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What changed in Udemy, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Udemy, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+429 added−417 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-26)

Top changes in Udemy, Inc.'s 2024 10-K

429 paragraphs added · 417 removed · 348 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeEmployees from around the globe participated in our Leader Development programs, including MentorU, Udemy Manager, Invested Leader and Leadership Coaching. We had over 1,500 downloads of our Team Toolkit for Learning Essential Generative AI Skills designed and piloted by our team, which is just one example of how we are leading the transformation to a skills-based organization.
Biggest changeDue to these efforts, 95% of employees spent time learning on our platform during the fiscal year ended December 31, 2024. Employees from around the globe participated in our Leader Development programs, including MentorU, Udemy Manager, Invested Leader and Leadership Coaching. As of December 31, 2024, we had 1,246 full-time employees.
Udemy uses a rigorous content curation process that considers enterprise customer demand, learner feedback and ratings, topic relevance, course quality, and instructor engagement on our platform, including frequency of updates and interaction with student questions. We regularly review courses in the Udemy Business catalog to ensure ratings consistently stay above a certain threshold and the topics are still relevant.
Udemy uses a rigorous content curation process that considers enterprise customer demand, learner feedback and ratings, topic relevance, course quality, and instructor engagement on our platform, including frequency of updates and interaction with learner questions. We regularly review courses in the Udemy Business catalog to ensure ratings consistently stay above a certain threshold and the topics are still relevant.
When subscribed to a Personal Plan, an individual will have unlimited access to the curated subscription catalog during the subscription term, including immersive learning experiences such as practice tests and coding exercises. Udemy Business Global organizations recognize the need for upskilling and reskilling capabilities to ensure their workforce is agile, resilient and competitive in a rapidly changing environment.
When subscribed to a Personal Plan, an individual learner will have unlimited access to the curated subscription catalog during the subscription term, including immersive learning experiences such as practice tests and coding exercises. Udemy Business Global organizations recognize the need for upskilling and reskilling capabilities to ensure their workforce is agile, resilient and competitive in a rapidly changing environment.
We build deep, trusted customer relationships at all levels with a specific focus on the C-suite, and our engagements support upskilling and reskilling across hybrid workplaces. With our dynamic product portfolio from on-demand and immersive learning to a tailored cohort experience for leadership development, Udemy Business supports skill development at all levels of the organization.
We build deep, trusted customer relationships at all levels with a specific focus on the C-suite, and our engagements support upskilling and reskilling across hybrid and remote workplaces. With our dynamic product portfolio from on-demand and immersive learning to a tailored cohort experience for leadership development, Udemy Business supports skill development at all levels of the organization.
We are continuing to invest in growing brand awareness globally. Udemy’s brand awareness is relatively low, representing a significant opportunity, and this is consistent with the category as a whole. Our brand marketing is designed to increase awareness of Udemy through online and offline campaigns that drive media coverage, social sharing and more word-of-mouth virality.
Increase overall Udemy brand awareness. We are continuing to invest in growing brand awareness globally. Udemy’s brand awareness is relatively low, representing a significant opportunity, and this is consistent with the category as a whole. Our brand marketing is designed to increase awareness of Udemy through online and offline campaigns that drive media coverage, social sharing and more word-of-mouth virality.
Competition The market for developing skills is rapidly growing and highly fragmented, but is not well-suited to address the growing need for people to develop skills, reskill and upskill since the landscape is continuously evolving. Participants in this market can include corporate training offerings, direct-to-consumer training offerings, specialized content training offerings, and providers of online free resources.
Competition The market for developing skills is rapidly growing and highly fragmented, but is not well-suited to address the growing need for people to reskill and upskill since the landscape is continuously evolving. Participants in this market can include corporate training offerings, direct-to-consumer training offerings, specialized content training offerings, and providers of online free resources.
Our marketplace encourages engagement between learners and instructors, including course enrollment, consumption and Q&As. The volume and frequency of this engagement allows us to generate meaningful insights and provide real-time feedback and analytics for our instructors and enterprise customers. Udemy leverages AI and machine learning throughout our platform.
Our marketplace encourages engagement between learners and instructors, including course enrollment, consumption and Q&As. The volume and frequency of this engagement allows us to generate meaningful insights and provide real-time feedback and analytics for our instructors and enterprise customers. Udemy leverages AI and machine learning throughout its platform.
Udemy’s global content engine powers Udemy Business with the highest-rated content from our Consumer marketplace, proven new product capabilities and organic new business leads. Udemy Business enables organizations around the world to offer on-demand learning for all employees, immersive learning for technology teams, and cohort learning for business leaders.
Udemy’s global content engine powers Udemy Business with the highest-rated content from our marketplace, proven new product capabilities and organic new business leads. Udemy Business enables organizations around the world to offer on-demand learning for all employees, immersive learning for technology teams, and cohort learning for business leaders.
We will consider acquisitions that expand our international footprint and/or to acquire innovative technology that expands the immersive learning experiences we offer, with the goal of improving learner outcomes and ultimately increasing new customer acquisition and retention.
We will consider acquisitions that expand our international footprint and/or to acquire innovative technology that expands the immersive learning experiences we offer, with the goal of improving the learner experience and customer outcomes and ultimately increasing new customer acquisition and retention.
In addition, there is a growing need to offer cost-effective, flexible and personalized training to allow employees to learn at their own pace as more companies offer remote positions and strive to create a culture of continuous learning.
In addition, there is a growing need to offer cost-effective, flexible and personalized training to allow employees to learn at their own pace as more companies offer remote and hybrid positions and strive to create a culture of continuous learning.
Learners can access content from local experts from around the world and in their preferred language. Udemy provides a comprehensive and immersive learning experience through tests, Q&As, and other interactive activities.
Learners can access content from numerous local experts from around the world and in their preferred language. Udemy provides a comprehensive and immersive learning experience through tests, Q&As, and other interactive activities.
Global instructors learn about Udemy in a variety of ways including awareness campaigns and by coming to the platform as learners. We have 24,000 free courses available on our consumer marketplace. These free courses represent an important entry point for learners to experience our platform, driving cost-effective top of the funnel engagement for both consumer and Udemy Business leads.
Global instructors learn about Udemy in a variety of ways including awareness campaigns and by coming to the platform as learners. We have 27,000 free courses available on our consumer marketplace. These free courses represent an important entry point for learners to experience our platform, driving cost-effective top of the funnel engagement for both consumer and Udemy Business leads.
Many CEOs around the world believe the need for new skills is their largest business challenge and, for employees, opportunities for development have become an important factor that determines workplace satisfaction. Hybrid work, distributed teams and the rapid pace of change mean organizations can no longer rely on in-person training alone.
Many business leaders around the world believe the need for new skills is their largest business challenge and, for employees, opportunities for development have become an important factor that determines workplace satisfaction. Hybrid work, distributed teams and the rapid pace of change mean organizations can no longer rely on in-person training alone.
Investments in our brand enable us to drive long-term growth by attracting new learners to our platform and keeping existing learners engaged. Optimize business model and pricing . Our machine-learning pricing optimization approach is designed to make it easy and accessible for learners to purchase courses, which drives instructor earnings, thereby increasing incentives for instructors to supply more courses.
Investments in our brand enable us to drive long-term growth by attracting new learners to our platform and keeping existing learners engaged. Optimize business model and pricing . Our pricing optimization approach is designed to make it easy and accessible for learners to purchase courses, which drives instructor earnings, thereby increasing incentives for instructors to supply more courses.
Udemy’s differentiated feedback loops enable instructors to gain insights directly from learners that help to improve the quality and relevance of content, and our platform is designed to facilitate instructors making frequent, real-time updates to their courses. On average, courses were updated five times by top instructors on Udemy in 2023.
Udemy’s differentiated feedback loops enable instructors to gain insights directly from learners that help to improve the quality and relevance of content, and our platform is designed to facilitate instructors making frequent, real-time updates to their courses. On average, top courses were updated five times by top instructors on Udemy in 2024.
We are continuing to invest in our machine-learning pricing algorithms to determine the optimal price we charge for our courses in our marketplace on a per-country basis, taking into account dozens of course characteristics, including category of content, hours of content, course rating and popularity. Pursue strategic acquisitions.
We are continuing to invest in our machine-learning pricing algorithms to determine the optimal price we charge for our courses in our marketplace on a per-country basis, taking into account dozens of course characteristics, including category of content, hours of content, course rating and enrollments. Pursue strategic acquisitions.
Udemy Business features collections in 14 local languages, in addition to English. Non-English content accounts for more than 50% of the Udemy Business course collection. Local language courses are taught by native speakers with local context, making the content and learning experience more relevant and effective.
Udemy Business features collections in 15 local languages, in addition to English. Non-English content accounts for more than 50% of the Udemy Business course collection. Local language courses are taught by native speakers with local context, making the content and learning experience more relevant and effective.
Our land-and-expand strategy is an investment in building long-term, high ROI relationships with our customers. Our teams work closely with customers during onboarding to understand the company's business objectives and partner with the leaders in the organization to develop programs tied to driving business results.
Our land-and-expand strategy is an investment in building long-term, high ROI relationships with our customers. Our teams work closely with customers during onboarding to understand the company's business objectives and partner with the leaders in the organization to develop programs tied to driving outcomes.
The volume and frequency of these interactions allow us to generate meaningful insights and provide real-time feedback and analytics for our instructors. These data insights improve content quality, enhance course personalization, and optimize productivity and satisfaction for our learners. Powerful data insights and analytics .
The volume and frequency of these interactions allow us to generate meaningful insights and provide real-time feedback and data and analytics for our enterprise customers and instructors. These data insights improve content quality, enhance course personalization, and optimize productivity and satisfaction for our learners. Powerful data insights and analytics .
We believe many of today's learning platforms have a number of shortcomings, including relevance, quality, breadth, scalability, and affordability of content. Udemy’s platform is designed to address these shortcomings by effectively connecting global learners with up-to-date knowledge from experts and practitioners around the world. Our global platform supports learners, instructors and enterprise customers to achieve their goals.
We believe many of today's learning platforms have a number of shortcomings, including relevance, quality, breadth, scalability, and affordability of content. Udemy’s platform is designed to address these shortcomings by effectively connecting global learners with up-to-date knowledge from experts and practitioners around the world. Our global platform supports learners, instructors and enterprise customers.
Udemy’s platform is designed to support learners throughout their journey as they develop skills needed to achieve their professional goals and receive validation of skills proficiency through badges and certification. We provide personalized and guided skill-based learning experiences, including videos, reading tutorials, hands-on practice and assessments. Learners can focus on career and occupational areas of their choice.
Udemy’s platform is designed to support learners throughout their journey as they develop skills needed to achieve their professional goals and receive validation of skills proficiency through badges and certification. We provide personalized and guided skill-based learning experiences, including on-demand videos, hands-on practice and assessments. Learners can focus on career and occupational areas of their choice.
Our platform is purpose-built to empower instructors with data insights and innovative technology to meet the specific needs of learners and organizations in order to help them achieve their goals and desired outcomes. Our products are designed to deliver measurable incremental value, which ultimately creates upselling or expansion opportunities.
Our platform is purpose-built to empower instructors with data insights and innovative technology to meet the specific needs of learners and organizations in order to help them achieve their career goals and desired business outcomes, respectively. Our products are designed to deliver measurable incremental value, which ultimately creates upselling or expansion opportunities.
We use advanced technology applications, such as personalized promotions, lifecycle marketing and content personalization, to help tailor our platform for our learners. 8 Table of Contents Our technology and research and development Udemy’s technology features a modern architecture designed to support our continued growth at scale and to deliver on our mission.
We use advanced technology applications, such as personalized promotions, lifecycle marketing and content personalization, to help tailor our platform for our learners. 8 Table of Contents Our technology and research and development Udemy’s technology features a modern architecture designed to support our continued growth at scale.
Udemy’s learning marketplace enables tens of thousands of instructors to develop, distribute and enhance content that reaches Udemy’s broad global audience of 69 million learners. Udemy leverages technology, including artificial intelligence (“AI”), as well as data and insights, to deliver personalized, immersive and effective learning experiences.
Udemy’s learning marketplace enables tens of thousands of instructors to develop, distribute and enhance content that reaches Udemy’s broad global audience of nearly 77 million learners. Udemy leverages technology, including artificial intelligence (“AI”), as well as data and insights, to deliver personalized, immersive and effective learning experiences.
Available as an add-on to any Udemy Business enterprise license, Udemy Business Pro provides a deeper, immersive learning experience with assessments, labs and workspaces and pre-built learning paths that accelerate skill development across key roles in information technology, software engineering, and data & analytics. Pricing is based on contract length and number of seats. • Leadership Academy.
Available as an add-on to any Udemy Business enterprise license, Udemy Business Pro provides a deeper, immersive learning experience with assessments, labs and workspaces and pre-built learning paths that accelerate skill development across key roles in information technology, software engineering, and data & analytics. Pricing is based on volume and contract length. • Leadership Academy.
We continue to make investments in our global partner ecosystem to support direct and indirect revenue channels that help enable us to scale with agility across the global marketplace. 3 Table of Contents Udemy has curated more than 25,000 of the most highly-rated and relevant courses from its extensive content catalog on its marketplace to meet the needs of its Udemy Business customers in over 150 countries.
We continue to make investments in our global partner ecosystem to support direct and indirect revenue channels that help enable us to scale with agility across the global marketplace. 3 Table of Contents Udemy has curated more than 29,000 of the most highly-rated and relevant courses for in-demand skills from its extensive content catalog on its marketplace to meet the needs of its Udemy Business customers in over 150 countries.
As a result, organizations must leverage digital and hybrid learning experiences to scale skills acquisition. Our go-to-market approach is focused on understanding our customers’ businesses and developing learning strategies so they can achieve organizational goals.
As a result, organizations must leverage digital and hybrid learning experiences to scale skills acquisition. Our go-to-market approach is focused on understanding our customers’ business needs and developing learning strategies so they can achieve organizational goals.
Our marketplace model motivates instructors to provide relevant content to learners quickly, whether by being first to address in-demand topics, refreshing existing topics, or finding new and better ways to serve the learner community on existing topics.
Our marketplace model motivates instructors to provide high-quality content to learners quickly, whether by being first to address in-demand topics, refreshing existing topics, or finding new and better ways to serve the learner community on existing topics.
We leverage our global infrastructure to produce assets at scale and work with local language experts and native marketers to make the necessary adaptations for each country. 10 Table of Contents Go-to-market strategy We sell to our Udemy Business customers both directly, through our sales teams, and indirectly, through third-party channels.
We leverage our global infrastructure to produce assets at scale and work with local language experts and native marketers to make the necessary adaptations for each country. Go-to-market strategy We sell to our Udemy Business customers both directly, through our sales teams, and indirectly, through third-party channels.
Item 1. Business Our mission Udemy’s mission is to improve lives through learning. About Udemy Udemy is a global learning company whose online platform empowers organizations and individuals with flexible and effective skill acquisition, development and validation.
Item 1. Business Our mission Udemy’s mission is to transform lives through learning. About Udemy Udemy is a global learning company whose online platform empowers organizations and individuals with flexible and effective professional skill acquisition, development and validation.
We believe our operating model benefits from several competitive advantages: Comprehensive global course catalog . We provide access to over 220,000 courses, including over 90,000 non-English language courses. This extensive library covers a broad range of topics, including technical skills, business and soft skills, and personal development.
We believe our operating model benefits from several competitive advantages: Comprehensive global course catalog . We provide access to over 250,000 courses, including over 115,000 non-English language courses. This extensive library covers a broad range of topics, including technical skills, business and soft skills, and personal development.
Our machine-learning pricing optimization approach is designed to make it easy and accessible for learners to purchase courses, which drives instructor earnings, thereby increasing incentives for instructors to supply more courses.
