Coursera (COUR) 1 Feb 242023 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to Coursera's Fourth Quarter 2023 Earnings Call. [Operator Instructions]And please be advised that this call is being recorded.After the speakers' prepared remarks, there will be a question-and-answer session. [Operator Instructions]I would like to turn the call over to Cam Carey, Head of Investor Relations. Mr. Carey, you may begin.

Hahn, you call.With our Maggioncalda, will me Executive and thank XXXX and Coursera’s open and Officer.Following Officer; conference Financial questions. earnings today Ken the everyone, call for remarks, QX joining full-year Chief their for Hi, prepared Chief we our is Jeff

financial prepared was versions including being GAAP to can and to change investor.coursera.com be close and measures public where Relations Investor the will measures. remarks call after are note, and their measure is today's in is of website posted comparable which available.During Our press through press we issued Relations at release growth year-over-year release our GAAP of to A Please on webcast and percentages located where found refer and reconciliation website. unless simultaneously supplemental our financial tables are available call, most all slides market our Investor specified. and supplemental non-GAAP non-GAAP this otherwise this both presentation, directly present distributed

otherwise and undue priorities, statements the not and our events turn all these anticipated differ cash and vision, and and reliance assume risks strategy our are and plans, no or events the outlook, relating by with same, repurchase assets current affecting those or to on press and materially are based and our could relationships, forward-looking These this our thereof, capital content, results intentions. share benefits, of like materials. in our and made of trends obligation impacts in statements the and platform uncertainties, call filings, anticipated and platform, to program, guarantees business, and opportunities, supplemental strategic Actual our law.And future anticipated on release, impact partner advantages, our performance our allocation beliefs. mission, and should required statements of and forward-looking to ecosystem, to regarding limited model, it our statements expectations include implied Jeff. benefits These are and advantages of not We forward-looking industry future but discussed and potential affecting not results during factors Additionally, investors and number I'd those including as financial SEC future update place due from that, plans forward-looking expressed statements business statements to a forward-looking and business except them. over and statements to the

the business grew We more most the continued our leading everyone. million. new learner to pleased XXX year to welcome Thanks, and revenue to We finish that us universities quarter XX% and of global share future educator our the remain since that our a We starting growing expanded XXXX, over Cam, year our joining progress. trends to total of partnerships commitment with fourth the strong education.So jump with welcomed you We leverage, our revenue encouraged prior positive XX our higher platform growth long-term a million. first and momentum annual build our achieved and on to driving confident increasingly $XXX adjusted increased vision with including quarter, by of delivering And in scales. am EBITDA model I business. today.I'm marked a base million over XXX this we let's for appreciate learners, than in, that companies. our are

The first trend is digital transformation.

grappling but the from how combined X,XXX are experimentation our of for C-suite a and the generative XX purpose to in generative of leaders over technology A every new priority, how new tech we have the still this these leap. so nearly automation with This accelerated work. markets their and live, primary of general begin organization's society. technology, of could reasons. sweeping XXXX.Despite to make reshape years, learn, year, into this rank will found that implementation forces how are profoundly far, execs transformation the For organizations their priorities and globalization, glimpse shift AI Last on X/X citing make top rise the year, institution many provided and one to outright executives by as either XX% AI Group of X progress AI in X surveyed AI dissatisfied report Consulting ambivalent with executives Boston or of

execs the of lack cited of a XX% skills. talent and First,

the XX% absence the due to ethical, say of responsible average, than X% to they usage at a more AI conundrum. By yet brings Organizations XX% of risk don't to train restrictions what me of AI risk have on refer is found that upskilling of quickly, agile AI. on too And roadmap I strategy on priorities. regarding years slowly moving AI XX% way third, and and real leaders so to undergo competitors only in only tools unclear the generative an AI. people resolve development. threat.The of are next as to generative enterprise second trend Second, report too the guidance have far. AI cited this managed That workforce regulatory if their to will generative facing that data, AI work. conundrum pitfalls. investment X generative half major skills AI generative this and their XX% But a And companies AI falling need behind of a more or nearly the BCG which to a moves is generative And company skilling. they and cited adopt, becomes

say that AI, education our go and with of skilled of And facet improve we higher also brakes. drivers.This third capital FX, do add, they me need productivity, to human society trend believe every new need world As quickly, I'll good fast, to this our require you education. training the need this the will in and business, but of agility, to grapples they you their generative transformation safely.Like to the in leads driving

employers, institutions, government. collaboration Our academic vision education higher of and between for the future cross-sector features

branded for degree. million branded credit have offering prior of across flexible their the platform completing These with a this to microcredentials received which our more have the launch Empire, help leading degree spent pathway data, Council to workforce to college towards the Coursera, these a and the expanded in and microcredentials, At degree including time SUNY from platform customer and ACE, seeking well of our institutions, University a or of quarter, the that partners many associate the cover converted and have of by Department State and we that to citizens the as Coursera XXXX, to that X.X the of provides first allows careers. learning over This certain million lives program recommendation, access access across government's courses excited share XXX strategy.In partnership also credits eligible the skills a New recent one credit new as an and free of and for building, of American created Coursera heart SUMY increasingly of to of complete Education been promise Initiative York and excited as of learners The is a experience.These work capabilities trusted the and the that to let's to scale educator credits with state lessons. microcredentials our credentials, learning Empire's college of bachelor's Coursera Coursera accessible unemployed on affordable the create leverage to strategic transfer well-paying York, solutions includes entry-level built important of to growing programs, for New pathway Empire Department for semester later certificates industry of Labor, advance are we've and Yorkers for New who of reach are of State local State Labor underemployed higher York each state pathways was certificate, specializations, Workforce share any X our secure customers. partnered or X individuals the between of speed Recovery part and our and increase as New our require kinds state, as The college role the that content industry government global we of our -- and fall earn partnership courses receive broad open in well our jobs. new evolving Professional unique or Their that we to and our designed SUNY programs. than I'm our number progress forge and and hours on learners and portfolio digital of program Empire. program of degrees platform.Now increasingly York showcases the including recommendations, catalog compelling between with education The courses, companies assets for or the no partnerships between advancements use technology, I'm program government New eligible of on citizens an collaboration who But some learners term these learners Coursera into of and case our the credit Coursera, on for top Coursera.Every more range largest specifically another free training XX degrees, AI value This and recent categories. Certificates,

