Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, thank you for standing-by. And welcome to Coursera's Second Quarter 2023 Earnings Call. [Operator Instructions]

I'd like to turn the call over to Cam Carey, Head of Investor Relations. Mr. begin. may you Carey,

Cam Carey

thank me joining Coursera's today Ken Financial Officer; and conference Chief QX call. and Officer. Chief our With is Hahn, you everyone, our for earnings Executive Hi, Jeff Maggioncalda,

will we remarks prepared their open call for the questions. Following

available. was is financial is our and our versions being website simultaneously Our Relations market investor.coursera.com at prepared on after supplemental of tables webcast release close issued remarks slides press where Investor located including and posted this are and call where

call, present non-GAAP our financial which to note, otherwise Please comparable will this and measures. which distributed A found percentages are year-over-year growth directly supplemental change all unless non-GAAP During GAAP and release are be and we both most today's Relations can reconciliation measures, specified. GAAP refer through available Investor website. press presentation, public in to of measure, the the

made our the statements economic advantages industry partner relationships; but intentions. regarding statements impacts all in results and forward-looking our and to relating are trends content the opportunities, These Additionally, and educational statements and mission, environment; outlook, and program current events beliefs. anticipated our future plans the benefits and our platform, current uncertainties this and our our share to; affecting statements during priorities; cash and of not limited allocation; forward-looking and on future based and potential ecosystem, strategy thereof; repurchase call capital expectations and anticipated and are business model, include

release, undue are investors or of and materials. them. statements. and results our obligation performance should to our and to projections assume no discussed a on filings due events update plans not forward-looking number supplemental materially press risks differ statements uncertainties future not We place from forward-looking Actual of reliance in These guarantees and could SEC

And Jeff. with it like to over I'd that, turn to

Jeff Maggioncalda

delivered momentum We had appreciate growth XX% prior We in raising is revenue us and on strong second second segments. adjusted afternoon good today. with provide year. year. with navigate welcomed year. outlook half learners our We Coursera revenue to of we're that EBITDA of us as platform, remains changed that you today the diversified platform. quarter a pleased the to thing initiatives new The confidence to that enter in growth the We Thanks, ability our share our Cam, for dynamic, double-digit and X.X joining environment several over and everyone. we each I'm grew has macro but key one given our our not the million

global rapidly advance can that has the And branded and job been demand spending the provide seeing strong to the them for structural trends workforce. created a despite relevant long-term driving prominence more their world strategic to entry-level citizens, with to Coursera switch transform world's best known In a from a companies. training to see We environment, business the we asset lives. relevant institutions in make changing collaboration are that the their looking continue as individuals start, continues to around particular, or credentials our Professional and grow. skills, destination are Coursera's Certificates, their for Learners careers, looking coming with in students that proving skills employees, in are sustainable. and corporate our challenges believe pathways

share a from of digital like our skills to transformation, several For trends, findings key recent higher today's World Forum Economic as well. views these I'd discuss and call, I education. will on transformation development, report latest the

economies. a than Future edition XX report impact Report. or across of on was of data. In XX contributor companies over WEF skills focuses published global and The perspectives of Jobs their and labor individuals than June, brings like of of World Indeed technology years. XXX latest the for base the analysis disruptions, global the reveals more skilling adoption the and the outlook Coursera scale learner to jobs alongside due our together Economic and LinkedIn data the more market key Forum The million employing next companies the current five

digital the our of an rate The we're compared automation and trend, now to technology, start clear every change. what Let's forces general adoption but have in unprecedented of of been transformation transformation. the technologies, of society, historical globalization, purpose with that first experiencing our institution it's is accelerating

million like ChatGPT. computing it dramatically, from witnessing to Today time we're telephone, the with internet with example, innovations and just electricity, for matter of years decades XXX mobile a automobile to several months this the horizon took and global compress For reach users. the

general adoption increased skills and the worker a We work. amongst believe we and business key highlights technology Not reinforces transformation, be as will next address report WEF of surprisingly, and it shift profoundly that driver technological AI major will how the learn, the the live, businesses. their a urgency also of that purpose to representing technology change looking companies gap between an needs future

to me second with the companies in Six major governments And reflected the in associate individual skills strategies, leads the companies fastest this upskilling XX% report next in-demand five Employers or be in are faced Several skills globally. that And increasing that workers before estimate workers’ require the see over careers. key disrupted of years. trend, skill development. challenges by in will XX findings express XXXX. will the corporate and not the training commonly sets the skilling learners in importance always skills

And these thinking, well skills, and influence, cognitive I AI example, important analytical like technical equally social thinking directly seen as leadership as hear customers. big in challenges our are creative and skills as from as For and data.

than months, countries, nine leaders, visited officials, XX XX from I’ve business government more more campus and than presidents. in cities, hearing past the Over

capabilities change the of It harness and and create, combination existing greater disruption, and agility human they future organizational struggle into technologies. of new advantage technical is to these and a building order workforce. institutions navigate opportunities on emphasis As the take in requires a of there skills to the

change hallmarks do transformation to the believe are employment. education. will We business, this report businesses WEF of education skills of XX% institutions, pace And coaching, future driving all leaders, the see higher is the thinking, of connect leads on as and that to industry. exceptionally of universities government, incentives, the an academic of fast-changing effective collaboration intervention employer this me between industry this well. firing of many lack and that experience tax to and universities talent This third And ahead of traditional and other to pace for meet changes collaboration, and and that’s the institutions digital laws. governments transformation, seeking and findings of higher practices, require the at institutional the the needs world. between demands. skills funding like colleges to the Adapting flexibility industry, immigration digital and ranks to our hiring to landscape, trend available accelerated university community to new and methods Critical pace evolving a connection But education

nearly launching more quarter, to our and Republic system. are to drive Education faculty implementation its I Last when Higher of uplevel using public provide and have up, XXX,XXX Ministry speed amassing is what courses. completing spending of hours the Since than and higher together. highlighted working institutions national partnership enrollments, we March, education the on students learning, Coursera XX,XXX in XX,XXX update scale can with XX,XXX Science Kazakhstan, these signed and where the of And an wanted

types rapidly include skills, courses a innovation programming leadership, communication. and popular that Coursera’s of most the well as physics, and three-sided like the This the combination as and a changing of blueprint like promise for our human to platform, and keep powerful provide with technical be is required examples entrepreneurship, of pace will world. And these

