COUR - Earnings call transcript Q2 2024

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Coursera's Second Quarter 2024Earnings Call. [Operator Instructions] Please be advised that this call is being recorded. [Operator Instructions] I'd now like to turn the call over to Cam Carey, Head of Investor Relations. Mr. Carey, you may begin.

Cam Carey

you Call. us thank XXXX Coursera's and Conference Earnings everyone, for for joining QX Hi, today Jeff me Hahn, With is our and Executive Chief Ken Officer; Financial Officer. Maggioncalda, Coursera's Chief

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

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

call, present non-GAAP financial to GAAP will this and measures. on Investor A in the comparable supplemental non-GAAP During GAAP and release our found Relations we both directly earnings be reconciliation measures measure website. press presentation today's of can most

otherwise Please specified. note, percentages change all growth refer to unless year-over-year

call these uncertainties, Actual presentation in most implied results expressed events release, from statements forward-looking future statements during to supplemental SEC forward-looking number are and materially all results to that and beliefs. a on our events made press current and those based in this filings. those or relating discussed could differ recent including risks expectations earnings due and and our statements of are Additionally,

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

Jeffrey Maggioncalda

great to Thanks, Cam, good with afternoon, everyone. you all. and be It's

since courses, X our share than I'm XXXX. increases platform, one and million we and hands-on financial enrollments to execute million our solid our we results credentials that new pleased more nearly set X in to AI highest as We projects. initiatives. on a delivered of of of catalog surpassed learners operating We our welcomed generative quarterly growth

any professional single We quarter in certificates entry-level our in launched history. more

titles Microsoft. of leading entirety the Cloud, like from than coming IBM partners Meta more XXXX with Google fact, new and In

importantly, Academy EBITDA. and outlook strides full have And teams product and academic for are Builder, for in and AI Generative innovations, revenue reaffirming adjusted including ranges We integrity year AI-powered new features. a XXXX Coursera we of our Coach, Course suite significant enhancing made introducing

like landscape to I'd of focusing to how the in we're Now brief the executing education. a address opportunity before overview evolving how is evolving begin with on

As transformation development intersection demands in higher of trends the an at shifting the we urgent skills better education demographics of for evolution several the economy, globalization The institution digital trends. to these our of of a not discussed, Coursera's long-term society, need platform and secular task. easy talent. Navigating the sits every is of changing and meet

Work and Microsoft Trend every worried Index competitive annual adapt. XXXX report. implement nearly lacks to see a They their AI stay adopt As struggling the generative are organization's XX% and job that date. revolution are XX% we of vision company needs AI anxious agree that AI. leadership displacement study to recently and found to plan And published and that LinkedIn unfolds, almost leaders in outlined to to businesses their individuals their about security but this

And talent say skills candidate these AI someone they experienced dynamics they without candidate would that hire experienced strategy. XX% of leaders with skills with and are more affecting said their hire less a AI rather them. XX% a without wouldn't

Coursera's report. trend, global findings second Several of community. need development. drawing learning the published and Global for to key data Annual the This our the report, from skills June, on leads reaffirm the insights we Microsoft sixth In Skills

they in First, into hands. own development demonstrates AI to employers literacy global up. how for has not catch demand emerged are their our employees waiting skilled learner as taking imperative trends and a are Recent their

quadrupled In our XXXX, X per in XX it per minute. example, enrollments enrollment has saw XXXX, content For AI generative minute.

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access equal help can and a fast-changing to affordable, anywhere more credentials our to job the and flexible ensure world. skills, system of education to higher that relevant compete has Access opportunities anyone in

acknowledge Academic over as me education. XX to campus to final and of government headquarters countries, as future their including transformation June, our nearly and from brings Education this customers the at higher trend, Summit. the And evolve. university industry need well higher leaders annual convened partners In of XXX Higher for institutions education we our

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discuss advantages. Coursera's platform how this let's on executing progress are of Now the with recent across we vision each

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retain from to of new no the being that the their into studying of learner credentials skills so educator degree thrive our Over focused equitable necessary and credentials, Across power every is journey in hands-on can stage digital projects access the infused skills advance a short in from Clemson to critical value longer decade the to curriculum catalog including to today's generative acquire proposition order and economy. matter later, of same their Coursera's on University, content career. the necessary with our to forms AI engine partners many acquire, a continues ensuring branded

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efforts certificates Recently, job-specific our existing announced this enhance and not our IBM, these AI that focused content. job credentials Meta and launches. is keep generative from requirements. catalog, with emerging start X catalog to transforming that are have we upgraded initiative with new solely skill ensuring to pace roles the broader on But certificate Microsoft enhance This of a been