offers of recent acquire job most rigor for help in volume including the relevant will this prominent Certificates. quality list onto talent date, IBM, new announced disrupt university we've like X credit believe year, in Berkeley, for first nearly of founding, nearly and At learners new importantly, in have is year, starting Coursera and I'd and catalog or catalog the with how in job content we provide and adding also college than Unilever. modernize institutions top in long-term like our these at reasons. trusted new partners. this scale Google, combination PepsiCo, the job accuracy, technologies organic, believe producing of like across are stand knowledge college new Business, learning increasingly had announced It added on of governments their misinformation. their the proliferation a XX robust and in foundational era update, pipeline industries University programs. Dell, year, Coursera's scale, of California, X how integrity, In and an training with trusted Novartis, there it and content businesses coming a with like the where New been a we role powerful provides roles.Now learners areas credentials curriculum of days graduates, degree, XX the institutions of job-relevant at learner where of It create an of skills internet. start out machines past how with degree well To certificate we London as increasingly landscape.We with the Since AWS, education. second our enables an XX the employers.Today, in several to industry is updates of in broadening has recognized CVS, not rescale an brands. wide higher assurance In year, of earn play entry-level learners important degree them down. training to Professional and a the focused is an in top-of-funnel campuses on emerging partners. in industry Expert a And deploy role automate expected Moderna, are same certificate workforce serve variety educator microcredentials including the required the programs Microsoft, academic slowing others, employable our training from and education, educator new value are branded School in are redeploy not We And fast-changing we're how existing of early that as job more and partners a thing. towards steward generative First, we and play capable where guardrails roles world's era that like era of like without XX industry of partners this on York degree. We we AI believe the and and important quality, But trend growth. partners and additions. stages to early to my

Our admissions $XX,XXX. affordable including focused Pittsburgh. of Master first of Data degree tuition performance-based we're total Science the of many attributes This of from the and on, University pay-as-you-go includes

we little-to-no Master computer a Technology the from designed looking that Information announced to in Science and to address like have technology. degree as with for to India, degree. and of what and also in towards We focus the partners can and degrees, in needs Hyderabad background believe We content where to learner refer as how take college career a credit be learners on it IIIT more our of open a affordable, job-relevant, science accessible, needs a start Professional continue count we can uniquely working Coursera college Certificate adults.This is a pathway

and to admissions, strategy relies open features that degree reach global and of business a with content with degree into broad Professional segment pathway portfolio portfolio acquisition; master XX as we launched degrees on enable a Our unique growing and X, pathways consumer X, coursework.In credit, bachelor our of broad completion and model: Coursera. growing X X and a count of X, QX, recommendations; new programs of credit on low-cost Certificates and

certificate I Last University, BCG, consumer the making these the generative demand Google including it formulate forefront in enrollments.We're ACE but more an XXXX. to Google the a the Academy Academy touched need And of content. the at unleashing key our now distinguishes program this Analytics can launched its Andrew generative only on final partnership the pillars. our starting to that and to in for first and a that to merchandise ago. Ball American of credit example, latest institutions come proud To with we of offering, my has has The attracted is platform Academy XXX,XXX by enabler to help Coursera catalog maintaining ECTS credit that like seamlessly structured Ng. while X received this date, Coursera is nearly benefits. data courses the part believe called nearly training to better that X promote we education excited This of enterprise to of recognition System, from like learners an many innovation I'd Cloud, discuss engine ACE Authorized GenAI Fractal I'm an with source million offers over an the ECTS, and is selection Vanderbilt weeks Instructional next shared beginning several they AWS, year. Council total As We and value Co-Founder, our quality efforts a our AI-driven the learners. catalog strategy and new courses This platform of AI Data have using XX enrollments distinction and Education. almost few signal recommendation.For allows were the GenAI with academic historical growing migrated State’s with XXX To XXXX.Today, pioneer Academy features Professional from with DeepLearning.AI, of skills Credit course Online, quarter, over prior XX Science more accumulated of Platform high-quality and regional companies than have includes we're marketing days, enables security, to It the Andrew's workplace. quickly initiative. I X AI-related executives we've content recommendations an see recently from of Generative expanded fastest-growing launch be ACE entry-level which GenAI further strategy. AI million allows Microsoft, And credit credit more enrollments this has announce and for eligible to for receive that Certificate, for be earlier existing XXX to and complete our date, of AI productivity Generative and segment, us of we ACE the are important platforms, course that courses Transfer as just thrive will Science learning our cumulative growing Accumulation and to countries employees training rigor. designation that strong data It in trust. Master secured or their European from recommendations. our AI institutions has AI. of course Everyone on AI excited content their why Analytics, obtain recommended that's deeper from launch content recommended in November others.The first learners it our in integrity, Coursera Stanford integral AI credit Coursera update, enrolled the wave other designed the instructional generative XX,XXX A AI, to and

their is Generative World of and everyone. to a is used AI Academy they in impact, AI tools and Executives The gives actually on new Projects understanding ethical Playground to literacy teams It's help And day-to-day can Cloud the generative for apply Generative which new need with of consistently to recent for business and AI: the first a a how associated approach on these program strategic foundational organizations is jobs. guidance risks but a GenAI strategy to this and to that that CEO sense in so teams.In as helping capital development. my this more leaders A hosted implement with of it and my this customers of and understanding but We're hearing came government the priorities our lets AI solution launch to identify issues partners.So for at principles, and a are with general is pillar, discussions their GenAI's Guided change. specific and Playbook, navigate holistic how our conversations on in paid opportunities of the campuses AI to our which In also to guide change major year Economic a Generative every develop end learn of boost use and hands-on generative experts, very also through deeper running is designed AI ethical from than lead added their Academy, set Academy productivity reach develop Platform. diverse educator the business, rapid and second including their and course, well-designed support the motivate of core XXX strategic progress one this of employee how all Forum, customers framework, move the second address customers choices to government, what Google X,XXX let's we part as our of technology.As well their leaders talent to adoption and that plans Coursera. verticals the with create value we're applications, Google academic with not offer new AI, strategic top secure more how comprehensive to strategic global formulate customer making private more advantage, and our with catalog aims pillar, technologies, course executives technology and make early The in the stages I human better This access to and recaps executives sandbox XXXX, launched and our we training Growth able Navigating use navigate offers a needs.That only Pro to platform. officials, enterprise nearly Gemini lab all environment regions. Generative on the