We a trusted of assets credentials. branded pursue broad our catalog who of to our and are content partnerships advantages, these and created like include able because which and have partners educator leading strategic platform

advancements Our global and that individuals data, as reach across technology, as includes platform. and our and institutions, which we businesses, leverage well our to governments, campuses, AI

cover progress our each. for recent let’s Now,

First, our can to partners. platform, valuable focus institutions solutions, Hiring admissions quality advancements capable will Solutions, career look at credit around differentiated recommendations, American because verification, build a projects, Coursera And of value and believe using educator or in-demand Council in hands-on where on our technology performance-based producing college the and with for content that unlock learners. education and branded our career as our our scale, like able accuracy. of and of are content integrity, centers play ecosystem in our for to are like And credentials degrees. pathways ID engine from ACE, we that role opportunities strategic catalog, global Education, trusted The open machines skills academic increasingly content a world We around learners

many trusted Our created attracted of universities our are mission. by than experts, which combination to more and catalog XXX for a reasons, including is Coursera industry

expand continue recent on of being record brands. institutions. Our of our global I’d to world’s partners to trusted Professional individuals updates like growing distribution rapidly the entry-level catalog, These with start best And our Certificates. of and selection and a steward our to

In Call Health, Health, consulting from Service, engineering also from Cybersecurity Microsoft. Roles QX, customer from Center Power introduced also from Customer from XX Human include from Akamai, CVS existing Analyst from Associate new BI entry-level HR Certification network Akamai, Resource we Data partners. Certificates from new and Institute. Customer Professional Retail new and and Service also CVS partners Microsoft from Analyst, support,

digital from segment. IT across college Enterprise Google, additional launched And of a upgrade forge a begin, Project and Cybersecurity Project and leveraged be most as successful of Developer, governments every our pathways and new of as Professional to to all partners, systems platform. from our campuses earliest enable Coursera They on entire to to IBM. education in segment The Consumer also our Certificates our student are our entry-level from They two job in higher credit in We Degrees Manager, including Front-end allow Manager, and segment. towards, roles well segment. earn they degree jobs well-paying able

And cohorts school Colombia. working University many announced artificial starting well Illinois from Now, these we QX, programs from quarter, from pathway India of bachelor's welcome full intelligence programs in in of their Indian accessible and first from for pathway programs, in the take discuss of of Coursera program Boulder, as los as universities, will Guwahati, master's these top-tier two make degree de of international student of Colorado to the in ten and a program Tech, A new capabilities new a engineering degrees, Universidad Technology let’s which this Andes including we adults. Last degrees Several the Ball including well-suited Degrees. Institute advantage announced State, fall.

focused to AI in been our courses, industry in artificial meet to and leading generative the partners, university projects, Google degrees partners educator content. both for learning Vanderbilt intelligence, addition This includes have DeepLearning.AI, Cloud, on creating and demand new like Finally, specializations University. and

more. to in hundreds courses that broadly, algebra, equip Our help more existing linear skills and new like AI content of learning, supplements with learners Python, machine work

on update an our catalog that’s partners. and So educator

to move Learner to by let’s regions. percentage the we the major Now advantage, learner end of million our June. new with X.X all reach platform. growth learners, growing of QX, our registered In added double-digit increases across global base our second broad-based, be million to continues global XXX

number also recent with Paid X,XXX, nearly in of government by driven We campus Enterprise grew Customers verticals. and to the momentum our additions

Coach subscribers like the with to which generative partners It practice ongoing and I’d April, the We Plus early receive ask grounded be I’d And launched and to with continue to across and designed powered a when quick personalized product resources our innovation in some efforts is Coach like is answers, partner, Coursera. evaluations explanations advantage, to get in the content. expert provide learners and we from Finally, Coursera updates AI. Conference examples video And Coursera trusted, in a content our better on during At and summaries third millions their on beta understand and submissions, questions. Coursera from personalized to version is on the platform. and Coach. allow a feedback paired excited authoritative generative start AI quarter specific our receive learning context-relevant lecture unveiled to questions discover feedback virtual technologies concept. about our of of these our by to

enhanced exploring. personalization AI allows learners plugin reimagining Coursera personalized in are for credentials subject an the of Additionally, interested the the initiatives experience. discovery ChatGPT generative catalog. on a recommended one identify across we the or the they’re Coursera to discovery example and GPT-X counselor, academic to on based we content career and introduced field plugin the says using and ChatGPT learner working related Like It’s

machine our Finally, we continue initiative. to on progress make learning translation

and courses milestone in reminder, technology is believe to with the a trusted translation around producing X,XXX subtitle dramatically what our learners to the the first be As full We content world’s quarter, translations that education, begin scale, matter anywhere coming In learners QX, we speak. world seven should for they time reduce including the to leading world. will the experts the strategy cost in to high-quality, the we roll high-quality at In out and localization. no use to different from course accessible delivered of brands, languages. language

wrap you priorities To remind me of up opening several my in are remarks, focused that let we ahead. the years on key

broadening and support roles, new Degree languages, catalog our Certificates, recommendations including partners, we are First, to entry-level of pathways. credit Professional

