Udemy Reports Third Quarter 2025 Results

SAN FRANCISCO--( BUSINESS WIRE)--Udemy (Nasdaq: UDMY), a leading AI-powered skills acceleration platform, today reported results for the three-month period ended September 30, 2025. Udemy has provided a supplemental deck with earnings highlights, which is available for download on the “Quarterly Results” section of the Investor Relations website.

Financial Results and Key Operating Data Summary

(in millions, except enterprise customers, subscribers, percentages, and basis points)

Three Months Ended September 30,

Change

2025

2024

YoY

Revenue

195.7

195.4

—

Subscription Revenue

143.9

133.7

Gross Profit

128.9

123.1

Gross Margin

300

bps

Net Income (Loss)

1.6

(25.3

)

106

Adjusted EBITDA

24.3

11.6

110

Adjusted EBITDA Margin

600

bps

Enterprise Segment

Total Customers

17,111

16,848

UB Annual Recurring Revenue

527.2

504.6

Segment Revenue

132.8

126.1

Subscription Revenue

132.3

125.5

Segment Adjusted Gross Margin

100

bps

Consumer Segment

Paid Subscribers

294,000

156,000

Monthly Average Buyers

1.20

1.31

Segment Revenue

62.9

69.3

Subscription Revenue

11.7

8.2

Segment Adjusted Gross Margin

300

bps

“Our Q3 results demonstrate strong momentum as Udemy evolves towards becoming the world's leading AI-powered skills acceleration platform,” said Hugo Sarrazin, President and CEO of Udemy. “Given our excellent progress in the strategic shift toward higher-value recurring revenue streams, we are accelerating our consumer subscription-first approach. This strategic pivot impacts near-term Consumer segment growth but significantly shortens our path to a more durable, predictable business model with compelling unit economics.”

“As hundreds of millions of workers globally will need to develop new skills due to AI and automation over the next few years, organizations and individuals that move quickly to upskill and reskill will gain significant competitive advantages. We are combining the power of AI with human expertise to strengthen Udemy’s platform solution and expand our market opportunity. Udemy is building a comprehensive learning platform that takes people from curiosity to career advancement with structure, support, and validation that AI alone cannot provide. Ultimately, Udemy bridges the critical gap between where skills are today and where they need to be tomorrow,” concluded Sarrazin.

Additional Highlights

Financial Outlook 1

Three months ending December 31, 2025

Year ending December 31, 2025

Revenue 2

$191 to $194 million

$787 to $790 million

Adjusted EBITDA 3

$18 to $20 million

$92 to $94 million

Weighted Average Share Count, Basic 4

148 million

Weighted Average Share Count, Diluted 4

150 million

1. Udemy provides guidance based on current market conditions and expectations. Actual results may differ materially. Please refer to the comments below regarding forward-looking statements.

2. Revenue guidance assumes FX rates will remain unchanged from the end of the third quarter of 2025.

3. Udemy has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) within this earnings release because the company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence.

4. Udemy’s outlook for weighted average share count, basic and diluted, excludes any impact from potential future repurchase activities under our share repurchase program.

Webcast Information

Udemy will host a conference call and webcast at 2:00 p.m. PT / 5:00 p.m. ET today, Wednesday, October 29, to discuss its third quarter 2025 financial results and outlook. A link to the live webcast and recorded replay of the conference call will be available on the “Quarterly Results” section of Udemy’s Investor Relations website at https://investors.udemy.com/. The live call may also be accessed via telephone at (833) 630-1963 domestically and (412) 317-5702 internationally. The archived replay of the webcast will be available for approximately one year.

Non-GAAP Financial Measures

To supplement the consolidated financial statements prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this press release contains certain non-GAAP financial measures as defined below. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide useful information to investors and others in understanding and evaluating our operating results because our management team and board of directors use these non-GAAP financial measures for the purposes of assessing operating results and business planning. These non-GAAP financial measures also provide useful measures for period-to-period comparisons of our business by removing the effect of certain non-cash expenses and certain variable charges.

Udemy’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented herein in conjunction with Udemy’s financial statements and the related notes thereto. Please refer to the non-GAAP reconciliations in this press release for a reconciliation of these non-GAAP financial measures to the most comparable financial measure prepared in accordance with GAAP.