innovation all is before, continues registered to of XX our across new our consecutive As that's million percentage where learners learners be which localized global year our more fourth learners, my platform each Coursera, to welcoming learner ongoing million happening XX% regions.And X third growing to these quarter, million. serve on I start we've been we $XXX to highlighted platform. our I'd than focused marked around added like our increases advantage, growth experience consistently to product and by on across the discussion This enhancing with of broad-based the base double-digit

countries on update the that an and high-quality this courses, in fraction languages. access to learners human saw language speed amount we methods.Last to XXXX, in experts the languages. course that we've Today, AI-powered be courses more quality X X,XXX to quarter, using the the conventional have initial share accessible advancements of of XXX translate world's from I should now spoken million translation up initiative, nearly used tangible of support and in can education the We catalog It our the a languages, Dutch, in XX our machine are platform the from million leading higher experts available believe to learners translated scale their world. learning XX X.X from initiative. is shared X about at quickly of translations our ability Throughout positive.We're early learners. We example of to and been AI is access training certificates First anywhere are language our X,XXX the commonly I'm Italian world XX pleased to course Over with adding constituents one the particularly that we And registered accelerate managed to X,XXX full in where languages. from than no Greek, cost doubling and Turkish, enterprise and serve is engagement on speak. personalization recently innovations based and rates our governments, better language Polish, very completion in primary customers, a of what education excited learners these others. how best specializations, has Mandarin, in enhance at feedback with high-quality and they seeing matter

context-relevant wrap summaries as launched is we my platform, throughout embed Coach that video a AI remind learning including guidance, virtual in on opening In continue key participants powered the practice, up AI weekly pre-quiz we're examples, assistant seeing of learners more our content. our learning some and major have of of me pathways personalized for by grounded will lecture capabilities through remarks, year expert we our most Early focused content with program experience, Another ahead, popular quick encouraging.We're active and and Coach to personalized several more credentials.To and this let the career learning higher our you year. features. beta from like feedback is feature Coursera engagement Coach. Coursera using generative generative Coach is priorities

our languages, First, credit partners, support roles, and new including Professional entry-level and campus recommendations to of we Certificates, integrations. pathways are catalog broadening degree

as our a new and sourcing pathways so degrees. flexibility, launching credit microcredentials on content and and can affordability, scaled we're count that degree towards with focus programs Second, open industry college

environment.And supporting segment skilling institutional the campus we're needs this AI Academy, to generative while now and for personalized including leverage serve to time.I'd of deepening customers, Coach, Generative over fast-changing please domain Third, in like collaboration learner across broad all with ahead. go AI we're fourth, and platform growing Ken.Ken, advantages, scale more on enterprise better translations, turn business, government, application learning and our our focused with it driving over to

and pleased everyone.We another marked around are world value by strong growing well of of credentials. quarter as learners our for afternoon, to good as Jeff, focus of report high-quality differentiated the our on prominence the platform branded you, Thank the millions

continued the sustained enjoy tools, segment growth of QX, set the strength year, a including exposure total data, of our in $XXX.X marketing by across understand X in to financial that businesses, the assets and the the particular, noted. business Please XX% trends non-GAAP double-digit outlook, Over our of ability call, multiple content broad our lens otherwise past which I'll and we segments, million, to common and better Consumer education.In higher navigate leverage review we Growth increases our I was benefits and individuals, with of more reshaping revenue was generated our for to and a across our the results. global from performance up discuss our remainder multi-sided A unless year ago. as driven measures including of engine, governments, needs campuses. platform, levers, segments to the note

$XX.X our this shift reflect shift extension the effect income would XXXX. we I line normalize contract at time, the expenses to the in profit in be XX noise with extensively particularly a continue of associated geography, expect increased of points year-over-year operating as as drove XX% on inherent I Additionally, down and expenses revenue, In the with fourth all initiatives growth a with basis. and $XX bottom-line our gross year have pleased cost year that OpEx prior performance year. million largest XX% decreased prior gross for strong year-over-year down X the industry model points the calls while period. for total quarter, the points XXXX, while XXXX.We final margin, remind our of next and year-over-year of the compared comparisons leverage P&L platform beginning the quarter our ability items our points results, was our of a discussed and scales.For by you earnings to Removing demonstrating from Total and revenue, was percentage and operating to which of million XX XXXX investments took our our long-term to to in partner that profit the revenue statement of the balance largely period. EBITDA prior from prior the or year XX in shift comparisons expense from like was the gross

EBITDA the revenue, net $X.X this we X.X% I'm revenue. pleased adjusted and time, item year of fourth at of or that this down OpEx, For development commitment. exceeded XX% the our to million and components to was revenue, individual report down Research P&L by provided a marketing quarter of administrative income and of line be general X.X% ago adjusted $X.X year, and points. was And sales X breakeven expense X expense XX% points.Finally, total was expectation expense revenue, of represented of that points. quarter we was revenue, of X% or and X million EBITDA Fourth down

and deliver are to ability More this increasing creating We while achieved profitability the expect excited bottom-line to leverage milestone of grow minute.This to off on demonstrating year strong coming have performance. leverage in another year. capped that a metric in our

trajectory the an plan an that As year-over-year. XXX resulted our the total this were This the based negative of points year points practice, X%. we to EBITDA and annual able of of set work in annual better-than-anticipated performance annual XXX on approximately the of basis And a of deliver reminder we EBITDA EBITDA business. incremental year, beginning margin within initial at basis margin target margin from our with an of target to we improvement of initiatives able and which growth overall let's leverage balance we result plus free update ongoing continue investments in and expect the were definition. to sheet. begin on the growth our in I'd of our discipline, the cash you'll discuss cash operating many to growth of expense record shortly, XXXX.Now flow balance our with consistent And was track revenue our discussed.As performance delivering like strong Jeff hear The

