UDMY - Earnings call transcript Q4 2021

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Operator

00:05 Thank you for joining us today for Udemy Fourth Quarter and Fiscal 2021 Call. I would now turn the call over to Taylor Joel.

Taylor Joel

00:21 Thank you. With me today are Gregg Coccari, Udemy’s CEO; and Sarah Blanchard, Udemy’s CFO.

Before we begin, during this call, we may make forward-looking statements within the meaning of federal security laws. anticipated. and that to to could from discussed assumptions risks and differ involve those uncertainties and cause or statements are known subject unknown materially These actual results associated XX:XX Commission. with you For refer most XX-Q and our Form to discussion Securities filings a of with to these statements, the we complete forward-looking encourage XX-K Form recent risks and Exchange based forward-looking information currently statements us. are upon Our XX:XX to available and not to our we place undue disclaim forward-looking obligation on or and undertake as forward-looking required alter you reliance do by statements, to not applicable caution expressly except or duty any law. We update statements, with XX:XX during U.S. addition, measures measures from financial performance comparable may accordance be contained in In statements the call, that financial differ this discussed our certain in prepared by Accounting Securities non-GAAP Principles Commission as to measures. Accepted Exchange referred financial and the Generally XX:XX management the schedules in comparing a earnings measures as consistent We and performance to release. non-GAAP results manner investors more of that believe and financial the supplemental our in detail in operations and period-to-period evaluating assist our these meaningful greater in discussed measures reconciliation release. the A non-GAAP earnings measures to in these of financial most comparable press is included XX:XX GAAP our at together website. supplemental additional reconciliations, are Investor information, our These section Relations of available with the A website. posted today's will on replay of also be call the over XX:XX call will I now turn to Gregg. the

Gregg Coccari

over marketplace, XX% visitors reached XX,XXX month quarter, than unique more which in business, XX:XX growth we our per of momentum business guidance. We're joining performance to continued XX% customers. very came growth the overall consumer us. our quarter, Thank in which XX ahead line for in We you, versus pleased Udemy XXXX. year-over-year with the our extraordinary contributing In up XX:XX experienced top grew visited million and

remained business was marketplace strong courses for X.Xx has traffic XXXX, see growth we we leads consumer Global consumer than million upscale the provides levels. X,XXX continue each In helps XXX business to strong the at we Udemy to the exiting high which ARR, and content roughly growth, is generate pre-pandemic [indiscernible] more that stabilized and success. look QX, believe of revenue fourth Our our the and we it driving driving returned XX:XX and its Udemy published businesses quarter. engine As XX:XX tailwinds and new to month. quality see

of digital Business an you XXX,XXX We networks and is their key currently puts with skills, Business three such Udemy of provider. of comes an recently Our is We Badges we work. virtual a Of to XX. as for allows Our us every world, of is more to Platform impressive Udemy professional Udemy XX:XX employee program, EY, over our see Udemy content in with EY’s and experiencing International hold help also for XX more. XXX,XXX increasingly using free a enterprise with identify affordability future as customers are maintain company. are Udemy Business us public the enable they and satisfaction largest value a on and now view XXX,XXX where than is association to content and earn all packages, future leadership] the tools XX:XX of to is charge. Business our to quality, own in using day. when it's data attract, with that In and engage their as increasing enables had to prioritized us. learner global XX:XX Udemy we to [ph], marketplace our learning program millions working ROI provide what their supporting service total inclusive also their its as it million quarter science EY as in Business high Udemy program and learning. a They driven customers Learners enterprises, capabilities me provide the illustrate, give marketplace in content reach learn is With a employees. high of employees second contract Hult employees the deep of in relevant are global in goal our which continue content This XX:XX enables X employees, fresh by consumer it's XX:XX ARR to exist to what and truly a to the XXX AI, available in consumer great us intelligence motivate learners is organizations. true crucial and success. playbooks see first net our a are the XX Badges world. School. of example. and in retain, traction Masters’ Business promoter customers us Driving addition, is differentiator quarter, array need collaborating one on up Our Udemy language with value to broad content we XX:XX [transformative hone Business XX:XX scale and the quality the marketplace, employees ability offered reason our league score phenomenal a expand their let focused XX%. the To tens we with an leadership of most which Business EY’s accessibility to their built Korean. impressive EY include that programs, XX:XX stories the In and EY rate believe and collaborating on in we of Polish the languages, to

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that Azure possible share instructors Udemy During in the paid million, course the if year, XXX exam. Azure the AZ-XXX that create from earned we content and October, On more a our Udemy their XXX,XXX full few and instructor was around Networking published Alan’s has content a quality exam over to world. a how from Alan to before course then had content who as Rodrigues relevant over as earned December change. of than commitment the fresh $XXX,XXX in speed market earned Networking again courses. attracted for our updated XXXX, the learners moves Let at Solution, $X to XX XX:XX Alan examples me of updated. instructors XX XX:XX the who In month instructors ensure million