Second, credit we working count and are adults, especially college and that content programs, unique our the needs as to launching Degree clear microcredentials so can tailored sourcing pathways, and those of affordability, open including degrees. industry new flexibility, towards meet

deepening needs are in including our our our for Enterprise AI while to across fast-changing the use business, focused leverage campus educators, driving over and seeking customers. government, And scale their more to advantages, environment. customers, and of technologies segment we we address and this benefit opportunity time, the Third, growing learners, are on

to over go like Ken. Ken, now turn please ahead. it to I’d

Ken Hahn

Thanks, Jeff, and good afternoon everyone.

second job-relevant millions strong credentials results to differentiated world. value branded, our learners the demonstrate of around Our of quarter the

continue company, through providing the us and learning ability our while we benefit model, other channels. multiple That deliver segments we diversified As model is with including grow, from to high-quality helping leverage assets each a our platform also to financial competitive operational leverage. three produce growth

strength double-digit million, segments, total all in of In from across ago. particular revenue QX, of driven was Growth Consumer. was we up our year XX% a generated with three $XXX.X which by increases

I unless for the that measures, the our remainder discuss and note non-GAAP call, I financial outlook, review business as of will noted. performance our Please otherwise

driving in line with operating expenses, you beginning-of-year to profit Additionally, comparisons earnings our like largest Cutting associated bottom-line gross our discussed that would industry we through in calls. I statement in to items year-over-year, are that remind our strong income with particularly thoroughly two results, P&L continue EBITDA extension the and shift geography performance. year-over-year reflect the which shift contract have partner, prior we the in

percentage total revenue increased compared as a of OpEx of ago Cost revenue, by year results. to points points XX decreased XX while

XXXX we in will As minute, we raising are target. EBITDA discuss annual margin a our

year from was million, slightly gross quarter, basis down ago, on period. For gross a $XX.X points prior the second which profit up the margin, XX% a year was a and XX dollar from

from prior the XX% down operating XX of was $XX.X expense or Total million, revenue, points in XX% year.

general million, revenue, item X of of components was and total OpEx: X.X% Looking And XX% marketing XX%. down was X of revenue. points at XX%. administrative revenue, down from Net X and was adjusted expense X.X% a represented of Sales from the P&L and of and line revenue, development or EBITDA down XX%. of revenue, from of approximately points expense Research expense was $XXX,XXX, loss $X.X points or XX% loss XX%

an performance EBITDA amendment discipline, with partner. of educator operating overall adjusted to contract benefit due associated combination expense Our with was strength, revenue a and better-than-anticipated one-time factors, million $X.X a a including

growth We pleased our our and multiple each while and including the with on have of years, a in to and initiatives I leverage, track scale leverage demonstrating am execute model. with operating invest record past five ability also of growth delivering

unrestricted ended cash, Turning sheet. debt. approximately $X.X of and to We cash a quarter, cash year with and cash a performance of quarter million Free was marketable million during with $XX.X million compared the of securities, ago. flow use $XXX to the no use balance a equivalents, the

shareholder repurchase bought the amount, our during for quarter place am to and happy million back direct a second from commissions. quarter, equity, dilution confidence total of program, of shares to X.X regards we price business in at we our report announced the $XX to With including year. that reduce that value in the $XX.XX we share an our and $XX.X I impact last designed grants one-time a million, reflection talent The authorization dollars was per million as of share, average program repurchase the prior of issued on

In in both we unchanged. remain focuses allocation right capital our early, the win capital belief on resilience context enable on cash, organic is We long-term the to our hold and by large investments strong which our and in market of position we management assets growth views a our markets, Importantly, vision have balance asset the that sheet. benefit that provided our for of to execute us the dear, strategic growth our and shareholders. our on will believe optionality considerable our our

Next, let’s on for year from the discuss, results in Consumer of progress $XX up industry-partner Professional million, demand revenue strong our entry-level, our more and detail, the was XX% in financial each prior Certificates. segments.

It including new well our industry top-of-funnel we As of created million our from brands. learners, learning our to new from certificates and seeing also credentials strategic learners X.X of job-relevant the brands. believe titles most additional benefits Coursera Jeff of Consumer categories our registered performance. traffic, discussed, as are ultimately, XX value the job QX. world-class we And several We new distinguishes which to partners, quarter, emphasizes by this it as introduced in offerings our successful platform, new coming focus, our with enhances

profit was year revenue, Consumer XX% gross the of impact XX% mentioned partner or Segment reflecting a compared of $XX.X to contract the extension ago, previously. industry million,

in customers vertical enterprise X,XXX, during by a of for increasing XX% customers And ago pressure quarter. to benefit Coursera in was $XX.X X the revenue million, ago. our higher $XX.X percentage points ongoing gross a number enterprise rate Moving our contract XX%, net had the continued our The Enterprise due with of segment for business, verticals. our to margin amendment than growth expected increased was partners, slightly one from retention XX% up of a Business was and quarter. Enterprise. or effect government, revenue, a year paid Enterprise year with for which profit was million, of to campus Segment the paid educator from on one-time our XX% of which up Enterprise total

navigate continued budgets uncertainty. We in customers spending exercise they to amidst caution corporate their as learning macroeconomic see priorities tighter

Degrees year was finally, ago from to a year Degrees number students ago increased a on XX,XXX. revenue up from grew of degrees The segment. our XX% total student And enrollments. $XX.X million, X%

As a the scale. unique We that our content progress gross early like partners platform’s segment Degrees momentum cost of remain the margin and in there reminder, by the and encouraged so was is segment, Degrees Boulder in capabilities to Colorado XXX% from our of revenue. no programs University attributable leverage Degrees

In our of the affordable, prospective required for education college model welcoming look several fall. newly-sourced, a is it cohorts relevant forward discussions and with to is current for these and clear and accessible, more universities, degrees, first we of pathway-focused starting programs this student

onto our financial outlook. Now,

in range For be QX million an of the $XX to range EBITDA we to $XXX of are loss expecting to $XXX million. million in million and the revenue adjusted $X

full $XXX outlook for midpoint the at For we be $XXX revenue adjusted and now increasing We are of to million the anticipate our the growth XXXX, of both XX% approximately representing million, in range to year revenue EBITDA. range.