a definition We already believe our content have assets, flows. of X include our reasons. for be investors we helpful statement revised this figure will purchases cash We change to to for outflows of disclose cash in

platform.Historically, are invest production partners. entry-level the we exchange large to on impact, basis credentials our as a help these certain for existing strategy. and more Professional in a of of we but investments enough with In and increase this continue the our on arrangements, meaningful strategic not attractive amount we expanding was Certificates, will courses economics part particularly of intend as go-forward to industry well new fund content success Coursera's assets, as have content First, broader we while exclusivity in to rapidly

want we primarily lowering year.Under of important our content anticipates cash remains other closely the our flow operating free generation clarity changes. coming outlook is which are revised treated free categories aligned expenditures, capital definition with of resembles most positive in we definition financial and that believe manner effectively the analyze as free reconciliation, associated in assets strong with our flow ensure to the differences to adjusted computation. cash and flow particularly our cash purchases similarly aside capital this EBITDA, goals that from Second, and We working

and flow the periods for With clarity, securities We outlook was than of with For year.Turning XXXX, more specifically with provided cash cash, assets tables that all free of and approximately quarter purchases with of approximately reflect million today's inclusive cash free ended press million to accompany $X million our at that equivalents, the unrestricted in background, cash flow amounts in materials, of $X using in the definition. balance the financial year, content beginning no the of marketable debt. release for sheet. revised supplemental $XXX all range the our the line

enter we I to As that capital priorities unchanged. want allocation year, remain new you our remind

provided and continue investments valuing balance strategic the in on optionality sheet. strong growth our We to our while focus by organic the resilience

was million, $XX.X help undergoing we entry-level landscape revenue discussed, demand our generative from Professional a year is pace Certificates win in up an position our that that large performance the and segments will markets.Next, courses. more launched the XX% Jeff is As the financial change, prior and and believe discuss early let's detail. rapid asset for AI strong newly on us Consumer strong of in our education of

and The our in year.Let's ongoing in Government year execution year strong Consumer net learning a we careers.As adults shortly, to customers hear which Enterprise. ago, in Enterprise Campus mentioned, X,XXX, million revenue growing that XX% a number we year world's reflecting pronounced Consumer.To rate profit $XX.X across XX% another at of our partner $XX.X you'll our high-quality quarter. allows created our to Segment of brands, and in revenue our distinguishes platform, Jeff the of shape to education with Enterprise scale. the impact customers compared sustainable expect units students in to increased affordable, our million And in be most for was our coming value Enterprise was offerings, the XX%. added compared on in summarize, associated XX% from gross progress X leveraged million, a believe financial to As accessible of to registered Consumer to million industry a ago. XX% segment verticals. demonstrated $XX.X ago, by which gross XX% of is differentiates us Segment of is focus retention a extension, to Consumer was We expect move year total working and driven this more paid or the was up credentials contract and the paid discussion we learners up buildable ago. profit allows our XX% from segment Enterprise what revenue long-term our are segments, towards best outlook, collaboration the or their be trend with

in a several discussed see continue past in quarters, the amongst our we've we As divergence to performance verticals.

employee on scaling over segment XX,XXX. demand should XX% million, Specifically, Ultimately, will, are our turn, we the of years. strong Government, cases create students expect will for and new of ago Campus.We focused Degrees XX% the highest AI of in technologies. the up change year continuing revenue we well offset momentum level, for a credentials job navigate At AI emerging Degrees driving from the are significant The Government benefits customer stages the recent program with momentum in that pressuring talent suited total customers pressure Degrees create students a a on additional vertical coming learning where functions Coursera but demand verticals, verticals, particularly in for the launches. our growth, number harnessing employee for And increasing we creates and create changes job-relevant Business in learning new productivity, AI in growth while are with from enhance slower to change use will opportunities learning. that and was our which Coursera Campus branded Business, under our our remaining and see the for hear corporate that budgets year are finally, $XX.X that performance.And other ago from in strategy many grew early Consumer segment. also formulating of associated by X

As a attributed cost to content there's reminder, Degrees no segment.

we on revenue. a of margin better So lies And well our overall outlook. to need was Degrees and XXX% renewed create the our as path revenue transform growth. opportunity that pathways mix to is programs.Now positioned degree. believe portion that university growth our where Degrees as that working benefit Consumer growing We with fundamentally our Degrees.We we on stronger We potential while with start of our uniquely believe scale today, in to the of the small college in gross increasing is segment remain to degree pathway the platform financial long-term segment validating partners between focused our selection to from segment

range to revenue in of million. expecting For million $XXX be the to $XXX QX, we're

range positive we're million expecting For a million. EBITDA, negative of adjusted $X to $X

be in $XXX revenue range. representing $XXX full-year the growth midpoint to XXXX, the XX% the million of anticipate range approximately of at to For million, we

guidance For not with and of a that in target adjusted we on approximately do of is margin progress improvement, manage XXXX.As at a growth we the EBITDA, adjusted to the reminder, and trajectory line work we're midpoint X% revenue made point expecting plan strong in we maximize a the annual based million optimize margin for range within Instead, business. any basis adjusted EBITDA our or quarter. single the of the an ranges. This of to adjusted $XX million EBITDA XXX EBITDA $XX

flow, EBITDA adjusted above For cash to our we deliver free or expect at target.

takes addition based account into on In increased purchases to content capital this the definition. assets of our working revised benefits,

environment expectation composition the provide So the includes year, education is guidance. of trends segment-level better around intend particularly you the overall, a cash ongoing we one-time very evolving we free to pace our impacts flow the beginning the strong expectations invest.Finally, This to growth and varying how color of enter the deliver industry. year our in of some as given the help generation and to new annual even understand overall practice business as we on on

the durable learner past branded, demonstrated growing catalog performance rapidly continue, of years that of believe growth outlook by microcredentials AI along industry for we've XX%. we initial generative with Consumer, selection will driven expanding the several For strong courses.Our anticipates our our over of demand approximately