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NII on foundational focused specific applications job programs secure leaders Teams hands-on formulate all right as AI the education curates earlier Our executive well for offering and employees practice literacy roles functions, inside of the AI But use strategy. GenAI as to and generative courses. help for real-world to

with have the these are and marketing the created product data starting unlock innovation are daily into gains productivity teams from and by their outsized integrating We and AI to initial software estimated generative functions operations. as benefits

and harness broad strategic generative of portfolio the and our to are new initial credentials. offerings of help educated technologies, Individuals partners AI of are institutions emerging course the these a stages create potential to initiative a looking

creating transform looking for a develop looking AI to career skills demonstrate for learners are talent. We to discover, advancements generative businesses for leading their destination and and

our to our of global reach advantage, me platform. major brings This the second

X referenced learners recent additions registered of enterprise verticals, number I to our million XXX earlier, by paid by to X,XXX businesses. added base million new grew the XX% global the nearly growing with As we June. We coming nearly all customers especially of end from over

continue platform's we And to innovation. needs in our which is third rapidly of to ecosystem, a broad invest serve product expanding the advantage,

on data, efforts AI technology uniquely including focused innovation we our marketing. and continue how be leverage content, platform, generative Our across can to

Coach of this Earlier pleased all to learners general enterprise with were today's For for consumer availability the Coach. I'd like to start our customers. updates, month, and announce we paid Coursera

for integrated identity redesigned unveiled along visual user also We Coach, with an a experience. updated more

is tailored guide unique goals on our AI-powered Coursera. and expert As content in that a interactive reminder, Coursera is to Coach anchored learners'

and the play ask knowledge increasingly Coach stay language key to date, aligns Coach large practice to role XXX,XXX from models. the learners by counseling quizzes or Today, supported career Coursera's we in for will than In future has and and with learning discovery clarify platform they're takeaways expect current used notetaking, To an to tests for and gaps, and concurrently guidance. and Coach how explore career prominent better solidify by throughout underlying learning summarize leavers future, more personalized material questions and been goals. XX languages enables on respond to track,

which Next year. enterprise is we earlier this Builder, our Course customers introduced to

courses customer authoring government AI-assisted business, to tool or Our allows high-quality scale. quickly campus at easily and produce any

unique tailored learning of each that expertise blend to and internal partners catalog training can from Builder the are and custom Course with of courses order to create private Additionally, content, industry modules organization. our in needs university

the institutions excited have Course planned using number quarters, we are positive XXX We a but started I'm for of early receiving Builder. the enhancements nearly about coming from the feedback have that

to academic like product And Online powerful important integrity. advancements in tool and our a students for AI-powered has update, rapidly for prepare changing and final affordability world, a institutions to recent become it accessibility. learning both in for discuss I'd role an better plays my

must the rigorous that ensure for universities standards academic meets required it However, credit.

integrity introduced unprecedented to enhance generative cheating, student and it While new for misconduct provides scale. risk at for opportunities AI academic also universities

assessment to generative and features in was scale evaluation. grading, utilized universities proctoring, assistant educator platform excited plagiarism and ways announce like providers integrity and to learning academic why several automated degree is designed more. review, peer capabilities a generation, included AI assessment which exams suite grading, and I broad particularly AI-powered creation new enhanced campus and by of as features customers The viva Our is help partners, strengthen detection,

material course, the and employers recent on learning credit Designation, reputation verified of for Authorized for micro easier genuinely industry Education's their student our everywhere employment. for Coursera. These on on builds steps their and candidate's Council recognize protecting American effort, the value mastery from institutions learning learning first benefit launch of online outcomes in validate to Instructional also receive the and recognition academic individuals for as ensure It to helps making and online This Platform platform qualifications helping universities skills. major are to and a them trusted it reflect credentials,

focused A of my wrap To opening the half. reminder second in on important up most are remarks, initiatives the we

broadening are to professional our including upgrades new entry-level we launches catalog titles. existing First, certificates, and of

from affordability focused labor scaling flexibility, customers And keep with focused our government AI we're and third, consumer with growing our credit campus on helping degree on Second, our segment, and gentive programs and we're focus pathways catalog. enterprise demands. business, a on our market pace

Finally, product the coming deliver millions can differentiated we of and Coursera that for a to experience investing learners quarter. value in every more are innovation

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

Kenneth Hahn

report up Coursera. for Thank solid good second you, revenue generated quarter we $XXX.X XX% and pleased from year total In results ago. afternoon, which was of a to everyone. Jeff, million, QX, I'm

individual institutions Our diverse as the education. large needs customers to well us continues trends from of the platform's serve ability world higher reshaping to we around navigate address to learners

quarter. creates and demonstrate the operating lens, common product, In a to marketing. including addition with providing model, our and shared growth a flow content, strong of free set once delivered global to cash bottom this leverage with we assets we continue And performance in approach allows and which target our this data investments, broad again opportunities line this us to

