Coursera Q3 Earnings Call Highlights

Key Points

• Revenue grew 94% as reported to $377 million following the Udemy combination, but declined approximately 3% on a normalized basis. Adjusted EBITDA reached nearly $62 million, or 16.3% of revenue.
• Coursera is accelerating integration savings, targeting more than $150 million in annualized gross cost reductions by the end of 2026 and reaching its $115 million net synergy goal ahead of schedule. The company also repurchased more than $215 million of shares under its authorization.
• Consumer performance remains the main weakness: normalized consumer revenue fell 9%, while enterprise revenue rose 2% on a normalized basis. Management expects further consumer deceleration in the fourth quarter and anticipates roughly flat-to-declining enterprise revenue and a low-double-digit consumer decline in 2027.

Coursera NYSE: COUR reported third-quarter revenue of $377 million and adjusted EBITDA of nearly $62 million in its first full quarter as a combined company with Udemy, while executives said consumer demand remained below the company’s growth ambitions.

Revenue increased 94% year over year on an as-reported basis, reflecting the inclusion of Udemy results following the May 11 transaction close. On a normalized basis that includes Udemy’s pre-close performance for comparison, revenue declined about 3%, Chief Financial Officer Mike Foley said. Adjusted EBITDA reached 16.3% of revenue, while reported adjusted EBITDA margin expanded by more than 800 basis points year over year.

“We are strengthening our financial profile as committed,” President and Chief Executive Officer Greg Hart said. “At the same time, our top-line trajectory, particularly in consumer, remains below our growth ambition.”

Integration Savings Accelerate

Coursera said it expects to have more than $150 million in annualized gross cost savings in place by the end of 2026. Those actions support its previously announced $115 million annual run-rate net synergy target, which accounts for an estimated $35 million of potential gross-profit impact from revenue dis-synergies.

Management said the company is on track to reach that net synergy target eight months after the transaction closed, compared with its original 24-month timetable. Foley said the company has not yet seen revenue dis-synergies in practice, including among customers that purchase both platforms, though it is incorporating an expectation for some potential impact into its preliminary outlook for 2027.

The company reported gross profit of $240 million, for a 64% gross margin. Operating expenses totaled $186 million, or 49% of revenue, declining 120 basis points year over year as a percentage of sales. Net income was $57 million, or 15.2% of revenue.

Free cash flow was nearly $5 million and included approximately $28 million of merger- and integration-related costs. Coursera ended the quarter with about $776 million in unrestricted cash equivalents and marketable securities and no debt. During the quarter, it repurchased roughly 18 million shares for just over $100 million; total repurchases under its $500 million authorization exceeded $215 million through the earnings call.

Enterprise Growth Holds Up, Consumer Revenue Declines

Enterprise revenue was $201 million, up 214% as reported and 2% on a normalized basis. The company ended the quarter with 11,897 enterprise customers, down 4% year over year. More than 90% of logo churn came from accounts with annual contract value below $50,000, according to Foley.

Enterprise net retention rose to 93% from 91% in the prior quarter, although Foley said management does not yet view the increase as a trend. He said retention is meaningfully higher among larger North American enterprise customers and lower among mid-market customers and nongovernmental organizations outside North America.

Consumer revenue totaled $176 million, up 35% as reported but down 9% on a normalized basis. Consumer subscription revenue was about $131 million, representing more than 70% of segment revenue. Coursera ended the quarter with more than 1.6 million paid subscribers, up 30% year over year.

Foley said subscriber growth exceeded subscription-revenue growth partly because of the geographic mix of new additions. Core subscriptions continued to grow, but that growth was more than offset by pressure in individual certificate subscriptions and Udemy’s transactional offerings.

Hart cited changing traffic patterns, search-engine optimization and discovery trends, as well as weaker consumer confidence amid inflation, as challenges for the consumer segment. He said Coursera Plus continues to grow while subscriptions tied to individual specializations have declined, a structural shift that has persisted for several quarters.

Project Helix Targets Enterprise Skills Needs

The company’s principal product initiative is Project Helix, an adaptive AI-native skills platform intended to connect learning content, skills assessments, applied practice and credentials. Coursera plans to work with selected customers and partners during alpha and beta phases, with broad enterprise availability targeted for the first half of 2027. A consumer rollout is expected later.

Hart said Helix is designed to begin with a business or individual outcome, identify the related skills, assess current capabilities and create an adaptive learning path. The platform is expected to incorporate graded role-play exercises, technical labs and integrations with AI tools including ChatGPT, Claude and Copilot.

Management said Helix investments are already included in current operating expenses and do not require an anticipated increase in operating expenses ahead of launch. The company also said its 2027 assumptions do not include a material revenue contribution from the initiative.

Coursera and Udemy now reach more than 310 million learners, serve more than 1.6 million paid subscribers and nearly 12,000 enterprise customers, Hart said. The combined ecosystem includes nearly 100,000 Udemy instructors and more than 425 university, company and professional-institution partners associated with Coursera.

Fourth-Quarter and 2026 Outlook

For the fourth quarter, Coursera forecast revenue of $358 million to $366 million and adjusted EBITDA of $55 million to $59 million. The company expects enterprise growth to be approximately flat and consumer revenue to decelerate further, citing softer leading funnel indicators.

For full-year 2026, Coursera narrowed its as-reported revenue outlook to $1.229 billion to $1.237 billion, equivalent to $1.503 billion to $1.511 billion on a normalized basis. It reaffirmed its approximately 14% full-year adjusted EBITDA margin target.

While the company did not provide formal 2027 guidance, Foley said its initial planning assumption is that fourth-quarter revenue trajectories will broadly represent normalized full-year growth next year. That implies enterprise revenue that is approximately flat to modestly declining and a low-double-digit year-over-year decline in consumer revenue. The assumptions include potential customer overlap effects and no expected cross-sell or material Helix revenue contribution.

Foley added that free cash flow is expected to remain positive in 2027 but be lower than adjusted EBITDA because of purchase-price accounting effects, continuing merger-related costs and working-capital effects associated with anticipated revenue headwinds.

About Coursera (NYSE:COUR)

Coursera, Inc is an online learning platform that provides access to courses, professional certificates, guided projects, and degree programs. The company works with universities, colleges, and industry partners to offer content in areas such as business, technology, data science, computer science, and personal development.

Coursera serves individual learners, businesses, governments, and academic institutions in countries around the world. Its enterprise and government offerings support employee training, workforce development, and large-scale education initiatives, while its consumer platform allows learners to enroll in individual courses or broader credential and degree programs.

Coursera was founded in 2012 by computer-science professors Andrew Ng and Daphne Koller.

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