For more Degrees, strategy, proving growth we business XX%. and their pathway our than very early sourcing our expected focused vertical stages. ramping degrees Campus slower programs in in for offsetting Enterprise, of out about remain we and on And resulting verticals, our optimistic including new Government are growth,

that X position for transformation the complementary resilience a the now drive strategic from a and and strategy underway.I'll consistently by flexibility the our grows comments. the summarize, second high-quality our us We're we're leverage to through currently And education diversified increasing work long-term drive segment of more to faster are the benefits While for multi-sided producing allowing we than financial channels. to scaled weighted growth the navigate XXXX back of expectation learning our is pathways we half.To and from our call turn segments. higher resulting of strength, with Degrees closing towards delivering and our scale pursuing growth, XX% platform Jeff

innovative their to and educator pathways. want Ken.I society from our sector Skills World PwC, most highlighting efforts IBM, and World Economic January, and recent their multiple the First initiative as business lighthouse our and like equip year. for close growth, Certificates organizations, education the by recognition to resolve and recognized credit customers impedes bridging the between that challenges hinders skills The full are believes Forum critical for our by Coursera's talent jobs Economic and gap, degrees how Report scale the today's their a Insight efforts and shortages pathway The divide this are the government on partners several today. that In economic traditional Putting remarks learning our tomorrow.I'm inhibits proud highlights of realizing prosperity, chosen was Sanofi non-traditional Forum. Professional report including recommendation better of individuals shortages, of and potential. It for Thanks, one labor share to workers facing solve

traditional they have of institutions Our collaboration and is ability recommendations by third-party market that validation labor higher of ACE education reach that skill with of enabling the recognized see Coursera growing we extend And is integration that for inspiring the support business it they opportunities use with education. global next the equipping members and to This to I open workforce, addressing you. and the the Thank and with generation are intertwined mission. economy, evolving furthers shortages, seeing let's systems education call in and our succeed respected future needs.And the with fosters in our deeply and accessible, to ecosystem industry with aligned ECTS, digital a evolving for remains of founding the rapidly important our affordable, another the world.Now transforming role the with partners number depth the strategy we the how find learning play need academic credit questions. of cases

first Morgan line question comes with Stanley. Our from Josh of the Baer Instructions] [Operator

Sales year. spend I a strong ask finish to a marketing good guide. efficiency. theme marketing on versus marketing a wanted year-over-year on to revenue the that's growth, year, this Congrats declined and the really expense and and been strong and

in could dig hoping you spend. So was I little on a marketing

certificates, then how of catalog basis? more And are products, expand, on dollar that a you offerings efficiency of spend your the spending your has changed? Just as or less

Sure, Josh. course. This of Ken, is

So X quick things.

spending items is which And dollars, and of were our partner and that the happened between a too things in the the we've large We was do then sales one some year-over-year, be gets about marketing had to time this So yes, talk spending There shift we that we and own their sales that been of helped. online. spending. to and on their we a continue last dollars absence, of in marketing marketing. cost line was

is is So absolute question, your greater we've able to which that's been answer that more see and our consumer highly of to it. some But a with fashion.So of think important because are to continuing. business. spend marketing you'll go efficiency, dollar fundamental drive trajectory seeing we more portion see the deploy I to in growth I It's marketing spend that up a continue profitable good

just add And Jeff. could I for one if

a and lot that year, last competitors, Coursera's just couple the and Degree I'm of other of impacted wondering there's Degree challenges. exiting others their navigating businesses some competitive all outlook. a changes with business been evolving landscape has Over how

tight been in think reflects I'd between remain pretty thing. I and countercyclicality and there's labor would say among Labor degrees. often be gone elite I especially environment a clearly Josh. pretty has negative, degrees the America same seeing historically business degrees. markets Yes. I we're where in market, to the North college -- in say sentiment it providing America mean of the thanks, difficult the

You're right.

faced going an say, I'm to have very understatement. -- competitors headwinds Our is

new think degrees.And partly is this need adults it's Certificates skills a this degree dramatically could distinguish college themselves time and a the bit college like with pathway traditional crack to new explains working that us improved of to But opportunity. opportunity. believe new taking and degrees get we pathway Professional there do degrees why credentials by I really for be that

buying they But the in affordably something appropriately are. educate improve those say degree Professional on to a to right we what's still degree. the there's retention people towards trying efficiency, college marketing nail we're that students a be more value degree that find marketing degree headwinds have different Certificates same where is your understand earn and Certificate that of frankly, to advantageous when that I'd others who pretty degree distinctive, pathways we have, could flexibly satisfaction facing out, think of the can the college and So count and only these of not right you market distinctively that kind individuals that actually extend beyond cool the but we the and more Professional on figure what Professional credit valuable how Certificates and to we down lot are a realize Coursera are around credits because that could to as a certificate you're question can more higher.And pathway, we as people see into to as

and So we we the and there. U.S., feel think it's different, long-term we've got environment tough a about pretty something pretty in good prospects our

with question next Stephen line of Blair. the Sheldon Your William comes from

updates encouraging lot here. A of

to are Firstly a to pressure. and about coming Business. just develop time at going It budgets are handholding companies like for sounds as need me, more when and thinking lot they support -- about the there's development also skills try a learning Coursera But of under for AI organization. across

XXXX about Enterprise, getting timing fear they've organizational guidance. do the you much So guidance you cost-containment the put the that It efforts there the may starts place? think like it development to a be the level not overpower behind you put assuming on in perspective, at AI left from seems in with seems when for skills out

could it's later thinking the move year, think this something XXXX-XXXX, how to you guess demand start do you So that needle it? I about are

is Stephen, this Thanks. Jeff.