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

functions. million gross For the XX% XX% second operating a the operating of the margin, X revenue, million, percentage Total $XX.X $XX.X gross continuing in year. discipline points prior was G&A from up quarter, from year improvement of our and prior was period XX% in profit on R&D expense or an

EBITDA adjusted $XX.X of was Net or revenue. or $XX.X income revenue of was X.X% million and million X.X%

us demonstrate optimize our performance of achieving has strong single to model. While our the inherent we target our EBITDA half EBITDA a X%. any first and continued for provided adjusted XXXX do not leverage in margin toward in quarter, start with approximately

let's $X expenditures, million generated capital computation. other flow cash now effectively approximately Now free assets We performance. than cash which to of discuss of of we free I'll of more flow treat content our similarly strong is categories which you, remind $XX in lowering cash million, the inclusive purchases

As partner trusted type Jeff of future skill career play advancement. brands exciting, the learning, to will has important role of we mentioned, credentials and this to particularly arrangement strategic in receptivity due content and believe been verify the development

April, as the of common call, in million with cash In for million repurchased Moving in I approximately the remaining stock the excluding our no on $XX followed. that resulted bought equivalents and QX, balance quarter sheet. $XX we weeks cash to the This in of shares back unrestricted $XXX which million expected inclusive our million, million us commissions. well discussed we we $XX was the This as with complete prior ending of to approximately debt. X.X

preserving returned during that prioritizing we believe repurchases year, change. million resilience particularly growth a has optionality, financial position shareholders stock capital is allocation valuable capital strategy, not focus focus and while allocation our terms of strategy of of past which an technological emphasizes provides our rapid is asset and in which changed. strategic the on to period primary $XX We strong the the over growth. And our that through

believe important is But future to we address of investors. our concerns dilution it also

shareholder reflection of we approval, management committee are value So per introduction issued for dollar-denominated $XX of our number the the the program shares future floor of for all compensation. with has a grants, employee direct compensation recommended eliminating place completed action, equity. repurchase price stock-based along share a effectively on This with of the

focused As to position trends for executing large, on near-term long-term dynamic we and better remain navigate our to future strategy growth our markets. ourselves early opportunities we lead

revenue million AI discuss prior let's gross and Consumer by segments more courses of on up Consumer. Now was for growth certificates detail, the Plus, Coursera generative activity performance ongoing year mix quarter, professional $XX.X which Segment X outside of $XX.X of a in learners and entry-level was profit remained in robust, or driven the prior up of with North approximately And revenue, from XX% higher new in regions coming top million demand from million, XX% include our year starting with funnel America. period. Consumer this registered the XX% credentials. from our did

execution number our and economics content by Consumer our more this under include pleased that can launched, in particularly production branded arrangements was favorable quarter, including several exclusivity. created that were I high-quality in of many the we new share revenue cases, credentials

margin including across learning $XX.X XX% was of ago. Enterprise revenue up segment. year a Moving million, government on enterprise gross and was of Enterprise $XX.X campus a XX% to to or Segment our the year verticals, on X% ago growth revenue from corporate in compared market. some business, our stabilization signs million

of expected was our As a enterprise of that last quarter. X than due year points partners has a onetime segment which for percentage by historic QX one contract of a amendment increasing margin benefit effect higher educator the slightly of to our with reminder,

our to increased more up a number Removing total paid partnerships retention work the government Enterprise have we net transitory to through been ago. was paid of as margin year Enterprise budgets. onetime of X,XXX, segment enterprise year-over-year. variance, from XX% customers some continue customers slightly The with XX% would rate up And

our total students of of number growth revenue recent ago ago new XX% in Degrees to grew up XX,XXX. Degrees year and year from a from The Degrees segment. million, $XX.X XX% programs. students finally, on scaling And was a

there's a to content As gross was segment, XXX% of attributable reminder, no costs margin Degrees Degrees segment the so revenue.

financial our outlook. on to Now

For million. in the to QX, $XXX $XXX we're revenue expecting range million be to of

For adjusted a to breakeven EBITDA, expecting we're $X million. of range positive

anticipate the million. revenue reaffirming in are million ranges. $XXX XXXX, range our be to of For year the we We $XXX full to

X%. maintaining For a million $XX EBITDA of annual to EBITDA, we're expecting of $XX target our approximately adjusted margin range adjusted million,

adjusted demonstrated of the in of the we successfully a half record we to the year. managing of the pleased have our been ongoing margin by the strong XXXX. strong target at and We beginning discipline leverage delivered operating commit I've annual by first EBITDA

