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Udemy Reports Third Quarter 2022 Results

Third-quarter total revenue increased 22% year-over-year to $158.4 million
Udemy Business delivered 67% year-over-year revenue growth and achieved Annual Recurring Revenue of $350 million

SAN FRANCISCO, Nov. 02, 2022 (GLOBE NEWSWIRE) -- Udemy (Nasdaq: UDMY), a leading destination for learning and teaching online, today reported results for the three-month period ended September 30, 2022.

“Udemy delivered strong Q3 results, driven by solid execution and healthy customer demand,” said Gregg Coccari, Udemy’s Chairman and CEO. “Udemy Business continues to serve as our leading growth engine and we are encouraged by the resilience of our marketplace in this economic environment. It is increasingly clear that organizations and learners around the world look to Udemy for upskilling and reskilling to help them achieve their goals. Although we expect some short-term macro-related headwinds, we remain as bullish as ever about the long-term opportunity available to Udemy.”

Third quarter 2022 financial performance highlights include:

  • Total revenue increased 22% year-over-year to $158.4 million. Revenue growth includes a negative impact of 5 percentage points from changes in foreign exchange (FX) rates year-over-year.
  • Udemy Business segment revenue increased 67% year-over-year, including the negative impact of 4 percentage points from changes in FX rates year-over-year, to $83.9 million and now accounts for more than 50% of total revenue mix.
  • Udemy Business Annual Recurring Revenue increased 69% year-over-year to $350 million and Net Dollar Retention Rate was 117%.
  • Revenue from multi-year deals accounted for over 40% of Udemy Business revenue and increased 135% year-over-year.
  • Consumer segment revenue decreased 6% year-over-year, including the negative impact of 6 percentage points from changes in FX rates year-over-year, to $74.6 million.
  • Demand for Udemy’s Consumer marketplace is stable, as Monthly Average Buyers increased 4% year-over-year to 1.32 million.

Third Quarter 2022 Financial Results and Key Operating Data Summary:
(in millions, except customers, percentages and basis points)

 Three Months Ended
September 30,
 % Change Nine Months Ended
September 30,
 % Change
 2022 2021 YoY 2022 2021 YoY
Revenue$158.4   $129.6   22 % $463.8   $380.2   22 %
GAAP Gross Profit$89.4   $71.6   25 % $262.4   $208.3   26 %
% of Revenue 56.4 %  55.2 % 120 bps  56.6 %  54.8 % 180 bps
Non-GAAP Gross Profit$91.7   $72.2   27 % $268.1   $209.5   28 %
% of Revenue 57.9 %  55.7 % 220 bps  57.8 %  55.1 % 270 bps
GAAP Net Loss$(46.7)  $(9.3)  402 % $(101.7)  $(38.6)  163 %
Non-GAAP Net Loss$(20.7)  $(1.7)  1,118 % $(45.5)  $(14.5)  214 %
Adjusted EBITDA$(12.9)  $1.6   (906)% $(28.4)  $(2.9)  879 %
% of Revenue (8.1)%  1.2 % (930)bps  (6.1)%  (0.8)% (530)bps
Enterprise Segment                     
Total Customers 13,437    9,592   40 %           
Annual Recurring Revenue$350.4   $207.4   69 %           
Net Dollar Retention 117%   118%  (100)bps           
Segment Revenue$83.9   $50.4   67 % $223.4   $129.2   73 %
Segment Gross Profit$56.4   $32.9   71 % $149.1   $84.3   77 %
% of Revenue 67.2 %  65.3 % 190 bps  66.7 %  65.2 % 150 bps
Consumer Segment                     
Monthly Average Buyers 1.32    1.26   4 %  1.33    1.33    %
Segment Revenue$74.6   $79.2   (6)% $240.4   $251.0   (4)%
Segment Gross Profit$38.7   $42.0   (8)% $128.5   $132.4   (3)%
% of Revenue 51.9 %  53.0 % (110)bps  53.5 %  52.7 % 80 bps

Operational Highlights:

  • Udemy Business added new or expanded existing relationships with global customers including Kia Corporation (Korea), Orient Corporation (Japan), ORIX Corporation (Japan), Samsung Electronics America (U.S.), Tata Consultancy Services (India), and The Permanente Medical Group (U.S.).
  • Exclusively partnered with The RBL Group, a global leader in human capability, to offer Udemy Business’s enterprise customers increasingly unique cohort-based learning options, including a leadership-development dual-certificate from RBL and the University of Michigan.
  • Joined the AWS Partner Network (APN), a global community of partners that leverages AWS programs, expertise and resources to advise, build and grow customer offerings, allowing thousands of AWS customers to easily discover and deploy next-gen learning solutions by Udemy Business in their organizations. Additionally, recently accepted into the AWS Independent Software Vendor Accelerate (ISVA) Program, a co-sell program that helps drive new business and accelerate sales cycles by connecting participating independent software vendors (ISVs) built on AWS with the AWS Sales organization.
  • Entered into a strategic partnership with FUNiX, the leading online education platform in Vietnam, to empower the people of Vietnam with a personalized, digital-first learning experience, which resulted in signing several new customers, including FPT Polytechnic.
  • Through Udemy’s reseller partnership with Gale, part of Cengage Group, a global provider of educational resources, access to Udemy Business is provided to Texas public libraries that participate in the Texas State Library and Archives Commission’s TexShare e-resource sharing program.

Other Business Highlights:

  • For the second year in a row, Sustainalytics ranked Udemy number one for ESG risk ratings in the Internet Software and Services sub-industry as of September 2022.
  • Became a signatory of the United Nations (UN) Global Compact, a voluntary initiative to implement sustainability principles and to take steps to support UN Sustainable Development Goals.
  • Recognized by Fortune and Great Place to Work® U.S. as one of the Best Workplaces for Women in 2022.

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.

Given the historic rate at which the U.S. dollar has strengthened this year, Udemy expects FX to continue to be a headwind in the fourth quarter of 2022. Assuming foreign currency exchange rates remain constant, FX is expected to impact total revenue year-over-year growth by approximately six percentage points in the fourth quarter of 2022. In addition, Udemy anticipates experiencing some seasonality during the fourth quarter due to increased marketing investments around Black Friday.

The following table reflects Udemy’s financial outlook for its fourth quarter and full year ending December 31, 2022.

 Three Months Ending
December 31, 2022
 Year Ending
December 31, 2022
Revenue$164 - $167 million $628 - $631 million 
Adjusted EBITDA Margin*(17)% - (15)% (10)% - (9)% 
Weighted Average Share Count143 million 141 million 
*Udemy has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) within this earnings release because the company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. 

Webcast Information
Udemy will host a webcast at  2:00 p.m. PT / 5:00 p.m. ET today, Wednesday, November 2 to discuss its third quarter 2022 financial results and outlook. Individuals interested in participating in the live conference call by phone may access the dial-in information by registering here. A link to the live webcast can be found on the “Events & Presentations” section of Udemy’s Investor Relations website at An archived replay of the webcast will be available for approximately one year on the Udemy Investor Relations website.

Non-GAAP Financial Measures
To supplement the condensed 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 (income) determined in accordance with GAAP, excluding i) interest expense (income), net; ii) provision for (benefit from) income taxes; iii) depreciation and amortization; iv) other expense (income), net, including gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency and v) non-cash 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 income as net loss attributable to common stockholders, adjusted to exclude non-cash stock-based compensation expense and the amortization of acquired intangible assets. We define non-GAAP gross profit as gross profit, adjusted to exclude non-cash 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 fourth quarter of 2022, the full year 2022, and future periods, anticipated future expenses and investments, our business strategy and plans, market growth, our market position and potential market opportunities, and the impact of acquisitions and business alliances. 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 June 30, 2022, filed with the SEC on August 3, 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.