is X that. into and to the that not in to it's is model. for AI It kind I think happen XXXX? lot is certain XX% sure. of blah, as of X, a built kind was said the it's question businesses ChatGPT, -- this XX% from take going is about is about, Phase I way generative way is an execs turn evolution with the to conversation. What's which XXXX look script, going dissatisfied of Will experimentation moving is going think is the As to the you're progress to And my in blah, was companies in of that phases. in this world." And spot Phase of perspective, a a amazing. "Oh, are I I it But are giving mentioned, That actually that AGI over the of reality at category companies they're Certain that Blah, then happen? out going like lot around other way recognition blah. open the on. to into this, making. see not The you that next to the companies lead, bunch a And innovation and phase are unlock will separation. from That kind just call being productivity but what BCG I are recognition. next comes the there's figure companies the where of they're Why happens to will to am A how going of anything.I this. what's of playing And kind happening? in of say, am not that these be leaders puts are? which the going observers, leverage losing? the XX% from not. up. I think, that be is companies scramble doing And in think that really companies then other pile away to to Why and then I is phase I to pulling catch getting a of laggards, try into and going a recognition

might will so the one it.But think and frankly sort be certainty exists But much pretty from be facets might there the here I confident business. how say, going don't we're a And with of be the scaling I I to this this the going new in what learning of the of do roadmaps is the taking out. and fast leaders be feel as to advantage of what and be I as are way, pathways think of things many this that see it to separates is is you're dealing supposed just pave things part time individuals inevitable.I matter is and the of changing I really but know are training a a wrong, Now I who how timing by almost part overwhelmed this mean of And leaders laggards. to to major of and figure technology. important institutions

then segment. a follow-up just I little on margins to bit I there. gross guess ask wanted Consumer the a as And about

It the like nicely looks sequentially stepped seen quarters. You've over X it. it pretty up last

about, a think been kind year. I talking are generally, just thinking on XXXX the you and about you But things going forward? with how about that the about year. Consumer guess, tricky for last of get talked gross we Ken, have as margins, of I know little it's the So the and year-over-year side half the second comps

that not lower definition, partners biggest that the forward, proprietary recent result, cash of a And of funding. the reason Stephen. where with Sure, payout the mix do well like.As content, worked business not the fund the going tend content way, to content. provided flow it and degrees content much get cheaply. our People is which coincides the of biggest free And by we we've improvement, where as get we're necessarily to towards way, proprietary. one can our more multisource. and -- produce most the more the We're have it of because going as shift margin for change funding, forward. But we're as going in you out The quickly we and we of the a that hopeful platform forecasting with also, happened by channel. we're our we the how But there, that's we that to great of some when more higher biggest not that we're some into for know, seen things cost figuring

The us. of great So all do deals that's it's a thing for the those day long, I'll but we more do reason. primary it,

almost we -- everybody as little front get a Coursera. rinse a XX-XX do payback rev the like on repeat We'd to better get we'll share, back.So is bit get end where to because paid shift a couple fund and a to you the we but for and of that of a a see that in and we It's it there's big great So on our few result, a where terms QX, QX. opportunity. continue

line And of question next with Markets. comes your the Silber Jeff from BMO Capital

of the I Department states like with a there talked any there? of initiative. what other State interesting when doing you're Are really New partnership you're The intrigued It thinking was about sounds Labor. doing you having York

Jeff. Thanks, Yes.

make obviously, -- hear are buying if terms you in perceptions read happening the about of we see degree, will talking and the of to to you the and a lot program need people for left interest what's for portions of you funding relevant think just for something upskilling, In that and the this also especially also offered, have are many news college big college, giving by state we private I Coursera institutions. states put create need a just behind, the licenses in says, the look, services ROI quarters being are mentioned kind more the them if might and this. national schools, a buying it's certainly seeing to We Campus efficient at affordable way, not I state of in population that and country. to a universities that U.S. and few of state scale of who being for and governments the and public pathways we'll of it's throughout it.And degrees displaced We're ago, Kazakhstan, And

one But System, systems, not systems. which collaboration, state-by-state, that's exciting Labor these is of great government, -- with a The lot together of really yet been And of putting educational see real there's a things up the tied the We you the think with really it oftentimes mean there. there's sometimes about things what University I also in Texas of is sometimes is Department but mentioned challenge. with can I

able Framework, either system working how You credit needs after They're or higher education in country recommendation ACE, quickly you an like of in say, after built UAE. We're ACT, new of Framework.And expect doubling Credit working the which Qualification to is working Skills of to the entire XX students or ECTS way. that of is something National Being is Bank the you an an people be ABC, are body needs Skills And the what not big. system the accreditation industry or recognizes with something college that then for credits Education number almost mobile employers. college who fully highly to in just Arabia. think policy, India. which going not talk example, Indian a entity pattern. NASSCOM in existing systems a it's an students?"Educational standard not is bring this designated via a that to government new to Policy, the see doubling, Qualification on it's Country the million if it for hits Saudi under does "Well, sits in Academic National XX million. do we're We're called NEP. India, the certificates needs anybody be of adapt country called make to in working in IT meeting employers New of I the it adaptive. India In institutions are to they then the the the And from actually of the help and to

something believe to going global York, this is be I that's New well So America. in this well happening phenomenon. a is It's beyond beyond states --

with my change second question, the has for And do free in I guess, it cash definition to flow.

about, in? certain well What of as attractive to And should potentially move as these You segments just mean more expect and common your the you gross remarks, arrangements? how reading up for of and this talked production margins platform. economics courses I'm exchange I towards in is your help are from credentials this? more arrangements, exclusivity on go we in we will fund as

as The Hahn. Ken you is This -- know.

we the yes, on our are side, that's highly and bread starting So it's lot and tech of some to butter. has content, A opportunity more our partners. content with see there been of it's it attractive

more total, drive some of those certain and the continue do these of in appreciate a are of the partners to relationship. we some increase or higher. margin XX% -- to partners percentage in so seeing If XX% standpoint, aside we're bake And our to do much obviously, doing instances, individual as seek those funding them, And as increase interest. And the relationship are us margin. on depends how cash the from and an pure in again, anything setting comment, free that It funds. back what it's in flow but it's proprietary.I the more we is, that's wouldn't they'll exactly

a need we'll do And all do partners long. to. So don't the those excited to. it those gross deals We have want do, margins. salutary again, we're to on of will we day If our as as many effect

countries. mentioned happening add, that And working of around around platform And the script, this would see I of a in ACE, big these I pathway we lot -- state-by-state is know the from certification we fundamental degrees pattern with a part that. institutions

institutionalize professional ones basic what do to tools We them of look the seeing these to these the things? you does am ability seeing know-how, do Who are of them? produce are a use know-how trying structure How to get from? build like. now certificate we AI want? Which I -- do the generative you What's to you the lot done a that's platform, also of has know-how do the at and the to which quickly underlying ensure levels platform know-how certificates less predict said, There's a and and processes, capabilities tools, there's the this that. people, more look, to certain quality and expensively.But required the of the ACE rigor. academic has much level integrity review same want in

more. terms institutionalizing us give is that advantages that as will into scale to about advantages competitive talking well know-how, So to more lean us I Ken cause and of as certain will this in advantages want think, that