Our machine-learning pricing optimization approach is designed to make it easy and accessible for learners to purchase courses, which drives instructor earnings, thereby increasing incentives for instructors to supply more courses and update existing content.
Udemy enables learners to gain the knowledge and skills they need to attain in-demand jobs, further their career, and improve their well-being. Our library of more than 220,000 free and paid courses is created by 75,000 instructors and covers a wide range of topics, including technology, business and soft skills, and personal development.
Udemy enables learners to gain the knowledge and skills they need to attain in-demand jobs, further their career, and improve their well-being. Our library of more than 250,000 free and paid courses is created by over 80,000 instructors and covers a wide range of topics, including technology, business and soft skills, and personal development.
Historically, we have expanded from individual to team to multi-department and company-wide sales as Udemy Business’s value is proven and customers identify additional use cases. With under 10% of total available seats contracted in our customer base as of the end of 2023, we see a large opportunity for growth.
Historically, we have expanded from individual to team to multi-department and company-wide sales as Udemy Business’s value is proven and customers identify additional use cases. With under 10% of total available seats contracted in our existing Udemy Business customer base worldwide as of the end of 2024, we see a large opportunity for growth.
With less than 15% of Udemy's traffic coming from the U.S., we are focused on ensuring that our marketing speaks to local audiences. Our design communications and production capabilities allow us to produce creatives that, while anchored on our global brand, also adapt to the cultural norms of the countries we advertise in.
With only 15% of Udemy's traffic coming from the U.S., we are focused on ensuring that our marketing speaks to local audiences around the world. Our design communications and production capabilities allow us to produce creatives that, while anchored on our global brand, also adapt to the cultural norms of the countries we advertise in.
As of December 31, 2023, Udemy Business offers global companies annual or multi-year subscription access on a per-seat basis to a catalog of more than 25,000 courses in 14 local languages, in addition to English. Udemy Business provides access to its platform through Team and Enterprise subscription plans and offers the ability to add on Udemy Business Pro services.
As of December 31, 2024, Udemy Business offers global companies annual or multi-year subscription access on a per-seat basis to a catalog of more than 29,000 courses in 15 local languages, in addition to English. Udemy Business provides access to its platform through Team and Enterprise subscription plans and offers the ability to add on Udemy Business Pro services.
For example, we are incorporating generative AI-powered features that enhance the learner experience, support content creation and increase course enrollments for instructors, and optimize productivity and satisfaction for our learners. 1 Table of Contents Udemy’s marketplace addresses the evolving needs of learners across the globe by providing access to a wide range of high-quality and relevant content in local languages.
For example, we are incorporating generative AI-powered features that enhance the learner experience, support content creation and drive course consumption for instructors, increase personalization for learners and optimize productivity for our enterprise customers. 1 Table of Contents Udemy’s marketplace addresses the evolving needs of learners across the globe by providing access to a wide range of high-quality and relevant content in local languages.
Finally, a critical part of Udemy’s success requires that we work with partners to enable our users to access Udemy Business content in their flow of work. To support this, Udemy Business can be integrated into various Learning Management Systems (“LMS”) and Learning Experience Platforms (“LXP”).
Finally, a critical part of Udemy’s success requires that we work with partners to enable our users to access Udemy Business content in their flow of work. To support this, Udemy Business can be integrated into various Learning Management Systems (“LMS”) and Learning Experience Platforms (“LXP”), such as Cornerstone OnDemand, Degreed, ServiceNow and Workday.
Instructors around the world have created courses in 75 languages, resulting in over 90,000 courses on our platform in non-English languages, as of December 31, 2023. Our learners benefit from the local context provided by local instructors, further enhancing the learner experience.
Instructors around the world have created courses in 75 languages, resulting in over 115,000 courses on our platform in non-English languages, as of December 31, 2024. Our learners benefit from the local context provided by native language instructors, further enhancing the learner experience.
As of December 31, 2023, Udemy Business NDRR was 106%, and NDRR for Udemy Business customers with at least 1,000 employees, or Udemy Business Large Customer NDRR, was 113%. This level of retention demonstrates the potential for consistent expanded growth within the existing Udemy Business customer base.
As of December 31, 2024, Udemy Business NDRR was 98%, and NDRR for Udemy Business customers with at least 1,000 employees, or Udemy Business Large Customer NDRR, was 103%. This level of retention demonstrates the potential for consistent expanded growth within the existing Udemy Business customer base.
This continuously updated content, along with personalized recommendations and advanced search capabilities, presents a better value proposition for learners who benefit from accessing the most up-to-date, high-quality content that is relevant to them.
This regularly updated content, along with personalized recommendations and advanced search capabilities, presents a better value proposition for learners who benefit from accessing the most up-to-date, high-quality content that is relevant to their individual needs.
Within that, the global corporate opportunity is expected to grow to $183 billion by 2028, or at a 15% compound annual growth rate, or CAGR.
Within that, the global corporate opportunity is expected to grow to $204 billion by 2029, or at a 15% compound annual growth rate, or CAGR.
When an instructor’s course is added to the Udemy Business catalog, instructors are required to agree, subject to limited exceptions, not to offer any on-demand content, such as pre-recorded courses, on any competing platform in a way that directly competes with or impairs the sales of such content on our platform.
When an instructor’s course is added to the Udemy Business catalog, instructors are required to agree, subject to limited exceptions, to exclusivity, which prevents them from offering any on-demand content, such as pre-recorded courses, on any competing platform in a way that directly competes with or impairs the sales of such content on our platform.
For certain Udemy Business customers, we provide professional services that support the cohort learning experience, as well as learning architecture development and skills mapping. Consumer Udemy’s direct-to-consumer business is built on our global marketplace, which is a destination for high-quality and relevant courses taught by expert instructors in their respective fields.
Udemy Business customers may elect to engage us to provide professional services that support the cohort learning experience, as well as learning architecture development and skills mapping. Consumer Udemy’s direct-to-consumer business is built on our global marketplace, which is a destination for on-demand courses taught by expert instructors in their respective fields.
We believe that we are positioned favorably because of the synergies between our consumer and enterprise businesses, and the strategic relationships we form with our enterprise customers that help them drive engagement in their learning programs and, in turn, business outcomes like employee retention and corporate productivity.
We believe that we are positioned favorably because of the strategic relationships we form with our enterprise customers that help them drive engagement in their learning programs and, in turn, business outcomes like employee retention, acquisition of certifications and increased productivity.
By leveraging our comprehensive learning solutions and strategic customer success approach, we believe we are uniquely positioned to empower organizations with the tools to build a future-ready workforce, increase employee engagement and retention, and achieve critical business outcomes, while also helping individuals to stand out in an increasingly competitive job market.
By leveraging our comprehensive learning solutions and strategic customer success approach, we believe we are uniquely positioned to empower organizations with the tools to build a future-ready workforce, increase employee engagement and retention, and achieve critical business outcomes, while also helping individuals to achieve career goals.
The growing number of individual learners and enterprises on our platform attracts more instructors with diverse experiences and backgrounds to create content for in-demand topics and update existing courses. The increasing number of relevant, high-quality and up-to-date courses attracts more individual learners and enterprises.
Powerful network effects. Udemy is one symbiotic, data-centric platform. The growing number of individual learners and enterprises on our platform attracts more instructors with diverse experiences and backgrounds to create content for in-demand topics and update existing courses. The increasing number of relevant, high-quality and up-to-date courses attracts more individual learners and enterprises.
To date, customer expansion has been primarily driven by seat expansion, although new product adoption, such as Leadership Academy and Udemy Business Pro, is becoming a more meaningful driver. Partnerships Partnerships are a key element of Udemy’s long-term growth strategy.
To date, customer expansion has been primarily driven by seat expansion, although new product adoption is becoming a more meaningful driver. Partnerships Partnerships are a key element of Udemy’s long-term growth strategy.
Individuals can purchase a monthly or annual Personal Plan subscription with access to more than 11,000 courses across hundreds of professional and personal skills. Monthly and annual Personal Plan subscription pricing vary by geography. • Professional Services.
Individual learners can purchase a monthly or annual Personal Plan subscription with access to more than 13,000 courses across hundreds of professional and personal skills. Monthly and annual Personal Plan subscription pricing vary by region. • Professional Services.
Teams of up to 20 people can purchase Team Plan, which is a self-serve, subscription service. Team Plan is designed for teams or organizations who are in need of on-demand learning and development at work to develop new skills, reskill and upskill, which drives retention and increases productivity in a cost-effective manner.
Teams of up to 20 people can purchase Team Plan, which is a self-serve, subscription service. Team Plan is designed for teams or organizations who are in need of on-demand learning and development at work to reskill and upskill.
Companies around the world are preparing for a talent and workforce transformation, which is the process of developing the employees’ skill set to keep up with the ever-changing needs of the business.
Companies around the world are in the midst of a talent and workforce transformation, which is the process of developing the employees’ skill set to keep up with the ever-changing needs of the business, accelerated by generative AI.
In today’s rapidly evolving labor environment, there are two key trends currently reshaping the future of work: the rise of the skills-based organization and the widespread adoption and application of generative AI across various industries, regions and professional roles.
In today’s rapidly evolving labor environment, there are two key trends currently reshaping the future of work: the rise of the skills-based organization and the application of generative AI.
We are investing in the platform and leveraging technology such as generative AI to: • drive increased measurable learner outcomes; • deliver more personalized learning experiences; • improve our instructors’ ability to create additional modalities and hands-on learning experiences; and • improve our ability to support organizations and their need to upskill and reskill their workforces efficiently, including leadership needs and cohort-based offerings. 6 Table of Contents Increase overall Udemy brand awareness.
We are investing in the platform and leveraging technology such as generative AI to: • drive measurable learner outcomes; • deliver more personalized learning experiences; • improve our instructors’ ability to create content more efficiently; • improve our ability to support learners through career-oriented learning journeys; and 6 Table of Contents • improve our ability to support organizations and their need to upskill and reskill their workforces efficiently, including leadership needs and cohort-based offerings.
For example, we entered into a multi-year partnership, beginning in 2024, with McLaren Racing to become their Official Learning and Skills Partner and to build brand awareness among McLaren’s global fan base while showing the power of bringing a skills focus to the workplace.
Our marketing strategy focuses on brand, account based and performance marketing, strategic partnerships and lifecycle monetization. In 2024, we entered into a multi-year partnership with McLaren Racing to become their Official Learning and Skills Partner and to build brand awareness among McLaren’s global fan base while showing the power of bringing a skills focus to the workplace.
Thus far, the team has built algorithmic and model-driven solutions at scale to provide the following capabilities: personalized and differentiated experiences for all learners, comprehensive instructor tools for content delivery and student engagement, and insights dashboards for enterprises to track employee progress. 9 Table of Contents We continuously gather market research and leverage user data to optimize the content available on our platform.
Thus far, the team has built algorithmic and model-driven solutions at scale to provide the following capabilities: personalized and differentiated experiences for all learners, comprehensive instructor tools for content delivery and student engagement, and insights dashboards for enterprises to track employee progress. 9 Table of Contents Our market opportunity Before 2020, the majority of corporate training occurred offline.
Udemy Business offers organizations access to more than 25,000 of the highest rated courses from our marketplace across 15 languages. The range and volume of our course catalog enables employees to support their career growth with the most relevant and effective courses and real-world skills development, and organizations across the globe to reskill and upskill their workforce.
The range and volume of our course catalog enables employees to support their career growth with the most relevant and effective courses and real-world skills development, and organizations across the globe to reskill and upskill their workforce.
Additionally, customers need data integrations in order to assess ROI, adoption and other key metrics. Udemy’s open nature, platform services focus and APIs, enables us to build a robust integration ecosystem that supports our customers’ ability to get the most out of their software investments and investments in learning.
Udemy’s open nature, platform services focus and APIs, enable us to build a robust integration ecosystem that supports our customers’ ability to get the most out of their software investments and investments in learning.
Udemy generates revenue through the following product offerings: • Per Course . Individuals can enroll for free or purchase one of Udemy marketplace’s more than 220,000 courses to obtain lifetime access to that digital course content after enrollment.
Udemy generates revenue through the following product offerings: • Per Course . Individual learners can purchase one of the more than 250,000 courses available on the Udemy marketplace to obtain lifetime access to that digital course content after enrollment.
We leverage a wealth of data to drive customer outcomes. Our differentiated learner feedback loops help improve instructor outcomes by sharing insights on where the market opportunities are and how they can enhance their teaching capabilities. For learners, our marketplace unlocks valuable data for personalized recommendations.
Our differentiated learner feedback loops help improve instructor outcomes by sharing insights on where the market opportunities are and how they can enhance their teaching capabilities. For learners, our marketplace unlocks valuable data for personalized recommendations. This helps learners know the skills needed to achieve their goals, including demonstration of skills proficiency through validation and certification.
With a subscription to Team Plan, subscribers get access to a selection of courses included in the Udemy Business catalog, certification prep for more than 200 exams, practice tests, AI-powered coding exercises, goal-focused recommendations and analytics. Team Plan is offered as an annual subscription of $360 USD per seat, per year. • Enterprise Plan.
With a subscription to Team Plan, subscribers get access to a selection of courses included in the Udemy Business catalog, certification prep for more than 200 exams, practice tests, AI-powered coding exercises, goal-focused recommendations and analytics. • Enterprise Plan. Organizations can purchase Enterprise Plan, which offers a vast catalog of more than 29,000 high-quality courses.
With an average of 34 million monthly unique visitors during 2023, over 137 million cumulative course enrollments, and more than 13 billion cumulative minutes of learning, we believe that the volume of the data our platform collects provides meaningful insights into the behaviors and evolving needs of organizations, learners and instructors.
During 2024, we had an average of 38 million monthly unique visitors, and, through the end of 2024, we’ve had over 1 billion cumulative course enrollments since inception. We believe that the volume of the data our platform collects provides meaningful insights into the behaviors and evolving needs of organizations, learners and instructors.
We believe this international playbook will continue to allow us to build a targeted list of countries in which we anticipate we will expand with a high likelihood of success. Expand learning experiences to new modalities and more active learning that reaches a broader audience.
We believe this international playbook will continue to allow us to build a targeted list of countries in which we anticipate we will expand with a high likelihood of success. Launch innovative products that drive measurable learning outcomes and increased retention.
Udemy has a network of 75,000 global instructors. Instructors come to Udemy because of our scale. Our massive audience provides us with a significant amount of learner data and incentive for instructors to come to our platform. Tens of thousands of instructors have created hundreds of thousands of courses to serve tens of millions of global learners.
Udemy has a network of more than 80,000 global instructors. Instructors come to Udemy because of our scale and attractive revenue share model. Our massive audience provides us with a significant amount of learner data and incentive for instructors to come to our platform.
In 2023, our instructors earned $208.2 million and published an average of more than 5,000 courses per month. Global distribution and reach. Our platform connects individual learners and enterprise customers with instructors across the world.
In 2024, our instructors earned $190.6 million and published an average of more than 5,000 courses per month. Global distribution and reach. Our platform connects individual learners and enterprise customers with instructors across the world. In 2024, 60% of our revenue was generated outside of North America, and 85% of marketplace traffic originated from outside of the United States.
We also have traditionally seen increased bookings in the Consumer segment as the result of various holiday promotions offered in the fourth quarter. We recognize revenue for consumer individual course purchases over an estimated service period of four months, while revenue for consumer subscriptions is recognized over the corresponding subscription term.
We recognize revenue for consumer individual course purchases over an estimated service period of four months, while revenue for consumer subscriptions is recognized over the corresponding subscription term.
Our competitive advantages The traditional publisher model used by some competitors can be slow moving and reactive. Other niche marketplace models cannot effectively serve the enterprise learner who needs to develop both hard and soft skills. Udemy’s platform, in contrast, offers a comprehensive suite of skills development content required to support learners and organizations in achieving their goals and outcomes.