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

Jeffrey Maggioncalda

Increasing in Ken. our leading why access equitable join to the Thanks, learning reason us is to reason it and high-quality also founded is choose the we many were mission. companies why

thrilled partners our to and important Microsoft, relationship continues with is I'm deepen how grow. these and of One

we to that partnered recipients called X,XXX access In everyone, a share on provides certificates organization Cloud Microsoft Microsoft scholarship Women in This specializations certificates addition to latest has the Microsoft to professional thrilled their to and community Coursera open all May, universal in scholarship. with skill announcing are Coursera. access launch to to in

who through voucher be the learners complete the their careers, our empower or for will skilled certificate economy. switch credentials also Microsoft and filling exam. access providing critical to can shared industry-recognized It awarded professional successfully evolving essential of equitable certification commitment Learners start part a to is while advance the branded the skill scholarship a in to gaps that complementary

work services of AI, partners enabler, harness generation narrows responsibility into generative a accessible can and and next will both on it potential education more in fundamentally labor the to widens the like of equally collective Generative are global make their or the everyone. a tools AI broadly depends engine opportunity to on and act reshape it are skills opportunity an for creating market turning as ability that of technology our disruptor gap Microsoft, scale. embracing whether the who Leading an

we importance through recognizing education. who partners our threat into work especially the and role turning this Coursera's opportunity of of with proud an are We in

call open for Now up you. let's questions. the Thank

Operator

Baer Stanley. question Morgan line of comes the Josh first Instructions] [Operator with from Your

Josh Baer

in few I upside rest the a on revenue. had on on guidance couple for year, the the QX. one Congrats or of a

in decelerate And in annual from then the Just even to back that you double the from would reaccelerate as like the back so can trying to and X.X% how a QX expense how seasonality far expenses as would but that into wouldn't base on the little keep digits understand why about higher? the you why were much revenue in half, set the framework, your what are, in the back in then OpEx And QX, QX QX why margins talk pushed bit so half. side, And how spend up and much guidance that there? growth if could you they understanding of given year? half much like ultimately, margin here EBITDA like back margins move just deteriorate in just

Kenneth Hahn

we'll which Josh, forecast released introductions, to is regards an introductions, we of in based of past significant revenue, different and on quarter, the those the Ken. at the and With during content introductions, start do it's we of to numbers. expect on through year. forecast we which content a light see across this segments rest this the and release the rest year level the to product the the individual that based

So we came that's rest how split. up with the year versus of QX

to relates it handily. pretty As beat we and EBITDA, expenses

know, cadence As used has we public. the this day we've you since went been the

were year-end. long fact, In we we at public, since before target where

now, on won't opportunity waste year. we're year. to predict spend We it We the have We guidance of money. the beat to spending optimize annual the towards for down anything early but for half growth. end to to too It's our second front try X

had the approach the if X can't similar for we we're to forecasting. there, But last same years. again, what upside you'll it's spend So we've presently not see it, exact but

Operator

from with next question Stephen Blair. Instructions] Your Sheldon [Operator comes William

Stephen Sheldon

budgetary to environment ask just terms wanted Enterprise what seeing I you're the in for L&D. First, of

and noted been your you some corporate few some commentary in learning, Ken, stabilization similar think prepared months. hearing remarks, least at in from a providers other I we've in recent

think some provide more you and you growth? beyond move there? you're we better back seeing on could what So detail when And could to stabilization do

Jeffrey Maggioncalda

and free feel take Ken, Jeff. first is I'll this a then crack, to in. chime Stephen,

bit we're we've North seeing where Coursera to kind the most were NRR, the It's the it's the looking degree of is some all stopped So This healthier. that's in in America. of case signs and stabilization. variables. seeing seen X that are many different a Business some And been regions contracts, has Europe it's retention for bookings across markets, where of hit that

little hangover the Hard why of say part to people of I pullback sort and used budgets bit. exactly for shifted the a following their of think, the online spend When back that that a sessions, in think what got that offices COVID. COVID bit to years businesses And in of from in-person live saw were of still dealing reopening. I we're closed training out we is traditionally with

of to we're see bit reason. that I starting And a stabilization a think for little

most of the we Europe where originally we to most is shape. but again, My say are is might I and when knows We And for hard it AI, view this important. question up around sure, to think, of North seeing the and take think of continues stabilization your this open evolve in it's weakness. America, seen had everybody to generative

lot a risk There's and of uncertainty.