Adjusted EBITDA and Adjusted EBITDA Margin

We calculate Adjusted EBITDA as net income (loss) determined in accordance with GAAP, adjusted to exclude i) interest income; ii) interest expense; iii) provision for income taxes; iv) depreciation and amortization; v) other income (expense), net, including gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency; vi) stock-based compensation expense; and vii) restructuring charges. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue for the same period. We have not reconciled our expectations for Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss) and net income (loss) margin, respectively, the most directly comparable GAAP measures, because certain items are out of our control or cannot be reasonably predicted and a reconciliation for the guidance for Adjusted EBITDA and Adjusted EBITDA Margin is not available without unreasonable effort.

Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per Share, Basic and Diluted

We define non-GAAP net income (loss) as net income (loss), adjusted to exclude stock-based compensation expense, amortization of acquired intangible assets, and restructuring charges.

We define non-GAAP net income (loss) per share, basic, as non-GAAP net income (loss) divided by weighted-average shares used to compute net income (loss) per share, basic. We define non-GAAP net income (loss) per share, diluted, as non-GAAP net income (loss) divided by weighted-average shares used to compute net income (loss) per share, diluted, which adjusts for the potentially dilutive effects of our employee equity incentive plans.

Non-GAAP Gross Profit and Non-GAAP Gross Margin

We define non-GAAP gross profit as gross profit, adjusted to exclude stock-based compensation expense and the amortization of acquired intangible assets. We calculate non-GAAP gross margin as non-GAAP gross profit divided by revenue for the same period.

Free Cash Flow

We define free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized software costs, as we consider these capital expenditures necessary to support our ongoing operations.

Key Business Metrics

Udemy Business customers

We count the total number of Udemy Business (“UB”) customers at the end of each period. To do so, we generally count unique customers using the concept of a domestic ultimate parent, defined as the highest business in the family tree that is in the same country as the contracted entity. In some cases, we deviate from this methodology, defining the contracted entity as a unique customer despite the existence of a domestic ultimate parent. This often occurs where the domestic ultimate parent is a financial owner, government entity, conglomerate, or acquisition target where we have contracted directly with the subsidiary. We define a UB customer as a customer who purchases Udemy via our direct sales force, reseller partnerships or through our self-service platform.

Udemy Business Annual Recurring Revenue

We disclose our UB ARR as a measure of our Enterprise revenue growth. ARR represents the annualized value of our UB customer contracts on the last day of a given period. Only revenue from closed UB contracts with active seats as of the last day of the period are included.

Udemy Business Net Dollar Retention Rate and Udemy Business Large Customer Net Dollar Retention Rate

We disclose UB Net Dollar Retention Rate, or UB NDRR, as a measure of revenue growth for all UB customers within our Enterprise segment, including UB Large Customers, which we define as companies with at least 1,000 employees. We calculate UB NDRR as the total ARR at the end of a trailing twelve-month period divided by the total ARR at the beginning of a trailing twelve-month period for the cohort of all UB customers active at the beginning of the trailing twelve-month period. We calculate UB Large Customer NDRR as the total UB Large Customer ARR at the end of a trailing twelve-month period divided by the total Large Customer ARR at the beginning of a trailing twelve-month period for the cohort of UB customers with at least 1,000 employees active at the beginning of the trailing twelve-month period. Total ARR and Large Customer ARR at the end of a trailing twelve-month period are calculated as ARR and Large Customer ARR, respectively, at the beginning of a trailing twelve-month period that are then adjusted for upsells, downsells, and churns for the same cohort of customers during that period. Large Customer ARR represents the annualized value of contracts for UB customers with active seats and having at least 1,000 employees on the last day of a given period.

Paid Consumer subscribers

We count the total number of paid Consumer subscribers at the end of each period. Paid Consumer subscribers are defined as users who had an active paid subscription to any Consumer subscription offering at the end of the last day of a given period. The count of paid subscribers does not include users who are currently on a free trial.

Monthly average buyers

A buyer is a consumer who purchases a course or subscription through our direct-to-consumer offering. We first determine the number of monthly buyers by taking the total buyers of single courses during a given month plus the total active, paid consumer subscribers at any point in that month, adjusting for duplicate buyers that may be present in both totals. We then calculate monthly average buyers by taking an average of the monthly buyer totals over a particular period, such as a fiscal year. Our monthly average buyer count is not intended as a measure of active engagement, as not all buyers are active at any given time or over any given period.