Other niche marketplace models cannot effectively serve the enterprise learner who needs to develop both technical and professional skills. Udemy’s platform, in contrast, offers a comprehensive suite of skills development tools required to support learners and organizations in achieving their career goals and business outcomes, respectively.
Udemy is powered by a flywheel effect where instructors are encouraged to create relevant, high-quality content that attracts more learners and Udemy Business customers to the platform. More learners on our platform results in a larger audience and greater potential earnings for instructors, which in turn incentivizes more and better course creation and also attracts additional instructors to the platform.
Udemy is powered by a flywheel effect where instructors are encouraged to create relevant, high-quality content that attracts more learners and Udemy Business customers to the platform.
Our market opportunity Before 2020, the majority of corporate training occurred offline. With the increase of internet connectivity, technological advances, work-from-home flexibility and interactive tools at a low cost, we expect to see a continued acceleration of the shift from offline to online.
With the increase of internet connectivity, technological advances, work-from-home flexibility and interactive tools at a low cost, we expect to see a continued acceleration of the shift from offline to online. We believe that online education is well-positioned to address the scalability and affordability limitations that offline education presents.
We have effectively built a creator platform that allows instructors to develop content on virtually any topic, while having the flexibility to update courses as they incorporate feedback from millions of learners around the world. On average, our instructors publish more than 5,000 courses a month on our platform. 7 Table of Contents High-quality, relevant and up-to-date content.
We have effectively built a creator platform that allows instructors to develop content on virtually any topic, while having the flexibility to update courses to keep up with the pace of change and based on feedback from millions of learners around the world.
It powers our first-party applications that include our customer-facing Udemy.com website, our Udemy Business web experience, our native mobile applications and new experiences. This approach also supports an expanding set of third-party ecosystem integrations, through industry standard interoperability with learning management systems and learning experience platforms, as well as other key business systems and tools. Powerful data.
This approach also supports an expanding set of third-party ecosystem integrations, through industry standard interoperability with learning management systems and learning experience platforms, as well as other key business systems and tools. Powerful data. We leverage a wealth of data to drive customer outcomes.
We calculate this estimate by aggregating the global corporate opportunity of $78 billion and the global e-learning opportunity of $102 billion, including government, vocation and higher-education. We believe that market opportunity could grow to $380 billion by 2028.
Based on data from Arizton, the market opportunity in online learning was estimated to be $197 billion in 2023. We calculate this estimate by aggregating the global corporate opportunity of $83 billion and the global e-learning opportunity of $114 billion, including government, vocation and higher-education. We believe that market opportunity could grow to $435 billion by 2029.
Udemy produces curated learning paths focused on key domains and skill sets. We also allow organizations to author their own custom learning paths. These are customized to the organization-specific upskilling and reskilling objectives. Extensive integrations. We are evolving our comprehensive learning platform using an API-first approach.
Udemy produces curated learning paths focused on key domains and skill sets. We also allow organizations to author their own custom learning paths. Extensive integrations. We are evolving our comprehensive learning platform using an API-first approach. This starts by looking at our business as a set of key entities and capabilities, and we define modular, interoperable APIs to represent them.
For Udemy Business, we have courses in English and 14 other local languages. Having local language experts creating locally relevant content is a key differentiator for Udemy. Powerful network effects. Udemy is one symbiotic, data-centric platform.
We have courses in 75 languages on our marketplace. For Udemy Business, we have courses in English and 15 other local languages and customers in more than 150 countries. Having local language experts creating locally relevant content is a key differentiator for Udemy.
It also serves as an organic lead generation channel and allows us to test and iterate our product in real time in a way that is not disruptive to our business. Udemy analyzes platform data to better understand learners' needs and deliver personalized recommendations for the best courses and learning paths.
Our global marketplace serves as a testing ground for content before the best - as determined by learner ratings and reviews - are selected for inclusion in the Udemy Business portfolio. It also serves as an organic lead generation channel. Udemy analyzes platform data to better understand learners' needs and deliver personalized recommendations for the best courses and learning paths.
Instructors: We compete for instructors based on our ability to provide monetization opportunities and tools to enable instructors to create differentiated content to delight global learners. We believe that we are positioned favorably because of our ability to attract learners across the globe, provide data and insights to help instructors to retain learners, and offer an attractive shared revenue model.
We believe that we are positioned favorably because of our ability to attract learners across the globe, provide data and insights to help instructors enhance content to retain learners, and offer an attractive shared revenue model. Our competitive advantages The traditional publisher model used by some competitors can be slow moving and reactive.
In addition to our global focus, Udemy seeks to forge relationships that either extend our marketing reach or the capabilities and reach of our sales go-to-market. Through relationships with key brands and regional leaders that have reach and scale in their own right, we are able to increase the awareness and adoption of our offerings.
Through relationships with key brands and regional leaders that have reach and scale in their own right, we are able to increase the awareness and adoption of our offerings. Additionally, customers need data integrations in order to assess ROI, adoption and other key metrics.
We ensure that all of those programs support the right learning outcomes and then we focus on driving seat expansion. Our Customer Success organization is structured to support our customer base as it scales. Based on the nature of our customers, we support them using one of the following three models: • Self-serve.
We ensure that all of those programs support the right learning outcomes and then we focus on driving seat expansion. Our Customer Success organization is structured to support our customers based on their specific needs as determined by their organizational size and complexity: • Self-serve. A fully digital success experience for organizations utilizing our Team Plan product.
Human capital resources Our employees are our greatest asset. We believe we have a world-class culture with employees committed to redefining the future of work through a skills based approach and continuous learning. Udemy is establishing a blueprint for companies transitioning to skills-based talent management and hiring practices, which we can share with our Udemy Business customers.
Human capital resources Our employees are our greatest asset. We believe we have a world-class culture with employees committed to redefining the future of work through a skills based approach and continuous learning. In addition, we invest in areas to help us attract and retain top talent that support our core values.
We rely on a combination of intellectual property rights, including patents, trade secrets, trade dress, domain names, copyrights and trademarks to protect our competitive advantage. As of December 31, 2023, we held 16 registered trademarks in the United States and 39 registered trademarks in foreign jurisdictions, which have various expiration dates between 2024 and 2033.
We rely on a combination of intellectual property rights, including patents, trade secrets, trade dress, domain names, copyrights and trademarks to protect our competitive advantage.
Our platform’s ability to provide a personalized experience is further enhanced by the machine learning methodologies used to develop the algorithms included in our technology, which allow us to personalize each learner’s experience continuously and automatically. We regularly run tests to determine which product features, course recommendations, prices, and messaging will drive the best outcomes. Pricing optimization.
And for organizations, we are able to share powerful insights to help them achieve their goals and assess ROI. Our platform’s ability to provide a personalized experience is further enhanced by the machine learning methodologies used to develop the algorithms included in our technology, which allow us to personalize each learner’s experience. Pricing optimization.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny disclosures relating to an actual or perceived cyberattack or other security breach or incident suffered by us or any of our third-party service providers could lead to negative publicity and any such disclosures, or any belief that a cybersecurity attack, or a security breach or incident, has impacted us, our platform, or our service providers may cause our learners, instructors, or UB customers to lose confidence in the security of our platform and the effectiveness of the cybersecurity measures we and our service providers utilize.
Biggest changeAny disclosures relating to an actual or perceived cybersecurity attack or other security breach or incident suffered by us or any of our third-party service providers, or other third parties on which we rely, could lead to negative publicity and any such disclosures, or any belief that a cybersecurity attack, or a security breach or incident, has impacted us, our platform, or our service providers, or other third parties on which we rely, may cause our learners, instructors, or UB customers to lose confidence in the security of our platform and the effectiveness of the cybersecurity measures we and our service providers utilize. 30 Table of Contents Further, any limitations of liability provisions in our customer and user agreements, contracts with third-party service providers, or other contracts may not be enforceable or adequate or otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or incident or other security-related matter.
Among other things, these provisions: • provide that our board of directors is expressly authorized to make, alter or repeal our bylaws; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide that the authorized number of directors may be changed only by resolution of the board of directors; • provide that all vacancies on our board of directors and all newly created directorships may only be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director, except as otherwise required by law, our governing documents or resolution of our board of directors, and subject to the rights of the holders of our preferred stock; • establish that our board of directors is divided into three classes, with each class serving staggered three-year terms; • provide that a director may only be removed from the board of directors by the stockholders for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding capital stock entitled to vote in the election of directors; 41 Table of Contents • prohibit cumulative voting (therefore allowing the holders of a plurality of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); • require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • provide that special meetings of our stockholders may be called only by the board of directors acting pursuant to a resolution adopted by the majority of the entire board of directors, the Chairperson of the board of directors, our Chief Executive Officer or our President; • provide that, unless we otherwise consent in writing, a state or federal court located within the State of Delaware shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws, or (4) any action asserting a claim against us governed by the internal affairs doctrine; • provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act; and • require a super-majority vote of stockholders to amend some of the provisions described above.
Among other things, these provisions: • provide that our board of directors is expressly authorized to make, alter or repeal our bylaws; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide that the authorized number of directors may be changed only by resolution of the board of directors; • provide that all vacancies on our board of directors and all newly created directorships may only be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director, except as otherwise required by law, our governing documents or resolution of our board of directors, and subject to the rights of the holders of our preferred stock; • establish that our board of directors is divided into three classes, with each class serving staggered three-year terms; 42 Table of Contents • provide that a director may only be removed from the board of directors by the stockholders for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding capital stock entitled to vote in the election of directors; • prohibit cumulative voting (therefore allowing the holders of a plurality of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); • require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • provide that special meetings of our stockholders may be called only by the board of directors acting pursuant to a resolution adopted by the majority of the entire board of directors, the Chairperson of the board of directors, our Chief Executive Officer or our President; • provide that, unless we otherwise consent in writing, a state or federal court located within the State of Delaware shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws, or (4) any action asserting a claim against us governed by the internal affairs doctrine; • provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act; and • require a super-majority vote of stockholders to amend some of the provisions described above.
These kinds of transactions involve numerous risks, including the following: • difficulties in realizing the anticipated economic, operational and other benefits of the acquisition or strategic investment successfully or in a timely manner; • failure of businesses we acquire or invest in to achieve anticipated revenue, earnings, or cash flow; • diversion of management’s attention or other resources from our existing business; • any inability to maintain the key customers, business relationships, suppliers, and brand potential of businesses we acquire or invest in; • uncertainty of entry into businesses or geographies in which we have limited or no prior experience or in which competitors have stronger positions; • unanticipated or greater costs than expected associated with pursuing acquisitions or investments; 21 Table of Contents • difficulties in, or costs associated with, any integration process, such as challenges associated with assigning or transferring acquired intellectual property or intellectual property licenses; integrating and auditing financial statements of acquired companies that have not historically prepared financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”); and integrating the workforce of acquired companies and the potential loss of key employees of the acquired companies; • responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, such as liabilities arising out of the failure to maintain effective privacy, data protection and cybersecurity controls, and liabilities arising out of the failure to comply with applicable laws and regulations, including tax laws; • inability to maintain our culture and values, ethical standards, controls, procedures, and policies; and • asset write-offs and impairments of goodwill and intangible assets in connection with any acquisition or strategic investment, as well as any inability to accurately forecast such impacts.
These kinds of transactions involve numerous risks, including the following: • difficulties in realizing the anticipated economic, operational and other benefits of the acquisition or strategic investment successfully or in a timely manner; • failure of businesses we acquire or invest in to achieve anticipated revenue, earnings, or cash flow; • diversion of management’s attention or other resources from our existing business; • any inability to maintain the key customers, business relationships, suppliers, and brand potential of businesses we acquire or invest in; • uncertainty of entry into businesses or geographies in which we have limited or no prior experience or in which competitors have stronger positions; • unanticipated or greater costs than expected associated with pursuing acquisitions or investments; • difficulties in, or costs associated with, any integration process, such as challenges associated with assigning or transferring acquired intellectual property or intellectual property licenses; integrating and auditing financial statements of acquired companies that have not historically prepared financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”); and integrating the workforce of acquired companies and the potential loss of key employees of the acquired companies; • responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, such as liabilities arising out of the failure to maintain effective privacy, data protection and cybersecurity controls, and liabilities arising out of the failure to comply with applicable laws and regulations, including tax laws; • inability to maintain our culture and values, ethical standards, controls, procedures, and policies; and • asset write-offs and impairments of goodwill and intangible assets in connection with any acquisition or strategic investment, as well as any inability to accurately forecast such impacts.
Moreover, our pricing model and methodology has been, and may in the future become, subject to legal challenge under applicable federal or state laws, regulations, and guidelines relating to promotional pricing practices. Our results of operations may be adversely affected by any of the foregoing, and we may have increased difficulty achieving or maintaining profitability.
Moreover, our consumer pricing model and methodology has been, and may in the future become, subject to legal challenge under applicable federal or state laws, regulations, and guidelines relating to promotional pricing practices. Our results of operations may be adversely affected by any of the foregoing, and we may have increased difficulty achieving or maintaining profitability.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs and federal tax credit carryforwards to offset its post-change taxable income, or reduce its federal income tax liability, may be limited.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs and federal tax credit carryforwards to offset its post-change taxable income, or reduce its federal income tax liability, may be limited.
The use of our platform could be adversely affected if our mobile solutions are not effective. Learners have been increasingly accessing our platform on mobile devices through our Udemy and UB apps in recent years. The smaller screen size and reduced functionality associated with some mobile devices may make the use of our platform more difficult.
The use of our platform could be adversely affected if our mobile apps are not effective. Learners have been increasingly accessing our platform on mobile devices through our Udemy and UB apps in recent years. The smaller screen size and reduced functionality associated with some mobile devices may make the use of our platform more difficult.
Our business and operations could be materially and adversely affected by catastrophic events, such as earthquakes, floods, fires, telecommunications failures, power losses, break-ins, acts of terrorism, wars and other armed conflicts, political or geopolitical crises, inclement weather and public health crises.
Our business and operations could be materially and adversely affected by catastrophic events, such as earthquakes, floods, fires, telecommunications failures, power losses, break-ins, acts of terrorism, wars and other armed conflicts, political or geopolitical crises, inclement weather and public health emergencies.
The rapid growth we have experienced, and may continue to experience, in our business places significant demands on our operational infrastructure. The scalability and flexibility of our platform depends on the functionality of our technology and network infrastructure and our ability to handle increased traffic and demand for bandwidth.
The growth we have experienced, and may continue to experience, in our business places significant demands on our operational infrastructure. The scalability and flexibility of our platform depends on the functionality of our technology and network infrastructure and our ability to handle increased traffic and demand for bandwidth.
Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our business, financial condition, and results of operations. 34 Table of Contents Risks related to financial reporting, taxation, and operations as a public company If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, lead to a decline in the market price of our common stock.
Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our business, financial condition, and results of operations. 36 Table of Contents Risks related to financial reporting, taxation, and operations as a public company If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, lead to a decline in the market price of our common stock.
Requiring tax reporting or collection could decrease learner or instructor activity, which would harm our business, and could require us to incur substantial costs in order to comply, including costs associated with tax calculation, collection, and remittance and audit requirements, which could make our offerings less attractive and could adversely affect our business, financial condition, and results of operations. 36 Table of Contents Also, tax rules of certain countries, including the United States, generally require payors to report payments to unrelated parties to the applicable taxing authority and to withhold a percentage of certain amounts and remit such amounts to the applicable taxing authority.