Third Party Data
This press release contains information developed by Sustainalytics ( Such information and data are proprietary of Sustainalytics and/or its third party suppliers (Third Party Data) and are provided for informational purposes only. They do not constitute an endorsement of any product or project, nor an investment advice and are not warranted to be complete, timely, accurate or suitable for a particular purpose. Their use is subject to conditions available at

About Udemy
Udemy (Nasdaq: UDMY) provides 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 Udemy from real-world experts in topics ranging from programming and data science to leadership and team building. Udemy Business offers corporate customers an employee training and development platform with subscription access to thousands of courses, learning analytics, and the ability to host and distribute their own content. Udemy Business customers include Fender Instruments, Glassdoor, On24, The World Bank, and Volkswagen. Udemy is headquartered in San Francisco with hubs in Ankara, Turkey; Austin, Texas; Boston, Massachusetts; Mountain View, California; Denver, Colorado; Dublin, Ireland; Melbourne, Australia; New Delhi, India; and Sao Paulo, Brazil.

Udemy, Inc.

Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)

 Three Months Ended September 30, Nine Months Ended September 30,
  2022   2021   2022   2021 
Revenue$158,432  $129,563  $463,767  $380,206 
Cost of revenue (1)(2) 69,080   57,986   201,330   171,902 
Gross profit 89,352   71,577   262,437   208,304 
Operating expenses (1)(2)       
Sales and marketing 77,490   52,258   212,789   156,399 
Research and development 28,062   16,703   74,595   46,898 
General and administrative 27,051   12,166   72,147   41,969 
Total operating expenses 132,603   81,127   359,531   245,266 
Loss from operations (43,251)  (9,550)  (97,094)  (36,962)
Other income (expense)       
Interest income (expense), net 592   (61)  962   (452)
Other expense, net (3,523)  (196)  (4,439)  (714)
Total other expense, net (2,931)  (257)  (3,477)  (1,166)
Net loss before taxes (46,182)  (9,807)  (100,571)  (38,128)
Income tax (provision) benefit (511)  545   (1,151)  (514)
Net loss attributable to common stockholders$(46,693) $(9,262) $(101,722) $(38,642)
Net loss per share attributable to common stockholders       
Basic and diluted$(0.33) $(0.25) $(0.73) $(1.04)
Weighted-average shares used in computing net loss per share attributable to common stockholders       
Basic and diluted 140,951,605   37,740,586   140,116,156   37,068,570 

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

 Three Months Ended September 30, Nine Months Ended September 30,
  2022  2021  2022  2021
Cost of revenue$1,611 $350 $3,440 $888
Sales and marketing 9,372  2,149  18,516  5,784
Research and development 6,258  1,304  13,303  4,445
General and administrative 7,728  3,417  17,784  12,587
Total stock-based compensation expense$24,969 $7,220 $53,043 $23,704

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

 Three Months Ended September 30, Nine Months Ended September 30,
  2022  2021  2022  2021
Cost of revenue$725 $293 $2,175 $293
Sales and marketing 342  97  1,025  97
Total amortization of intangible assets$1,067 $390 $3,200 $390

Udemy, Inc.

Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)

 September 30, December 31,
  2022   2021 
Current assets:   
Cash and cash equivalents$427,914  $533,868 
Marketable securities 66,052    
Accounts receivable, net of allowance for doubtful accounts of $1,072 and $678 as of September 30, 2022, and December 31, 2021, respectively. 71,580   73,180 
Prepaid expenses and other current assets 13,478   15,927 
Deferred contract costs, current 29,373   18,898 
Total current assets 608,397   641,873 
Property and equipment, net 7,816   9,887 
Capitalized software, net 25,887   20,054 
Operating lease right-of-use assets 12,939    
Restricted cash, non-current 3,629   2,900 
Deferred contract costs, non-current 32,817   25,647 
Strategic investments 12,104   10,000 
Intangible assets, net 10,397   13,597 
Goodwill 12,646   12,646 
Other assets 3,761   3,247 
Total assets$730,393  $739,851 
Liabilities and stockholders' equity   
Current liabilities:   
Accounts payable$17,060  $34,627 
Accrued expenses and other current liabilities 36,777   40,140 
Content costs payable 34,437   35,961 
Accrued compensation and benefits 25,111   22,341 
Operating lease liabilities, current 7,008    
Deferred revenue, current 237,852   208,274 
Total current liabilities 358,245   341,343 
Operating lease liabilities, non-current 8,014    
Deferred revenue, non-current 3,096   2,280 
Other liabilities, non-current 4,522   6,528 
Total liabilities 373,877   350,151 
Stockholders' equity:   
Preferred stock     
Common stock 1   1 
Additional paid-in capital 917,031   848,229 
Accumulated other comprehensive loss (265)  (1)
Accumulated deficit (560,251)  (458,529)
Total stockholders’ equity 356,516   389,700 
Total liabilities and stockholders' equity$730,393  $739,851 

Udemy, Inc.

