic ultimate parent, defined as the highest business in the family tree that is in the same country as the contracted entity. In some cases, we deviate from this methodology, defining the contracted entity as a unique customer despite the existence of a domestic ultimate parent. This often occurs where the domestic ultimate parent is a financial owner, government entity, conglomerate, or acquisition target where we have contracted directly with the subsidiary. We define a UB customer as a customer who purchases Udemy via our direct sales force, reseller partnerships or through our self-service platform. Udemy Business Annual Recurring Revenue We disclose our UB Annual Recurring Revenue (“ARR”) as a measure of our Enterprise revenue growth. ARR represents the annualized value of our UB customer contracts on the last day of a given period. Only revenue from closed UB contracts with active seats as of the last day of the period are included. Udemy Business Net Dollar Retention Rate We disclose our UB Net Dollar Retention Rate, or NDRR, as a measure of our enterprise revenue growth. We believe NDRR is an important metric that provides insight into the long-term value of our subscription agreements and our ability to retain, and grow revenue from, our UB customers. To calculate NDRR, we begin with UB customers who are active at the beginning of a twelve-month period. Then, we divide the ending annualized recurring revenue, or ARR, for those same UB customers at the end of the twelve-month period by the total ARR for those UB customers at the beginning of that twelve-month period. We calculate ARR as the total annualized run-rate revenue of all UB customers with active licenses on the last day of a given period. Udemy Business Large Customer Net Dollar Retention Rate We calculate UB Large Customer NDRR as the total UB Large Customer ARR at the end of a trailing twelve-month period divided by the total Large Customer ARR at the beginning of a trailing twelve-month period for the cohort of UB customers with at least 1,000 employees active at the beginning of the trailing twelve-month period. We believe UB Large Customer NDRR reflects our ability to retain and expand our footprint with larger organizations, who present greater opportunities for us to retain and grow revenue given the wider range of potential use cases and land-and-expand opportunities. Segment Revenue and segment adjusted gross profit Segment revenue represents the revenue recognized from our two segments, Enterprise (or Udemy Business), and Consumer. Segment adjusted gross profit is defined as segment revenue less segment adjusted cost of revenue. Segment adjusted cost of revenue includes content costs, customer support services, hosting and platform costs, and payment processing fees that are allocable to each segment. Segment adjusted gross profit excludes amortization of capitalized software, depreciation, stock-based compensation, and amortization of intangible assets included in cost of revenue as our chief operating decision maker does not include the information in his measurement of the performance of the operating segments.
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19 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 GAAP to Non-GAAP Gross Margin
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20 1 For periods presented with a net loss, potentially dilutive securities were excluded from the computation of net loss per share, diluted, because the impact of including them would have been anti-dilutive GAAP to Non-GAAP Net Income (Loss)
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21 1 We calculate net loss margin as net loss divided by revenue for the same period 2 We calculate adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period Adjusted EBITDA Reconciliation
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