Segment revenue and segment adjusted gross profit

Segment revenue represents the revenue recognized from our two segments, Enterprise (or Udemy Business), and Consumer. Segment adjusted gross profit is defined as segment revenue less segment adjusted cost of revenue. Segment adjusted cost of revenue includes content costs, customer support services, hosting and platform costs, and payment processing fees that are allocable to each segment. Segment adjusted gross profit excludes amortization of capitalized software, depreciation, stock-based compensation, and amortization of intangible assets included in cost of revenue as our chief operating decision maker does not include the information in his measurement of the performance of the operating segments.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding Udemy’s expectations relating to future operating results and financial position, including fourth quarter and full year 2025 as well as future periods; trends in consumer and learner activity related to our platform; anticipated future expenses and investments; our business strategy and plans, including the impact of our strategic and operational efficiency initiatives and our ability to successfully execute on these initiatives; market growth; and our market position and potential market opportunities. The words “believe,” “may,” “will,” “estimate,” “potential,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “target,” and similar expressions are intended to identify forward-looking statements.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance.

The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the caption "Risk Factors" and elsewhere in our publicly available filings with the Securities and Exchange Commission. All information provided in this release is as of the date hereof, and we undertake no duty to update this information unless required by law.

About Udemy

Udemy (Nasdaq: UDMY) is an AI-powered skills acceleration platform transforming how companies and individuals across the world build the capabilities needed to thrive in a rapidly evolving workplace. By combining on-demand, multi-language content with real-time innovation, Udemy delivers personalized experiences that empower organizations to scale workforce development and help individuals build the technical, business, and soft skills most relevant to their careers. Today, thousands of companies, including Ericsson, Samsung SDS America, On24, Tata Consultancy Services, The World Bank, and Volkswagen, rely on Udemy Business for its enterprise solutions to build agile, future-ready teams. Udemy is headquartered in San Francisco, with hubs across the United States, Australia, India, Ireland, Mexico and Türkiye.

Udemy, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Revenue

195,680

195,417

595,859

586,623

Cost of revenue (1)(2)

66,812

72,362

205,499

221,888

Gross profit

128,868

123,055

390,360

364,735

Operating expenses (1)(2)

Sales and marketing

81,512

85,997

243,832

260,288

Research and development

25,581

32,976

76,900

96,607

General and administrative

21,937

22,266

68,776

74,299

Restructuring charges

—

11,275

1,578

11,275

Total operating expenses

129,030

152,514

391,086

442,469

Loss from operations

(162

)

(29,459

)

(726

)

(77,734

)

Other income (expense), net

Interest income

3,784

4,732

11,022

15,655

Interest expense

(350

)

504

(485

)

424

Other expense, net

(523

)

(185

)

(498

)

(11,077

)

Total other income, net

2,911

5,051

10,039

5,002

Net income (loss) before taxes

2,749

(24,408

)

9,313

(72,732

)

Income tax provision

1,107

863

3,177

2,692

Net income (loss)

1,642

(25,271

)

6,136

(75,424

)

Net income (loss) per share

Basic

0.01

(0.17

)

0.04

(0.49

)

Diluted

0.01

(0.17

)

0.04

(0.49

)

Weighted-average shares used in computing net income (loss) per share

Basic

149,917,275

149,179,826

149,076,960

152,867,160

Diluted

151,996,844

149,179,826

151,308,077

152,867,160

(1) Includes stock-based compensation expense as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Cost of revenue

1,806

1,807

5,160

5,277

Sales and marketing

6,038

7,573

17,053

22,578

Research and development

5,025

7,183

14,653

21,187

General and administrative

5,425

6,839

16,815

21,382

Restructuring charges

—

(160

)

—

(160

)

Total stock-based compensation expense

18,294

23,242

53,681

70,264

(2) Includes amortization of intangible assets as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Cost of revenue

—

430

—

1,880

Sales and marketing

230

228

689

688

Research and development

187

—

375

—

Total amortization of intangible assets

417

658

1,064

2,568

Udemy, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

September 30,

December 31,

2025

2024

Assets

Current assets:

