Coursera, Inc. (COUR)·Q3 2025 Earnings Summary

Executive Summary

• Coursera delivered a solid Q3 with revenue of $194.2M (+10% Y/Y) and non-GAAP diluted EPS of $0.10; both beat S&P Global consensus (revenue $190.3M*, EPS $0.084*) as Consumer segment growth accelerated to +13% Y/Y .
• Management raised FY25 revenue guidance to $750–$754M (from $738–$746M), implying 8–9% Y/Y growth; Q4 revenue outlook is $189–$193M and Adjusted EBITDA $7–$10M, with the annual Adjusted EBITDA margin target maintained at ~8% (200 bps Y/Y improvement) .
• Strong cash generation continued (OCF $33.9M; FCF $26.6M) and cash stood at ~$798M with no debt; Consumer margin expanded while enterprise NRR softened to 89% in a still-muted corporate spend environment .
• Stock-relevant catalysts: raised FY guide; ongoing AI/product momentum (ChatGPT app embedding; Anthropic content); Coursera Plus scale (>50% of Consumer rev), and new enterprise SKUs (Skills Tracks) to address upskilling ROI, offset by enterprise NRR pressure and Q4 seasonality commentary .

What Went Well and What Went Wrong

• What Went Well

  • Beat on revenue and EPS vs Street; revenue $194.2M vs $190.3M* and non-GAAP diluted EPS $0.10 vs $0.084*; FY25 revenue guidance raised by $10M at midpoint .
  • Consumer strength: +13% Y/Y revenue to $130.3M; Coursera Plus now “more than half” of Consumer rev; Consumer gross margin +180 bps Y/Y to 61.2% as newer content carries lower revenue share .
  • Product/AI momentum: first online learning platform embedded in ChatGPT (top-of-funnel discovery) and Anthropic content partnership; quote: “We launched one of the first generation of apps in ChatGPT…positioning Coursera at the forefront of AI‑native learning experiences” .

• What Went Wrong

  • Enterprise softness: NRR fell to 89% (flat Y/Y but down from 93% in Q2); management: “We’re not pleased with 89% NRR…we won’t be happy until we get that north of 100%” .
  • Q4 seasonality and modest guide; mgmt highlighted Q4 is typically smaller than Q3, contributing to sequential deceleration despite Consumer momentum .
  • Mix dynamics and one-time prior-year benefit: Enterprise gross margin was 69.6% (–40 bps Y/Y) partly because Q3’24 had a ~150 bps one-time revenue share benefit; without that, margins would have expanded .

Financial Results

Consolidated performance and margins

Vs. S&P Global consensus and company guidance

Values marked with * retrieved from S&P Global.

Segment trends

KPIs and cash

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered revenue of $194 million, up 10% year over year…we are raising our full-year 2025 revenue outlook to a range of $750 to $754 million” — Greg Hart, CEO .
• “Coursera is the first online learning platform to be embedded directly in ChatGPT…positioning Coursera at the forefront of AI‑native learning experiences” — Greg Hart .
• “Coursera Plus has grown to become the majority of our consumer segment revenue, providing important visibility with more predictable, recurring revenue streams” — Ken Hahn, CFO .
• “We’re not pleased with 89% NRR…we won’t be happy until we get that north of 100%” — Greg Hart on Enterprise .
• “There is no economic arrangement between OpenAI and Coursera. This is really a top-of-funnel opportunity” — Greg Hart .

Q&A Highlights

• ChatGPT app integration: Early days; no rev-share; viewed as high-intent discovery funnel for course enrollment on Coursera .
• Marketing efficiency & Q4 mix: Will invest where ROAS is strong (subscriptions help visibility); Q4 sequential deceleration driven by seasonality .
• Content investments & AI leverage: AI lowers per-course production cost; supports faster catalog expansion and margin tailwinds via lower revenue-share content .
• International monetization: Significant geo-pricing reductions (up to ~60%) in select markets improved paid conversion; localization efforts ongoing .
• Enterprise playbook: Skills Tracks introduce curated, role-based SKUs tied to measurable proficiency; new Enterprise GM (Anthony Salcito) to evolve packaging and GTM .

Estimates Context

• Q3 beats vs S&P Global: Revenue $194.2M vs $190.3M*; Primary EPS $0.10 vs $0.0836* — both positive surprises. Q4 revenue guide ($189–$193M) essentially brackets consensus of $191.8M* .
• Implications: Street models likely move higher on FY revenue given raised guide and Consumer momentum; EPS revisions may reflect Q4 reinvestment but full-year margin target intact .
  Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Coursera’s return to higher growth is increasingly Consumer-led, with subscription mix (>50% of Consumer) and AI/product enhancements improving conversion and visibility .
• FY25 revenue outlook raised for the second consecutive quarter; Q3 also exceeded the prior Q3 guide’s top end, supporting confidence in execution .
• Enterprise remains the swing factor; NRR at 89% underscores macro caution, but Skills Tracks and leadership changes could support gradual improvement in 2026+ .
• Structural content/AI tailwinds (lower revenue share, faster production) support sustained gross margin quality and scalable unit economics over time .
• Near-term trading setup: positive bias from raised FY guide and AI catalysts (ChatGPT app, Anthropic), tempered by Q4 seasonality and enterprise NRR softness .
• Balance sheet remains a strategic asset (≈$798M cash, no debt) to fund growth and absorb macro variability while maintaining profitability targets .
• Watch list: Q4 conversion under new geo-pricing; Coursera Plus net adds; early Skills Tracks traction; and any update on permanent CFO appointment (CFO transition announced Oct 2) .

Additional Relevant Press Releases (Q3 2025)

• Coursera Partners with OpenAI to Bring Learning Capabilities into the First Generation of Apps in ChatGPT — first online learning platform embedded in ChatGPT; discovery channel into Coursera .
• Coursera Announces CFO Transition — Ken Hahn to advisory role post Oct 29; guidance reaffirmed ahead of Q3 results .