Total revenue increased 22% year-over-year for both the fourth quarter and full year
Announced strategic actions to further accelerate path to profitability

SAN FRANCISCO, Feb. 14, 2023 (GLOBE NEWSWIRE) -- Udemy (Nasdaq: UDMY), a leading destination for learning and teaching online, today reported results for the three- and twelve-month periods ended December 31, 2022.

“Udemy ended its first full year as a public company strong, despite a very challenging macro environment,” said Gregg Coccari, Udemy’s Chairman and CEO. “We continue to be encouraged by the strength of our leading growth engine, Udemy Business, which is supported by an accelerating shift from offline to online skills development, and the health of our Consumer marketplace. We are cautiously optimistic about the year ahead as we focus on balancing long-term sustainable growth and margin expansion, driving toward delivering a profitable second half of 2023 on an adjusted EBITDA basis.”

Fourth quarter 2022 financial performance highlights include:

• Total revenue increased 22% year-over-year to $165.3 million. Revenue growth includes a negative impact of 4 percentage points from changes in foreign exchange (FX) rates year-over-year.
• Enterprise segment, or Udemy Business, revenue increased 57% year-over-year, including the negative impact of 4 percentage points from changes in FX rates year-over-year, to $90.6 million.
• Udemy Business Annual Recurring Revenue increased 55% year-over-year to $371.7 million and Net Dollar Retention Rate was 115%. Net Dollar Retention Rate for Udemy Business Large Customers, or customers with at least 1,000 employees, was 123%.
• Consumer segment revenue decreased 4% year-over-year, including the negative impact of 5 percentage points from changes in FX rates year-over-year, to $74.7 million.
• Monthly Average Buyers on Udemy’s Consumer marketplace decreased by 2% year-over-year, but increased 3% sequentially from Q3 2022, to 1.36 million.
  

Fourth Quarter and Full Year 2022 Financial Results and Key Operating Data Summary
(in millions, except customers, percentages and basis points)

Business and Operational Highlights:

• Announced leadership changes at the start of Q1 2023, including the retirement of current Chairman and CEO, Gregg Coccari; the promotions of current President of Udemy Business Greg Brown to CEO and current Senior Vice President of Customer Success Stephanie Stapleton Sudbury to President of Udemy Business; and the hiring of Karen Fascenda as Chief People Officer and Nathan Blain as General Manager of Cohort Learning.
• Udemy Business added new, or expanded existing, relationships with global customers including European multinational chemical company, BASF SE (Germany); the world’s largest manufacturer of construction equipment, Caterpillar, Inc. (U.S.); global technology platform for Business Spend Management, Coupa Software (U.S.); the leading global platform for the luxury fashion industry, FARFETCH Limited (UK); multinational retailer Grupo Falabella (Chile); and global supplier of premium and luxury cars and vans, The Mercedes-Benz Group AG (Germany).
• Recently closed a multi-year deal with Capgemini, a global technology services company, in which Udemy Business was selected as its learning content partner to support the launch of their new Capgemini Engineering and Industry Academies.
• Continued Udemy Business’s expansion in the Asia-Pacific region with new customer wins through strategic reseller partnerships, including the fintech and software developer, Kaitai Vision Information Technology (China); shipping and logistics company, Nippon Yusen Kaisha (Japan); and provider of outsourcing, software development and security services, Ryobi Systems Co., Ltd. (Japan).
• Established new reseller partnerships in Latin America (LATAM), including HSM, an executive education provider in Brazil; CognosOnline, a leader in LATAM for digital learning solutions; and eClass, an e-learning content and technology vendor.
• Launched a collection of courses for in-demand skills compliant with 508 accessibility standards; a redesigned instructor performance dashboard with enhanced insights into Udemy Business course engagement; and a set of immersive learning data-science labs and coding exercises for new learners.
• Added a new Hindi collection, the 14th language to be included in the Udemy Business International Collection.
• Named to Built In’s Annual List of Best Places to Work, which recognized Udemy as a top employer in the U.S., Colorado, Austin and San Francisco.

Business Update

On February 13, 2023, Udemy announced to its employees that in response to macroeconomic conditions and to further streamline its operations and cost structure, it made the difficult decision to reduce its global workforce by approximately 10%. Employee notifications are complete and this action will result in a one-time charge in Q1 2023 of $8 to $9 million in non-GAAP severance costs, primarily consisting of personnel expenses, such as salaries and wages, one-time severance payments, and other benefits. Udemy expects these actions to result in annualized non-GAAP savings of approximately $30 to $32 million. Udemy believes these actions will accelerate its path to profitability and now expects to be profitable on an adjusted EBITDA basis for the second half of 2023.

Financial Outlook

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.

The following table reflects Udemy’s financial outlook for its first quarter and full year ending December 31, 2023.

The revenue guidance range above assumes foreign currency exchange rates will remain constant. As a result of changes in FX rates during 2022, FX is expected to impact total revenue year-over-year growth by approximately 6 percentage points in the first quarter and 3 percentage points for the full year 2023.

Webcast Information

Udemy will host a conference call and webcast at 2:00 p.m. PT / 5:00 p.m. ET today, Tuesday, February 14, to discuss its fourth quarter and full year 2022 financial results and 2023 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 (877) 270-2148 toll-free domestically and at (412) 902-6510 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”), Udemy’s key non-GAAP performance measures include Adjusted EBITDA, Adjusted EBITDA Margin, and non-GAAP net loss.

We calculate Adjusted EBITDA as net loss determined in accordance with GAAP, excluding i) interest (income) expense, net; ii) provision for income taxes; iii) depreciation and amortization; iv) other expense, net, including gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency and v) stock-based compensation expense. 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 loss and net 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. As Adjusted EBITDA and Adjusted EBITDA Margin facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. Accordingly, we believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and certain variable charges. We define non-GAAP loss as net loss attributable to common stockholders, adjusted to exclude stock-based compensation expense and the amortization of acquired intangible assets. 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. We believe the presentation of operating results that excludes these non-cash items provides useful supplemental information to investors and facilitates the analysis of our operating results and comparison of operating results across reporting periods.

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.

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 the first quarter of 2023, the full year 2023, and future periods; anticipated future expenses and investments; our business strategy and plans; market growth; our market position and potential market opportunities; the costs and benefits associated with Udemy's reduction in force; and the timing of completion of the reduction in force and the recognition of associated costs. 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 filings with the Securities and Exchange Commission (“SEC”), including, without limitation, our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022, filed with the SEC on November 2, 2022. 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) improves lives through learning by providing flexible, effective skill development to empower organizations and individuals. The Udemy marketplace platform, with thousands of up-to-date courses in dozens of languages, offers the tools learners, instructors, and enterprises need to achieve their goals and reach their full potential. Millions of people learn on the Udemy platform from real-world experts in topics ranging from programming and data science to leadership and team building. Udemy Business enables employers to offer on-demand learning for all employees, immersive learning for tech teams, and cohort learning for leaders. Udemy Business customers include FenderⓇ, Glassdoor, On24, The World Bank, and Volkswagen. Udemy is headquartered in San Francisco with hubs in Istanbul and Ankara, Türkiye; Austin, Texas; Boston, Massachusetts; Mountain View, California; Denver, Colorado; Dublin, Ireland; Melbourne, Australia; New Delhi, India; and Sao Paulo, Brazil.

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

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

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Reconciliation of GAAP to Non-GAAP Financial Measures
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Investor Contact
Dennis Walsh
Vice President, Investor Relations
dennis.walsh@udemy.com

Media Contact
Abby Welch
Senior Director, Corporate Communications
abby.welch@udemy.com