Cash and cash equivalents

235,929

190,592

Restricted cash, current

203

100

Marketable securities

135,292

163,844

Accounts receivable, net

76,560

88,216

Prepaid expenses and other current assets

28,587

22,735

Deferred contract costs, current

47,567

40,841

Total current assets

524,138

506,328

Property and equipment, net

6,976

4,534

Capitalized software, net

29,122

31,548

Operating lease right-of-use assets

10,117

10,950

Restricted cash, non-current

912

1,115

Deferred contract costs, non-current

26,636

32,212

Intangible assets, net

2,865

2,428

Goodwill

12,646

Other assets

5,492

3,867

Total assets

618,904

605,628

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

6,534

6,311

Accrued expenses and other current liabilities

26,190

31,156

Content costs payable

32,275

37,607

Accrued compensation and benefits

22,953

28,793

Operating lease liabilities, current

5,298

2,502

Deferred revenue, current

295,926

291,106

Total current liabilities

389,176

397,475

Operating lease liabilities, non-current

6,670

8,315

Deferred revenue, non-current

1,240

2,438

Other liabilities, non-current

Total liabilities

397,091

408,234

Stockholders' equity:

Common stock

Additional paid-in capital

1,020,518

1,002,390

Accumulated other comprehensive income (loss)

144

(11

)

Accumulated deficit

(798,850

)

(804,986

)

Total stockholders’ equity

221,813

197,394

Total liabilities and stockholders' equity

618,904

605,628

Udemy, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Cash flows from operating activities:

Net income (loss)

1,642

(25,271

)

6,136

(75,424

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

6,139

6,340

19,285

19,515

Amortization of deferred contract costs

16,780

15,221

48,392

43,863

Stock-based compensation

18,294

23,242

53,681

70,264

Allowance for credit losses

444

283

2,835

1,026

Net (accretion) amortization of marketable securities

(543

)

(2,201

)

(2,677

)

(6,651

)

Non-cash operating lease expense

854

909

2,700

3,641

Unrealized loss on strategic investments

—

10,311

Other

423

817

1,046

1,319

Changes in operating assets and liabilities:

Accounts receivable

7,437

632

8,821

10,364

Prepaid expenses and other assets

(6,392

)

(4,963

)

(6,805

)

(5,508

)

Deferred contract costs

(14,550

)

(13,892

)

(49,542

)

(46,626

)

Accounts payable, accrued expenses and other liabilities

909

3,025

(9,287

)

5,962

Content costs payable

(893

)

649

(5,332

)

(3,978

)

Operating lease liabilities

880

(984

)

(731

)

(4,523

)

Deferred revenue

(15,693

)

(9,907

)

3,622

19,906

Net cash provided by (used in) operating activities

15,731

(6,100

)

72,144

43,461

Cash flows from investing activities:

Purchases of marketable securities

(25,298

)

(93,405

)

(137,803

)

(239,783

)

Proceeds from maturities of marketable securities

52,350

91,800

169,050

265,350

Purchases of property and equipment

(620

)

(562

)

(5,281

)

(1,116

)

Capitalized software costs

(3,025

)

(3,536

)

(8,676

)

(10,247

)

Payments related to asset acquisitions

—

(1,500

)

—

Net cash provided by (used in) investing activities

23,407

(5,703

)

15,790

14,204

Cash flows from financing activities:

Net proceeds from exercise of stock options

482

921

Proceeds from share purchases under employee stock purchase plan

—

2,560

4,533

Taxes paid related to net share settlement of equity awards

(4,921

)

(5,548

)

(14,838

)

(25,363

)

Repurchases of common stock and excise taxes paid

(28,337

)

(51,014

)

(29,212

)

(141,591

)

Payments of debt issuance costs

(219

)

—

(1,438

)

—

Net cash used in financing activities

(33,464

)

(56,080

)

(42,866

)

(161,500

)

Effect of foreign exchange rates on cash flows

)

169

Net increase (decrease) in cash, cash equivalents and restricted cash

5,671

(67,801

)

45,237

(103,774

)

Cash, cash equivalents and restricted cash—Beginning of period

231,373

273,579

191,807

309,552

Cash, cash equivalents and restricted cash—End of period

237,044

205,778

237,044

205,778

Udemy, Inc.

