• Quarterly Revenue: Surpassed $200 million for the first time.
• Adjusted EBITDA: Exceeded expectations, approximately $21 million or 11% of revenue.
• Udemy Business ARR: $519 million, up 8% year-over-year.
• Udemy Business Revenue: $128 million, an increase of 9% year-over-year.
• Consumer Segment Revenue: $73 million, down 8% year-over-year.
• Gross Margin: Total company gross margin was 65%, a 300 basis point improvement from Q1 2024.
• Net Income: Approximately $18 million.
• Cash and Cash Equivalents: $358 million at the end of the quarter.
• Free Cash Flow: $7 million for the quarter.
• Subscription Revenue: Accounts for 68% of total revenue, a 500 basis point expansion year-over-year.
• Net Dollar Retention: 96% overall, 100% for large customers.
• Q2 Revenue Guidance: Expected to be between $195 million and $199 million.
• Full Year 2025 Revenue Guidance: Expected to be in the range of $772 million to $794 million.
• Full Year 2025 Adjusted EBITDA Guidance: Expected to be $77 million to $87 million, approximately 10% of revenue at the midpoint.

• Warning! GuruFocus has detected 4 Warning Signs with UDMY.

Release Date: April 30, 2025

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

Positive Points

• Udemy Inc (NASDAQ:UDMY) exceeded the high end of its guidance for both revenue and adjusted EBITDA in Q1 2025.
• The company is seeing strong customer traction, including a multiyear enterprise-wide expansion deal with a large professional service firm.
• Udemy Inc (NASDAQ:UDMY) is focusing on increasing consumer subscriptions, which saw a nearly 40% year-over-year revenue rise in Q1.
• The company is implementing a comprehensive global market activation strategy to enhance its international presence.
• Udemy Inc (NASDAQ:UDMY) is leveraging AI to enhance its platform, offering personalized learning experiences and AI-driven learning paths.

Negative Points

• There is increased uncertainty in the market, leading to a more conservative outlook for the second half of the year.
• The company is experiencing pressure on top-line growth due to restructuring and reduced sales capacity.
• Consumer segment performance is softer than expected, impacting overall revenue projections.
• There is a noted decrease in net dollar retention, particularly among large customers, due to changes in the sales organization.
• Udemy Inc (NASDAQ:UDMY) faces challenges in effectively marketing and packaging its AI capabilities to fully capture market opportunities.

Q & A Highlights

Q: Hugo, can you share your key observations from your first 45 days at Udemy and your main priorities for the next 90 days? A: Hugo Sarrazin, CEO, expressed excitement about the potential at Udemy, highlighting the need to better package and market their AI capabilities. He emphasized the importance of consumer subscriptions and leveraging partnerships to enhance platform stickiness. He also mentioned the introduction of AI-powered role-play tools for instructors, which have seen rapid adoption.

Q: Sarah, regarding the updated guidance, are there any assumptions for contributions from the new Career Accelerators in the Consumer segment? A: Sarah Blanchard, CFO, stated that while Career Accelerators are expected to be exciting, the majority of consumer revenue remains transactional. The company is cautious due to macroeconomic uncertainties, but they are optimistic about the potential of Career Accelerators and the shift towards subscriptions.

Q: Can you elaborate on the conversations with enterprise customers regarding AI and how these have evolved? A: Hugo Sarrazin noted that enterprise customers are increasingly focused on AI fluency across all departments, not just IT. This shift presents an opportunity for Udemy to offer targeted AI training packages. He emphasized the importance of demonstrating ROI and business outcomes to customers.

Q: How is Udemy planning to enhance its consumer subscription offerings? A: Hugo Sarrazin mentioned plans to reimagine the consumer subscription model, including changes in website positioning, merchandising, and creating different subscription models. The goal is to transition from a transaction-based model to a subscription-first approach, offering more personalized learning experiences.

Q: What is the impact of AI on Udemy's sales strategy, and how will it be packaged with the new Chief Customer Experience Officer in place? A: Hugo Sarrazin explained that AI is central to many customer conversations and is included in Udemy Business Enterprise offerings. The company plans to create targeted AI training packages for different organizational roles and explore monetization opportunities for AI-powered features like role-play.

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