Requiring tax reporting or collection could decrease learner or instructor activity, which would harm our business, and could require us to incur substantial costs in order to comply, including costs associated with tax calculation, collection, and remittance and audit requirements, which could make our offerings less attractive and could adversely affect our business, financial condition, and results of operations. 38 Table of Contents Also, tax rules of certain countries, including the United States, generally require payors to report payments to unrelated parties to the applicable taxing authority and to withhold a percentage of certain amounts and remit such amounts to the applicable taxing authority.
We rely on our brand and trademarks to identify our platform and to differentiate our platform and services from those of our competitors, and if we are unable to adequately protect our trademarks, third parties may use our brand names or trademarks similar to ours in a manner that may cause confusion in the market, which could decrease the value of our brand and adversely affect our business and competitive advantages. 32 Table of Contents We hold a small number of issued patents and thus have a limited ability to exclude or prevent our competitors from implementing technology, methods, and processes similar to our own.
We rely on our brand and trademarks to identify our platform and to differentiate our platform and services from those of our competitors, and if we are unable to adequately protect our trademarks, third parties may use our brand names or trademarks similar to ours in a manner that may cause confusion in the market, which could decrease the value of our brand and adversely affect our business and competitive advantages. 34 Table of Contents We hold a small number of issued patents and thus have a limited ability to exclude or prevent our competitors from implementing technology, methods, and processes similar to our own.
If our partners do no not effectively sell or market our products, choose to promote our competitors’ products or otherwise choose not to devote sufficient efforts to our business, our ability to grow our revenue may be impaired, and our results of operations may suffer.
If our partners do not effectively sell or market our products, choose to promote our competitors’ products or otherwise choose not to devote sufficient efforts to our business, our ability to grow our revenue may be impaired, and our results of operations may suffer.
We may be more susceptible to cyberattacks and other security breaches and other security incidents while many of our employees work remotely, because we have less ability to implement, monitor, and enforce our information security and data protection policies.
We also may be more susceptible to cyberattacks and other security breaches and other security incidents while many of our employees work remotely, because we have less ability to implement, monitor, and enforce our information security and data protection policies.
Amazon Web Services may take actions beyond our control that could seriously harm our business, including discontinuing or limiting access to Amazon Web Services, increasing pricing terms, terminating our contract, establishing more favorable terms with one or more of our competitors, and modifying or interpreting its terms of service or other policies in a manner that impacts our ability to administer our business and operations. 30 Table of Contents Our payments system depends on third-party providers and is subject to evolving laws and regulations.
Amazon Web Services may take actions beyond our control that could seriously harm our business, including discontinuing or limiting access to Amazon Web Services, increasing pricing terms, terminating our contract, establishing more favorable terms with one or more of our competitors, and modifying or interpreting its terms of service or other policies in a manner that impacts our ability to administer our business and operations. 32 Table of Contents Our payments system depends on third-party providers and is subject to evolving laws and regulations.
Our rapid growth may not be sustainable and depends on our ability to attract new learners, instructors, and organizations and retain existing ones. Our success depends, in part, on growing the number of learners and instructors engaging with our platform.
Our growth may not be sustainable and depends on our ability to attract new learners, instructors, and organizations and retain existing ones. Our success depends, in part, on growing the number of learners and instructors engaging with our platform.
Future growth in our organization could place additional strain on our existing resources, and we could experience systemic operating difficulties in managing our business, which may negatively impact our gross profit or operating expenses.
Future growth in our organization could place additional strain on our existing resources and processes, and we could experience systemic operating difficulties in managing our business, which may negatively impact our gross profit or operating expenses.
Furthermore, many of our current and potential competitors may have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do. 33 Table of Contents Intellectual property litigation, including litigation related to content available on our platform, could result in significant costs and adversely affect our business, financial condition, results of operations, and reputation.
Furthermore, many of our current and potential competitors may have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do. 35 Table of Contents Intellectual property litigation, including litigation related to content available on our platform, could result in significant costs and adversely affect our business, financial condition, results of operations, and reputation.
These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, and results of operations. 35 Table of Contents Unanticipated changes in our effective tax rate and additional tax liabilities, including as a result of our international operations or implementation of new tax rules, could harm our future results of operations.
These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, and results of operations. 37 Table of Contents Unanticipated changes in our effective tax rate and additional tax liabilities, including as a result of our international operations or implementation of new tax rules, could harm our future results of operations.
In addition, customers may choose to continue using or develop their own online learning or training solutions in-house rather than pay for our platform.
In addition, enterprise customers may choose to continue using or develop their own online learning or training solutions in-house rather than pay for our platform.
New investors in such issuances could also receive rights senior to those of holders of our common stock. 39 Table of Contents If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our industry, or if they change their recommendation regarding our common stock adversely, the market price and trading volume of our common stock could decline.
New investors in such issuances could also receive rights senior to those of holders of our common stock. 41 Table of Contents If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our industry, or if they change their recommendation regarding our common stock adversely, the market price and trading volume of our common stock could decline.
If our learners encounter difficulty accessing or using, or if they choose not to use, our mobile platform, our business and results of operations may be adversely affected. 31 Table of Contents Internet search engines drive traffic to our platform and, if we fail to appear prominently in search results, our growth rate could decline and our business, financial condition and results of operations could be adversely affected.
If our learners encounter difficulty accessing or using, or if they choose not to use, our mobile platform, our business and results of operations may be adversely affected. 33 Table of Contents Internet search engines drive traffic to our platform and, if we fail to appear prominently in search results, our growth rate could decline and our business, financial condition and results of operations could be adversely affected.
Our business and operations could be materially and adversely affected by natural disasters, public health crises, political crises, or other catastrophic events.
Our business and operations could be materially and adversely affected by natural disasters, public health emergencies, political crises, or other catastrophic events.
We receive, transmit, store, and otherwise process personal information and other data relating to our learners, instructors, and other individuals, such as our employees. Numerous local, municipal, state, federal, and international laws and regulations address privacy, data protection, cybersecurity, and the collection, storing, use, disclosure, protection, and other processing of certain types of data.
We receive, transmit, store, and otherwise process personal information and other data relating to our learners, instructors, and other individuals, such as our employees. Numerous local, municipal, state, federal, and international laws and regulations address privacy, data protection, cybersecurity, and the collection, storage, use, disclosure, protection, and other processing of certain types of data.
Although we view the breadth and diverse expertise of our instructor base and the content they create as one of our competitive advantages, a significant portion of the most popular content on our platform, and as a result a significant portion of our revenue, is attributable to a limited number of our instructor s.
Although we view the breadth and diverse expertise of our instructor base and the content they create as one of our competitive advantages, a significant portion of the most popular content on our platform—and consequently a significant portion of our revenue—is attributable to a limited number of our instructor s.
This exclusive federal forum provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. 42 Table of Contents These exclusive forum provisions may discourage lawsuits against us and our current and former directors, officers, stockholders, and other employees.
This exclusive federal forum provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. These exclusive forum provisions may discourage lawsuits against us and our current and former directors, officers, stockholders, and other employees.
Our ability to retain UB customers and expand our deployments with them may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with our platform, the quality and timeliness of our customer success and customer support services, our prices, the prices and features of competing solutions, reductions in customers’ spending levels, insufficient adoption of our platform by our customers’ constituents, and new feature releases, any of which could cause our revenue to decline or grow less quickly than anticipated, which would harm our business, financial condition, and results of operations.
Our ability to retain UB customers and expand our deployments with them may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with our platform, the quality and timeliness of our customer success and customer support services, our prices, the prices and features of competing solutions, customers’ spending levels, sufficient adoption of our platform by our customers’ constituents, and customers’ satisfaction with new feature releases, any of which could cause our revenue to decline or grow less quickly than anticipated, which would harm our business, financial condition, and results of operations.
Any change in export or import regulations, economic sanctions, or related legislation or changes in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform. 24 Table of Contents Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws, and similar laws, could subject us to penalties and other adverse consequences.
Any change in export or import regulations, economic sanctions, or related legislation or changes in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform. Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws, and similar laws, could subject us to penalties and other adverse consequences.
Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by our affiliates as defined in Rule 144 under the Securities Act, which are subject to the limitations of Rule 144.
Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by our affiliates (as defined in Rule 144 under the Securities Act), which shares would be subject to the limitations of Rule 144.
Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing could adversely affect our business, financial condition, and results of operations. Our sales to government clients expose us to additional risks.
Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing could adversely affect our business, financial condition, and results of operations. 25 Table of Contents Our sales to government clients expose us to additional risks.
There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our services. 28 Table of Contents While we have taken measures to protect our own proprietary and confidential information, as well as the personal data and confidential information that we otherwise process, and measures to protect our platform, we, our third-party service providers, and the networks and systems used in our business, including those of third-party service providers, have been subject to, and we, our service providers and our platform may in the future may be subject to, cybersecurity attacks or other security breaches or incidents.
There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our services. 29 Table of Contents While we have taken measures to protect our own proprietary and confidential information, as well as the personal data and confidential information that we otherwise process, and measures to protect our platform, we, our third-party service providers, other third parties on which we rely, and the networks and systems used in our business, including those of third-party service providers, have been subject to, and we, our service providers and our platform may in the future be subject to, cybersecurity attacks or other security breaches or incidents.
As a result of actual or perceived noncompliance with these laws, regulations, or contractual provisions, we may be subject to non-ordinary course audits and internal investigations, which may prove costly to our business, divert management time, or limit our ability to continue selling our products and services to our government customers.
As a result of actual or perceived noncompliance with these laws, regulations, or contractual provisions, or applicable executive orders, we may be subject to non-ordinary course audits and internal investigations, which may prove costly to our business, divert management time, or limit our ability to continue selling our products and services to our government customers.
Moreover, any attempts to rehabilitate our reputation and brand recognition may be costly and time-consuming, and there can be no assurance that any such efforts will ultimately be successful. We could face liability, or our reputation might be harmed, as a result of courses posted to our platform.
Moreover, any attempts to rehabilitate our reputation and brand recognition may be costly and time-consuming, and there can be no assurance that any such efforts will ultimately be successful. 19 Table of Contents We could face liability, or our reputation might be harmed, as a result of courses posted to our platform.
Changes with respect to any of these matters may lead to additional costs and increase our risk exposure. Additionally, we are or may become subject to laws, rules, and regulations regarding cross-border transfers of personal data, including transfers of personal data outside the EEA, Switzerland and the United Kingdom.
Changes with respect to any of these matters may lead to additional costs and increase our risk exposure. 27 Table of Contents Additionally, we are or may become subject to laws, rules, and regulations regarding cross-border transfers of personal data, including transfers of personal data outside the EEA, Switzerland and the United Kingdom.
We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies. 37 Table of Contents We could be adversely impacted by the effects of inflation.
We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies. 39 Table of Contents We could be adversely impacted by the effects of inflation.
We believe that maintaining and enhancing our reputation and brand recognition is critical to our ability to attract and retain learners, instructors, UB customers, and partners, and that the importance of our reputation and brand recognition will continue to increase as competition in the markets in which we operate continues to develop.
We believe that maintaining and enhancing our reputation and brand recognition is critical to our ability to attract and retain learners, instructors, and UB customers, as well as commercial and strategic partners, and that the importance of our reputation and brand recognition will continue to increase as competition in the markets in which we operate continues to develop.
These risks include: • the cost and resources required to localize our services, which requires the translation of our websites into foreign languages and adaptation for local practices and regulatory requirements; • competition with local market participants who understand the local market better than we do or who have pre-existing relationships with our potential learners and UB customers in those markets; • greater reliance on third-party resellers and other commercial partners for the distribution and marketing of our offerings; • legal uncertainty regarding our liability for the content and services provided by our instructors, including as a result of local laws or a lack of clear precedent of applicable law; • the burdens of complying with a wide variety of foreign laws and legal standards; • lack of familiarity with and unexpected changes in foreign regulatory requirements; 22 Table of Contents • adapting to variations in methods of payment from learners and UB customers; • difficulties in managing and staffing international operations; • fluctuations in currency exchange rates; • potentially adverse tax consequences, including the complexities of foreign value added tax systems, digital services tax and restrictions on the repatriation of earnings; • increased financial accounting and reporting burdens and complexities and difficulties in implementing and maintaining adequate internal controls; • political, social, and economic instability abroad, wars and other armed conflicts, terrorist attacks, and security concerns in general, including Russia’s invasion of Ukraine and the conflict between Israel and Hamas in Gaza; • reduced or varied protection for intellectual property rights in some countries; and • higher telecommunications and internet service provider costs.
These risks include: • the cost and resources required to localize our services, which requires the translation of our websites into foreign languages and adaptation for local practices and regulatory requirements; • competition with local market participants who understand the local market better than we do or who have pre-existing relationships with our potential learners and UB customers in those markets; • greater reliance on third-party resellers and other commercial partners for the distribution and marketing of our offerings; • legal uncertainty regarding the operations of our platform and our liability for the content and services provided by our instructors, including as a result of evolving local laws or a lack of clear precedent of applicable law; • the burdens of complying with a wide variety of foreign laws and legal standards; • lack of familiarity with and unexpected changes in foreign regulatory requirements; • adapting to variations in methods of payment from learners and UB customers; • difficulties in managing and staffing international operations; • fluctuations in currency exchange rates; • potentially adverse tax consequences, including the complexities of foreign value added tax systems, digital services tax and restrictions on the repatriation of earnings; • increased financial accounting and reporting burdens and complexities and difficulties in implementing and maintaining adequate internal controls; • political, social, and economic instability abroad, wars and other armed conflicts, terrorist attacks, and security concerns in general, including Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East; • reduced or varied protection for intellectual property rights in some countries; and • higher telecommunications and internet service provider costs.
Moreover, regulators in the United States and in other countries in which we operate may introduce new regulatory regimes or modify existing regulatory regimes, including in ways that increase potential liability for information or content available on or through our platform or the content moderation decisions we make with respect to our platform, or which impose additional obligations to monitor such information or content, which could increase our costs.
Moreover, regulators in the United States, the E.U., and in other jurisdictions in which we operate may introduce new regulatory regimes or modify existing regulatory regimes, including in ways that increase potential liability for information or content available on or through our platform or the content moderation decisions we make with respect to our platform, or which impose additional obligations to monitor such information or content, which could increase our costs.
Any of these events could have a negative impact on our business, financial condition, and results of operations. Our revenue, results of operations, and financial condition could be negatively affected by general economic conditions. Our business is sensitive to trends in the general economy, which is unpredictable.
Any of these events could have a negative impact on our business, financial condition, and results of operations. 20 Table of Contents Our revenue, results of operations, and financial condition could be negatively affected by general economic conditions. Our business is sensitive to trends in the general economy, which is unpredictable.
This dynamic marketplace model takes time to build and may grow at a slower pace than we expect. In addition, although the number of individual and UB learners and instructors engaging with our platform has grown in recent years, there can be no assurance that this growth will continue at its current pace or at all.
This dynamic marketplace model takes time to build and may grow at a slower pace than we expect. In addition, although the number of individual and UB learners and instructors engaging with our platform has grown in recent years, there can be no assurance that this growth will continue.
We may not be able to effectively adapt our operations to avoid disruptions arising from the occurrence of such events, and our business could be affected adversely as a result. 20 Table of Contents Our business could be harmed if we fail to manage our growth effectively.
We may not be able to effectively adapt our operations to avoid disruptions arising from the occurrence of such events, and our business could be affected adversely as a result. Our business could be harmed if we fail to manage our growth effectively.
Cybersecurity attacks may take the form of denial of service attacks, attacks using ransomware or other malware, or other attacks, and can come from individual hackers, criminal groups, and state-sponsored organizations. These sources have used artificial intelligence and machine learning to launch more automated, targeted and sophisticated attacks against targets.
Cybersecurity attacks may take the form of denial of service attacks, attacks using ransomware or other malware, or other attacks, and can come from insider threats as well as individual hackers, criminal groups, and state-sponsored organizations. These sources have used artificial intelligence and machine learning to launch more automated, targeted and sophisticated attacks against targets.