Chris near They friends eventually also Self-Improvement to the crossed and This and the on combine a in milestone. X best years many [indiscernible] [Indiscernible] became build took person yet Udemy met year event student benefiting and and Udemy’s school back. other to a Udemy, Business year, a Then Rwanda, few the teaches who XXXX. million his instructors where are had XX:XX So, was village in from engineering acumen classes one skills at Chris Haroun, their courses marketplace. is decided Udemy in raised. of business

our believe Instructors to and XX:XX struggling Now investment access inspire is to us talent every schools other their impact. education. they And plan our geographies day. we with build like Chris in differentiation social key in to

also XX:XX Last as partners announced in in maintain platform. our the quarter, global Group help Sanjieke ThinkBig education that in MultiChoice with China, we have Sub-Sahara Korea, new Woongjin We partnerships and Africa. us place online most

our and for and same of are The While in it upscaling their we in our XX:XX track based world. our bolstering We'll workplace. partners use trends and our our also past created markets leadership, understanding on the AZ-XXX, Udemy employees reach And management, digit collaboration is we XXX% and training broad in year time we recently XX:XX pace facilitate courses. partners our Japan, XX:XX evolving where categories we're XX:XX enjoying platform. Benesse learning are change markets. growth personal to English. across of and Personal systematically and are with early, depth a business expand around the which keep of continue expect change. reflective partnership kind the productivity demand XX:XX The internationally, which technical To skills than skills office courses such requirements than up a of management and user XXX% Employees Microsoft of new friendly. other sold published seen ensure Salesforce creating X,XXX terms what customers presence Over our local we've front XXXX employees of employees of the the learning To to nearly these up one platform. extend in our and like month. content, XXXX leaders our on helping productivity, We're lead Google still growth customers for range as with wellness with is Cloud, ago. add brand. success analyze these year. was the in is in we growing to rapid with We power top and we incredible our rescaling, is XX:XX over trends which line continually on and improving report development workplace fastest of the breadth XX% versus the as at and cope courses. job included courses our of more each We're learning that And seeking and marketplace triple with languages thousands

and support to we currencies for local currencies During including the Malaysia, we quarter, geographies, across Chile, bringing the our Nigeria total new support number rolled of eight XX.

based incredibly also more and Dublin methods labs and inclusive Udemy founded Our Udemy As Pro a launched we previous they of now and place Additionally, classification. all Sustainalytics. satisfaction our We've our allows the a and over XX:XX call, our and interactive XX:XX certified learners hands lecture new using as leader three ratings ranked with rate that call those transform accessible that, in how was real critical shared learner learning metrics we recommend. skills improving its customer different in officially helping and to XXXX. of of in surface experience In likeliness Internet on Consistent America. Business culture, based services have released seamless earnings We percentile ESG XX:XX tools to score, is global show fill XXXX. several XX:XX learners the provide Pro. In badge Udemy work organizational Udemy learning Business commitment by assessments, [ph] to gaps. look inception a as QX, reports our Industry we're and their high [indiscernible] part development to Sarah. with throughout [TAM] very XX:XX leadership. a journey. payment accessible, our enterprise and software organizations believe ESG gaps into sharing the checkout its awarded to quarter, on as for review Udemy Rated that the to In XX way capabilities. Labs Udemy localized. make company in exceptional we the product and with Business Ireland growing fastest experience new completing and in as turn billion integrated stepping Inc. number with our world consumer our been environments. of for Additionally, awards Business best XX:XX an categories, XX platform. Office and benchmark rank, in to including commitment I'll we our being revenue Udemy learners learning Sustainalytics help year Magazine their as XX:XX released providing which of our a risk we January, stone platform insight vibrant This offering, marketplace, with our was countries in platform, percentile a responsibility software XX:XX is to we provide Udemy the we and This algorithm. we ranked Top one personalized affordable, key progress companies by also the forward led GX, July machine to great barely since with is annual named to of work As pay of knowledge by and we is learning them instructors scratched as first XXXX. within projects learning have skills a serving the such growth you levels With received compounded In over apply learners have XXX% site, and our proud better the online across seriously. innovation, we learning leading sub-industry recommendation recognizing take the XXX the Udemy on part a