outlook revenue in driven million increased prior $XX of segment. year increased year, continue and our start by demand confidence quarter, by the the we full since has our Consumer durable the $XX since Our see million the in to

now For million revenue of $XX the a the of loss adjusted million, negative $XX adjusted guidance or margin EBITDA EBITDA we ranges. a and X.X% at EBITDA, are expecting to midpoint

on year target our consistent within as that business. to the the of know, at of the you beginning annual company, based to pre-public set practice, maximize and EBITDA work growth margin a trajectory an plan public both As and the is

full-year and of this top-line guidance is points change a efficiency, in for improvement performance us, driven margin. So, basis a revised adjusted by notable XXX EBITDA for both operating

profitability to commitments the in Furthermore, the this reiterate our target at year. in I Day for we a March made of higher to year, addition Investor want

positive breakeven be full in We EBITDA fourth the to year and this quarter expect year XXXX. of EBITDA to for be

To summarize.

three-sided a our are with diversified operating growth multiple We platform. company, levers across

and built flexibility We us that this financial large a with our strategic foundation have growth and and lead are scale increased And to will delivering the leverage. early markets. we afford resilience strong

for to will Jeff comments. call back now I the turn closing

Jeff Maggioncalda

Thanks, Ken.

of Our our also business, mission but this deeply case in customers. rooted for many is the our is

online a partnership of To largest like today’s Coursera over for our to to credentials provides BNP employees, families, remarks, policy value help leading as relationship Business insurance job insurance wrap to all example as has potential. Paribas an a and customers. had million their for skills America. one June, them also protects across where of exciting a not company, services only but their BNP to I’d new well with since education we Cardif, uses the necessary customers Paribas Cardif Cardif share agreement financial XXXX. up education access with earning a opportunities partnership now provide Paribas expanded as In increase services. Latin our Their and with includes BNP access multi-year an Coursera X insurance customers, digital to and enhancement Coursera

are trusted It brands. example access a global their employers, brands, strategy increasingly and the And playing businesses is enablers our as role as to needs education economies; a as future how is and changing global of another prominent quality our their to of workforce. ecosystem, and of enhance of the as to seeing educators, an their key offerings as reputation the Coursera steward rapidly address

fulfilling anywhere with In on world. our can focused opportunity we rise collaboration talent, in from mission so that the our and customers, are

you. Session the Question-and-Answer questions. Thank call open let’s for Now,

Operator

question [Operator Instructions] Stanley. with first of our line the from Morgan now We'll take Josh Baer

Josh Baer

strength able Certificates more hoping in seeing AI-related of and look like if sales you're quantify at certificates? the type driven any way contribution from on enrollments it you the launched, in a by some then existing could programs? also Consumer for to And year. in any sense rest same-store courses Professional of the quarter for that for the also really commentary was of your I you're in the Is and new in hone the wondering

Jeff Maggioncalda

Google Certificate for Coursera the partners but Certificates from think is, Josh, in three that that also Jeff. like of on QX. It's Microsoft. broadly on They in Professional quantity Analyst One put in like this from categories. new entry-level QX, the I first a of and side Hey on things Cybersecurity number also came came is Yes. consumer jobs certificates new out content their

definitely content new So is of that. part a

see from existing as same-store But to your growth do titles point, we around sales, good well.

higher just it's So demand it's existing marketing. is effectiveness which of apparently too, for new another also There's content. paid not piece content,

see think environment we it's it's do offering. marketing, this seem paid this pretty So And brands, job but ton this a this just the return of I with in better don't we I in it's People the product I a interested -- in stuff. think to think orientation. seem

credentials. it's think I the

to a I a think of the I environment. the been lot including credit eight of it's in we've features the plurality are degree. It's last, building just pathways flexibility, the like a resonating it's things about this these affordability. certificates, over that mean, years, whatever

finally often environment, I the the to point, is that then And that college countercyclical. sort education of say think people

I now, of or well. unemployment new might the means lot not see goes as more not a think up. college whether be enrollments up. unemployment degree. think job And right It cyclicality that -- the We're higher is it usually college this you opportunities I but counter seeing degrees for case when do in going

had. career of new couldn't to resonating have skills a way that career you have I pathway these the those that, just a as get so And think to where kind in new don't are into you just a are Professional if Certificates the opportunities, I do and to otherwise opportunity credentials

about say future? see out the it's playing different think of positive. the things how in it's economics the bunch of you a factors, of but it these Ken, board that I or across you'd feeling So kind anything pretty

Ken Hahn

add. to incremental Nothing Yes.

said. the environment, look like in and model pretty they growth others this all about the It's said. well as you is Now

Josh Baer

type strong. M&A fit you and your your in I thinking review one your into assets your hoping just was more, potentially could If balance sneak it's could philosophy I about what could strategy, Thanks. very sheet, platform? of

Jeff Maggioncalda

we've in I front Historically, strategic as and right as that limited us, flexibility you know Josh, powder We dry the are for having of pretty important. opportunity that right activity. the with M&A had these agree, is Sure. believe huge markets, assets the do markets, in

expensive have continued people with we've environment, front coming aware end, as the assets look, previous are down. been things On the are to

in today We development as some remain continue doing do investments corporate deals. look We're to group. within active. partnerships that results we some And a at various

right revenue. at price we not philosophically, we're in found haven't -- things to at the anything the looked bolt for on We asset. more looking right But

on think I not actually leverage product just growth I'd the the top-line add to you buying see portfolio things we expect that as how as the deals that's us opposed revenue. future, announce we. where and Philosophically in to get