More generally, we cannot guarantee that applicable recovery systems, security protocols, network protection mechanisms, and other procedures of ourselves or our third-party service providers are or will be adequate to prevent network and service interruption, system failure or loss, corruption, or unauthorized access to, or disclosure, acquisition, unavailability, destruction, or other processing of, data, including personal data and other sensitive information that we or they process or maintain.
More generally, we cannot guarantee that applicable recovery systems, security and data encryption protocols, network protection mechanisms, and other procedures of ourselves or our third-party service providers, or other third parties on which we rely, are or will be adequate to prevent network and service interruption, system failure or loss, corruption, or unauthorized access to, or disclosure, acquisition, unavailability, destruction, or other processing of, data, including personal data and other sensitive information that we or they process or maintain.
Alternatively, if a court were to find either exclusive forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could have a material adverse effect on our business, financial condition, and results of operations. Item 1B.
Alternatively, if a court were to find either exclusive forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could have a material adverse effect on our business, financial condition, and results of operations. 44 Table of Contents
For example, the United States enacted the Inflation Reduction Act, which imposes a 1% excise tax on certain stock repurchases and a 15% alternative minimum tax on adjusted financial statement income. The Organization for Economic Cooperation and Development proposed a 15% global minimum tax, which has been adopted by the European Union effective from January 1, 2024.
For example, the United States enacted the Inflation Reduction Act, which imposes a 15% alternative minimum tax on adjusted financial statement income. The Organization for Economic Cooperation and Development proposed a 15% global minimum tax, which has been adopted by the European Union effective from January 1, 2024.
We believe that our ability to successfully compete depends on a range of factors, both within and beyond our control, including: • the availability or development of alternative online learning platforms that are more compelling to learners, instructors, or organizations than ours; • changes in pricing policies and terms offered by our competitors or by us, including for example the change in our revenue share with instructors that became effective at the beginning of 2024; • the ability to adapt to or compete with new technologies and changes in requirements of our learners, instructors, and UB customers; • the ability to adapt to disruptive innovation that may significantly alter or transform the competitive landscape, such as natural language processing, artificial intelligence and machine learning; • costs associated with acquiring and retaining learners, instructors, and UB customers; • the ability of our current and future competitors to establish relationships with customers; • industry consolidation and the number and rate of new entrants; • difficulties with software development that could delay or prevent the development, introduction or implementation of platform modifications and enhancements; and • costs associated with improving and maintaining our platform.
We believe that our ability to successfully compete depends on a range of factors, both within and beyond our control, including: • the availability or development of alternative online learning platforms that are more compelling to learners, instructors, or organizations than ours; • changes in pricing policies and terms offered by our competitors or by us, including the 2024 change to our instructor revenue sharing model; • the ability to adapt to or compete with new technologies and changes in requirements of our learners, instructors, and UB customers; • the ability to adapt to disruptive innovation that may significantly alter or transform the competitive landscape, such as natural language processing, artificial intelligence and machine learning; • costs associated with acquiring and retaining learners, instructors, and UB customers; • the ability of our current and future competitors to establish relationships with customers; • industry consolidation and the number and rate of new entrants; • difficulties with software development that could delay or prevent the development, introduction or implementation of platform modifications and enhancements; and • costs associated with improving and maintaining our platform.
If we fail to maintain and expand our relationships with UB customers, our ability to grow our business and revenue will suffer. Revenue from our Enterprise segment represented 58%, 50%, and 36% of total revenue during the fiscal years ended December 31, 2023, 2022, and 2021, respectively.
If we fail to maintain and expand our relationships with UB customers, our ability to grow our business and revenue will suffer. Revenue from our Enterprise segment represented 63%, 58%, and 50%, of total revenue during the fiscal years ended December 31, 2024, 2023, and 2022, respectively.
Our marketing efforts include the use of search engine optimization, paid search, email marketing, and television. 18 Table of Contents We have invested in and plan to continue expanding our sales and marketing organizations, both domestically and internationally.
Our marketing efforts include the use of search engine optimization, paid search, email marketing, and television. We have invested in and plan to continue expanding our sales and marketing organizations, both domestically and internationally.
Factors that may contribute to the variability of our quarterly and annual results include, but are not limited to: • our ability to attract and retain learners, instructors, and enterprises that use our platform in a cost-effective manner; • our ability to accurately forecast revenue and operating expenses; • the effects of increased competition on our business; • the impact of worldwide economic conditions, including the resulting effect on consumer and business spending on online learning solutions; • our ability to successfully expand in existing markets and successfully enter new markets; • our ability to successfully leverage our resellers and other strategic relationships to market and sell our products; • changes in learner or customer behavior with respect to online learning solutions; • increases in marketing, sales, and other operating expenses that we may incur to grow and acquire new learners, instructors, and customers; • the revenue mix between our consumer and UB offerings; • our ability to maintain an adequate rate of growth and effectively manage that growth; • the effects of changes in search engine placement and prominence; • our ability to keep pace with technology changes in our industry; • the success of our sales and marketing efforts; • our ability to protect, maintain, and enforce our intellectual property rights; • costs associated with defending claims, including intellectual property infringement claims, and related judgments or settlements; • changes in governmental or other regulations affecting our business; • interruptions in service and any related impact on our business, reputation, or brand; • the attraction and engagement of qualified employees and key personnel; • our ability to choose and effectively manage third-party service providers; • the effects of natural or man-made catastrophic events, including wars and other armed conflicts, such as Russia’s invasion of Ukraine, and the conflict between Israel and Hamas in Gaza; • the impact of a pandemic or an outbreak of disease or similar public health concern, such as the COVID-19 pandemic, or fear of such an event; • potential volatility in our gross margins, including due to revenue mix shifts between our Enterprise and Consumer segments, changes in our pricing policies, increased use of subscriptions in our Consumer segment, and timing differences between recognition of revenue and related content costs for courses; 14 Table of Contents • the effectiveness of our internal controls over financial reporting; • the impact of payment processor costs and procedures; and • changes in our tax rates or exposure to additional tax liabilities.
Factors that may contribute to the variability of our quarterly and annual results include, but are not limited to: • our ability to attract and retain learners, instructors, and enterprises that use our platform in a cost-effective manner; • our ability to accurately forecast revenue and operating expenses; • the effects of increased competition on our business; • the impact of worldwide economic conditions, including the resulting effect on consumer and business spending on online learning solutions; • our ability to successfully expand in existing markets and successfully enter new markets and manage the risks associated with doing so; • our ability to successfully leverage our resellers and other strategic relationships to market and sell our products; • changes in learner or customer behavior with respect to online learning solutions; • increases in marketing, sales, and other operating expenses that we may incur to grow and acquire new learners, instructors, and customers; • the revenue mix between our consumer and UB offerings; • our ability to maintain an adequate rate of growth and effectively manage that growth; • the effects of changes in search engine placement and prominence; • our ability to keep pace with technology changes in our industry; • the success of our sales and marketing efforts; • our ability to protect, maintain, and enforce our intellectual property rights; • costs associated with defending claims, including intellectual property infringement claims, and related judgments or settlements; • changes in governmental or other regulations affecting our business; • interruptions in service and any related impact on our business, reputation, or brand; • the attraction and engagement of qualified employees and key personnel; • our ability to choose and effectively manage third-party service providers; • the effects of natural or man-made catastrophic events, including wars and other armed conflicts, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East; • the impact of actual or anticipated public health emergencies, such as an outbreak of an epidemic or pandemic; 14 Table of Contents • potential volatility in our gross margins, including due to revenue mix shifts between our Enterprise and Consumer segments, changes in our pricing policies, increased use of subscriptions in our Consumer segment, and timing differences between recognition of revenue and related content costs for courses; • the effectiveness of our internal controls over financial reporting; • the impact of payment processor costs and procedures; and • changes in our tax rates or exposure to additional tax liabilities.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our solutions, impair the functionality of our platform, prevent or delay introductions of new or enhanced solutions, result in us substituting inferior or more costly technologies into our platform, or injure our reputation.
Any failure to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our products, impair the functionality of our platform, prevent or delay introductions of new or enhanced products or features, result in us substituting inferior or more costly technologies into our platform, or injure our reputation.
Factors that could cause fluctuations in the trading price of our common stock include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales of shares of our common stock by us or our stockholders; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new services or platform features; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; 38 Table of Contents • actual or anticipated changes in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • actual or perceived privacy or security breaches or other incidents; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, services, or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any significant change in our management; • general economic conditions and slow or negative growth of our markets; and • other events or factors, including those resulting from wars and other armed conflicts, such as Russia’s invasion of Ukraine and the conflict between Israel and Hamas in Gaza, incidents of terrorism, natural disasters, public health concerns or epidemics, such as the COVID-19 pandemic, natural disasters, or responses to these events.
Factors that could cause fluctuations in the trading price of our common stock include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales of shares of our common stock by us or our stockholders; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new services or platform features; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; 40 Table of Contents • actual or anticipated changes in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • actual or perceived privacy or security breaches or other incidents; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, services, or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any significant change in our management; • general economic conditions and slow or negative growth of our markets; and • other events or factors, including those resulting from wars and other armed conflicts, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East, incidents of terrorism, natural disasters, public health emergencies, or natural disasters, as well as responses to any of these events.
As of December 31, 2023, our directors, executive officers, and holders of more than 5% of our outstanding common stock, together with their respective affiliates, beneficially owned shares representing approximately 43% of our outstanding common stock.
As of December 31, 2024, our directors, executive officers, and holders of more than 5% of our outstanding common stock, together with their respective affiliates, beneficially owned shares representing approximately 54% of our outstanding common stock.
Our service providers have been, and in the future may be, the targets of cyberattacks, malicious software, phishing schemes, fraud, and other risks to the confidentiality, security, and integrity of their systems and the data they process for us.
Our service providers have been, and in the future may be, the targets of cyberattacks, malicious software, phishing schemes, fraud, intentional and unintentional insider threats, and other risks to the confidentiality, security, integrity, and availability of their systems and the data they process for us.
If catastrophic events were to cause damage to our properties or interrupt our operations, our results of operations would suffer. Global climate change may result in natural disasters occurring more frequently or with greater intensity, such as drought, wildfires, storms, sea-level rise, and flooding.
If catastrophic events were to cause damage to our properties or interrupt our operations, our results of operations would suffer. Global climate change may result in natural disasters, such as drought, wildfires, severe storms, flooding, and heat waves, occurring more frequently or with greater intensity.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq . Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq . Our current controls and any new controls that we develop may become inadequate for a variety of reasons, including changes in conditions in our business.
We plan to continue to establish and maintain similar strategic relationships, and we expect these partners to become an increasingly important aspect of our business.
We plan to continue to establish and maintain similar strategic relationships as part of our growth strategy, and we expect these partners to become an increasingly important aspect of our business.
We have in the past pursued, and may in the future pursue, acquisitions of, or strategic investments in, businesses, technologies, services and other assets that complement our business. For example, in August 2021, we announced our acquisition of CUX, Inc. (d/b/a CorpU) (“CorpU”), an online leadership development platform.
We have in the past pursued, and may in the future pursue, acquisitions of, or strategic investments in, businesses, technologies, services and other assets that complement our business. For example, in 2021 we acquired CUX, Inc. (d/b/a CorpU) (“CorpU”), an online leadership development platform that we have rebranded as our UB Leadership Academy.
We and our third-party service providers may be unable to implement adequate preventative measures or stop any attacks while they are occurring.
We and our third-party service providers, and other third parties on which we rely, may be unable to implement adequate preventative measures or stop any attacks while they are occurring.
Although we do not believe the loss of any one of these instructors would materially impact our business, the loss of multiple existing instructors, as well as any failure to attract additional instructors, could negatively impact our business, financial condition and results of operations by adversely affecting our ability to provide high-quality, engaging, and relevant content for one or more subject matters and the pace at which we provide such content, which in turn could reduce the attractiveness of our platform to learners and customers.
Although we do not believe the loss of any one instructor would materially impact our business, significant attrition by multiple instructors, as well as any failure to attract additional instructors or source replacement content as needed, could adversely affect our ability to provide high-quality, engaging, and relevant content for one or more subject matters, slow the pace at which we provide such content, and reduce the attractiveness of our platform to learners and customers, any of which could negatively impact our business, financial condition, and results of operations.
The unpredictability of our results of operations could cause our results to vary from period to period or to fall below expected levels for a given period, which will adversely affect our business, financial condition, and results of operations.
The unpredictability of our results of operations could cause our results to vary from period to period or to fall below our public guidance or the expectations of analysts and investors for a given period, which will adversely affect our business, financial condition, and results of operations.
Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability. Our strategic and other relationships with partners overseas may also subject us to additional regulatory scrutiny in the United States and other jurisdictions.
The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability. 23 Table of Contents Our strategic and other relationships with partners overseas may also subject us to additional regulatory scrutiny in the United States and other jurisdictions.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation. 29 Table of Contents Interruptions or performance problems associated with our technology and infrastructure could adversely affect our business and results of operations.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation.
These risks include: • maintaining and increasing a base of learners, instructors, and UB customers using our platform; • successfully competing with existing and future participants in the market for online learning solutions; • successfully expanding our business in existing markets and entering new markets and geographies; • anticipating and responding to market and broader economic conditions; • avoiding interruptions or disruptions in the service of our platform; • accurately forecasting our revenue and operating expenses on a quarterly and annual basis; • maintaining and enhancing the value of our reputation and brand; • attracting, hiring, and retaining qualified personnel to manage our operations and further develop our platform; • effectively managing rapid growth in our operations, including personnel; and • successfully implementing and executing our business strategies. 13 Table of Contents Additionally, because we operate in a rapidly evolving market, any predictions about our future revenue and expenses may not be as accurate as they would be if we operated in a more established and predictable market.
These uncertainties include: • maintaining and increasing a base of learners, instructors, and UB customers using our platform; • successfully competing with existing and future participants in the market for online learning solutions; • successfully expanding our business in existing markets and entering new markets and geographies; • anticipating and responding to market and broader economic conditions; • avoiding interruptions or disruptions in the service of our platform; • accurately forecasting our revenue and operating expenses on a quarterly and annual basis; • maintaining and enhancing the value of our reputation and brand; • attracting, hiring, and retaining qualified personnel to manage our operations and further develop our platform; • effectively managing growth in our operations, including personnel; and 13 Table of Contents • successfully implementing and executing our business strategies.
Certain of our gross U.S. federal NOLs are subject to this limitation as a result of these ownership changes, and if it is determined that we have experienced additional ownership changes, including as a result of our Initial Public Offering (“IPO”), future transactions in our stock, some of which are outside our control, or both, our ability to use our NOLs and federal tax credit carryforwards to reduce future taxable income and tax liabilities may be further limited.
Certain of our gross U.S. federal NOLs are subject to this limitation as a result of these ownership changes, and if it is determined that we have experienced additional ownership changes, our ability to use our NOLs and federal tax credit carryforwards to reduce future taxable income and tax liabilities may be further limited.
Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.
Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. Our disclosure controls and procedures or our internal control over financial reporting are not expected to prevent all errors and all fraud.
Several states in the U.S. have proposed or enacted laws that contain obligations similar to the CCPA and CPRA that have taken effect or will take effect in coming years, creating the potential for a patchwork of overlapping but different state laws and for a trend of 27 Table of Contents increasingly stringent privacy legislation in the U.S., which could increase our potential liability and adversely affect our business, financial condition, and results of operations.
Many of these similar state privacy laws have taken effect or will take effect in coming years, creating the potential for a patchwork of overlapping but different state laws and for a trend of increasingly stringent privacy legislation in the U.S., which could increase our potential liability and adversely affect our business, financial condition, and results of operations.