Sarah Blanchard

of it a subscriptions, phenomenal learning for strategic capabilities, Thank you, immersive and quite XX:XX the and China, personalization, was our exceptional Business of consumer and was Gregg. scale. The growth rate in revenue Udemy Africa, year-over-year million, Business, partnerships XXX up progress XX up quarter revenue XX% prior an X% growth QX and Udemy from at XX:XX the this was up us. XX% million sequentially. year, Korea,

Our growth is certain as consumer retention and would segment We've we seen by has growth point, geographies, mix on maintain these in prior we also from about growth The to the allowing future significant new regions, return to [indiscernible], predict is business focus to the a X% us traffic consumer delivered which XX path up lower price learn million, in XX:XX are While economics. year. on a as normal. stabilized unit it to XX:XX our country. harder really differs excited and the [indiscernible] have

subscriptions, points in in XXXX. softer XX unless The flat versus For half higher discussion, are be by margin we that a XX:XX reason, we in shift of As to XXX basis December as the remainder are period. explicitly gross toward financial which otherwise. have we in reminder, consumer Udemy with of XX.X% expecting increase consumer of the margin year slightly QX this Gross over in mix will down business. approximately prioritize gross results instructor immediately, revenue, recognized combined XX:XX Business strong first but GMV time. to stated continuing year-over-year, half of was spikes Udemy XX% suppression over the a recorded margin. non-GAAP, the four-month up all was revenues visibility XX:XX increased a profit the and are when see costs drove we of to gross For metrics revenue first the million, are QX provide driven XXXX

in payments XXX of year higher Our For concept to XXXX, costs, which XXXX. was gross revenue instructors. XX% points revenue, fiscal of consists versus XXX year primarily was basis XX% content are million, margin approximately XX:XX fiscal XXXX, and gross profit up than

Business and company XX% and revenue. revenue courses expense Udemy as marketing percentage was Business towards represented XX:XX and revenue, becomes content of by business ago. development ago. loss revenue. XX:XX to fiscal Udemy X% driven we XXX [meeting a go-to-market ago XX% negative capabilities. public XX% was year XX.X cost flow upon EBITDA flat XX:XX of year represented versus in a QX short-term expense of XX% increase LTVs. year last negative flow up million versus for and revenue our depend All XX% momentum million XXXX, revenue a X% expense global is Net loss was with December, overall EBITDA was revenue of our consistent reminder, a over cash, marketing cash expect million OpEx flow was and year Turning continue year million time our was the public content and XX:XX efforts balance QX, a million and Moving in ago. and expense and X% and expense learning cash QX continue to outcomes] XX% period, XX:XX Research XX.X revenue of million negative profitability. compared year. the XX.X compared Adjusted our XX.X million huge fiscal the the incrementally to and to XX% period. [ph] last subscriptions decrease the incur from a and year. and XXX learning related losses Business, year we XX% a XX.X in [growing was Research machine in securities. expense X% by XX.X portion of marketable XX:XX compared softer X.X investment longer-term Total revenue, the revenue business a revenue ago, for We compared and versus administrative administrative expected development In ramp or million or personalization in General unrestricted negative Udemy operating revenue, with large revenue cash XX% million EBITDA will expense million to or of negative company continue XX.X Sales higher Adjusted TAM leverage] Free order negative to revenue. quarter year to was and of capture ago. negative mix XX% for team. immersive to XXXX. in our revenue a and between As in in drive of due positive revenue. part leaners. X% in Udemy which Net XXX XX:XX was total quarter to ago. negative improve with consumer the of as or a a We was costs total [ph] year XX% represented OpEx, General the ended our readiness. of negative shift of versus cost XX:XX total of of or and or to ago Adjusted was year negative sheet. of investments free versus Free negative XX% and year us X.X on negative consumer XX:XX of we impacted XX% in equivalents, than as to the holidays. were XX% XX% the cash month was Udemy the in of XX% million million to of Sales XXXX further key or while

basis monthly X% Looking XXXX. QX we QX approximately at a X.X versus the segments profit than consumer revenue, the in XX XX.X% gross approximately up million year were quarter, Consumer in and points In XX:XX higher or Udemy active was X% buyers, consumer revenue XX.X consumer XXX million up million, year-over-year. ago. of of individually, Business was

base our quarter, X.X learner consumer total XX and the leaners to million. million bringing we During business had new

Business marketplace can us. continue higher more is differentiator While provide see and Greg year-over-year. very are our Business at extremely which XX:XX what's mentioned, a growth up topics, remains that with The content XX:XX to retention and continues is that as point, To high of that leads that to we X,XXX XX:XX in variety content wide prior XX,XXX Udemy rate up to XX:XX huge month it pleased continues million Business We Udemy over Business important exceptional into significantly of year. Udemy the level million, the compelling an the to revenue quality a with year-over-year. healthy, engine QX XXX is exited quality broad, a pre-pandemic, XX% fuels up than quarter was ARR able instructors of publishing [indiscernible] XX% we consumer As net XX for and Udemy stabilize high access XX% dollar for we Business. the business our across content that the are organizations. a the local and courses Udemy offering was marketplace most customers, that XXX% curate than compared feeds to

exceed the Going forward, before Business should with revenue to to year. rapidly grow end the revenue Udemy consumer of expected continue

