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CI

Coursera, Inc. (COUR)·Q2 2025 Earnings Summary

Executive Summary

  • Coursera delivered $187.1M revenue (+10% YoY), non-GAAP diluted EPS $0.12, and Adjusted EBITDA margin 9.6% in Q2 2025; both topline and bottom line accelerated, with strongest quarterly cash performance to date ($28.6M FCF) .
  • Results beat Wall Street consensus: revenue $187.1M vs $180.5M*, EPS $0.12 vs $0.086*; FY 2025 guidance raised to $738–$746M and Adjusted EBITDA margin target increased to 8.0% (from 7.0%) . Values retrieved from S&P Global.
  • Segment growth was broad-based: Consumer and Enterprise each +10% YoY; margins expanded on learner engagement with content under newer, lower revenue-share arrangements .
  • Q3 2025 guidance: revenue $188–$192M, Adj. EBITDA $10–$14M, weighted toward Consumer; Enterprise outlook remains cautious given corporate spend uncertainty, tempering expectations and implying seasonal moderation in Q4 .

What Went Well and What Went Wrong

  • What Went Well

    • Double-digit revenue growth with operating leverage: GAAP gross margin improved to 54.9%, Adjusted EBITDA margin to 9.6% (+350 bps YoY); FCF rose 68% to $28.6M . “We are raising our expectations for full year revenue and Adjusted EBITDA” — CEO Greg Hart .
    • Consumer and Enterprise margins expanded (Consumer 61.3%, +160 bps; Enterprise 69.7%, +170 bps) due to engagement with content produced under lower revenue-share economics .
    • Strong learner and customer growth: 7.5M new registered learners (largest since 2020), 183M total learners (+18% YoY), paid enterprise customers +12% to 1,686 . AI product innovation (Coach; translations/dubbing) supported engagement and conversion .

  • What Went Wrong

    • Enterprise visibility remains constrained; NRR at 93% (still sub-100%) despite sequential improvement, with CFO noting no forecasted NRR improvement near term .
    • Degrees now included in Consumer are expected to decline YoY, contributing to seasonal Q4 moderation despite Consumer momentum .
    • GAAP net loss persisted at $(7.8)M; while improved YoY, continued stock-based compensation and legal/regulatory costs remain notable non-GAAP adjustments .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($M)$179.2 $179.3 $187.1
GAAP Net Loss per Share$(0.14) $(0.05) $(0.05)
Non-GAAP Diluted EPS$0.08 $0.12 $0.12
GAAP Gross Profit Margin %53% 55% 54.9%
Adjusted EBITDA Margin %5.3% 10.4% 9.6%
Free Cash Flow ($M)$7.4 $25.3 $28.6

Segment Breakdown

SegmentQ4 2024Q1 2025Q2 2025
Consumer Revenue ($M)$101.7 $117.6 $122.8
Consumer Gross Profit Margin %54% 61.6% 61.3%
Enterprise Revenue ($M)$62.3 $61.7 $64.3
Enterprise Gross Profit Margin %68% 70.0% 69.7%

KPIs

KPIQ4 2024Q1 2025Q2 2025
New Registered Learners (M)6.0 7.1 7.5
Total Registered Learners (M)168 175.3 183
Paid Enterprise Customers1,612 1,651 1,686
NRR (Paid Enterprise Customers)87% 91% 93%

Consensus vs Actual (Q2 2025)

MetricConsensusActualSurprise vs Consensus
Revenue ($M)$180.5M*$187.1M +$6.6M (+3.7%)*
EPS (Primary)$0.086*$0.12 +$0.033*