(the “UK DPF Extension”), is available for companies as a lawful transfer mechanism for personal data transfers to the U.S. from the EEA and UK. The Swiss-U.S. Data Privacy Framework (“Swiss-U.S. DPF”) also has been established, but has not yet been granted an adequacy decision by the Swiss Federal Data Protection and Information Commissioner. We have self-certified to the EU-U.S.
(the “UK DPF Extension”), is available for companies as a lawful transfer mechanism for personal data transfers to the U.S. from the EEA and UK. The Swiss-U.S. Data Privacy Framework (“Swiss-U.S. DPF”) also has been established to serve as a lawful transfer mechanism for personal data transfers to the U.S. from Switzerland. We have self-certified to the EU-U.S.
Our amended and restated bylaws also provide that, to the fullest extent permitted by applicable law and unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act against any person in connection with any offering of our securities.
This exclusive forum provision would not apply to any action brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. 43 Table of Contents Our amended and restated bylaws also provide that, to the fullest extent permitted by applicable law and unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act against any person in connection with any offering of our securities.
We believe that many of our new learners find us by word of mouth and other non-paid referrals from existing learners. If existing learners do not find our platform or its content appealing and engaging, whether because of a negative experience with, declining interest in or relevancy of the content, they may stop referring others to us.
If existing learners do not find our platform or its content appealing and engaging, whether because of a negative experience with, declining interest in or relevancy of the content, they may stop referring others to us.
As a global platform with learners and instructors in over 180 countries, w e are subject to a wide range of laws and regulations regarding consumer protection, advertising, electronic marketing, privacy, data protection and cybersecurity, data localization requirements, online services, freedom of speech, labor, real estate, taxation, intellectual property ownership and infringement, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing. 23 Table of Contents The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly laws outside the U.S., and compliance with laws, regulations and similar requirements may be burdensome and expensive.
As a global platform with learners and instructors in over 180 countries, w e are subject to a wide range of laws and regulations regarding consumer protection, advertising, electronic marketing, privacy, data protection and cybersecurity, data localization requirements, online services, freedom of speech, labor, real estate, taxation, intellectual property ownership and infringement, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing.
Aspects of the interpretation and enforcement of the CCPA, as amended by CPRA, and other evolving federal, state, and foreign laws and regulations relating to privacy and the collection, storing, sharing, use, disclosure, protection, and other processing of certain types of data are subject to varying enforcement and new and changing interpretations by courts, and may impose different or inconsistent obligations.
The PIPL allows for fines of up to 50 million renminbi or 5% of a covered company’s revenue in the prior year. 28 Table of Contents Aspects of the interpretation and enforcement of the CCPA, as amended by CPRA, and other evolving federal, state, and foreign laws and regulations relating to privacy and the collection, storing, sharing, use, disclosure, protection, and other processing of certain types of data are subject to varying enforcement and new and changing interpretations by courts, and may impose different or inconsistent obligations.
Increases in our effective tax rate would reduce profitability or increase losses. In addition, we are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions.
Several other jurisdictions have adopted or are in the process of adopting laws to implement this initiative. Increases in our effective tax rate would reduce profitability or increase losses. In addition, we are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions.
Based on our instructor registration records, we estimate that a majority of our instructors are located outside the United States. Any further international expansion efforts that we may undertake may not be as successful as we expect or at all. Additionally, conducting international operations subjects us to risks that we have not generally faced in the United States.
Any further international expansion efforts that we may undertake may not be as successful as we expect or at all. Additionally, conducting international operations subjects us to risks that we have not generally faced in the United States.
Since online learning is generally dependent on discretionary spending, negative general economic conditions or uncertainty regarding future economic conditions, including as a result of public health concerns like the COVID-19 pandemic, inflation, and instability in the banking or financial services industries or in financial and capital markets, could significantly reduce the overall amount that learners and organizations spend on, and the frequency of, online learning or result in delays to planned spending on online learning.
Since online learning is generally dependent on discretionary spending, negative general economic or financial conditions or uncertainty regarding future economic or financial conditions could significantly reduce the overall amount that learners and organizations spend on, and the frequency of, online learning or result in delays to planned spending on online learning.
Any violation of government contracting laws 25 Table of Contents and regulations or contract terms could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments and fines, treble damages, and suspension from future government contracting.
Any violation of government contracting laws and regulations or contract terms could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments and fines, treble damages, and suspension from future government contracting. Also, engaging in sales activities to foreign governments introduces additional compliance risks specific to the U.S.
On June 28, 2021, the European Commission announced a decision of “adequacy” concluding that the United Kingdom ensures an equivalent level of data protection to the GDPR, generally permitting personal data transfers from the European Economic Area (the “EEA”) to the United Kingdom.
On June 28, 2021, the European Commission announced a decision of “adequacy” concluding that the United Kingdom ensures an equivalent level of data protection to the GDPR, generally permitting personal data transfers from the European Economic Area (the “EEA”) to the United Kingdom. This adequacy determination must, however, be renewed after four years and is subject to modification or revocation.
We may be subject us to investigation or enforcement actions by regulators if our statements, policies or practices relating to privacy, data protection, or cybersecurity are alleged to be deficient, lacking transparency, deceptive, unfair, or misrepresentative.
We may be subject to investigation or enforcement actions by regulators if our statements, policies or practices relating to privacy, data protection, or cybersecurity are alleged to be deficient, lacking transparency, deceptive, unfair, or misrepresentative. We are also bound by contractual obligations related to our collection, use, disclosure, protection, and other processing of personal data and other types of data.
From time to time we have experienced, and may continue to experience, difficulty in hiring and retaining employees with the appropriate level of qualifications. The companies with which we compete for qualified employees may have greater resources than we have and may offer compensation packages that are perceived to be better than ours.
The companies with which we compete for qualified employees may have greater resources than we have and may offer compensation packages that are perceived to be better than ours.
For example: • we may choose to prohibit certain content from our platform that we believe is inconsistent with our values even though we could benefit financially from the sale of that content; • we may choose to revise our policies in ways that we believe will be beneficial to our learners, instructors, and UB customers in the long term even though the changes may be perceived unfavorably among our existing learners, instructors, and customers; or • we may take actions, such as locating our servers in low-impact data centers, that reduce our environmental footprint even though these actions may be more costly than other alternatives.
For example: • we may choose to prohibit certain content from our platform that we believe is inconsistent with our values even though we could benefit financially from the sale of that content; • we may choose to revise our policies in ways that we believe will be beneficial to our learners, instructors, and UB customers in the long term even though the changes may be perceived unfavorably among our existing learners, instructors, and customers; or • we may take actions, such as locating our servers in low-impact data centers, that reduce our environmental footprint even though these actions may be more costly than other alternatives. 26 Table of Contents Increased scrutiny and changing expectations from regulators, investors, customers, employees, and others regarding our environmental, social and governance practices and reporting could cause us to incur additional costs, devote additional resources and expose us to additional risks, which could adversely impact our reputation, customer acquisition and retention, access to capital and employee retention.
Similar limitations may apply under state tax laws. Our results of operations, which we report in U.S. dollars, could be adversely affected if currency exchange rates fluctuate substantially in the future. We conduct our business across more than 180 countries a round the world.
Our results of operations, which we report in U.S. dollars, could be adversely affected if currency exchange rates fluctuate substantially in the future. We conduct our business across more than 180 countries a round the world. As we continue to expand our international operations, we will become more exposed to the effects of fluctuations in currency exchange rates.
Additionally, changes in our compensation structure, workforce reductions (including the reduction in force we announced in February 2023), or any previously implemented reductions in workforce and other cost reduction efforts may be negatively received by employees and result in attrition or recruiting difficulties.
Additionally, changes in our compensation structure, workforce reductions and other cost reduction efforts (including our ongoing operational efficiency initiatives and the restructuring plan announced in September 2024) may be negatively received by employees and result in attrition or recruiting difficulties.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe devote significant resources and designate high-level personnel, including our Vice President of Information Technology (“VP of IT”), who reports to our Chief Financial Officer, and our Vice President, Engineering Infrastructure & Security (“VP of Engineering”), who reports to our Chief Technology Officer, to manage the risk assessment and mitigation process.
Biggest changeWe devote significant resources and designate high-level personnel, including our Chief Information Security Officer and Head of Information Technology (“CISO”), who reports to our Chief Financial Officer and Chief Technology Officer, to manage the risk assessment and mitigation process. Our CISO has over 25 years of industry experience, including serving in similar roles overseeing cybersecurity programs at other companies.
Under our incident reporting process, cybersecurity incidents are reported, and then reviewed by senior members of our information security, internal audit and legal department, who then evaluate and, if appropriate, escalate any incidents immediately to our Audit Committee.
Under our incident reporting process, cybersecurity incidents are reported, and then reviewed by senior members of our information security, internal audit and legal department, who then evaluate and, if appropriate, escalate any incidents immediately to our Audit Committee. 47 Table of Contents
For additional information regarding whether any risks from cybersecurity threats are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” including the risk factor entitled “Risks related to technology, privacy, and cybersecurity: A cybersecurity attack or other security breach or incident could delay or interrupt service to our learners, instructors, and UB customers, harm our reputation or subject us to significant liability ” in this annual report on Form 10-K.
For additional information regarding whether any risks from cybersecurity threats are reasonably likely to materially affect our company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” including “—Risks related to technology, privacy, and cybersecurity—A cybersecurity attack or other security breach or incident could delay or interrupt service to our learners, instructors, and UB customers, harm our reputation or subject us to significant liability” in this Annual Report on Form 10-K.
Following these risk assessments, we design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.
Following these risk assessments, we work to design, implement, and maintain reasonable safeguards to mitigate identified risks; work to reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards.
The processes by which our VP of IT, our VP of Engineering and our Risk Committee are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents includes direct engagement with the security team by our VP of IT and VP of Engineering, as well as our incident reporting process.
The processes by which our CISO and our Risk Committee are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents includes direct engagement with the security team by our CISO, as well as our incident reporting process.
We engage outside consultants in connection with our risk assessment processes. These service providers assist us to design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards.
From time to time, we engage outside consultants in connection with our risk assessment processes. These service providers assist us with evaluating, designing and implementing our cybersecurity policies and procedures, as well as monitoring and testing our safeguards.
The Audit Committee receives updates at least twice a year from 43 Table of Contents management on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, control maturity assessments, and relevant internal and industry cybersecurity incidents.
The Audit Committee receives updates at least twice a year from management, including our CISO, on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, control maturity assessments, and relevant internal and industry cybersecurity incidents. 46 Table of Contents Our CISO and our management Risk Committee, consisting of our executive leadership team, are responsible for overseeing our cybersecurity risk management processes.
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Our VP of IT and our VP of Engineering each have over 20 years of industry experience, including serving in similar roles overseeing cybersecurity programs at other companies.
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In addition, our CISO has held Certified Information Systems Security Professional (CISSP), Information Systems Security Management Professional (ISSMP) and Certified Information Security Auditor (CISA) credentials for over a decade. Our CISO also currently holds the National Association of Corporate Directors (NACD) CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University.
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In addition, our VP of Engineering has been a Certified Information Systems Security Professional (CISSP), a Certified Information Security Manager (CISM) and has been Certified in Risk and Information Systems Control (CRISC) for over a decade.
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In addition to an ongoing “bug bounty” program, we engage with independent third parties to perform external testing of our security controls on an annual basis.
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Our VP of IT, our VP of Engineering and our Risk Committee, consisting of our executive leadership team, are responsible for overseeing our cybersecurity risk management processes.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe maintain co-working or other short-term office spaces in Austin, Texas; Melbourne, Australia; Gurugram, India; and Istanbul, Turkey through co-working leases or similar arrangements. We believe that our facilities are suitable to meet our current needs. We anticipate that suitable additional or alternative space would be available at commercially reasonable terms for future expansion, as needed.
Biggest changeWe maintain co-working or other short-term office spaces in Austin, Texas; Gurugram, Chennai and Mumbai, India; Istanbul and Ankara, Turkey; and Mexico City, Mexico, through co-working leases or similar arrangements. We believe that our facilities are suitable to meet our current needs.
Item 2. Properties Our corporate headquarters, consisting of approximately 59,000 square feet of office space in San Francisco, California, is leased through October 2024. We also lease additional office space in locations around the world, including Denver, Colorado; Ankara, Turkey; and Dublin, Ireland.
Item 2. Properties Our corporate headquarters, consisting of approximately 59,000 square feet of office space in San Francisco, California, is leased through June 2029. We also lease additional office space in locations around the world, including Denver, Colorado; Dublin, Ireland; and Melbourne, Australia.
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We anticipate that suitable additional or alternative space would be available at commercially reasonable terms for future expansion, as needed. 48 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOther legal proceedings We are subject to other legal proceedings and claims that arise in the ordinary course of business from time to time, as well as governmental and other regulatory investigations and proceedings. In addition, third parties may from time to time assert claims against us in the form of letters and other communications.
Biggest changeUdemy has resolved the claims of approximately 6,000 of these purported learners for an immaterial amount. We intend to vigorously defend ourselves in these matters. Other legal proceedings We are subject to other legal proceedings and claims that arise in the ordinary course of business from time to time, as well as governmental and other regulatory investigations and proceedings.
The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures Not applicable. 45 Table of Contents PART II.
The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. 49 Table of Contents Item 4. Mine Safety Disclosures Not applicable. 50 Table of Contents PART II.
We are not currently a party to any legal proceedings that, if determined adversely to us, would, in our opinion, have a material adverse effect on our business, financial condition, results of operations, or cash flows.
In addition, third parties may from time to time assert claims against us in the form of letters and other communications. We are not currently a party to any legal proceedings that, if determined adversely to us, would, in our opinion, have a material adverse effect on our business, financial condition, results of operations, or cash flows.
The complaint seeks declaratory relief, injunctive relief, statutory, liquidated, and punitive damages, as well as reasonable attorney fees and costs. On August 30, 2023, we filed a motion to compel arbitration. We intend to vigorously defend ourselves in this matter.
The complaint seeks declaratory relief, injunctive relief, statutory, liquidated, and punitive damages, as well as reasonable attorney fees and costs. On August 30, 2023, we filed a motion to compel arbitration and on March 21, 2024, the motion was granted and the matter stayed pending individual arbitration.
In addition, on June 6, 2023, and July 28, 2023, we were informed that several law firms threatened to file individual arbitration demands against us on behalf of approximately 20,000 alleged Udemy learners. The firms 44 Table of Contents threaten claims similar to those in the class action complaint described above. We intend to vigorously defend ourselves in these matters.
In addition, several law firms have threatened to file individual arbitration demands against us on behalf of approximately 20,000 purported Udemy learners. The firms threaten claims similar to those in the class action complaint described above arising under the VPPA and/or California state privacy laws.
On July 28, 2023, the Superior Court of California, County of San Diego granted final approval of the settlement in Case No.37-2023-00003666-CU-BT-NC. Video Privacy Protection Act class action complaint and threatened arbitration demands On December 12, 2022, a putative class action complaint captioned Mohamed Saleh v.
Video Privacy Protection Act class action complaint and threatened arbitration demands On December 12, 2022, a putative class action complaint captioned Mohamed Saleh v.
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California class action complaint On August 23, 2021, a putative class action complaint captioned Williams v. Udemy, Inc. , Case No. 3:21-CV-06489, was filed against us in the U.S.
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District Court for the Northern District of California alleging violations of California’s unfair competition and false advertising statutes as well as the California Consumer Legal Remedies Act in connection with our pricing practices. The complaint sought injunctive relief, unspecified damages, restitution and disgorgement of profits.