We excited this. about really are

or versus is costs revenue Business a Our XX.X million in Udemy million, ARR monthly growth scale the line active a basis or as XXXX XX.X% up year-over-year. roughly Business to year million fiscal point Udemy increases XX.X% X% Business direct profit due consumer at profit million, gross revenue million Business which was partnerships, our COVID For X% Fiscal is Business XXXX, Udemy XX:XX was Consumer was which as was consumer year revenue. lower XX:XX Business revenue. sales increase represents XXX gross XX.X% Udemy top revenue our This our best-in-class fiscal comps. XX:XX revenue dealt year-over-year towards down profit [indiscernible], XXX visibility. of continued such we up as have and or buyers, our We the for increase XXXX shift of million XX% had gross was Udemy from with in revenue, Udemy approximately of X.X was ago. XXX XXX largely support XXX year-over-year. channel.

We expect Looking XXX deliver to to between the over million of XX%. XX% X%. we margin adjusted XXX of quarter revenue an million EBITDA negative expect revenue expected first Business and negative XXXX, with year-over-year growth Udemy XX:XX to fiscal

into Udemy we XXX guidance Business by million XX% million XXXX, nature won’t representing between provides flat of expect provides forward, provide XXX with the a XX%. visibility of Business annual to model full-year the between SaaS XX% so segment here. with of greater us an contrast, and consumer going XX:XX negative are expect revenue we to In consumer the fiscal current X% predictability, wider EBITDA less we revenue confident million segment our to revenue Udemy XX:XX XXX million our While forecast adjusted year range. For are and million XXX market between margin down negative and revenue and sharing We we growth million year-over-year. XX% year-over-year, and XXX XXX revenue consumer with of

While we Udemy business still Our down and exceptional very learning the certain Business year-over-year, and countries stronger volatility to are we as experience. some experiencing consumer best to in is improve with even others provide is segment our customer mentioned XX:XX up our are satisfaction than build continuing Gregg ensure we the and expected. we offering

think the which impact for call point. in see year. cash the pandemic. with consumer is We We vantage as less economics country country by impact retention. subscriptions time, accordingly have XX:XX we we of focused our consumer to investment time, Business the Business, long-term At most in Udemy year, success a that marketing flow, increased we R&D, and We and a over for delivering increasing have our is our work In globe, of driving same cash we spend executing will we in for please that, Udemy while manage given which GMV are unique growing better much investing business are the questions. the see this areas strategy outcomes, able the are through burn our and and visibility. on rapidly the increase outsized expect increasing across open XX:XX unit consumer increases operator, remain can against and modest through the an XX:XX to And monetary

Operator

Oliver, from [Operator Baird. comes Instructions] first question you. Thank XX:XX Our Rob

is open. line Your

Rob Oliver

Good hear much. XX:XX okay? Great. guys Thank me very you Can you afternoon.

Sarah Blanchard

I’m Yes, clear. XX:XX

Rob Oliver

XX:XX Great. Thanks. Appreciate Great. it.

Sorry, and a had you a you, one follow-up Gregg for Sarah. noise little here. for background then I

the NRR is help logos of here So, because color expansion Business, on stabilizing are expansions a those little some for HR strong predominantly curious driven business, seeing you wondering bit I'm are I had of all those some nicely Udemy is would guys cylinders for UB, seeing IT for deals on new on follow-up on you're of XX:XX clearly, mentioned, an sort the guys you a or if on you and then those could Sarah? UB more courses be deals still the now? you of On expansions. great around the by, lands, great? really more firing just really logos And curation understand I'm UB, us it quick around like Gregg,

Gregg Coccari

XX:XX based. Yes Rob. very It's actually broad

So, we successfully we the tech into the sides We we're and come and both come house. of come side. there in HR into in selling side

company. both broad And based very sides it's so the of

impact And also Our than so content very be tends the expansions are broad. they're teams, but much broader that. to XX:XX

leadership all communication kinds have content. and We of learning content and content

into the works it almost every So person corporation. for

it's So, broad based a expansion.