Condensed Consolidated Statements of Cash Flows
(in thousands)

 Nine Months Ended September 30,
  2022   2021 
Cash flows from operating activities:   
Net loss$(101,722) $(38,642)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization 15,616   10,400 
Amortization of deferred sales commissions 22,558   11,995 
Stock-based compensation 53,043   23,704 
Provision for doubtful accounts 467   324 
Accretion of marketable securities (138)   
Non-cash operating lease expense 4,643    
Unrealized loss on strategic investments 2,896    
Other 460    
Changes in operating assets and liabilities:   
Accounts receivable 1,132   5,715 
Prepaid expenses and other assets 1,375   (6,252)
Deferred contract costs (40,203)  (25,455)
Accounts payable, accrued expenses and other liabilities (14,257)  (13,455)
Content costs payable (1,525)  (989)
Operating lease liabilities (5,012)   
Deferred revenue 30,395   23,234 
Net cash used in operating activities (30,272)  (9,421)
Cash flows from investing activities:   
Purchases of marketable securities (66,128)   
Purchases of property and equipment (1,397)  (4,554)
Capitalized software costs (10,652)  (9,767)
Purchases of strategic investments (5,000)   
Payments related to business combination, net of cash acquired (1,500)  (24,490)
Net cash used in investing activities (84,677)  (38,811)
Cash flows from financing activities:   
Net proceeds from exercise of stock options 5,785   7,619 
Proceeds from share purchases under employee stock purchase plan 5,563    
Payment of redeemable convertible preferred stock issuance costs    (2,250)
Payment of deferred offering costs (1,586)  (1,992)
Net proceeds from exercise of Series A-1 redeemable convertible preferred stock warrants    2 
Net cash provided by financing activities 9,762   3,379 
Effect of foreign exchange rates on cash flows (38)   
Net decrease in cash, cash equivalents and restricted cash (105,225)  (44,853)
Cash, cash equivalents and restricted cash—Beginning of period 536,768   177,931 
Cash, cash equivalents and restricted cash—End of period$431,543  $133,078 

Udemy, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures
(in thousands, except share and per share amounts)

 Three Months Ended September 30, 2022
 GAAP Stock-based Compensation Amortization of Intangible Assets Non-GAAP
 (in thousands, except share and per share amounts)
Revenue$158,432  $  $  $158,432 
Cost of revenue 69,080   (1,611)  (725)  66,744 
Gross profit 89,352   1,611   725   91,688 
Operating expenses       
Sales and marketing 77,490   (9,372)  (342)  67,776 
Research and development 28,062   (6,258)    21,804 
General and administrative 27,051   (7,728)    19,323 
Total operating expenses 132,603   (23,358)  (342)  108,903 
Loss from operations (43,251)  24,969   1,067   (17,215)
Other income (expense)       
Interest income, net 592         592 
Other expense, net (3,523)        (3,523)
Total other expense, net (2,931)        (2,931)
Net loss before taxes (46,182)  24,969   1,067   (20,146)
Income tax provision (511)        (511)
Net loss attributable to common stockholders$(46,693) $24,969  $1,067  $(20,657)
Net loss per share attributable to common stockholders       
Basic and diluted$(0.33)     $(0.15)
Weighted-average shares used in computing net loss per share attributable to common stockholders 140,951,605       140,951,605 