Ken Hahn

And what sometimes I We've along buy you add to because would in talent it. talent is entity that, an done good past. the with Josh, really that and there's associated comes

valuable. Hiring now. do that the spent continue to learning, of just where elements Talent on We we placement extremely of is Coursera time In lot job we a launched Solutions.

in that We accelerate like job building that's able I out. capabilities going. are certain the might way We have be to that with assets placement. that in

do that something content, we in buy content but might engine. think we don't I

the but I and on our works, be there's a content engine of complementary so to the think it's would bringing not catalog that content much content, way novel current if way So of that great. that is

models the do we technology more than On language M&A early for talking about Frankly, probably talent capabilities and companies, moving these large language quickly. stage the new actual model. AI, because whole products get are of base see subsumed We a people AI. are it into would very the

called years machine projects enable was that hands bought projects. a technology So better a virtual speaking, using on on We ID experience And assessment back that integrity, content that learning better then verification, a ago the a broadly on great, or little that's makes whether we're few design, company always is technology kind the holding bit. that academic of Rhyme hands desktop better software.

content enhanced learning So and it enhanced was supported technology. an experience a technology that of because the

in are kind We interested stuff. that of

Operator

comes of line the from with Our next Singlehurst Citi. Tom question

line open. is Your

Thomas Singlehurst

the Good that Yes. And a so obviously, it's with on taking evening. And on of I'm results. XX% obviously and in the for XX% of cyclicality. business help. in parts I on to got particular. couple it. the On still theme take starting in Thanks year-on-year, robust for mean, terms of you of in questions. going continued Enterprise, things of your of think earlier And cyclical targeted number congrats really interested year Maybe a question. pressures counter A sort I continuing obviously Consumer, you different that’s in growth.

checking just happy you that… with So if so are

Jeff Maggioncalda

think I caught Tom, I Yes. that.

cycles. campuses, it different pro-cyclicality from cyclicality, are Consumer. in teams are Enterprise, Business, much little see touched where mentioned and Enterprise to revenue But really governments, I across diversified and cyclicality is Europe L&D talk are governments. in bit frankly, with that that We But different part budgets you counter mostly greatest So and businesses diversified see the the they we being when comes reduced. to about so segment. North from of different even we in Coursera a mean, model, when all universities on don't economic exposures for as also a we and have in America, and

Enterprise into see as with blended segment. campuses counter verticals so the we cycles where governments. differences those the actually the I segment Business, dampen And bigger, and would on become offsetting it the generally, some neutral And that of economic least we could a Enterprise Coursera for to of pro-cyclicality bit some of are or at say think cyclicality exposure

know on so Ken, kind my that. that. don't add to anything And that's of I if thinking you'd

Ken Hahn

That's spot Thanks. on.

Thomas Singlehurst

-- well, exploiting a business. pricing. that have to I'm the continue pricing is you across are whether the way places new interested clearly there follow-up by power have you And find just on that cited you

Jeff Maggioncalda

content that than we be they -- which of is anywhere learner, get can't to you say a power, are lot they think will, solution very not sort out much growth academy against think are, still a that we if there We is don't I this the Yes. Professional But We really. basically game career in unique. requires I only all town. frankly, on these are else. pricing mean, with pretty There you we do Certificates the of would the mode. like, different in Internet.

great us content our like pricing between this not want we our are comes it brands. sure to to flex We we anything to are sharing When credentials. are motivated So of economic super sort and create of make arrangements our and partners point. sort to now. trying more on at right These partners,

in much we anything might we have some international methods probably currency. we opportunities payment in where really that could Consumer are there on not we kind believe be that also markets, and of side. pricing, the unlock most opportunity So so on is They not and there. And we think think flexing there currency, payments still but

Operator

next of comes Capital from RBC Our line the with question Rishi Jaluria Markets.

line Your open. is

Richard Poland

Hey. Republic well This questions. my It's expanded as the for partnership taking Thanks partnership with as is Rich see Poland of great on with the to momentum Kazakhstan BNP. the for Rishi.

how curious, to these that learners get of out those monetized? about any there mechanics new similar think should how and then partnerships we you'd Thanks. other Just of the And call here? deals are types highlight or

Jeff Maggioncalda

would least Yes. generally, categorize way it about it, Hey, is modeling segment we're The think this that think licenses. and we Jeff. selling about is in way from at fundamentally a I or Rishi, seat that this the the I perspective, Enterprise

university if in capabilities What will. I a certain really and approach. or an what think educators. institution thinking and testing seeing be of The are of of places. of of country institution an of number a school sort a system could other do question will one about systems we're the many uplevel almost the head a state including within Kazakhstan so you system the United system and one is, or with a deals, of workforce is seat even is licenses whom? the school other with sort license to of the with a programs institutions, system-wide States what Oftentimes we And of you'll sort for buys municipality. of systems, here sort Labor educational development number as buy and pilot of the intention and It Department find And who member State Republic NRR well, how, a a in

buying We you license a that to to you institutions get government, sales where more single the and prove and person. of who but opportunities. can of win every with it not substitutions model time for a takes really be you to upsell with bit think but do, a many get other once a lots more there's model, lots smaller If upsell use a could on they're cases someone a buy, leveraged can access lot in demonstrate for licenses out availability because where

should our it. sales effects think think It's it longer about time. So think defensible that's how more a we and bit of positive it's we NRR kind have on little We over cycle.