Rob Oliver

XX:XX great Sarah, Okay, great. That's to hear. then And one for you.

the in personal an to drill you to don't the really, majority the really obvious but getting uncertain plan, going is be some environment. from want I of mentioned guidance, just consumer think side, revenue your here, caution, an UB business focus the Just on going strong to that's increasing is which down wanted the year, I on in to consumer I business and and be the distract the on the this subscription,

Just you my a own being of from was and guys, a offered but navigation all offered. being I plan, with sudden then now customer I am the not virtual

there are expanding very Thank update point be much. plan you the feels guys right traction and just and guys would and you price $XX early any whether great? it – wondering is out that reason if personal So, any

Sarah Blanchard

would Awesome, learner Rob. not I many yet. people Udemy XX:XX lucky you're the a because plan say are personal seeing

spoke as testing about. in mode We are we still

the [plan of for in we beta] [ph] year. first So, mode half the

what learning very on offering. subscription paths and and offerings learning in just packaging perspective, we're making there really compelling built-out not prices but successful but really is the are But so doing saw and investments it building a different Our we outcomes there's from price, market. platform, focused and a XX:XX the we're testing. in the you subscription subscription we're We pricing one see testing which

that on, we up second rollout offering out want so expect focused subscription the We what be the just have the rounding great that content, half. is masses roll don't we're and we until the and so to to it's to

Rob Oliver

helpful. Got guys much. XX:XX very Thank it. you Very

Operator

you. XX:XX Thank

next Terry from Tillman question Our comes of Truist.

line Your is open.

Unidentified Analyst

guys. the Hey so much Thanks taking here is Terry. for XX:XX This for question. on [indiscernible]

you that the new to there, help quarter, just any in machine consumer traction capabilities last stabilize think you're enhance was learning this mentioned retention seeing business, some functionality if you'd conversion incorporate around kind wondering I of business? I

Gregg Coccari

Yes. XX:XX

something in a AI So, lot we've it's and that our machine doing business. across learning, invested we’re that

in recommendations We it engine. and it in matching we're places. our use using use numerous it pricing we in So, and

So, seeing In matching wins the the the actually a increase quarter. we're people types there to courses we better we're though. did some by, We fourth doing in for. on saw looking a their of recommendations, have just rates limit conversion nice and match actually ability

Unidentified Analyst

and – being broader hear. hiring quarter XXX last so increased about Okay, to Udemy wondering then sequentially And just is you exit should much. headcount and environment we that the how's think a at for then that you about XX:XX think That's as a what Thanks great I level, the people, team was overall go like just the XXXX? mentioned just to as market follow-up, if I’m

Gregg Coccari

but go market go the plus to to with year. a that. We're are that it Yes, for. company last again to hiring about doing team plans grow going we finding, of And bit to work little successes difficult than that's to are We XX:XX XXX XX:XX the ended XX%, our grown up the well. people number. market We've customer about our market like kind very team, maybe environment, more a XX% is

company, culture. marketplace. based a we're in nice doing the We’re We've very a mission well

in biggest the So, hiring history I our December think actually we've month Business. of been was Udemy hiring,

Sarah Blanchard

XX:XX when hire XX just Yeah, the We December, salespeople. give were that. you accelerators] getting overall really tough expecting, in to were to given to well fourth Business which on their a in able color was quarter their [ph]. what Joe [in little especially people Udemy we hire it's In above

with see. pleased So, what we're we

traction in both our We and continue to across see a lot within teams. R&D Business hiring of Udemy

right. So, Gregg’s I think

out. us that company the going it's the mission, think belief helps I and this it’s in think I culture, the is where really

Unidentified Analyst

helpful quantitative Appreciate color. it. Really XX:XX

Sarah Blanchard

question XX:XX for Thanks the Joe.

Operator

Thank XX:XX you.

of question next Our from comes JP Sterling Morgan. Auty

is open. line Your

Unidentified Analyst

is [Drew] on [ph] XX:XX for Hey, Sterling. this

provide than softer any on could currently? impacts seeing occurred what expected some You there from referenced seasonality month, you're that more color December the you and

Gregg Coccari

consumer some is quite going is traffic XX:XX it other rapidly countries some of are, and the words and is Yes, the volatile down. growing market in

so it in January. a just in saw we December, back little volatility, And actually came

So came our traffic. about environment, traffic closing down but remained unique type are January, visitors. countries, are of the closing our XX:XX opening visitors. mean, with I weather up. they're So having certain XX million it stabilized consumer as But has a are happy pandemic XX XX that into it's very of overall where unique over to countries down, We million we we're volatile pandemic million to market related still just certain again, it's in

than into a at stabilized we're still much we've three of going yet, year pandemic. bigger So, we But higher business had is it a volatile that before. the given

Sarah Blanchard

diversified very as are, XX:XX to I said, globally. we're is for Gregg us add that, think to we

where can some countries see good allocate to So, we countries, stable, we're in countries lower power declined A able we're are see we're the back spend lower can the we continue spend to purchasing we're seeing and are up. LTV good. countries XX:XX through We growth that our marketing in of where of that sort direct conversion lot pull bit. or a are kind we conversions, seeing lean work the of accordingly as seeing we're that this. of that going but is our So, we managing

Unidentified Analyst

you. it. Okay, XX:XX Thank got

Sarah Blanchard

XX:XX Thanks.