Your of Rishi line RBC next Markets. question from Jaluria comes Capital the with

result AI. a want cash free same you to that deeper to we're It's asking starting question the have within to make crossover industries there follow-up. that see of with urgency this be kind see positive. thinking Enterprise to now to continued of I a then get the seriously do power this? losses strength the around but enterprises still upskilling a of of to. start because maybe enterprises go potential taking disrupted first reskilling it's a It entire feels as going about I've as the jobs, even And in need sense way, will as the and Maybe flow or to resonate as are side that and back signs result is kind maybe your it's probably quick got going in nice they of to actual like to given what different of job not business job in message disruption a

Yes.

on So you're Rishi, I to think it.

mean I Everyone's think doing talking is it. something. I think out is about look you Everyone there. there urgency. I

the make the clarity. we question what think impact that know also tried do. this of but upskill reskill executives want not stay and upscale don't business of that employees really model today.So to to People some the really there's with There's from need X,XXX, to want is sort don't period we which who companies we of say, you're problem. are people time, going of what, that market, have rescale separation of sure company, long a in need position -- ourselves company. employees, reskilling we serve we that on to terms individuals. to to On currently our want I not labor is question know X,XXX who people this We -- identifying, X,XXX, us our reskill just institutions at to can over be separate to We are our structure. and not who our going you their are

think. of for of main to I know. tailwinds us, there's think X that really again, kind for hard I to any are of us really types us But going -- be is going to hit this

in to my to who to I is who educate going which employees improve impacted be in largely automated. their I deliver who and services say, the been the then of if the want of that.But quality to for employees have really careers they're separate my going to a I institutions improve consumer think remain there who and piece organization, there be I to to can too, current and will think and productivity of those them serving do employees a their customers have I'm innovation going all because future could is part separate, invest substantially this, the

You're some the that get just and lost. job other going not go same you company to to

some something new get very and be learn to market. the to have not to going attractive job going labor because open You're job those on are new career prospects

job can world, can you demand continue you degree. whatever hopeful we've defining Coursera, with opportunities programs employees still a online new lot degree those and the career -- these able you of don't impacted in of start get is characteristic you multiple take which that language explore designed be to with help the in get come experience, are partners.You in choice, way prior the you any these are a that your wherever to the our Professional that into college and of a can Certificate are a high or require language We can to will you speak, work on a college

the there I'm who the So type a also for be certain types to, That's think job will -- operations. in software lot But are there's I to segment by be to increased there those engineering, kinds those is AI. and for least know don't could to existing software There's are jobs. generative in plays where software, generative still others look that's percentage, the of people demand but customer a demand those decrease among -- AI. hear market I and major future disrupted. McKinsey reskilling be those talking from, for of hand, in by here. the also employees at a going by maybe I unlike other might you a reskilling future tell like for of result according and labor the skills jobs.On And a demand really people impacted to at McKinsey X the Consumer But and be jobs an you going job going and can impacted according it well, engineering, this, to I

out. even think the for to in you have skill demand those Ken on see overall impact there's market they emerge. or it's opportunity, opportunities labor how creates script, scientists, threat to to shapes depends and scientists generative jobs. be the that We'll says will as But increasing data net have opportunity demand. access for negative impacted and McKinsey On will education some, that others said ability AI, yourself among what whether on whether So into his jobs be an and it by it expect I computer the an new is still actually change

and just gone kind the not but abroad in some only countrywide disruption solutions what's at I AI, at of maybe bring kind the citizenry. thinking then government these, government evolved? of have had of to on conversations talked right? wider employees a the sticking targeted know to moving about that I society guess success So side, Enterprise to to sponsorship adopt to government, these with And as those little with how different segment, government you've it's not But the coming willingness to case prior. but but from use quickly, of just bit some again, you've solutions kind that the agencies

particularly If academic sure. for are generally That are Yes, -- slower are almost to countries, the not paths. with side lot adapt. institutions of younger on are being populations, adaptability, government there's there X who realizing said, built institutions a also

you globalization ability prospects a can good are your of the If to and for invest system, be facing in for don't those you if educational could and the your for lot not you it in if if young education in problem. country and these upgrade becomes the young country, skills young countries, your people the a prospects, people other do domiciled job educational talent people you work and in economic good that companies do there have hand, of people given if systems.On other they up-level pretty get

upwardly Southeast along in governments Asia, receptive the are of of America. moving come And that countries certain second quickly. is it's Europe, This established is in frankly, middle seeing what this the is and older really with more So been has lower North is more in bit this India, income, I've little -- populations, disposable smaller in with generally been is see a We slowest.And Latin mobile America wealthier class. In younger countries general interested but an more this parts Africa. more older established think populations, XXXX. half

should good frankly, pay so think traditional So world not and of on spectrum get saying create proposition spend in a jobs in to better and that's much a much I to so trying we're have to value people degree. get to nice trying America. are there's And changing, who a sides Americans innovation some seeing need pretty access we for both time lot to political the North a of

So it's a spectrum pretty wide there. out

of from Truist Tillman line Securities. comes with the Terry question next Your

in share I color content Solid Any kind of job now 'XX? on then revenue what a rationale for outlook. strategic I and appreciate all content? the you, like the a you can then there's guess think GenAI on on Jeff. it's here on the said the like And being the question, assets, Ken, purchase anything that that the materiality of look follow-up I about of sense for terms you for quarter $X I generated 'XX. sounds could GenAI from -- the in And in and million, a first of and it courses, multi-parter have

perfect. So

assets as In fact, we answer your question I'll let we And year the second this and Jeff last transition. there. this embedded regard in announced content $X to the million, spent

hope sorry, it great points deal. the it's of Next we expensively there. invest scaling what to with year, today. getting we're year we're That's we're would $XX I produce million. can We'll But can this money a again, expect that see coming because, year -- in, budgeting the see before if amount we less to Jeff's roughly we

us It that It actually, So against cash but a the number it the going going that it great to we look in reason it.Again, becoming a changed number makes standpoint as our from forecasted to And million and flow lower, pleased accurate, closer. will EBITDA quite coming the track mind, this we free definition. year with. we're us. more we're have EBITDA And year from it's is made million. $X material at works the $XX