Richard Poland

I follow-up just then where of think is should economic just to then seeing in like, become that across -- within those businesses the but of, offset the in good not the to momentum trying the of side corporate you to government TAM highlighted enough the, the three how kind business, cycle some only And you're maybe you've this think side? about near-term of how just we situation large the also on -- it's difference in and just a make like sub-verticals? the kind headwinds like to the the that, campus next think and about meaningful Or Enterprise dynamics business about Enterprise guess just

Jeff Maggioncalda

more future offset question. of out that enough is together Government more it than Business, pro-cyclicality expect more thing. for and I in -- They that's Coursera unreasonable think Coursera but big the than Campus being will real say, they're Business. time some there. they for Coursera a big to be some will enough, Great way mean, for than are And two not be will it's for those XX%. to Coursera not I not of I becoming are generally not

TAMs development programs, I think and you about It's it's speaking, Business? tuition big. sales, spend underneath strategy take all market how of workforce same mean, when in money. can government our all pretty And marketing, of it's conceivable. campuses breakeven. be definitely they a institutions mean, be the degree a the the for can all granting I $X trillion and so for broader same and TAM? And Coursera bigger than Will of platform same don't those across etc, the the to leverage products, technology say, credentials, content know. is it get part I you obviously they're Generally world. in lot about of a terms basically

mean, So clearly. $X they well universities over spend worldwide, I spend, trillion they

be that think. a meaningful And so TAM we could

Operator

comes from Goldman Our next line the Eric Sachs. of with Sheridan question

Eric Sheridan

topic back on Maybe Enterprise. coming to the the

marry mentioned growth you how to funnel about exit you long-term, and that of in you think or of the think about behind growth forward this trends year? mixtures want investing velocity environment trying an the to versus and achieve visibility the into of should in we earlier, the into visibility it sort for you as the want characterize corporate terms to possibly would NRR or whether how acquisition your spending customer rate of going Given

Jeff Maggioncalda

give do high we about you is the, question, of usually how Let the you harder me, think very level which take the you. to which can Ken, I Maybe I'll it. part velocity, exit

bookings, when your clearly, yes, of you you bookings, customers, don't new of of those you NRR, new then all versus bookings got among part not you we Well, NRR. Now, NRR. the versus and not right, of got we you bookings say, characteristics And same at look ARR. your expansion see retention. Then got retention existing three, new part expansion bookings

things displaced times where on and is workers great signed during support, Europe learning happening budgets budgets the tighter, what's especially of government deals big, COVID, in for are anymore. more providing were lot in who the the with including office. really bigger economy A The focused pressure COVID been in there. from very Well, aren't companies customers institutions looking not support has

there has pressure on based a across there on of -- the been have budgets tightening those some as And more of so the expansion board. the bookings,

that over does that watch that all artful I'm what to your velocity? exit want play does to you how punt -- into answer. and So, Ken,

Ken Hahn

now it to laggy, the well, beginning I cycle, on and revenue deals. -- impact our NRR have both bookings thing Jeff think said, immediate is been which affects a we've we're and the No, And Yes. much as strong. Jeff bookings topic renewals, as important expansion planning this least the very -- said the early. new our it it, quickly, which more minds right because new is revenue that's because quite relatively remained immediate, But relates and is

to B, for as start and we between newer will salesforce opportunity So and those year try G, to towards the for the bookings opportunity revenue. as for then come towards look to an to our do of bookings, to it's flow C best for do which budgeting we we from economy optimize standpoint. a those C where next we're into end C, going balancing And year, C of start the considering forward, we'll

So that's how we think about it.

Jeff Maggioncalda

for and hinted in headwinds big kind at Europe we a of Business America. but think already bit, it I the North Coursera Yes, in NRR are

Operator

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

Matthew Shea

a relative then for XQ, hit those numbers? I expectation grow with kind This year. your question, you on Degrees, Thanks fall what your come of next in for start quarter Shea door is trending guys to XQ for programs on taking and to as if enrollment XX% for cohorts your Matt to segment around And here. trends could talk those the seeing or and timing enrollment in what expectations. those those in, see upcoming should how expectations is congrats of we that's or you're Ryan. to given the wanted nice about terms Wondering the enrollments start

Jeff Maggioncalda

little segment. impact this pretty the the feeling segment. about next year. you bit talk maybe We're Ken, could the I'll dynamics about of and a the talk about numbers So for of good timing

when about did good Part positive opportunity is of in year about perhaps XX% in segment seeing feeling revenue Day is more economy, have guys Degrees year-on-year you at we of supply say, are than but the the time? the of it last why it told look a this improvements Degrees. We say lot Investor for what growth and we at XXXX are the we And we the segment.

that, pathways can We these What These of do on from among that do platform. want you good especially want you you the that these industry a are The they something the find idea an hear like matching. new the Certificates, have that that's that. really as that player, adults online And college and harder from towards transition a to Professional flexible. also this one affordable Professional on another. from as we job something something People we aligned feel is want broader We from pushing can earning more a earn want flexible. credit certificate to degrees one Certificates. They to of more they with is account kind They if good We learners degree. about career while a the long notably, affordable. selection. certain and our are more matches is can that more certain much to pathways have are built working we really job, degree

is sometimes product, strategy today. degrees like, just isn't who are a to in these sell switch as online. offer degrees, frankly that careers pathways really much pathway the solution of not a a So think more let's now to them to of We market better our trying are let's suited. that It's, degrees adults, lot that really working are much

to estimate positive. But the be. hits at something same same kind good we numbers for the had of will the have So Boulder. it are us fall there. it's see Masters We new characteristics, pretty of continue of you early in what that feel the demand about Science, Colorado pathway and these market to of the results days. They A number really makes the and exactly degrees hard talked Science learner Data time, coming University before see on

terms So on impact for kind Ken, of expectations and QX of that. in

Ken Hahn

in volume. strategy you And emphasis set on around up the degrees, highlight, right with change have of pathway the in are these at this Sure. already higher course, which or new the strategy

first and student couple have will this fulfill. see, those but be the quarter is you of new we we of quarters The new introduced over indication degree have we well capacity have quarter to last We those been cohorts. and will the fall that that when announced programs how building fulfill

hard looking fulfilling we forward student numbers are those And as in cohorts. work very we those talking so to

feedback coming that Investor immediate year Day, -- for back will are revenue at our the side. fairly but clue a XX% see be this have that guidance we the It how doing. you quarter. And we so we expect on visibility And well we because on great will gave