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On December 13, 2022, the parties entered into a definitive settlement agreement for an immaterial amount. Pursuant to the settlement agreement, the parties agreed to dismiss the pending case in federal court and refile in California state court, which filing was made on February 3, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeStock performance graph The following shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any of our other filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Biggest changeThe following table summarizes share repurchase activity during the fourth quarter of 2024: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be repurchased under the program (in thousands) October 1, 2024 - October 31, 2024 1,091,031 $ 7.68 1,091,031 $ 334 November 1, 2024 - November 30, 2024 41,811 8.00 41,811 — December 1, 2024 - December 31, 2024 — — — — Total 1,132,842 $ 7.70 1,132,842 $ — Securities authorized for issuance under equity compensation plans Refer to Item 8, Note 11 – Stockholders' equity for information on securities authorized for issuance. 51 Table of Contents Stock performance graph The following shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any of our other filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s 500 Index ("S&P 500 Index") and the Nasdaq Computer Index (“Nasdaq Computer Index”) since our IPO on October 29, 2021 through December 31, 2023, assuming an initial investment of $100.
The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s 500 Index ("S&P 500 Index") and the Nasdaq Computer Index (“Nasdaq Computer Index”) since our IPO on October 29, 2021 through December 31, 2024, assuming an initial investment of $100.
Stockholders As of December 31, 2023, there were 44 registered stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Recent sales of unregistered equity securities None.
Stockholders As of December 31, 2024, there were 35 registered stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Recent sales of unregistered equity securities None.
Data for the S&P 500 Index and Nasdaq Computer Index assumes reinvestment of dividends. 46 Table of Contents October 29, 2021 December 31, 2021 December 31, 2022 December 31, 2023 Udemy $ 100.00 $ 71.05 $ 38.36 $ 53.53 S&P 500 Index $ 100.00 $ 103.76 $ 83.37 $ 103.57 Nasdaq Computer $ 100.00 $ 105.56 $ 67.79 $ 112.86
October 29, 2021 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Udemy $ 100.00 $ 71.05 $ 38.36 $ 53.53 $ 29.93 S&P 500 Index $ 100.00 $ 103.76 $ 83.37 $ 103.57 $ 127.71 Nasdaq Computer $ 100.00 $ 105.56 $ 67.79 $ 112.86 $ 153.89 52 Table of Contents Item 6. [Reserved] 53 Table of Contents
Removed
Issuer Purchases of Equity Securities None. Securities authorized for issuance under equity compensation plans Refer to Item 8, Note 12 – Stockholders' equity for information on securities authorized for issuance.
Added
Issuer Purchases of Equity Securities In 2024, our Board of Directors approved a share repurchase program, which authorized the purchase of up to $150 million of Udemy common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions.
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The share repurchase program was completed in November 2024.
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Data for the S&P 500 Index and Nasdaq Computer Index assumes reinvestment of any dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults are as follows (in thousands): Fiscal Year Ended December 31, 2023 2022 2021 Revenue $ 728,937 $ 629,097 $ 515,657 Cost of revenue (1)(2) 309,598 275,320 236,024 Gross profit 419,339 353,777 279,633 Operating expenses (1)(2) Sales and marketing 316,738 301,347 227,023 Research and development 120,335 104,556 66,107 General and administrative 93,898 99,064 64,410 Restructuring charges 10,263 — — Total operating expenses 541,234 504,967 357,540 Loss from operations (121,895) (151,190) (77,907) Other income (expense) Interest income 20,670 5,548 204 Interest expense (518) (1,251) (220) Other expense, net (1,898) (4,696) (920) Total other income (expense), net 18,254 (399) (936) Net loss before taxes (103,641) (151,589) (78,843) Income tax provision (3,653) (2,286) (1,183) Net loss attributable to common stockholders $ (107,294) $ (153,875) $ (80,026) Net loss per share attributable to common stockholders Basic and diluted $ (0.71) $ (1.09) $ (1.46) Weighted-average shares used in computing net loss per share attributable to common stockholders Basic and diluted 150,098,776 140,873,504 54,972,827 53 Table of Contents (1) Includes stock-based compensation expense as follows (in thousands): Fiscal Year Ended December 31, 2023 2022 2021 Cost of revenue $ 7,006 $ 5,360 $ 1,623 Sales and marketing 30,859 29,054 8,637 Research and development 26,301 20,850 6,816 General and administrative 30,672 26,029 17,604 Restructuring charges 1,208 — — Total stock-based compensation expense $ 96,046 $ 81,293 $ 34,680 (2) Includes amortization of intangible assets as follows (in thousands): Fiscal Year Ended December 31, 2023 2022 2021 Cost of revenue $ 2,900 $ 2,900 $ 1,022 Sales and marketing 1,208 1,366 481 Total amortization of intangible assets $ 4,108 $ 4,266 $ 1,503 The following table summarizes our results of operations as a percentage of revenue for each of the periods indicated: Fiscal Year Ended December 31, 2023 2022 2021 Revenue 100 % 100 % 100 % Cost of revenue 42 44 46 Gross profit 58 56 54 Operating expenses Sales and marketing 43 48 44 Research and development 17 17 13 General and administrative 13 15 12 Restructuring charges 1 — — Total operating expenses 74 80 69 Loss from operations (16) (24) (15) Other income (expense) Interest income 3 1 — Interest expense — — — Other expense, net — (1) — Total other income (expense), net 3 — — Net loss before taxes (13) (24) (15) Income tax provision (1) — — Net loss attributable to common stockholders (14) % (24) % (15) % 54 Table of Contents Comparison of the fiscal year ended December 31, 2023 and 2022 Revenue Fiscal Year Ended December 31, Change 2023 2022 $ % Revenue (in thousands, except percentages) Enterprise $ 420,646 $ 314,038 $ 106,608 34 % Consumer 308,291 315,059 (6,768) (2) % Total revenue $ 728,937 $ 629,097 $ 99,840 16 % Revenue for the fiscal year ended December 31, 2023, was $728.9 million, compared to $629.1 million for the same period in the prior year, which represents an increase of $99.8 million, or 16%.
Biggest changeResults are as follows (in thousands, except share and per share amounts): Fiscal Year Ended December 31, 2024 2023 2022 Revenue $ 786,565 $ 728,937 $ 629,097 Cost of revenue (1)(2) 294,625 309,598 275,320 Gross profit 491,940 419,339 353,777 Operating expenses (1)(2) Sales and marketing 342,946 316,738 301,347 Research and development 125,438 120,335 104,556 General and administrative 96,199 93,898 99,064 Restructuring charges 16,685 10,263 — Total operating expenses 581,268 541,234 504,967 Loss from operations (89,328) (121,895) (151,190) Other income (expense), net Interest income 19,666 20,670 5,548 Interest expense 379 (518) (1,251) Other expense, net (11,655) (1,898) (4,696) Total other income (expense), net 8,390 18,254 (399) Net loss before taxes (80,938) (103,641) (151,589) Income tax provision (4,350) (3,653) (2,286) Net loss $ (85,288) $ (107,294) $ (153,875) Net loss per share Basic and diluted $ (0.56) $ (0.71) $ (1.09) Weighted-average shares used in computing net loss per share Basic and diluted 151,320,497 150,098,776 140,873,504 59 Table of Contents (1) Includes stock-based compensation expense as follows (in thousands): Fiscal Year Ended December 31, 2024 2023 2022 Cost of revenue $ 6,887 $ 7,006 $ 5,360 Sales and marketing 28,665 30,859 29,054 Research and development 27,046 26,301 20,850 General and administrative 27,584 30,672 26,029 Restructuring charges (160) 1,208 — Total stock-based compensation expense $ 90,022 $ 96,046 $ 81,293 (2) Includes amortization of intangible assets as follows (in thousands): Fiscal Year Ended December 31, 2024 2023 2022 Cost of revenue $ 1,880 $ 2,900 $ 2,900 Sales and marketing 915 1,208 1,366 Total amortization of intangible assets $ 2,795 $ 4,108 $ 4,266 The following table summarizes our results of operations as a percentage of revenue for each of the periods indicated: Fiscal Year Ended December 31, 2024 2023 2022 Revenue 100 % 100 % 100 % Cost of revenue 37 42 44 Gross profit 63 58 56 Operating expenses Sales and marketing 44 43 48 Research and development 16 17 17 General and administrative 12 13 15 Restructuring charges 2 1 — Total operating expenses 74 74 80 Loss from operations (11) (16) (24) Other income (expense), net Interest income 3 3 1 Interest expense — — — Other expense, net (2) — (1) Total other income (expense), net 1 3 — Net loss before taxes (10) (13) (24) Income tax provision (1) (1) — Net loss (11) % (14) % (24) % 60 Table of Contents Comparison of the fiscal years ended December 31, 2024 and 2023 Revenue Fiscal Year Ended December 31, Change 2024 2023 $ % Revenue (in thousands, except percentages) Enterprise $ 494,458 $ 420,646 $ 73,812 18 % Consumer 292,107 308,291 (16,184) (5) % Total revenue $ 786,565 $ 728,937 $ 57,628 8 % Revenue for the fiscal year ended December 31, 2024, was $786.6 million, compared to $728.9 million for the same period in the prior year, which represents an increase of $57.6 million, or 8%.
We expect cost of revenue to generally decrease as a percentage of revenue as we increase the percentage of revenue derived from our UB offering and decrease the instructor revenue share percentage. Operating expenses Operating expenses consist of research and development, sales and marketing, general and administrative expenses, and restructuring charges.
We expect cost of revenue as a percentage of revenue to generally decrease, as we increase the percentage of revenue derived from our UB offering and decrease the instructor revenue share percentage. Operating expenses Operating expenses consist of sales and marketing, research and development, general and administrative expenses, and restructuring charges.
Investing activities For the fiscal year ended December 31, 2023, net cash used in investing activities was $25.0 million, primarily as a result of $307.7 million in purchases of marketable securities and $12.4 million related to capitalized internal-use software costs, which was partially offset by $295.8 million of proceeds received from the maturity of marketable securities.
For the fiscal year ended December 31, 2023, net cash used in investing activities was $25.0 million, primarily as a result of $307.7 million in purchases of marketable securities and $12.4 million related to capitalized internal-use software costs, which were partially offset by $295.8 million of proceeds received from the maturity of marketable securities.
We see a significant opportunity to expand our offerings into regions with large underserved adult learning populations. We have invested, and plan to continue to invest, in personnel and marketing efforts to support our international growth and expand our international operations as part of our strategy to grow our customer and learner base, particularly among our UB customers.
We see a significant opportunity to expand our offerings into regions with large underserved adult and corporate learning populations. We have invested, and plan to continue to invest, in personnel and marketing efforts to support our international growth and expand our international operations as part of our strategy to grow our customer and learner base, particularly among our UB customers.
We curate the highest-quality content from our marketplace for Udemy’s enterprise SaaS platform, Udemy Business, which enables companies around the world to offer effective on-demand learning for employees, immersive laboratory-style learning for tech teams, and cohort-based learning focused on leadership development.
We curate the highest-quality content from our marketplace for Udemy’s enterprise SaaS platform, Udemy Business (UB), which enables companies around the world to offer effective on-demand learning for employees, immersive laboratory-style learning for tech teams, and cohort-based learning focused on leadership development.
Segment revenue represents the revenue recognized from each of these offerings and is a key measure of the performance of our platform, and in turn drives our financial performance. We also monitor segment gross profit as a key metric to help evaluate the financial performance of our individual segments and our business as a whole.
Segment revenue represents the revenue recognized from each of these offerings and is a key measure of the performance of our platform, and in turn drives our financial performance. We also monitor segment adjusted gross profit as a key metric to help evaluate the financial performance of our individual segments and our business as a whole.
Cash and cash equivalents includes money market funds, certain U.S. government securities purchased with original maturities of less than 90 days, on demand deposits, and amounts in transit from certain payment processors for credit and debit card transactions.
Cash and cash equivalents includes money market funds, certain U.S. government securities purchased with original maturities of less than 90 days, time and on demand deposits, and amounts in transit from certain payment processors for credit and debit card transactions.
Content costs, which are payments made to our instructors, are the largest individual component of segment cost of revenue. We expect to increase the percentage of our revenue derived from our Enterprise segment over time, which we expect will improve our gross margins.
Content costs, which are payments made to our instructors, are the largest individual component of segment adjusted cost of revenue. We expect to increase the percentage of our revenue derived from our Enterprise segment over time, which we expect will improve our gross margins.
Principal versus agent — In order to determine whether revenue should be reported as gross or net of either payments to third-party instructors or amounts retained by reseller partners who sell access to Enterprise subscription offerings, we evaluated whether we are the principal for sales of our consumer and UB offerings. 64 Table of Contents Determining whether we are the principal involves making key judgments about whether Udemy controls the contracted services before being transferred to the end customer.
Principal versus agent — In order to determine whether revenue should be reported as gross or net of either payments to third-party instructors or amounts retained by reseller partners who sell access to Enterprise subscription offerings, we evaluated whether we are the principal for sales of our consumer and UB offerings. 70 Table of Contents Determining whether we are the principal involves making key judgments about whether Udemy controls the contracted services before being transferred to the end customer.
Until then, we expect to maintain this full valuation allowance until it becomes more likely than not that the deferred tax assets will be realized. 52 Table of Contents Results of operations The following table summarizes our results of operations for the periods presented. The results below are not necessarily indicative of results to be expected for future periods.
Until then, we expect to maintain this full valuation allowance until it becomes more likely than not that the deferred tax assets will be realized. 58 Table of Contents Results of operations The following table summarizes our results of operations for the periods presented. The results below are not necessarily indicative of results to be expected for future periods.
We estimate the fair value of RSUs and PSUs based on our common stock price on the date of grant or modification.
We estimate the fair value of RSUs, PSUs, and restricted stock based on our common stock price on the date of grant or modification.
We view the breadth and diverse expertise of our instructor base and the content they create as one of our competitive advantages. Our ability to expand the instructor payment pool while optimizing the revenue share structure is a key element of supporting the long-term growth of our business.
We view the breadth and diverse expertise of our instructor base and the content they create as one of our competitive advantages. Our ability to expand the instructor payment pool over time while optimizing the revenue share structure is a key element of supporting the long-term growth of our business.
Furthermore, a significant portion of the most popular content on our platform, and as a result a significant portion of our revenue, is attributable to a limited number of our instructors. We experienced minimal turnover among top instructors during the fiscal year ended December 31, 2023.
Furthermore, a significant portion of the most popular content on our platform, and as a result a significant portion of our revenue, is attributable to a limited number of our instructors. We experienced minimal turnover among top instructors during the fiscal year ended December 31, 2024.
Recent accounting pronouncements See Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recently issued accounting pronouncements. 66 Table of Contents
Recent accounting pronouncements See Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recently issued accounting pronouncements. 72 Table of Contents
Off-balance sheet arrangements During the periods presented, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. 63 Table of Contents Contractual obligations and commitments Our estimated future obligations as of December 31, 2023, include both current and long term obligations.
Off-balance sheet arrangements During the periods presented, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. 69 Table of Contents Contractual obligations and commitments Our estimated future obligations as of December 31, 2024, include both current and long term obligations.
When we offer content as part of the UB and consumer subscription offerings, our instructors agree to contribute such content exclusively through our platform, which we believe demonstrates our ability to increase the value of our platform through unique content.
When we offer content as part of the UB and consumer subscription offerings, our instructors agree to distribute such content exclusively through our platform, which we believe demonstrates our ability to increase the value of our platform through unique content.
We often enter into customized contractual arrangements with our UB customers in which we offer more favorable pricing terms in exchange for larger total contract values that accompany larger deployments.
We often enter into customized contractual arrangements with our UB customers in which we offer more favorable pricing terms in exchange for larger total contract values that accompany larger deployments and longer terms.
A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 is presented below.
A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023 is presented below.
