Online Learning Platform Udemy Shares Tumbled, Cuts Outlook

Udemy, Inc. UDMY shares are trading lower after it reported second-quarter FY24 revenue growth of 9% Y/Y to $194.4 million, beating the consensus of $194.16 million.

In the Enterprise Segment, customers rose 11% Y/Y to 16,595, and annual recurring revenue increased 17% Y/Y to $492.6 million.

In the Consumer Segment, monthly average buyers fell 4% Y/Y to $1.29 million and segment revenue fell 4% Y/Y to $73.8 million.

Adjusted gross profit increased 18% Y/Y to $123.7 million, with a margin expansion of 500bps Y/Y to 64%. Adjusted EBITDA rose significantly to $5.5 million from $1.9 million a year ago.

At the end of the quarter, cash, cash equivalents, restricted cash, and marketable securities totaled $422.1 million.

Repurchase: Udemy has repurchased $35 million worth of its shares, buying back 3.8 million shares in Q2. The company has $60 million left in its $150 million share repurchase program.

Outlook: Udemy forecasts Q3 revenue of $191 million – $194 million (vs. $210.17 million estimate) and has reduced its FY24 revenue outlook from $795 million – $805 million to $776 million – $782 million (vs. $799.2 million estimate).

The company will focus on high-growth large enterprise customers, aiming to boost operational efficiency and achieve significant margin expansion.

Udemy CEO Greg Brown said “strategic initiatives announced today” will enable the company to deliver significant Adjusted EBITDA over time.

Udemy is “confident in providing a target of $130 to $150 million for full year 2026.”

Also Read: Udemy Analysts Flag SMB Softness And Sales Cycle Elongation Leading To Enterprise Growth Moderation

Price Action: UDMY shares are trading lower by 17.76% at $7.60 premarket at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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