So planning excited more we going it's update But and adds look the some we year provide as will this do our I'd a on next once again, color look we forward pretty which are about. as to into year, which into next well. an quarter, student coming

Matthew Shea

touch to newer it. And is Got of initiatives. That one your then helpful. on super wanted

in began recently learners in launch med/surg. to the that healthcare how you do to increase Curious industry like, vertical-specific segment strategy there, have the on healthcare certifications, exposure You with your not more previously been might Thanks. challenges be vertical with healthcare an in time? market, have this how could Coursera Coursera and engaged think over the for large of opportunity workforce given you do guys

Jeff Maggioncalda

pathway Well to on you clearly high is credentialing help employer big acute then shortages. into would noticed say, side, find And out credentialed for institutions. respect come that's Matt, great where to obvious you It's or opportunities that are requirement do. people to we're allow us and the related what in degree, job large imagine Professional of we thing And A educationally with side there are simple to it's question. out are is about Certificates. putting very more of labor either And with acute maybe job a the on because shortages? the Certificates articulate already what a these that healthcare degrees, it not I appreciate not market I how our you can they kind but talking not full we're of, these labor health. very, trained we it trying healthcare can -- to putting if we from strategy been learner those will markets. move really trusted do if mean has Professional opportunities, very

where in because globally the nature the of least jobs. those imagine demographics technology of the be to is going going is and grow of report those workforce jobs of types AI. impacted we going. of opportunities might be global to and the can And healthcare job the aging after number is some report And will showing change the You that by

a face and pathways, value it's in really for degree, resilience the the think branded AI. acute we the the So degree credentials, of given the a given shortage global especially whole the of general attractive Coursera, market,

set to change think be of of people to be healthcare there's to a after lot start and opportunities going going going because I attractive are pretty there. their and think career a go I wanting related jobs

Operator

McGinnis UBS. comes the from Taylor next line Our of question with

Taylor McGinnis

you. one maybe Ken, So for

more You a little full bit this last guide quarter I which the little more year the took than a approach by is think raised XQ year conservative. you bit being of rev than different

there. a quarter greater what guess the to have get in there in bit in pipeline? visibility? there confidence environment giving a a a the And year? in greater happened that's chance I half you So you love little call back little Would something Is out, or maybe certain the color the segment you'd is of the that

Ken Hahn

Yes, sure. Thanks Taylor.

the But we that how some consumer have a doing course, these on better revenue which working. is dialed The from really progresses, have business Of the get is a the particularly think for seen year. is year segment, visibility on as we machine firming that we handle the on We professional in. we're up certs. metric nicely really on standpoint

greater we we than So have did operational visibility before.

mentioned programs, We have some previously. better certainty in of some our marketing which Jeff

the so as confidence to changes and forward. in in ability we gives And move to environment more that rack dial us

provide we're so cohorts commitments hit side better As time the to We fill the always. and closer just the reasonably student more get we closer end as the reliable. year-end, forecasts can course and over comfortable. we more year Degrees are increase visibility a to give But as that models both visibility confident. of to our of Degrees seek particularly, Enterprise get there's we They on can we get out the year, and

not a if company be to But overachievement, recognize Of course, the be clear. conservative, will. try as of that's very let you too public to more us we

Taylor McGinnis

side, last seeing Business. the in for Enterprise terms that July, just question like so you're And we're is that hear to on now on my what the into love trends. Enterprise of I'd

you call more how to on to and you'd talked out So quarter you're churn little have progressed bit pressure Any expansions. about, today? changes of the those a seeing that throughout

Jeff Maggioncalda

all it saying and broadly, they're Jobs the I change. time we will budgets after employment on layoffs just mean, Coursera, to change. -- jobs I be I as says, of could what unlock everybody first historically, retraining there's of these clearly increasing lot compression lot Generative almost budget ago. AI and -- mean, are generative a of I generative to teach because of of we going alone, one -- to a what's mean jobs McKinsey jobs? suggests characterize going response publication Taylor, well, AI interesting -- after changing. teams, are AI who's of put all out -- personally, But wonder gains. after of as CEO would people study planning people I teams. are and trillion going cuts. that productivity sort I about publication, a get is of L&D publish very the a that Part $X.X on a that They is in entering it of me a publish new agrees I of discretionary weeks L&D be few when this globally suggest everybody's McKinsey

the of kind learn I obviously skilling? take? to Some to needs made upgraded, be to to the going it and to systems what's $X investment Well, return? but trillion use What people tools to how get have those. be have

know, to order need of L&D where bit So, from of I companies in little people like don't be point cutting are is first a gains. principal's between a there retrained a a time going in to unlock incoherence to productivity view,

Operator

with comes line of Our next from Davidson. Robert DA the question Simmons

Robert Simmons

the your little what for from and logo pricing churn has net kind turn of of might gross I here, a on was In wondering come thinking also from particular, up? expectations And various if How pressure. it factors? are retention much number. you that could then I'm decline about what back deeper go the metric

Ken Hahn

in lot a by that really the metrics, awful what off the would and you Business the that in regions and C C grid Europe coming And I change in G, is for America. NRR North Coursera would really C the that B an If region, highlighting different find analysis variance for for be is of to try NRR two. that and then page, mean, this. if tribute, for explains you like really did did and you of hypothetically where it segment from jumps

Jeff Maggioncalda

companies at and you helpful well, in And how -- related do me view you going that turn North very learning for and say initiatives? least the businesses and and be when's answer, clarity, this not probably to giving America. fund In unfortunately I conditions without And it giving around? development Europe to okay, helps will macroeconomic in likely businesses can particular,

