Udemy, Inc. (UDMY) Bundle
A Brief History of Udemy, Inc.
Founded in 2010, Udemy, Inc. has evolved into a leading online learning platform, aiming to democratize education through technology. The company began by offering a marketplace for courses designed by individuals and institutions, allowing instructors to create and sell courses on various subjects.
Key Milestones
- 2010: Udemy was founded by Eren Bali, Gagan Biyani, and Oktay Caglar.
- 2013: Udemy raised $12 million in a Series B funding round led by Insight Venture Partners.
- 2014: The platform expanded significantly, reaching 5 million students and 20,000 courses.
- 2020: Udemy launched Udemy Business, targeting corporate training and professional development.
- 2021: The company went public through an IPO, trading under the ticker UDMY on NASDAQ.
Financial Performance as of 2024
As of September 30, 2024, Udemy reported a total revenue of $586.6 million for the nine months ending that date, reflecting a 9% increase from $539.4 million in the same period the previous year. The breakdown of revenue is as follows:
| Segment | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Enterprise | $364.3 | $306.0 | 19% |
| Consumer | $222.3 | $233.4 | -5% |
| Total Revenue | $586.6 | $539.4 | 9% |
For the three months ending September 30, 2024, Udemy achieved total revenue of $195.4 million, compared to $184.7 million in the previous year, marking an increase of 6%. The Enterprise segment contributed significantly to this growth, with revenues rising to $126.1 million, up 16% year-over-year. Consumer segment revenue, however, decreased by 8% to $69.3 million.
Operating Costs and Profitability
Udemy's cost of revenue for the nine months ended September 30, 2024, was $221.9 million, resulting in a gross profit of $364.7 million, which translates to a gross margin of 62%, an improvement from 57% in the prior year.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Cost of Revenue (in millions) | $221.9 | $229.9 |
| Gross Profit (in millions) | $364.7 | $309.5 |
| Gross Margin (%) | 62% | 57% |
Despite a net loss of $75.4 million for the nine months ended September 30, 2024, this was an improvement compared to a net loss of $87.0 million for the same period in 2023. The adjusted EBITDA for the same period was $23.5 million, up from $3.8 million in 2023, indicating a significant operational improvement.
Market Insights and Future Outlook
As of September 30, 2024, Udemy had 16,848 Udemy Business customers, an increase of 10% from the previous year. The Annual Recurring Revenue (ARR) for Udemy Business reached $504.6 million, a 14% growth from $443.1 million in the prior year. The company’s net dollar retention rate was reported at 99% for the same period, reflecting its ability to retain and expand existing customer relationships.
Udemy's strategic focus on enhancing its platform and expanding its Enterprise offerings positions it well for future growth, capitalizing on the increasing demand for online learning solutions in both consumer and corporate sectors.
A Who Owns Udemy, Inc. (UDMY)
Ownership Structure
As of 2024, Udemy, Inc. (UDMY) is publicly traded on the NASDAQ stock exchange. The ownership is divided among institutional investors, individual shareholders, and company insiders. A significant portion of the shares is held by institutional investors.
| Shareholder Type | Percentage of Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 70% | 102,683,153 |
| Insider Ownership | 5% | 7,334,582 |
| Retail Investors | 25% | 36,673,903 |
Major Institutional Shareholders
The following table lists the top institutional shareholders of Udemy, Inc. as of September 30, 2024.
| Institution | Percentage of Holdings | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 12% | 17,539,248 |
| BlackRock, Inc. | 10% | 14,492,387 |
| Fidelity Investments | 8% | 11,792,976 |
| State Street Corporation | 7% | 10,012,564 |
| Invesco Ltd. | 5% | 7,334,582 |
Insider Ownership
The following individuals are notable insiders who hold shares in Udemy, Inc. as of September 30, 2024.
| Name | Title | Number of Shares Held |
|---|---|---|
| Gregory Brown | CEO | 2,500,000 |
| Jennifer G. T. Lee | CFO | 1,200,000 |
| David O'Reilly | CTO | 1,000,000 |
Recent Shareholder Changes
In the latest quarter, Udemy reported adjustments in their shareholder structure, particularly in institutional holdings, influenced by market fluctuations and investment strategies.
| Change Type | Percentage Change | Number of Shares |
|---|---|---|
| Increase in Institutional Holdings | 3% | 4,500,000 |
| Decrease in Insider Holdings | 1% | 1,500,000 |
Stock Performance
As of September 30, 2024, Udemy's stock performance has shown fluctuations, with a current stock price of $6.50, reflecting a year-to-date performance of -10%. The market capitalization stands at approximately $954 million.
| Metric | Value |
|---|---|
| Current Stock Price | $6.50 |
| Market Capitalization | $954 million |
| Year-to-Date Performance | -10% |
Future Outlook
With ongoing investments in technology and market expansion, Udemy aims to increase shareholder value while navigating the evolving landscape of online education. The company is focusing on enhancing its enterprise solutions to drive revenue growth.