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ2 2025$179–$183M N/AN/A
Adjusted EBITDAQ2 2025$11–$15M N/AN/A
RevenueQ3 2025N/A$188–$192M New
Adjusted EBITDAQ3 2025N/A$10–$14M New
RevenueFY 2025$720–$730M $738–$746M Raised
Adjusted EBITDA MarginFY 20257.0% 8.0% Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/technology initiatives (Coach, translations/dubbing)Rolled out AI translations in up to 24–26 languages; launched AI-dubbed courses; Coach Dialogues in courses 2.6M learners, 36M coach messages; Coach improves first-attempt quiz pass rates by 10%; AI dubbing >120k learners, 400k hours, expanding languages Strengthening
Product performance and conversion (Consumer)Career-based discovery with role pages and localized labor data, early conversion benefits Geo-pricing, promotions, improved merchandising; conversion improvements especially in international markets Improving
Regional trendsBroad learner growth; largest markets U.S., India, Mexico, Brazil Fastest growth in APAC; India second-largest learner base; strong AI interest Positive APAC mix
Content engine accelerationCatalog growth to ~10,000 courses; expanding micro-credentials and AI courses >10,500 courses (+36% YoY); >925 AI courses; new certificates (ADP, IBM, Microsoft, SAP, Zoho) Accelerating
Enterprise macro cautionNRR 87% in Q4; corporate spend uncertainty NRR 93% (sequential improvement), but CFO not forecasting improvements; corporate spend environment may remain challenged Mixed/Cautious
Segment reporting simplification (Degrees)Degrees integrated into Consumer starting Q1 Degrees expected to decrease YoY within Consumer; contributes to seasonal moderation Implemented; headwind

Management Commentary

  • “We are executing at a renewed and rapid pace… We are raising our expectations for full year revenue and Adjusted EBITDA” — Greg Hart, CEO .
  • “We delivered double-digit revenue growth, demonstrated strong operating leverage, and generated $29 million in Free Cash Flow” — Ken Hahn, CFO .
  • On enterprise: “We’re pleased [NRR] improved from last quarter. Until we get to 100+, we are not going to be satisfied” — Ken Hahn .
  • On AI investments: “Coach… provides a personalized, interactive experience… Early data shows learners using Coach are 10% more likely to pass quizzes on their first attempt” — Greg Hart .
  • On Consumer momentum: “Top-of-funnel activity and Coursera Plus subscription receptivity… providing greater visibility into the back half of the year” — Ken Hahn .

Q&A Highlights

  • Revenue cadence and guidance composition: PMs probed Q3/Q4 deceleration; CFO cited Consumer strength, slight seasonal pullback in Q4, and Degrees softness as factors .
  • Enterprise vertical dynamics: Business and Campus stronger; Government benefited from lapping contracts; visibility remains limited; focus on improving NRR .
  • AI strategy and monetization: Management emphasized partnerships (AWS, DeepLearning.AI, Google Cloud, IBM, Microsoft), AI content scaling, and AI-enabled product features improving engagement and completion .
  • Conversion and go-to-market: Ongoing improvements to site experience, geo-pricing, and merchandising driving conversion gains, especially internationally .
  • Content engine and Coursera-produced content: $17M invested in 2024; $6M in H1’25; plan to increase investment given economics and strategic value .

Estimates Context

  • Q2 2025: Revenue $187.1M vs consensus $180.5M*; EPS $0.12 vs $0.086* — both beats. Company raised FY revenue and margin guidance following the beat . Values retrieved from S&P Global.
  • FY 2025: Company guidance $738–$746M vs consensus $752.3M* — guidance midpoint is modestly below consensus, reflecting cautious Enterprise assumptions despite Consumer strength . Values retrieved from S&P Global.
  • Q3 2025: Guidance $188–$192M aligns closely with consensus $190.3M*, implying limited near-term upside absent further Consumer outperformance or Enterprise improvement. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Broad-based beat with improved cash generation: Strong Consumer momentum and content-economics tailwinds drove margin and cash flow outperformance; expect continued leverage even as investments ramp .
  • Guidance reset signals confidence, but enterprise caution caps upside: Raised FY revenue and margin targets; watch NRR trajectory and corporate spend indicators for second-half upside .
  • AI initiatives are a durable catalyst: Coach and AI translations/dubbing are measurably improving engagement and conversion; expanding AI content/catalog deepens moat with trusted creators .
  • Consumer model responsiveness and subscription mix enhance visibility: Coursera Plus momentum and improved go-to-market support sequential strength into Q3; model seasonality and Degrees softness could temper Q4 .
  • Segment gross margin expansion appears sustainable: Newer content arrangements support structurally better segment margins; track mix effects and pace of content engine investments .
  • Near-term trading: Favorable beat/raise setup with AI/product catalysts; risk is enterprise macro and NRR stabilization below 100%. Watch Q3 conversion metrics and international momentum as key drivers .
  • Medium-term thesis: Scaling platform economics, expanding AI-enabled learning experiences, and robust cash/No debt balance sheet ($775M cash) provide optionality to invest and compound growth .