 Nine Months Ended September 30, 2022
 GAAP Stock-based Compensation Amortization of Intangible Assets Non-GAAP
 (in thousands, except share and per share amounts)
Revenue$463,767  $  $  $463,767 
Cost of revenue 201,330   (3,440)  (2,175)  195,715 
Gross profit 262,437   3,440   2,175   268,052 
Operating expenses       
Sales and marketing 212,789   (18,516)  (1,025)  193,248 
Research and development 74,595   (13,303)     61,292 
General and administrative 72,147   (17,784)     54,363 
Total operating expenses 359,531   (49,603)  (1,025)  308,903 
Loss from operations (97,094)  53,043   3,200   (40,851)
Other income (expense)       
Interest income, net 962         962 
Other expense, net (4,439)        (4,439)
Total other expense, net (3,477)        (3,477)
Net loss before taxes (100,571)  53,043   3,200   (44,328)
Income tax provision (1,151)        (1,151)
Net loss attributable to common stockholders$(101,722) $53,043  $3,200  $(45,479)
Net loss per share attributable to common stockholders       
Basic and diluted$(0.73)     $(0.32)
Weighted-average shares used in computing net loss per share attributable to common stockholders 140,116,156       140,116,156 

 Three Months Ended September 30, 2021
 GAAP Stock-based Compensation Amortization of Intangible Assets Non-GAAP
 (in thousands, except share and per share amounts)
Revenue$                129,563  $                         —  $                         —  $                129,563 
Cost of revenue                     57,986                          (350)                         (293) $                  57,343 
Gross profit                     71,577                            350                            293                       72,220 
Operating expenses       
Sales and marketing 52,258   (2,149)  (97)                     50,012 
Research and development 16,703   (1,304)                       15,399 
General and administrative                    12,166       (3,417)                          8,749 
Total operating expenses                    81,127   (6,870)  (97)                     74,160 
Loss from operations                     (9,550)                        7,220                            390                       (1,940)
Other income (expense)       
Interest expense, net                          (61)                             —                              —                            (61)
Other expense, net                        (196)                             —                              —                          (196)
Total other expense, net                        (257)                             —                              —                          (257)
Net loss before taxes                     (9,807)                        7,220                            390                       (2,197)
Income tax provision                          545                              —                              —                            545 
Net loss attributable to common stockholders$                  (9,262) $                    7,220  $                       390  $                  (1,652)
Net loss per share attributable to common stockholders       
Basic and diluted$                    (0.25)     $                    (0.04)
Weighted-average shares used in computing net loss per share attributable to common stockholders       
Basic and diluted              37,740,586                    37,740,586 

 Nine Months Ended September 30, 2021
 GAAP Stock-based Compensation Amortization of Intangible Assets Non-GAAP
 (in thousands, except share and per share amounts)
Revenue$380,206  $  $  $380,206 
Cost of revenue 171,902   (888)  (293)  170,721 
Gross profit 208,304   888   293   209,485 
Operating expenses       
Sales and marketing 156,399   (5,784)  (97)  150,518 
Research and development 46,898   (4,445)     42,453 
General and administrative 41,969   (12,587)     29,382 
Total operating expenses 245,266   (22,816)  (97)  222,353 
Loss from operations (36,962)  23,704   390   (12,868)
Other income (expense)       
Interest expense, net (452)        (452)
Other expense, net (714)        (714)
Total other expense, net (1,166)        (1,166)
Net loss before taxes (38,128)  23,704   390   (14,034)
Income tax provision (514)        (514)
Net loss attributable to common stockholders$(38,642) $23,704  $390  $(14,548)
Net loss per share attributable to common stockholders       
Basic and diluted$(1.04)     $(0.39)
Weighted-average shares used in computing net loss per share attributable to common stockholders       
Basic and diluted 37,068,570       37,068,570 

 Three Months Ended September 30, Nine Months Ended September 30,
  2022   2021   2022   2021 
Net loss$(46,693) $(9,262) $(101,722) $(38,642)
Adjusted to exclude the following:       
Interest (income) expense, net (592)  61   (962)  452 
Provision for income taxes 511   (545)  1,151   514 
Depreciation and amortization 5,416   3,943   15,616   10,400 
Stock-based compensation expense 24,969   7,220   53,043   23,704 
Other expense, net 3,523   196   4,439   714 
Adjusted EBITDA$(12,866) $1,613  $(28,435) $(2,858)

Dennis Walsh
Vice President, Investor Relations

Abby Welch
Senior Director, Corporate Communications


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