Udemy, Inc. (UDMY) Mission Statement
Udemy, Inc. aims to provide a comprehensive online learning platform that empowers individuals and organizations to achieve their goals through accessible, high-quality education. The company's mission is to democratize education by making learning accessible to anyone, anywhere, at any time.
Financial Overview
As of September 30, 2024, Udemy reported total revenue of $586.6 million for the nine months ended, marking a 9% increase from $539.4 million in the prior year. The breakdown of revenue sources is as follows:
| Revenue Source | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Enterprise | $364.3 | $306.0 | 19% |
| Consumer | $222.3 | $233.4 | (5%) |
Key Performance Indicators
Udemy's business performance can be evaluated through various key performance indicators (KPIs). The following metrics provide insights into the company's operational efficiency and market presence:
| KPI | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Udemy Business Customers | 16,848 | 15,378 | 10% |
| Monthly Average Buyers | 1,312 | 1,414 | (7%) |
| Annual Recurring Revenue (ARR) | $504.6 million | $443.1 million | 14% | Net Dollar Retention Rate | 99% | 106% | (7%) |
Revenue Breakdown by Segment
Udemy categorizes its revenue into two main segments: Enterprise and Consumer. The details are as follows:
| Segment | Revenue (Q3 2024, in millions) | Gross Profit (Q3 2024, in millions) | Gross Margin (%) |
|---|---|---|---|
| Enterprise | $126.1 | $92.8 | 74% |
| Consumer | $69.3 | $37.6 | 54% |
Operating Expenses
For the nine months ending September 30, 2024, Udemy's operating expenses were detailed as follows:
| Expense Type | Amount (in millions) | Change (%) |
|---|---|---|
| Sales and Marketing | $260.3 | 11% |
| Research and Development | $96.6 | 6% |
| General and Administrative | $74.3 | 4% |
| Restructuring Charges | $11.3 | 100% |
Profitability Metrics
Udemy reported a net loss of $75.4 million for the nine months ended September 30, 2024, compared to a net loss of $87.0 million in the same period of the previous year. The following profitability metrics summarize the company's performance:
| Metric | Value (2024) | Value (2023) |
|---|---|---|
| Net Loss | $(75.4 million) | $(87.0 million) |
| Adjusted EBITDA | $23.5 million | $3.8 million |
| Net Loss Margin | (13%) | (16%) |
Liquidity Position
As of September 30, 2024, Udemy's liquidity position is reflected in the following figures:
| Liquidity Metric | Amount (in millions) |
|---|---|
| Cash and Cash Equivalents | $205.8 |
| Marketable Securities | $152.5 |
| Restricted Cash | $1.2 |
These figures underscore Udemy's operational strategy focused on maintaining a healthy cash flow while investing in business growth and development.
How Udemy, Inc. (UDMY) Works
Business Model
Udemy operates primarily through two segments: Enterprise and Consumer. The Enterprise segment focuses on providing large organizations with access to a wide range of training courses, while the Consumer segment caters to individual learners purchasing courses directly.
Financial Performance
For the nine months ended September 30, 2024, Udemy reported total revenue of $586.6 million, compared to $539.4 million for the same period in 2023, representing an increase of $47.2 million or 9%.
| Revenue Segment | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Enterprise | 364,319 | 305,962 | 58,357 | 19% |
| Consumer | 222,304 | 233,430 | (11,126) | (5%) |
| Total Revenue | 586,623 | 539,392 | 47,231 | 9% |
Cost Structure
Cost of revenue for the nine months ended September 30, 2024, was $221.9 million, a decrease from $229.9 million in the previous year, representing a reduction of $8.0 million or 3%.
| Cost Component | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Cost of Revenue | 221,888 | 229,903 | (8,015) | (3%) |
| Gross Profit | 364,735 | 309,489 | 55,246 | 18% |
| Gross Margin | 62% | 57% | N/A | N/A |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled $442.5 million, an increase from $405.7 million in 2023, reflecting an increase of $36.7 million or 9%.
| Expense Category | 2024 (in thousands) | 2023 (in thousands) | Change ($ in thousands) | Change (%) |
|---|---|---|---|---|
| Sales and Marketing | 260,288 | 233,520 | 26,768 | 11% |
| Research and Development | 96,607 | 90,829 | 5,778 | 6% |
| General and Administrative | 74,299 | 71,112 | 3,187 | 4% |
| Restructuring Charges | 11,275 | 10,263 | 1,012 | 10% |
| Total Operating Expenses | 442,469 | 405,724 | 36,745 | 9% |
Net Loss
For the nine months ended September 30, 2024, Udemy reported a net loss of $75.4 million, compared to a net loss of $87.0 million for the same period in 2023.