Robert Simmons

Are Is are usage? churning guess, done? off? it pressure you renewals, there I metrics that pricing seeing actually within what their show And how your cutting though, up? the they customers you've on Is

Ken Hahn

It looks mostly renewals. on pressure like pricing

Operator

Our of line Celino question Markets. Jason from the KeyBanc with next comes Capital

Jason Celino

as improve on it I EBITDA earlier, Because I definitely Just a question raising nice confidence couple, similar guess to you're haven't the guided intra-year? the to think past to margin you the to Ken, you guide, but a in margin breakeven? what past see. the I up gives really

Ken Hahn

we we're opportunity EBITDA we spend Jason. the to that. and company to back towards moving on March opportunity the there's We're done That's the At for to do XXXX. not for and line, committed profitability. big there's And to Investor that. a positive QX we quick. intentionally top that never Day believe growth the right, the already overachievement markets it's in are to spend profitability and because We've the exactly because invest, Frankly,

and are in on that's the just waste just of we not year spend in are But more our the to been sure. we've So years. done improvement of of productively we a seeing are outpacing the that that conversation. to going we simply for matter It's leverage is model. last each money, trajectory. five ability And We've pace

to realistic within We point departments and guidance it. where have operating the needed model it's within we about that been be creating and at doing raise the the very on focused leverage to

Jeff Maggioncalda

look, Jason, previous there, natural manage going to manage than is, we probably this margin every obvious. did that into is year. constraint EBITDA and you adjusted adjust that When we it's going to And going were we put We higher added the in year, of we But I'll be adjusted positive put XXXX, Well, margin, are are are We QX what on the in not EBITDA to constraint. answer QX. we these one the add out we one just said, EBITDA said, that. to any for planning. comes constraints in to

set us way, still that's on up and the growth will would... at so thought, It we an where by commitment level. for and year, initiatives next And honor we could we feel, the let's nicely -- I appropriate that QX. mean, the we fund

Ken Hahn

That's step one.

Jeff Maggioncalda

that opportunities really the We the to we growth post higher we profit, would for were starving sacrifice company. growth order if not in thought

Jason Celino

Okay. Perfect.

quickly, then on stuff. know for everyone side, on one just you the but is competitively. else? feel Enterprise know a are tough really as you And market layoffs, announced everybody, Now think doing. do the competitors guess versus how a some your good of you private I doing but environment it's how curious whole I I

Jeff Maggioncalda

would I most one would from sure, seeing. expect have are the a know that others bit if when if, it. seeing we as pretty Coursera Well, hard sort specific I And pressure for like on I of who premium and is things weren't think don't for is the pricing surprised to Clearly, credentials. I information well, suffer said be and to renewal and Well, we that then get. I Robert, of branded would that quality distinctive that? the

perspective, an from a of So differentiated we sort more than arguably economist are products others.

So expect pricing are than there. but what they experiencing, others. be better position you would pressure we feels in relatively resist a really don't should could we better I it know like

imagine can they rationalizing also when cutting that, providers. as budgets, also are We are often see you people

If might a you it niche smaller harder. player, were be

exactly a what's competitors, environment, can't sure think I speaking that not whether some relatively again, but attractive tough But directly I is, it's features help speak with in to say relatively we I'm competitors. have I better. us the So what happening our can

Operator

Our Brett Cantor Knoblauch of last the with comes Fitzgerald. line from question

Your line is open.

Brett Knoblauch

my growth just on for after of kind guys. XX%, first, just in in It half the we've guide. implies from of question. and accelerate third Maybe the QX growth the seen of And in Thanks quarter quarter. percent in it, coming is revenue kind fourth taking XX% growth back call the XX-ish the Hi, this QX. year,

assumptions where call of revenue see in it the in, sort growth half? we factoring what XX point guess decel you a I would So are over back

Ken Hahn

Yes.

it are we current profitability time year. and period, increased in the the pretty $XX the by strength beginning ever we the $XX continued happy So increased year million guide in just this increase revenue see for Consumer. have We of million in first since an along with

we we think I see paths same trends the along are now. seeing right

So the specific that's investors. at we're pretty the of are. provide people help we're a to during provide yes, right. that general the their get of think guidance We we beginning the it’s staying, But just that year announcing models where we level We the excited segment don't growth guide year.

Brett Knoblauch

R&D, third decline XQ. on G&A What in similar know XQ kind I us fourth should and of the you OpEx the about said it into EBITDA. from lead research shot just marketing, levels Is then there quarter? call growth positive, year? -- that's the we think for in remainder And for a constrained seen absolute of hit we we've or question sales adjusted all but the quarter, have guys

Ken Hahn

spend that some focus No, we we real opportunity other course, guide translation a primarily course we'll this growth of quarter setting the we that There be for AI around have a we're and invest. to of some lot us we Again, harder guidance lend a think next the do provided. in will for growth XXXX. this and because specific third it's very year. of within a we company, to to now us hand provided the we on investments expect up XXXX with There's range, -- for increased and so that towards and a things do is it's leverage

did almost not So, be and if company. pointless think, QX people to we would damaging it I'm sure no, I that. doing would appreciate the

growth we've that five in up will the And years. we positive for QX. something setting back which is EBITDA we're an and for hit in committed important and We last March is delivered thing both ongoing leverage on basis, the

model. our that's so, And

I target we've think I it. difference notable The used to of profitability would investors invest. say trying increased year the are the instead is to in

picking described is it's It's Street that profitability that we Jeff get natural to driving for kind because important point a us. and and QX the of, think important towards in of before, outcome as a to

making progress environment we're there really something the with so, change is And about. excited

Cam Carey

Thank you, website, will this along the the A on Q&A. replay Relations our in be the next Investor XX of hours. everyone. That webcast transcript wraps available with

Operator

call. today's concludes This conference

You may disconnect. now

Coursera (COUR) 27 Jul 232023 Q2 Earnings call transcript