Operator

Thank you. XX:XX

Next question of Blair. William comes from Stephen Sheldon

open. line Your is

Stephen Sheldon

to strength XX:XX as talent I have guess, solutions. shortage you learning hire up in what maybe and segment. as they'd they and enterprise meant thanks. budgets, as of for what's level urgency their upscaling across Hey, on what going corporate in business to seen existing provide demand this industries externally? for can't they the waiver trends the Curious environment like or maybe are in opportunities Congrats employees your much the

Gregg Coccari

now. right a home, enterprise good is expanding within home, everybody XX:XX Yes, [indiscernible] The everybody's a People we in are of very business. the training lot market person. working from seeing

decelerating is across enterprises. transformation digital the the So, all

of a engagement have there time great time. People right are good so, XX:XX resignation. - and a people the worried now. sense employee leaving, about is is and are getting very, is market solution right very at worried but particularly a good We – market And a there right it's are at enterprise a urgency. about so, the we it's in retention we're the have bigger and the There's So business, we right place think with a We think great solution. the good. the budgets particularly

Stephen Sheldon

Thank Great. XX:XX you.

Operator

XX:XX Thank you.

Ryan MacDonald & Needham next Our Company. of comes from question

open. Your line is

Ryan MacDonald

Gregg, years a in expansion questions. you've the about past Thanks remaining over XX:XX for priority about a here. taking international talked bit few Hi. next the for Udemy quite top my

and And differs the in curious in that the which be you're countries versus Thanks. investment? incremental I'd side? focusing drive you're side Given, consumer based you're to on on seeing what enterprise what seeing how prioritizing how maybe

Gregg Coccari

are working the company. we been that's and expanding populations, partnerships, Africa which consumed playbook, we thanks obviously for and global investments was heavily question. the start now a have then high Indonesia, in a local in in we Sub-Sahara on most [ad market but U.S. So investing then local [ph] we're bring globe Yes, business we to local for so in into been working working put do and and XX:XX our across and XX:XX content local the on we've content example, building where there. so look We've In do marketing somebody and partner is depending and but is, we our being we're outside payments, consumer China we market we're that with playbook More Asia, we do developing we're and there's now, running there. go always playbook we're very revenue was And our currencies, a there different the we XX% tech] We're there. there. right and various MultiChoice, that the the start of Korea then And with country, large teams. through moved running into XX:XX we than it

different And the globe as in directions. So, Udemy it's across and as far broad very of lot we're expanding Business, based. we are expanding

North to that Latin are built America. our market are building that, building built We our we America. build-out we to continuing started So, but we're next, and EMEA in [indiscernible] out out we go teams, now we in

building team. are we global out go So, market a to

Ryan MacDonald

for, I as think Maybe Sarah That's just XX:XX helpful. follow-up as a well. this and is

in coming your of prepared remarks Sarah gross get benefit you slight I margin think a sales from partnerships you the from that mentioned on mix Udemy Business there.

about or to try in or market new directly expansion the with still? you being preference as a think of Udemy Business to choice there UB to countries, So, prioritization preferred go go partners continued is into Thanks.

Sarah Blanchard

XX:XX in best. can for country, that partner sort question. whether a great our best, we That's to or ourselves, whether market strategy it really know we comparison us of to very very It's a the can we minor and Ryan. benefit right minor the decision making is bring do go the

So, that I the we benefit small get supersedes in think margin. gross

Ryan MacDonald

again. helpful. Super XX:XX Thanks

Sarah Blanchard

Thank XX:XX you.

Operator

XX:XX Thank you.

next Our Jefferies. from comes Brent of question Thill

is line open. Your

Unidentified Analyst

and talk or but XX:XX dynamic Hi on you one competitive [indiscernible] if we're is I'll comps going and start talk taking guys. rather thing curious back people seeing, really are to what sorry if is just follow-up could this Just for missed you and a curious just a With lapping Thanks Brent. this, David – or it if on at super have is tough COVID a the side. behavior? I'd This outside? is consumer consumer this questions. for all could the with competitive already

Gregg Coccari

of for we're fatigue been markets There seeing seeing on we call the visitors. some [indiscernible] in in XX in world it been the markets, million the that – have growing that – So, rapidly. two almost seeing we And years. is down. unique online markets consumer a Zoom but traffic is then not learning competitive is It's conversely We're is website for – other certain a total going It traffic markets, have them any XX:XX behavior. on overall certain markets XX:XX with traffic issue. the we're most

competitive see more versus anybody it pandemic else. global than really, data we than anybody So, And a more the is else absolutely issue and it’s issue.

