• Full Year Revenue: $787 million, an 8% increase year over year, including a 2% negative impact from FX.
• Udemy Business Revenue Growth: 18% increase for the year.
• Consumer Revenue Decline: Down 5% for the year, including a 2% negative impact from FX.
• Adjusted EBITDA: $43 million, representing a 5% margin.
• Fourth Quarter Revenue: Nearly $200 million, a 5% increase year over year, with a 2% negative impact from FX.
• Udemy Business ARR: $517 million, up 11% from the previous year.
• Large Enterprise ARR Growth: Up 12% year over year.
• Udemy Business Revenue for Q4: $130 million, a 13% increase year over year, including a 2% negative impact from FX.
• Net New Udemy Business Customers in Q4: Approximately 250, increasing the global customer base by 9% year over year.
• Gross Margin for Udemy Business Segment: 75% for Q4, up 600 basis points from the prior year.
• Fourth Quarter Consumer Revenue: $70 million, down 7% year over year, including a 2% negative impact from FX.
• Total Company Gross Margin for Q4: 64%, a 500 basis point improvement from Q4 2023.
• Net Income for Q4: Approximately $60 million, or 8% of revenue.
• Adjusted EBITDA for Q4: Approximately $190 million, or 10% of revenue, representing a nearly 800 basis point expansion year over year.
• Cash and Equivalents at Year-End: $356 million.
• Free Cash Flow for the Year: Positive $38 million.
• Share Repurchase Program: $150 million used to buy back 60 million shares during the year.
• 2025 Revenue Guidance: $787 to $803 million, representing flat to 2% growth year over year, including a 2% negative impact from FX.
• 2025 Adjusted EBITDA Guidance: $75 to $85 million, approximately 10% of revenue at the midpoint.

• Warning! GuruFocus has detected 2 Warning Sign with UDMY.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Udemy Inc (NASDAQ:UDMY) reported full-year revenue growth of 8% year over year, exceeding expectations.
• The company achieved a significant increase in adjusted EBITDA, moving from a loss in 2022 to a positive margin in 2024.
• Udemy Inc (NASDAQ:UDMY) saw a 10x increase in generative AI course consumption, highlighting strong demand for AI-related content.
• The company closed nearly 50 deals over $100,000 in ARR, the highest for any quarter in 2024, indicating strong enterprise engagement.
• Udemy Inc (NASDAQ:UDMY) is focusing on large enterprise customers, which show higher retention rates and offer better upsell and cross-sell opportunities.

Negative Points

• Consumer revenue declined by 5% year over year, impacted by lower individual course purchases.
• The company anticipates 2025 to be a transition year with flat to modest revenue growth, reflecting ongoing challenges.
• Udemy Inc (NASDAQ:UDMY) faces a 2% point headwind from foreign exchange rates, affecting revenue growth.
• The company is experiencing a decline in net dollar retention rate, though it has stabilized compared to prior periods.
• There is a reduction in SMB sales capacity, which is expected to impact revenue growth in 2025.

Q & A Highlights

Q: How have conversations with existing customers evolved, particularly regarding interest in soft skills and role play simulations? A: We've seen positive signals from large enterprise customers, with strong performance in regions like Latin America. We closed more large deals over $100k in Q4 than any other quarter this year. Regarding role play simulations, we are confident in our current R&D team size and have reoriented priorities to focus on developing these simulations quickly.

Q: Regarding the consumer marketplace revitalization, are the new features expected to be monetizable, or are they aimed at increasing engagement? A: It's a mix of both. While we aim to improve engagement and retention, leading to higher lifetime value subscriptions, there will also be monetization opportunities, such as through our career academies.

Q: How does interest in non-AI versus AI courses differ from both instructors and learners? A: Interest in non-AI courses is strong, particularly in soft skills like communication and leadership, which are crucial for navigating dynamic environments. We have a broad platform to address both technical and soft skills needs, which is attractive to large organizations.

Q: What are the expectations for ARR growth in the enterprise segment for 2025, and how will net new ARR trend? A: ARR is expected to be a leading indicator, with net new ARR being more muted in the first half of the year due to smaller SMB capacity and territory shifts. We anticipate ramping up in the back half, with revenue following this trend.

Q: What gives you confidence that consumer revenue will accelerate through the year? A: We are launching significant product innovations, including career academies, which will impact both consumer and Udemy Business segments. These initiatives are expected to drive engagement and revenue growth as they roll out.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.