Coursera are this to companies way But through is the going different afford different on with a a is Coach, Integrity. this with of value really question generative might to Course customers. figure read There tried language the companies. to create trying right it. for those. We've of to jump in company use opportunities translations AI definitely with So has bunch with dimensions Academic And how to to technology move through Builder, out

And is and frankly, companies how are be this many job to using that figure roles. value, is on piece, based and to business But to I'm at to that which going generative do that's different create hearing. what their productivity the teams least struggling in There is in AI what different out productivity unlock technology models, can degree to gains. addition to

and making AI than software more AI that So could the role have be marketing. effective developer the in efficient different that generative in more might a generative more in marketers efficient the has role making

what ROI we can et both Microsoft, when efficiency. perhaps is unlock think optimistic create created value we're Academy create with using unlocked starting roles. have not the brands, Amazon, And there use AI cetera, will productivity. seeing either just Teams, one specific And part AI. open technology opportunity with this of And of for we Meta, team-specific is I associated now how from technology generative to the see And excited or productivity pretty value to real now that biggest in of that's training here a what clear a for bit indication Ken, I to by we're we're you'd going generative budgets be the to losers still on generative the that think that? start a that that Coursera. seeing pretty bookings because is Google, more to anything strength some for and we're AI to AI generative up is this companies be job add are going winners,

Kenneth Hahn

think enterprise down it's it is this I about of it actually No, was couple where a given years quite exciting slowed rebound thorough, first be and that talking ago. to

Stephen Sheldon

I the helpful, slowdown all of that free-to-pay a that out very one the it. expected In component you what consumer. quick commentary. Consumer, terms drove conversion? in all Got seeing Yes, slowdown that burner you called or was that's the to as are Jeff. appreciate address follow-up. just I in know And

improvement Any as quarter? to last thereafter of So is playing stabilization expectations? being out you out called drag, your a signs that

Jeffrey Maggioncalda

Yes.

We are actually little better seeing a stabilization. bit than

seeing as especially job, opportunities in how especially, content interested the to in hand winning and mean we're job credentials. launches know if specific that and learners getting the there. hand learners types credential worse Obviously, it America. -- positive are of the Europe, excited this they by we're new demand well. North job I gotten help AI, indications is content certainly with will generative credential that it like markets, hope, We're in valuable economies has in we some emerging about the because goes new anticipate, So in not developed

think effectively." be Learning the I skills real says, conversion productively see do could and excited and that We with will exponential to be will AI becomes a do specific proposition credentials and job rate. it that to can continuing it know stabilization with of "I we're value and help team how that, my also improvement something that the But and and generative job-specific AI, having in titles rates. the conversion effective

Kenneth Hahn

Jeff and I seen discussion nice particularly is little performance might internationally with which the we've to Josh. some chip earlier a bit -- in that and further

growth side, in promotions, the product geo On some of content. the price India, [indiscernible]

starting So the particularly of that namer had, some a been because to international. lot product see of we're the results of on outside focused we've innovation has

Operator

next comes BMO Your from Silber Markets. of line Capital Jeffrey with question the

Jeffrey Silber

close enough. That's

economics think color, remarks your we and You potentially arrangements prepared and in it a more about different would share content favorable called mentioned new had I little great? more some Can bit -- you revenue maybe potentially some be a get production more the with exclusivity. examples any framework around

Jeffrey Maggioncalda

Jeff. Sure,

strategy. could financials the Let the talk a bit you talk about about and Ken, little me economics.

big to change skills touched automation. going to AI The It's things. to to way have deal. will it generative going the task was with personalized to more do going going jobs. way, we way like, also change change we the jobs. that is it, change the far learn required the in we create I the It's It's So a content, an going a impact change lot world. and being to I is of moment this a It's like

rate as when talking content, few talk launch we're And the well. we're really at internally look our of that Course customers things. tools using are about for requires about Builder, So a new it we as tools to These use. of we not just

seeing First, there of has to be titles, demand the we're in for the demand. types these market

launch interest the I bit want like of are the wars, And wave sure to cloud It's brands just we're them. going and this technology. to technologies, this people use markets have of little that seeing, labor with where that generative use on got among is technology. partners to advantage skills AI, the about a saying not and say, to making who feel understand about how the industry titles credentials on Second, building to really training partners who's to it their unprecedented next credentializing people how it's take learn it, would who

interest want be seeing do our lot industry don't we're and capacity want from models. But the foundation of to but that job these we a specific lot a to So to. a We know expertise to in way, that training partners have way people in content partners and credentials saying in how build the only out general a we on industry way. the necessarily the not of

up and AI a teaming using with we content, do tools basically we're whole So to this are lot partners them our produce of to help generative it.

