Coursera Q2 Earnings Call Highlights

Key Points

• Coursera reported $299 million in Q2 revenue, up 60% year over year as reported following its Udemy combination, while normalized revenue declined 1%. The company raised its annual synergy target to at least $85 million by the end of 2026.
• Profitability and guidance improved, with gross margin reaching 62%, adjusted EBITDA near $43 million, and the full-year 2026 revenue forecast raised to $1.22 billion–$1.245 billion. Coursera expects adjusted EBITDA margins to exceed 16% in Q4 as integration benefits emerge.
• Coursera is investing heavily in AI and platform integration, including a $100 million investment in LearnVector and plans to begin rolling out a unified AI-native learning platform in the first half of 2027. Enterprise revenue rose 3% on a normalized basis, while consumer revenue declined 5% on the same basis despite paid subscribers increasing 44% to more than 1.65 million.

Coursera NYSE: COUR reported second-quarter revenue of $299 million, its first quarter as a combined company following the May 11 close of its transaction with Udemy. Revenue increased 60% year over year on an as-reported basis due to Udemy’s inclusion, while normalized revenue declined 1% when including Udemy’s pre-close results for comparison.

President and Chief Executive Officer Greg Hart said the company’s focus is on using the combination to build a larger learning ecosystem and accelerate development of a unified, AI-native platform. The company now expects to achieve at least $85 million in annual run-rate net synergies by the end of 2026, above its prior $80 million expectation.

“The goal was never simply to become larger,” Hart said. “It was to build a stronger, more capable company with the scale, data, and innovation capacity to create next-generation learning experiences faster than either company could alone.”

Margins Expand and Outlook Rises

Coursera reported gross profit of $186 million, up 77% from a year earlier, with gross margin rising to 62%. The company said the margin expansion reflected rate improvements and structural changes made by both businesses before their combination, including changes to content economics and a greater mix of subscription revenue.

Operating expenses totaled $150 million, or 50% of revenue. Net income was $40 million, equal to 13.5% of revenue, while adjusted EBITDA was nearly $43 million, or 14.3% of revenue.

Chief Financial Officer Mike Foley said the company took steps in early July to simplify the combined organization and reduce duplicative functions. Coursera also has begun aligning global account coverage and integrating its go-to-market organization.

For the third quarter, Coursera projected revenue of $364 million to $372 million and adjusted EBITDA of $52 million to $56 million. For full-year 2026, the company raised and narrowed its revenue forecast to $1.22 billion to $1.245 billion. It also increased its adjusted EBITDA margin target by 100 basis points from its June outlook, to approximately 14%.

Foley said Coursera expects adjusted EBITDA margin to exceed 16% in the fourth quarter as integration benefits and synergy actions become more visible. The company previously reported an adjusted EBITDA margin of 8.4% for full-year 2025.

Enterprise and Consumer Trends

Enterprise revenue totaled $140 million, rising 118% as reported and 3% on a normalized basis. The company ended the quarter with 12,107 enterprise customers, while net revenue retention was 91%.

Foley said enterprise demand remained mixed across customer segments, regions and use cases. He cited continued pressure on learning and development budgets in the company’s largest business segment, while describing its campus business as differentiated and its government business as potentially volatile because many government customers sign annual agreements.

Consumer revenue was $159 million, up 29% as reported but down 5% on a normalized basis. Coursera ended the quarter with more than 1.65 million paid subscribers, a 44% year-over-year increase. Consumer subscription revenue was approximately $122 million and represented more than 75% of consumer-segment revenue.

The company said its core subscription products, including Coursera Plus, remain its consumer growth engine. However, subscriptions to individual programs and Udemy’s transactional offerings continued to face pressure. Coursera said it plans to maintain disciplined paid marketing spending focused on profitable growth as it shifts toward a subscription-first model.

More than 85% of Coursera’s total revenue now comes from recurring subscription streams in its enterprise and consumer operations, according to Hart.

AI Platform Plans and LearnVector Investment

Coursera announced a $100 million strategic investment in LearnVector, a newly formed AI-native learning company founded and led by Coursera Chairman and Co-founder Andrew Ng. Hart said Coursera owns roughly one-third of LearnVector and is not a majority investor. Foley said LearnVector’s results will not be consolidated into Coursera’s financial statements; the investment will sit on Coursera’s balance sheet.

Hart said a special committee of Coursera’s board handled the related-party transaction. The company is also developing a commercial relationship with LearnVector that could bring its future innovations to Coursera’s unified platform.

Ng said LearnVector is seeking to shift learning from a traditional one-to-many model to a personalized, one-to-one experience. He said the company is building an agentic AI system intended to plan learning paths, adapt to individual learners and provide step-by-step instruction through skill mastery.

“Good learning experiences will require much more than just a chatbot,” Ng said, adding that chatbots without guardrails can harm learning through cognitive offloading and unreliable responses.

Coursera plans to introduce elements of its unified platform beginning in the first half of 2027. Hart said the platform will use a skills and career graph informed by more than 2 million data points connecting jobs, skills and learning content. The company has developed an early end-to-end prototype and is engaging enterprise customers and content creators as design partners.

Product Development and Capital Allocation

Coursera highlighted product developments across both platforms, including expanded AI-powered Role Play tools. Role Play is now available in more than 2,300 Coursera courses and includes real-time voice simulations and immediate feedback. Udemy has added customization, immersive video and AI avatars to its role-play experiences.

The company also introduced Ollie, a mobile app for Coursera Plus subscribers centered on short daily learning sessions, and expanded integrations that connect learning content to workplace AI tools. In June, Coursera announced its Connector for Claude, which allows enterprise learners to receive content recommendations and access role-play experiences from within Claude.

Across Coursera and Udemy, the company offers nearly 10,000 generative AI courses. Learners are enrolling in generative AI content at a combined rate of more than 45 enrollments per minute in 2026, compared with 25 enrollments per minute a year earlier, Hart said.

Coursera ended the quarter with approximately $982 million in unrestricted cash equivalents and marketable securities and no debt. Free cash flow was negative $33 million during the quarter, including roughly $39 million of merger and integration costs and $18 million of other merger-related payments. Excluding those payments, free cash flow would have been approximately $25 million, Foley said.

The company repurchased about $90 million of shares through the end of June at an average price of $5.45 per share. Total repurchases under its $500 million authorization have reached approximately $140 million.

About Coursera (NYSE:COUR)

Coursera, Inc NYSE: COUR operates a leading online learning platform that delivers courses, specializations, professional certificates and fully accredited degree programs in collaboration with top universities and industry partners. Founded in 2012 by Stanford University professors Andrew Ng and Daphne Koller, Coursera's mission is to provide universal access to world-class education and bridge skill gaps in a rapidly evolving job market.

The platform features more than 6,000 offerings created by over 275 academic institutions and corporate entities, spanning fields such as data science, business, technology, health care and the arts.

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