Supplemental Revenue and Segment Analysis

(in thousands, except percentages)

(unaudited)

Revenue by Segment and Product Offering

The following table presents revenue disaggregated by product offering for each segment:

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Enterprise:

Subscription

132,284

125,522

387,977

362,658

Other

518

601

1,870

1,661

Enterprise revenue

132,802

126,123

389,847

364,319

Consumer:

Subscription

11,661

8,152

31,242

22,347

Transactional and other

51,217

61,142

174,770

199,957

Consumer revenue

62,878

69,294

206,012

222,304

Total revenue

195,680

195,417

595,859

586,623

Segment revenue, adjusted gross profit, and adjusted gross margin

The following table presents revenue, adjusted gross profit, and adjusted gross margin by segment:

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Enterprise segment revenue

132,802

126,123

389,847

364,319

Enterprise segment adjusted gross profit

100,052

92,793

293,564

264,675

Enterprise segment adjusted gross margin

Consumer segment revenue

62,878

69,294

206,012

222,304

Consumer segment adjusted gross profit

35,742

37,610

118,195

122,323

Consumer segment adjusted gross margin

Udemy, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures

(in thousands, except percentages, share and per share amounts)

(unaudited)

Non-GAAP Gross Profit and Non-GAAP Gross Margin

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Gross profit

128,868

123,055

390,360

364,735

Stock-based compensation expense

1,806

1,807

5,160

5,277

Intangible asset amortization

—

430

—

1,880

Non-GAAP gross profit

130,674

125,292

395,520

371,892

Gross margin (1)

Non-GAAP gross margin (2)

Non-GAAP Net Income and Non-GAAP Net Income Per Share, Basic and Diluted

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Net income (loss)

1,642

(25,271

)

6,136

(75,424

)

Stock-based compensation expense

18,294

23,402

53,681

70,424

Intangible asset amortization

417

658

1,064

2,568

Restructuring charges

—

11,275

1,578

11,275

Non-GAAP net income

20,353

10,064

62,459

8,843

Net income (loss) per share, basic

0.01

(0.17

)

0.04

(0.49

)

Net income (loss) per share, diluted

0.01

(0.17

)

0.04

(0.49

)

Weighted-average shares used in computing net income (loss) per share, basic

149,917,275

149,179,826

149,076,960

152,867,160

Weighted-average shares used in computing net income (loss) per share, diluted (3)

151,996,844

149,179,826

151,308,077

152,867,160

Non-GAAP net income per share, basic

0.14

0.07

0.42

0.06

Non-GAAP net income per share, diluted

0.13

0.07

0.41

0.06

Weighted-average shares used in computing non-GAAP net income per share, basic

149,917,275

149,179,826

149,076,960

152,867,160

Weighted-average shares used in computing non-GAAP net income per share, diluted (3)

151,996,844

150,633,523

151,308,077

156,429,499

For periods presented with a net loss or non-GAAP net loss, potentially dilutive securities were excluded from the computation of net loss per share, diluted, and non-GAAP net loss per share, diluted, because the impact of including them would have been anti-dilutive.

Adjusted EBITDA and Adjusted EBITDA Margin

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Net income (loss)

1,642

(25,271

)

6,136

(75,424

)

Adjusted to exclude the following:

Interest income

(3,784

)

(4,732

)

(11,022

)

(15,655

)

Interest expense

350

(504

)

485

(424

)

Income tax provision

1,107

863

3,177

2,692

Depreciation and amortization

6,139

6,340

19,285

19,515

Stock-based compensation expense

18,294

23,402

53,681

70,424

Other expense, net

523

185

498

11,077

Restructuring charges

—

11,275

1,578

11,275

Adjusted EBITDA

24,271

11,558

73,818

23,480

Net income (loss) margin (4)

(13

Adjusted EBITDA margin (5)

(4)

We calculate net income (loss) margin as net income (loss) divided by revenue for the same period.

(5)

We calculate adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period.

Free Cash Flow

Three Months Ended September 30,

Nine Months Ended September 30,

2025

2024

2025

2024

Net cash provided by operating activities

15,731

(6,100

)

72,144

43,461

Less: purchases of property and equipment

(620

)

(562

)

(5,281

)

(1,116

)

Less: capitalized software costs

(3,025

)

(3,536

)

(8,676

)

(10,247

)

Free cash flow

12,086

(10,198

)

58,187

32,098