it us and different incremental able causes be it humans it, And bigger maybe, branding investment could economic ones capitalized that might a branded content. this we're putting a our way and types are resources talk what causes as different in is partner it us certain the but still arrangements. partner-branded gets on share taking the also this who to Ken, little to of of that does are invest money titles? content, on the this is role you So bigger partners Coursera is be And create these rev about bit the the to and producing into production Coursera-produced the an

Kenneth Hahn

important automation, represent your is And means what companies those relationships We we specifics, here. take which we've of the out we of what with. for doing obviously, description, a of makes in the risks, But the course, the experts Absolutely. partners. lot don't some best invested of on production are of transaction sense we're because respect are These brands, cost, this our individual for take our all right? on in they're a the disclose we've which on who done course, this

the out of pocket, product which this with so part we the negative talked that built capabilities pretty business is we flow to including to us we of which in what understand build a very cash product. a doing quarters profitably it definition people in around It was, calculation, to ago wanted couple as have create significant for because technological free a importantly, actually again, minimal tremendous and we us. free now we've We think, this some build with to cash And And change this on were makes opportunity, technically economics. better invest of is to about a these. strategically flow easy

dollars million quarter, I And highly in my $XX it's a prepared allocated financially. both and as of million this this strategically so year. of couple and spent, budget We attractive, mentioned we've past remarks,

about think you will hear to I continue So success. and progress here

Jeffrey Maggioncalda

any consumed to segment? use Ken, want the sharing Consumer And thinking titles when kind the that way don't of but about word incremental or economic -- the in get guidance, I happens the of

Kenneth Hahn

it rev a is we margin Well, the client significantly It client, of pretty it's we risk share but of from economics because better it -- funding with all specific, by standpoint. the entirely. relationship, but and a taking varies course, have us higher

Operator

next with question Brian from Peterson comes Your James. Raymond

Brian Peterson

growth thinking I the on Congrats acceleration to partnerships. segment? the level nice about in there. visibility sense how students, ramp-up rates the of be that see medium-term quarter. we Degrees. And new know on the should strong your you It's new mentioned for and I'm in on curious any

Jeffrey Maggioncalda

guidance at say you by give typically we year. in if segment don't that want or anything the the to not? know I addition there's of Ken, beginning Yes,

Kenneth Hahn

we'd which updated any year. last some reiterated different. had people guidance radical nothing for provided I when of across wouldn't we Otherwise, the historically board. -- haven't be guidance anything provide XX%, in just helpful to We've We year. that the the models. done assume their with But changes, but we

Jeffrey Maggioncalda

Yes. a on And what add, segment. just I as texture I guess little bit might the of

call more moving without Degrees, time. can content on this that degree Pathway -- you any We open in idea can we and at you the have a what been start towards of college start more notion Coursera

and by the degree You credit have can you be basic the process. the taking finish if for earn open is more the model, all content, around And lot of to you to your going model inexpensively. faster a a affordable. then go that think, flexible more don't degrees world. lot admissions It's through we Like and

industry higher content a excited traditional have because any count education you whole can as at you more with education, and idea towards about it even model So degree. we're to time, that can that blend higher structured this really online do it you plays

So going and continuing really we're be looking of in they're affordability, strategy that is flexibility, the we're ROI seeing the Degrees that. to learners for of to Pathway that more do from this kind signs

credit ] Transfer these recommendations System. Calcine is this ECTS the of enabler is from key European [ a which Credit And American and Education

that Degrees us now certificates Pathway ECTS opportunity. XX really of XX, have recommended recommended, this helps kind ACE our this are which We and unlock

Operator

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

Taylor McGinnis

You mentioned that it seems a the record quarter, number of entry-level was driver key professional outperformance. and the certificates launched like in of the

like ahead, that launched launches? benefited might have there rep XQ XQ? on maybe of so expected to much earlier be than that the might in some weighing and slowdown look and be certificate instance, might expected for And we expected certificates been the like inflection XQ was how XQ tied as So

Jeffrey Maggioncalda

Taylor. Yes.

that I'll you in and production in respect partners little about I quality Ken, the the an that piece. bit talk say said, titles maybe, could we interest have with really So think step-up a I on launching, a seen, we're the side. just as increase to and efficiency among financial

has these an the among had we X these X professional X AWS Meta, Cloud, Microsoft, certainly from for from X Google for had titles from and that at So certificates, impact way, from ADP. QX. IBM, By X on X

So big these doing of search. lots brands are

and segment. our want traffic They conversion ourselves titles how type this demand last there's mean of the what around to the is in of be was There's to going going in some seeing year not North supply and terms get of these still still of there's we perform. uncertainty we healthy I consumer America that and were be are are to good it certainly don't influence credential optimistic content ahead sense we going demand. on to though, that

things going that X a good these is to going sure pretty exactly of we're appetite in the the we're have lot to be confidence We continuing But not what months. to whole coming really launch be.

guidance And want rest overall consumer QX was expected QX of don't for the Ken, content delivered revenue that QX, -- I to link of segment, the the overall revenues in against if the on on know the or the in you any the year.