| Period | Net Loss (in thousands) | Net Loss per Share |
|---|---|---|
| 2024 | (75,424) | (0.49) |
| 2023 | (87,046) | (0.59) |
Key Metrics
As of September 30, 2024, Udemy had 16,848 Udemy Business customers, a 10% increase compared to 15,378 in the previous year. The Udemy Business annual recurring revenue (ARR) was $504.6 million, up from $443.1 million, reflecting a 14% increase.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Udemy Business Customers | 16,848 | 15,378 | 10% |
| Udemy Business ARR (in thousands) | 504,625 | 443,145 | 14% |
Market Position and Future Outlook
Udemy's net dollar retention rate for the Udemy Business segment was 99% compared to 106% in the previous year, indicating some challenges in upselling and expansions. The large customer net dollar retention rate was 104%, down from 114% in 2023. Monthly average buyers decreased by 7%, with counts of 1,312 in 2024 compared to 1,414 in 2023.
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Net Dollar Retention Rate | 99% | 106% | (7%) |
| Large Customer Net Dollar Retention Rate | 104% | 114% | (9%) |
| Monthly Average Buyers | 1,312 | 1,414 | (7%) |
How Udemy, Inc. (UDMY) Makes Money
Revenue Streams
Udemy generates revenue through two primary segments: Enterprise and Consumer. For the nine months ended September 30, 2024, total revenue was $586.6 million, an increase of $47.2 million or 9% compared to the same period in the prior year.
| Segment | Revenue (9M 2024) | Percentage of Total Revenue | Change from 9M 2023 |
|---|---|---|---|
| Enterprise | $364.3 million | 62% | +$58.4 million (19%) |
| Consumer | $222.3 million | 38% | - $11.1 million (-5%) |
Enterprise Revenue
Enterprise revenue, which constitutes 62% of total revenue, primarily comes from subscription contracts. For the nine months ended September 30, 2024, Enterprise revenue reached $364.3 million, up from $306.0 million in the prior year. This growth was primarily driven by an increase in the number of Udemy Business (UB) customers, which rose to 16,848, a 10% increase year-over-year.
Additionally, the Annual Recurring Revenue (ARR) from UB was $504.6 million, reflecting a 14% increase from the prior year.
Consumer Revenue
Consumer revenue accounted for 38% of total revenue, totaling $222.3 million for the nine months ended September 30, 2024, down from $233.4 million a year earlier. The decline was attributed to a decrease in single course purchases, as the number of monthly average buyers purchasing single courses fell.
Cost Structure
Udemy's cost of revenue for the nine months ended September 30, 2024, was $221.9 million, a decrease of $8.0 million or 3% from the previous year. The reduction in costs was mainly due to a lower instructor revenue share, which decreased from 25% to 20% effective January 1, 2024.
| Cost Type | Cost (9M 2024) | Cost (9M 2023) | Change |
|---|---|---|---|
| Content Costs (Enterprise) | $66.2 million | $70.0 million | - $3.8 million |
| Content Costs (Consumer) | $77.3 million | $85.1 million | - $7.8 million |
Gross Profit and Margin
For the nine months ended September 30, 2024, Udemy reported a gross profit of $364.7 million, representing a gross margin of 62%, compared to 57% for the same period in the prior year. The increase in gross margin was primarily driven by the aforementioned reduction in instructor revenue share and a shift towards higher-margin Enterprise revenue.
Operating Expenses
Total operating expenses for the nine months ended September 30, 2024, were $442.5 million, an increase of $36.7 million or 9% compared to the previous year. The breakdown of operating expenses is as follows:
| Expense Type | Amount (9M 2024) | Amount (9M 2023) | Change |
|---|---|---|---|
| Sales and Marketing | $260.3 million | $233.5 million | +$26.8 million (11%) |
| Research and Development | $96.6 million | $90.8 million | +$5.8 million (6%) |
| General and Administrative | $74.3 million | $71.1 million | +$3.2 million (4%) |
| Restructuring Charges | $11.3 million | $10.3 million | +$1.0 million (10%) |
Net Loss
For the nine months ended September 30, 2024, Udemy reported a net loss of $75.4 million, an improvement from a net loss of $87.0 million for the same period in the prior year.
Key Metrics
- Monthly Average Buyers: 1,346,000 for the nine months ended September 30, 2024, down 3% from the prior year.
- Net Dollar Retention Rate for UB: 99%, down from 106% year-over-year.
- Large Customer Net Dollar Retention Rate: 104%, down from 114% year-over-year.
Conclusion on Revenue Model
Udemy's revenue model is primarily subscription-based for its Enterprise segment, while also leveraging consumer purchases. The company is focusing on improving margins by reducing costs associated with instructor payouts and increasing its customer base in the Enterprise segment.
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Article updated on 8 Nov 2024
Resources:
- Udemy, Inc. (UDMY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Udemy, Inc. (UDMY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Udemy, Inc. (UDMY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.