Unidentified Analyst

you color. XX:XX follow-up there is areas if that would that just can for the Street end? came that as in prioritizing – guys I'm Got on adjusted Thanks focusing And on below is it. too that EBITDA investments? provide are you guidance curious [street] some the on a being or curious [ph], high, then that, color And

Sarah Blanchard

XX:XX Yeah.

I you've our Business it continues seen to performance, So, our Udemy exceed continues to and outperform. expectations think

expansion of our further go-to-market global we're accelerating team. so, And the

we that XX:XX frankly, So, space. we hiring edges in better anywhere that. scale expected. close getting We We’ve have got XX% the have we're XX to and a unheard of growth learner gone NPS at the has feeling of not and of than are much the

in it consumer growing enterprise you the hard lower general, Business. And we're than really So, a EBITDA business business it about whole, think our leaning you Udemy does know is fast, on a when margin the business. have as really

little I consumer bit, so, the we're being with And think a that's guidance down experiencing. what

Unidentified Analyst

guys. Thanks Appreciate it. Great. XX:XX

Operator

you. Thank XX:XX

Our next question comes from Jason Celino of KeyBanc.

line open. is Your

Jason Celino

Hey Thanks. Gregg. alright? you Great. Sarah. XX:XX hear me Hey, Can

Gregg Coccari

can. we Yes, XX:XX

Jason Celino

XX:XX Perfect.

best to upcoming the for the attracting $X.X hear million who position instructors instructors, we are growth year? but over $X So, million think about last the on it's for the nice and when year, how stats is that

Gregg Coccari

up. broke didn't You that question. I XX:XX hear

Jason Celino

It is attracting hiring from it's standpoint? like to wanted top environment, instructors about the XX:XX I it seems tough a Udemy. ask how instructor So, traction to but

Gregg Coccari

XX:XX Yes.

a at courses our record is X,XX levels. that finding over bringing publishing in publishing We're top people. we're We're So, month.

just top months. fact, from In of a instructors last brought we in in competitor two the couple

that are they monetize And we're [indiscernible]. this place they over know that million and finding new the for And – all we can because fact make the In instructors very payments want. going money getting well no economy. be trouble creator our are we and [publishments] are having come a of year we the instructor where so, can want getting that $XXX in to instructors, we [ph] is they XX:XX they and this

And so, we work very with well them.

very that changed all. at So been It's not robust. has

Jason Celino

the it conversion for at down, implied between like when QX, it think crunch year? buyers And monthly you looks little top speak funnel. we Perfect. Okay. for can maybe the then we this a with it When bit for average least XXXX, the and the consumer directionally but XX:XX the guidance the business, what about is stabilized of

Sarah Blanchard

Yes. XX:XX

of lot expecting growth think a half, the not first Jason, think I monthly we're in average in I buyers. So,

half, from the time what do from more to looking retention over back through and average the monthly versus more buyers. drive trying through in to efforts and we're personalization really buyers think growth our I back is LTV coming to get subscriptions

Jason Celino

excellent. quite That's Okay, XX:XX you. helpful. Thank

Sarah Blanchard

XX:XX Thanks, Jason.

Operator

you. Thank XX:XX

Our Morgan Josh next question comes Stanley. Baer, from

open. is line Your

Josh Baer

great how on around Pro Thanks And XX:XX just investments features some of Pro? Udemy else What to Business about and Udemy and working asking else hear tie EBITDA does it's making? and progress the are for question. the enterprises wondering the what guidance labs. Udemy are the you're this assessments I'm benchmark for you and that in Great. into specifically

Gregg Coccari

building question. XX:XX Yes, we're the Udemy for Pro, verticals. multiple up thank you

out So, web Google we Cloud and and building a development and AWS we’re Azure. with started

so every things why side, company are So, asked leadership reason various we're being the the and And we verticals other that the are leadership that from we're those more cohort we being needs to On training was CorpU build something asked more companies. asked and training. for of the for that in basis. XX:XX bought different that being –

learning. other out verticals, up build we’re a leadership, and out going So, and cohort We're CorpU. building ramping starting with other based to verticals that we're then we're

Sarah Blanchard

see just side the continue the to we're expectations XX:XX sales year our accelerating on perspective, were our revenue taking we expecting, UB investment that Udemy because we're Business investment an that R&D and it's traction for what really side, in from Josh marketing we up. is and is, this And