Kenneth Hahn

to Sure. much the had we detail too specifically tough and QX XXXX. the revenue. blockbuster cybersecurity, to a in Well, compare things XXXX, as the moves related We One which QX release without content titles a was it of of really relates had

QX for somewhat had that the we're XX launch, new was that is see with blockbuster the in offsetting that But year-over-year that partially we mitigating so certificates And a we'll coming. ago. in reason launched a year

see And don't same so in we comparison, year-over-year quite the the growth.

Taylor McGinnis

helpful. in content? growth in the are out like that that Ken, back investments then tied Could you how just Got half? break That's around much maybe really for my second to uptick maybe about just that? expecting of like could it. the you the expense drivers guys of be And you question, talk And might

Kenneth Hahn

within in -- we'll guide, we -- let to Yes. which find sure can't A sheet be year. down opportunities We'll the for lot try job year balance bring this of year, but if marketing to of course content fully clear, an of monitor a nice to we OpEx to hits to the And We're spend there and as of actually those. that R&D. spend we can we Again, growth opportunities in of spend. effectively, down. We'll continued can those. continuing have the look where drop as done through as work the then there's continue we percentage of the we'll pretty is the spending making process more to -- is as at it effectively, more beginning opportunity just cost we the the be a fund to get next set X% fund We've annual well.

Operator

Your comes the of next with Rishi from line question Jaluria RBC.

Unknown Analyst

for ask strategy? use Chris allocation in large primary [ balance. the capital you're Can is just the Rishi about of wanted cash term us cash your within Found to near ] you remind your on Jaluria. about how thinking This I the

Jeffrey Maggioncalda

Yes. Chris. Thanks,

level there's Let about know level view. take adjusted a certainly QX higher and team, want Ken mean the I talk around of what the And high we're to management reconciliation. some the with generative just and world, Board. a cash opportunities. of to about going EBITDA don't thanks and really significant have and be uses Ken, also at we leadership sort economies you not of me the a and anything if as a to Board hit than that me that team I AI transforms frankly But it the see

what really say, capabilities last EdTech, hit or the all been some other is of valuable companies certain opportunities going creates some be and and with start-ups find of as Gemini that the the we Ultra. a lot a a something Coursera. know, companies I quarters. we dramatically in next any there at version capabilities like be for balance than mature sheet know GPTX companies, place few that tough to healthy some potentially can more has more distribution the will people before. of experienced nonlinear are maybe have But or market moment, that what see perhaps don't

In distribution unlikely. completely great a a that kind those sheet system brand instances, a great pump of it many could and having both take a not big other that's brands, a and like balance global of through think breakout a global technology platform, that house we

that opportunities. the We've so we moves been optionality to able of pretty make do like like to. And if being investigating intensely we want

some seat attractive interesting with so about decided little have many Board position and conversation will what don't talk times as pretty in coming, our that is our Ken, if you think And a online is, and know in we landscape -- sort how an changing rapidly ways. us QX really sheet. want put educator that's this in we I about driver balance and in bit thinking the to you're there's of

Kenneth Hahn

sure. Yes,

what cash is on level, Board pretty active reconciliation which our strategic opportunities would EBITDA concrete So quarter, significant time, talk for you for that that transaction this I hit on achieved are we've the the to of for been highest about can didn't we aligned in close year, regardless team we target the pretty that a and say again, our the time strategic for were anything the the without see that point, and EBITDA we will, first that's costs closed [indiscernible]. M&A-related is focus the that you topic, the -- and most it, important just holding around. the further belief mentioned at and

that to on that and make a think potential when much size. you're it we're it a charge. the And transaction, efforts to points M&A I to continue means making $X.X expect million spending significant was a it's

opportunities. allocation look timing. at hard we're how think, about that, we're at and insight I little a But other capital further thinking is So continuing work bit of to into

Operator

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

Ryan MacDonald

bit about Congrats a the Brian's be back that segment growth on that degrees half wanted a the on about nice talked degree segment. to earlier double-click you quarter. into would more question be quarter, would Last I in year. weighted

on you business we is sort the here. the quarter that trajectory strong are second Just head you How that given basis comfortable gotten? growth of existing still in you've fall the perhaps what seeing you with cohort about And as towards are expectation a up this segment? curious feeling put of XX% if the the the programs