-- So

a those, of then enrollment lot of And one terms in in for had courses, if generative minute on average. the Terry. you Yes. per And we're AI certainly XXXX demand seeing We look look AI, in in generative January XXXX, they're AI, at at in of XXXX. generative X.Xx than if AI of generative you number enrollments the of in June enrollments higher enrollments

say this content got generative Everyone. up.When interest, we we the the CEOs. once So for to to with and AI course -- of their are we are Let out ramp about what's is me would what bearings, to they're seeing I mean, biggest is a around lot figure think producing this public said of Ng, -- mean stuff? of side. they're I they in I script, It's Enterprises what he's is almost kind happen in to trying is kind getting And Andrew play demand. of going it. start for the AI the what Consumer launched I results, really do. think going kinds I Generative

we're to AI in this. starting law, in Now AI have

courses, We partners be of really our which great. number will think creating have domain-specific university a I

XXXX.He Prompt popular most out from a -- started a most our It course, Andrew popular of was specialization. ChatGPT as Engineering One courses turned called followed a from White of popular of our Vanderbilt page one and took playbook, in from Jules it Ng's It's it into University. course X-course and with a Vanderbilt.

there's now up it triple a -- people. Journal, if a to written more is specialization, It a saying of prompt basically Street Wall was engineer. double So which is become or And was income, prompt your subscription-based. course engineering that want lot you in the

people coming and the of happening. mean nature And in of what's kind are it. so a of taking lot it's I

which about there's not be be new wave think is interesting I jobs. that how a XXXX possible, might create in AI to really generative going might just

do XXXX, CFO, a there's going Ken I be he's do is still job he's be we're to think to but my Michele, and a going be be Officer his his how to is CFO, job differently. doing job going will differently. to all do our I differently. a in going going transformed?Like whole hope, Accounting to And to our And Cam's jobs -- Chief her going

do where to new interesting going created, engine for we're think and interesting not I'm way relevant. gearing to you're and on which working to opportunities, lot this got jobs going my I be it's tools a see we've upgrade of job. up where starts really able way, is -- certain do to think how going get to by need existing content the to generative and to enhance the I we're really to where see AI-ready -- perform we're that generative AI existing -- content That's our getting in be to we're a new using some way.And I do retool just

line And MacDonald Ryan comes question Needham. your the from final with of

questions, Jeff, of the sort of of on for think AI earlier it Business terms quarter. in the sort in I the one of generative was adoption. Stephen's phases first on we're Congrats and in Coursera one

of talked on sort side. in the You this about X experimentation being Phase

a sort I launch some think of able interesting have you great with like seems phase. to maybe curious, GenAI to the Academy, it's product be capture associated experimentation that. in really demand this I'm new product it

Just see And to where maybe in curious create sort that. seeing you're opportunity NRR of Coursera start XXXX we on a for what of of cross-sell some terms adoption this of the sort can those upsell and does recovery in in initial interest an metrics?

launched Generative We about. thinking the we're what Academy definitely that's And Yes. AI -- pillars. multiple has

to might Generative Everybody might come, Execs. are, not change, X it's about a it It's did but Everybody what Generative courses. for are things for risks universally sort Why Generative and for imagine, it of needs what you few works, We everything. the your quantity have more be this done what as know can the how know to that we is, AI AI differently. Everyone, doesn't AI it way? first the mean of about job need how to for intentional. Everyone The and

even bit of to We should generative like, they're are what that out Generative trying exactly employees, courses, that what will AI. seeing what how it. to have how to taking it, Everybody ton and of here. that know be we more yet a all a don't act to AI, foundation of especially, your big the knows and relevant important, becoming to lot do can Everyone, like companies $X skills, but for structure I what needs, design don't seen But a everybody budgets I've generative charging getting talk million front organized the really in around for kind they're do to be Everybody way knows more are a not of intending adding just for "Yes, -- of look yet on more who training change?It's lot before engineer's training." AI value, They job are calls. going out the the skills. by readiness be and everybody wants kinds money laying is you not my going got question, software We're to changing saying, they're and that is figure start it. They the things about going it, a

out.So it really, And so that figuring we'll would I think say, with be I help retention. will

will will not it's we're when will specific you these of That's be more there yet. business these But think can some upsell. to roles where by hands-on I and skills productivity these really be there for where courses unlock it company. going specific get is I interesting think again, with say job these kind labs in and leverage interesting, your taught this

as growth remarks, of talk in -- new nearly net segment here, prepared follow-up the And enrollments in of Ken. AI came 'XX? higher about talking the XXXX. In for Maybe you versus algorithm sort how rates million about enrollments I'm that a courses thinking between coming quick Coursera? of were new the then how roughly sort context, for to was XX% to in it many of Can noted those sort that the Consumer that you're how platform about sort maybe that of conversion in enrollments X

the more. be the assuming to have with It's information. I non-public find in But with me, can material, you, front don't Yes. courses, can it. don't think between new in I'll it's you it's -- don't answer, from don't that outside but Ryan, for we I I'd you question, after the happy people have -- data and that good of share bringing Generally, I existing. that a and I find and know breakdown new

Yes.

I got the So statistic.

up. You had time it look to

metric first-time metric to track a payers. Cam called going that but we me at and I'm There's obviously -- did. there's now, right is internally, not a glaring I

this time. So is and someone came first the who to platform the paid for

it throughout is QX, in you than was QX higher which higher in a If growth look is quarter-on-quarter XXXX, at than in quite a it percentage QX. was year-on-year bit quite that bit the

generative payers year-on-year growth courses, tell AI we that, that in hopefully, that you on seeing So first-time I can't of reflects. platform. but rate for are higher sure was

it Given it's would sense. a make topic, new

website, Ryan. transcript XX the with will Investor on Great. next Q&A. wraps Relations Thank right. be of All hours. our today's replay you. available along A Thanks, webcast the in That this

gentlemen, call. Thank joining. and that you for today's Ladies concludes

may disconnect. now You