Josh Baer

you. Okay. great. That's XX:XX Thank

Sarah Blanchard

XX:XX you. Thank

Operator

you. Thank XX:XX

comes of Our Bank next America. from Schindler of Nat question

Your open. line is

Nat Schindler

for you Thank guys. my Hi Yes. taking XX:XX question.

and about So, your a I cycling you've break XX% plus in X.X – seasonality, QX Remember, and a been kind Udemy the you're to about Business little been kind been have of over over talk quarter and up I X said been guidance? seeing adding of and just from and effect basically fully and the quarters, know you it's this year year, this up, two you've is earlier you a million is from wanted last you in and layering bit out. million what didn’t your layering guide, it little QX, its last in but

on sort you in when or of mean customers of XX% Is should that means step a aware it, flowed when any this we down might it pretty seasonality there XQ that on how big So, through? that win and at be but the business layering. revenue work should

Sarah Blanchard

Nat. in Great focus had our to QX. to then biggest do great you and going Like see you as continue that to seasonality again and enterprise quarter is of SaaS Yes, We question December, great our we happen amount the QX throughout tend in is business. year. to many stabilization there do have had tend companies, grow QX. in We XX:XX the a

So, as I SaaS think cycle hard as in out year, We The buying [indiscernible] that but work businesses think secret enterprises. nothing we yet any normal. figured is QX the from XX:XX it throughout that's enterprise can most really a to even haven't out.

Nat Schindler

because But throughout QX? beginning in XX:XX QX? and in quarters October QX came They lot real wouldn't that full are worth revenue now customers in they in of mean come on the in customers didn’t a those QX a new of growth QX of thus layering

Sarah Blanchard

Yes. XX:XX

layered out of a we So, customers. lot

on I own. a lot something people plan team are size who is the think customer just have we into of coming their also

say logo average is size And so ARR quarter that every to per we different going can our be will trend I deal rate customers growing customers. the that continue. and expect attributed that to growth also do of is type up

Nat Schindler

offerings of kind have much? have that down down happens? going Business What sometimes than Udemy say for longer-term customers more on, asking Do on strategically. that Totally happened? left they it this and a competitive is have really Udemy what's just they or need still did or XX:XX the different cut they Okay. just as it cut Why about their If don't – going Business, left, I’m on on basis spend? look what spend –

Gregg Coccari

our retention much a thousand that over corporations So, on XX:XX is higher are employees.

the and the the why bigger of retention. There’s people longer reasons corporations, the lots higher So, stay, they the net leave.

business in of small and huge a churn We that. – and so there's a happens that have lot segment

they're always these longer accounts customers would to there plan, more X have less We churn team not XX to It’s small seats is part. very going the get on biggest churn. but we do things. variety reasons. and have just Competition there’s either part doing a decided have But in, or there, all there's businesses are come it, a and that so wide be XX:XX other managed of of well

your…? – not it's Sarah, what’s So,

Sarah Blanchard

with above our I all larger want thing well some XXX%. our XX:XX see Yeah. dollar one customers budget is with but issues. mean, net The is, customer for mention across it's it, I segments, our retention to do we'll XXX% of

Udemy. larger every as supporting and business goals while, aligning churn much to in but to them tend just their a XX:XX not that once our there, and partnering customer in teams So, customers see have what the We we are with with reasons. tend with bunch not on of competition often sometimes we're success not

Nat Schindler

the Udemy figures sense Makes give a is out one employees the Business just round to customers versus XX:XX total? to what last revenue and over if from customers? smaller just clarify of you don't percentage thousand In thing, want

Sarah Blanchard

a pretty It's more. we good to give exact really XX:XX but an and more have a portion. customers large I of don’t want out lot number,

remarks, in I we had think $X prepared deal. over first you that our probably our million. just heard That’s

coming from growing ARR customers of amount is the with price faster. size and So, our

Nat Schindler

you. Thank sense. Makes XX:XX

Operator

Coccari showing to close to this no I'd at you. time. Gregg Thank to further call XX:XX like turn over back I'm call. the the questions

Gregg Coccari

I I appreciate to just XX:XX time want questions. looking at Udemy. nice for very everybody their you asking thank and

and I business. that marketplace, in that seeing the an We we have next quarters. our opportunity excited over hope about the We be few are very think you'll extraordinary

Operator

conference. Thank for participating. Ladies XX:XX you conclude all gentlemen, does and this Thank you. today's

now may Goodbye. You great Have day. disconnect. a

Udemy (UDMY) 10 Feb 222021 Q4 Earnings call transcript