Jeffrey Maggioncalda

online happening managed in and Yes. I the the there business get we degrees say would come is what sea to is as -- they them are. or U.S. guess the yesterday, saw today market, that's models change manages what and way how who I who to was it, it a them create around

That would like I really of want. a changing. really Degrees. that us, basic be unique -- that's pretty lot much and it's to learners to what we our being say Pathway strategy said, think think going We these is we frankly it's there's And something so

how and be to thoughtful And cautious these. going so to be navigate to somewhat it's want we about

would guidance but that's to of think for adults segment degree for ago say update our quite to general working we growth. still real previous kind design no globally, out. So figure the on right that got Degrees a I while from revenue was a bit a And we've work going there's pattern the

on market we're the to journey redefining called $X trillion degree. so this our college And

Ryan MacDonald

consumer Pro launches and talked launches perhaps second [ or to follow-up, the a a that the about quarter the give knock-on us launches should ] expect new from these these of of positive we segment. a back consumer timing the upside half within like in you And maybe of just of of the from Cert impact maybe relative Can as year? magnitude came from sense more quarter new maybe the that in effect

Kenneth Hahn

Ryan. Sure,

they the specifically throughout released impact but broken were We coming it, out back new part from last in expect this quarter haven't quarter, toward than quarter. more by guidance the of you'll so content the what's

that would think make it to sense color I as Is as much provide. helpful? about that's

Ryan MacDonald

helpful. Very

Jeffrey Maggioncalda

script of certain And by we're of a have shaping where a other about, mean, we lot or titles. be everything can a a new growth -- the engine. definitely people existing will way, platform, on ways. is is the the certainly mean thousands I how And that we that thing not whether was really truly there obviously part the courses but the or up launching sure believe the of and you in manage creation of we whole how this is we talked we're feed do I that the titles, analysis, negotiate you world because the new AI. about content It lot to engine refreshing virtually you of it's generative data think how going of change

quite to optimistic with the way our it also of relevance the what's partners our generative we we're of But doing that. existing about AI if content include upgrade

that I will rapidly, a but changing refresh next also really major stimulate generative AI will hey, of when the in comes say, to sort and learners Of be a advance cycle, course, a that think among novelty out.

well. job learn how Now my to what do need about do I to

we're broad a titles to not try almost really we field person audience, job, who target newly has got market who's makes refreshing shooting only to redefine so that in And to wide their jobs. the I they think titles to launching but mean, what working really every relevant really do world new way existing like the for. there's like the the this everybody them a want essentially We a for is retool

Operator

KeyBanc with Our Capital final question comes from Devin Au Markets.

Devin Au

more to of customers you Could which the similar many quarter? some that this facing Jeff, slightly Ken, dynamics of kind segment. that are elaborate year? NRR, I think has ask how on front? last here. similar come called I you renewals And congrats to types what Is under saw were challenges likely want transitory results on again, for of these, downticked guess, and budgets you up out government I about Enterprise, just strong the to specifically

Jeffrey Maggioncalda

is Yes. I said Thanks, give Devin. I But this in Jeff. I I'll the like. are helpful. clear might which government. it's versus not different is level. versus past, high you realize campus by somewhat the really crystal Yes, business you a as this hope as And NRRs

or budget having deals, some multimillion if available. dollar COVID-era by not we that these and have funded then of end effect that is an money the renew, not On really been say are side, so up they transitory X government can does mentioned, a which deals outsized X

drag we of big mention there And so came a we from do. on there that gut-related did the overall. to work deals of is a bit that persistence through be certain substantial have -- actually a that budget NRRs that there. And for way that the hoped of have I Coursera would say will did we quarters, that not previous helped had vis-a-vis Business bump up is NRR

these the budgeting So persist The doing it's has helpful big And frame, than time. are when in in hurts. the for don't It's it of it. one those whales CPG has better of kind -- others. the Coursera to government some some at of segments certain things where same diversify

where effort cases might and And frequently loose do terms and buyers towards do cases a you is pockets NRRs what were the in basically to because put our add NRRs -- And see little trying do We those learners expect forward. bit the budgets attention healthy. use do more Ken, those of and that? the and as don't I'd use say anything within identify the that selling -- large XXX%. shake transitory find those, and that supporting are well, those our we of to more going business, are would we're targets

Kenneth Hahn

Materially, incremental nothing asking. to add. there's for Thanks

covers was -- hope I think detail. that's helpful. about I in that it all it

Cam Carey

you, wraps available That will and session. for us A replay Q&A All on webcast today's care. our Devin. you right. Well, Thank be website. thank Investor of this joining Relations take

Operator

and you Thank This call. concludes conference you disconnect. for participation, may now today's your

Coursera (COUR) 25 Jul 242024 Q2 Earnings call transcript