Udemy’s consumer marketplace has attracted 69 million learners in over 180 countries who are looking for the knowledge and skills they need to attain in-demand jobs, further their career, and improve their well-being.
Udemy’s consumer marketplace has attracted nearly 77 million learners in over 180 countries who are looking for the knowledge and skills they need to attain in-demand jobs, further their career, and improve their well-being.
Under our operating leases, as noted in the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data", Note 6 – Leases, we have a current obligation of $5.8 million and a long-term obligation of $1.1 million.
Under our operating leases, as noted in the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data", Note 6 – Leases, we have a current obligation of $2.5 million and a long-term obligation of $8.3 million.
Restricted cash totaled $4.0 million and consists of cash deposited with financial institutions held as collateral for our obligations under various facility leases. Marketable securities are comprised of investments in U.S. government securities with an original maturity greater than 90 days at the date of purchase.
Restricted cash totaled $1.2 million and consists of cash deposited with financial institutions held as collateral for our obligations under various facility leases. Marketable securities are comprised of investments in U.S. government securities with an original maturity greater than 90 days at the date of purchase.
A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2022 compared to the fiscal year ended December 31, 2021 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our prior year Form 10-K, which was filed with the SEC on February 27, 2023.
A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our prior year Form 10-K, which was filed with the SEC on February 26, 2024.
Cost of revenue also includes payment and mobile processing fees, costs associated with hosting digital content, employee related expenses for our customer support organization, including salaries, benefits, stock-based compensation, facilities and other expenses, depreciation of network equipment, amortization of capitalized software, amortization of vendor relationships and developed technologies acquired through business combinations, and the portion of fees paid to certain reseller partners attributable to their providing customer support services to UB customers.
Cost of revenue also includes payment and mobile processing fees, costs associated with hosting digital content, employee related expenses for our customer support organization, including salaries, benefits, stock-based compensation, facilities and other expenses, depreciation of network equipment, amortization of capitalized software, amortization of vendor relationship and developed technology intangible assets acquired through business combinations, and the portion of fees paid to certain reseller partners attributable to their providing customer support services to UB customers.
Income tax expense for the fiscal years ended December 31, 2023 and 2022, was primarily comprised of foreign and state taxes.
Income tax expense for the fiscal years ended December 31, 2024 and 2023, was primarily comprised of foreign and state taxes.
Segment gross profit excludes amortization of capitalized software, amortization of intangible assets, depreciation, and stock-based compensation allocated to cost of revenue as our chief operating decision maker does not include the information in his measurement of the performance of the operating segments.
Segment adjusted gross profit excludes amortization of capitalized software, depreciation, stock-based compensation, and amortization of intangible assets included in cost of revenue as our chief operating decision maker does not include the information in his measurement of the performance of the operating segments.
December 31, 2023 2022 2021 (in thousands) Udemy Business annual recurring revenue $ 465,997 $ 371,727 $ 239,257 Udemy Business Net Dollar Retention Rate and Udemy Business Large Customer Net Dollar Retention Rate We disclose UB Net Dollar Retention Rate, or UB NDRR, as a measure of revenue growth for all UB customers within our Enterprise segment, including UB Large Customers, which we define as companies with at least 1,000 employees.
December 31, 2024 2023 2022 (in thousands) Udemy Business annual recurring revenue $ 516,945 $ 465,997 $ 371,727 Udemy Business Net Dollar Retention Rate and Udemy Business Large Customer Net Dollar Retention Rate We disclose UB Net Dollar Retention Rate, or UB NDRR, as a measure of revenue growth for all UB customers within our Enterprise segment, including UB Large Customers, which we define as companies with at least 1,000 employees.
We define adjusted EBITDA as net loss attributable to common stockholders, adjusted to exclude: • interest income; • interest expense; • provision for income taxes; • depreciation and amortization; • stock-based compensation expense; • other expense (income), net; and • restructuring charges.
We define adjusted EBITDA as net loss, adjusted to exclude: • interest income; • interest expense; • provision for income taxes; • depreciation and amortization; • stock-based compensation expense; • other expense, net; and • restructuring charges.
Overview Our mission is to improve lives through learning. We believe traditional education and training methods are fast becoming outdated. Technological advancements and novel industries have significantly altered the types of skills required of workers, and lifelong training and continuous skills acquisition are becoming the norm.
Overview Our mission is to transform lives through learning. We believe traditional skills development and validation methods are fast becoming outdated. Technological advancements and novel industries have significantly altered the types of skills required of workers, and lifelong training and continuous skills acquisition are becoming the norm.
We presently expect that revenue from our Enterprise segment will continue to grow faster than our Consumer segment, which will be beneficial to our overall margins. 49 Table of Contents Ability to expand our international footprint We currently generate a significant portion of our revenue outside North America.
We presently expect that revenue from our Enterprise segment will continue to grow faster than our Consumer segment, which will be beneficial to our overall margins. 55 Table of Contents Ability to expand our international footprint We currently generate a majority of our revenue outside North America.
Segment gross profit is defined as segment revenue less segment cost of revenue, which include content costs, hosting and platform costs, customer support services, and payment processing fees that are allocable to each segment.
Segment adjusted gross profit is defined as segment revenue less segment adjusted cost of revenue. Segment adjusted cost of revenue includes content costs, customer support services, hosting and platform costs, and payment processing fees that are allocable to each segment.
We offer a single, combined performance obligation, which is the customer’s access to the online content on the Udemy platform, representing a series of distinct services as we continually fulfill our stand-ready obligation to provide the customer access to the online licensed content with the functionality of the Udemy platform.
For our single course and subscription product offerings, we offer a single, combined performance obligation, which is the customer’s access to the online content on the Udemy platform, representing a series of distinct services as we continually fulfill our stand-ready obligation to provide the customer access to the online licensed content with the functionality of the Udemy platform.
The increase in UB customers is primarily attributable to the continued pursuit of our global land and expand strategy. 57 Table of Contents December 31, 2023 2022 2021 Udemy Business customers 15,726 13,920 10,515 Udemy Business Annual Recurring Revenue We disclose our UB Annual Recurring Revenue (“ARR”) as a measure of our Enterprise revenue growth.
The increase in UB customers is primarily attributable to the continued pursuit of our global land-and-expand strategy. December 31, 2024 2023 2022 Udemy Business customers 17,096 15,726 13,920 63 Table of Contents Udemy Business Annual Recurring Revenue We disclose our UB Annual Recurring Revenue (“ARR”) as a measure of our Enterprise revenue growth.
Cost of revenue Cost of revenue primarily consists of content costs, which are the payments to our instructors. Content costs are driven by the means by which we acquired the learner consuming the content. For courses offered on Udemy’s consumer marketplace, instructors earn a specific percentage of the net sale amount when a learner purchases the instructor’s course.
Content costs are driven by the means by which we acquired the learner consuming the content. For courses offered on Udemy’s consumer marketplace, instructors earn a specific percentage of the net sale amount when a learner purchases the instructor’s course.
General and administrative Our general and administrative expenses consist primarily of personnel-related costs, including stock-based compensation, costs related to our executive, legal, finance, and human resources departments, as well as charges for indirect tax reserves, allowance for credit losses, professional fees, and other corporate expenses. We expect general and administrative expenses to increase in absolute dollars as our business grows.
General and administrative Our general and administrative expenses consist primarily of personnel-related costs, including stock-based compensation, costs related to our executive, legal, finance, and human resources departments, as well as charges for indirect tax reserves, allowance for credit losses, professional fees, and other corporate expenses.
The following table summarizes our cash flows for the periods indicated (in thousands): Fiscal Year Ended December 31, 2023 2022 2021 Net cash provided by (used in): Operating activities $ (2,005) $ (60,957) $ (7,104) Investing activities (24,972) (173,227) (52,693) Financing activities 19,195 14,755 418,634 Effect of foreign exchange rates on cash flows 20 (25) — Net increase (decrease) in cash, cash equivalents and restricted cash $ (7,762) $ (219,454) $ 358,837 Operating activities Cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization, amortization of deferred sales commissions, as well as the effect of changes in operating assets and liabilities during each period.
The following table summarizes our cash flows for the periods indicated (in thousands): Fiscal Year Ended December 31, 2024 2023 2022 Net cash provided by (used in): Operating activities $ 53,043 $ (2,005) $ (60,957) Investing activities 1,077 (24,972) (173,227) Financing activities (171,749) 19,195 14,755 Effect of foreign exchange rates on cash flows (116) 20 (25) Net decrease in cash, cash equivalents and restricted cash $ (117,745) $ (7,762) $ (219,454) Operating activities Cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization, amortization of deferred sales commissions, as well as the effect of changes in operating assets and liabilities during each period.
As consumer course content revenue is recognized ratably over an estimated service period of four months, consumer gross margins are lower in the period of purchase, and higher in the remaining periods of the estimated service period over which revenue is recognized.
For consumer single course purchases, content costs are incurred at the time of purchase. As consumer course content revenue is recognized ratably over an estimated service period of four months, consumer gross margins are lower in the period of purchase, and higher in the remaining periods of the estimated service period over which revenue is recognized.
Content costs for the Enterprise and Consumer segments were $95.8 million and $113.7 million for the fiscal year ended December 31, 2023, respectively, compared to $73.7 million and $118.8 million for the same period in the prior year, respectively.
Content costs for the Enterprise and Consumer segments were $89.6 million and $102.7 million for the fiscal year ended December 31, 2024, respectively, compared to $95.8 million and $113.7 million for the same period in the prior year, respectively.
Sales and marketing expenses for the fiscal year ended December 31, 2023 were $316.7 million, compared to $301.3 million for the same period in the prior year.
Sales and marketing expenses for the fiscal year ended December 31, 2024 were $342.9 million, compared to $316.7 million for the same period in the prior year.
Financing activities For the fiscal year ended December 31, 2023, net cash provided by financing activities was $19.2 million, driven by proceeds from issuance of common stock via stock option exercises of $17.9 million and issuances of common stock under our employee stock purchase plan of $8.0 million, which was offset by $6.8 million in taxes paid related to net share settlement of employee equity awards.
For the fiscal year ended December 31, 2023, net cash provided by financing activities was $19.2 million, primarily driven by proceeds from issuance of common stock via stock option exercises of $17.9 million and proceeds from issuances of common stock under our employee stock purchase plan of $8.0 million.
ARR represents the annualized value of our UB customer contracts on the last day of a given period. Only revenue from closed UB contracts with active seats as of the last day of the period are included.
ARR represents the annualized value of our UB customer contracts on the last day of a given period. Only revenue from closed UB contracts with active seats as of the last day of the period are included. The increase in UB ARR was primarily driven by an increase in the number of UB customers.
Our primary use of cash from operating activities are for personnel-related expenses, instructor payments, advertising expenses, indirect taxes, and third-party cloud infrastructure expenses. 62 Table of Contents For the fiscal year ended December 31, 2023, cash used in operating activities was $2.0 million, primarily consisting of our net loss of $107.3 million, adjusted for non-cash charges of $171.8 million and net cash outflows of $66.5 million provided by changes in our operating assets and liabilities.
Our primary use of cash from operating activities are for personnel-related expenses, instructor payments, advertising and marketing expenses, indirect taxes, and third-party cloud infrastructure expenses. 68 Table of Contents For the fiscal year ended December 31, 2024, cash provided by operating activities was $53.0 million, primarily consisting of our net loss of $85.3 million, adjusted for non-cash charges of $185.7 million and net cash outflows of $47.4 million provided by changes in our operating assets and liabilities.
Income tax provision Fiscal Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Income tax provision $ (3,653) $ (2,286) $ (1,367) 60 % For the fiscal year ended December 31, 2023, we recognized income tax expense of $3.7 million, compared to $2.3 million for the same period in the prior year.
Income tax provision Fiscal Year Ended December 31, Change 2024 2023 $ % (in thousands, except percentages) Income tax provision $ (4,350) $ (3,653) $ (697) 19 % For the fiscal year ended December 31, 2024, we recognized income tax expense of $4.4 million, compared to $3.7 million for the same period in the prior year.
We define adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period. 60 Table of Contents The following table provides a reconciliation of net loss attributable to common stockholders, the most directly comparable GAAP financial measure, to adjusted EBITDA (in thousands): Fiscal Year Ended December 31, 2023 2022 2021 Net loss attributable to common stockholders $ (107,294) $ (153,875) $ (80,026) Adjusted to exclude the following: Interest income (20,670) (5,548) (204) Interest expense 518 1,251 220 Income tax provision 3,653 2,286 1,183 Depreciation and amortization 24,588 21,216 15,297 Stock-based compensation expense 94,838 81,293 34,680 Other expense, net 1,898 4,696 920 Restructuring charges 10,263 — — Adjusted EBITDA $ 7,794 $ (48,681) $ (27,930) The following table provides a reconciliation of net loss margin, the most directly comparable GAAP financial measure, to adjusted EBITDA margin (in thousands, except percentages): Fiscal Year Ended December 31, 2023 2022 2021 Revenue $ 728,937 $ 629,097 $ 515,657 Net loss attributable to common stockholders $ (107,294) $ (153,875) $ (80,026) Net loss margin (15) % (24) % (16) % Revenue $ 728,937 $ 629,097 $ 515,657 Adjusted EBITDA $ 7,794 $ (48,681) $ (27,930) Adjusted EBITDA margin 1 % (8) % (5) % Net loss attributable to common stockholders decreased by $46.6 million in the fiscal year ended December 31, 2023, compared to the same period in the prior year.
We define adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period. 66 Table of Contents The following table provides a reconciliation of net loss, the most directly comparable GAAP financial measure, to adjusted EBITDA (in thousands): Fiscal Year Ended December 31, 2024 2023 2022 Net loss $ (85,288) $ (107,294) $ (153,875) Adjusted to exclude the following: Interest income (19,666) (20,670) (5,548) Interest expense (379) 518 1,251 Income tax provision 4,350 3,653 2,286 Depreciation and amortization 25,421 24,588 21,216 Stock-based compensation expense 90,182 94,838 81,293 Other expense, net 11,655 1,898 4,696 Restructuring charges 16,685 10,263 — Adjusted EBITDA $ 42,960 $ 7,794 $ (48,681) The following table provides a reconciliation of net loss margin, the most directly comparable GAAP financial measure, to adjusted EBITDA margin (in thousands, except percentages): Fiscal Year Ended December 31, 2024 2023 2022 Revenue $ 786,565 $ 728,937 $ 629,097 Net loss $ (85,288) $ (107,294) $ (153,875) Net loss margin (11) % (15) % (24) % Revenue $ 786,565 $ 728,937 $ 629,097 Adjusted EBITDA $ 42,960 $ 7,794 $ (48,681) Adjusted EBITDA margin 5 % 1 % (8) % Net loss decreased by $22.0 million in the fiscal year ended December 31, 2024, compared to the same period in the prior year.
This was partially offset by an increase in revenue from consumer subscriptions as we continue to expand the offering into new markets.
These factors were partially offset by an increase in revenue recognized from consumer subscriptions as we continued to expand the offering into new markets.
Sales and marketing expenses also consist of costs incurred for hosting and customer support services related to providing our platform to free learners. We expect sales and marketing expenses to increase in absolute dollars as our business grows.
Sales and marketing expenses also consist of costs incurred for hosting and customer support services related to providing our platform to free learners.
Building upon this success, we believe a significant opportunity exists for us to acquire new UB customers and expand our existing UB customers’ use of our platform by identifying new use cases and increasing the size of existing deployments.
Historically, we have expanded from individual to department to multi-department to enterprise-wide sales as our value is proven. Building upon this success, we believe a significant opportunity exists for us to acquire new UB customers and expand our existing UB customers’ use of our platform by identifying new use cases and increasing the size of existing deployments.
We also plan to continue investing in strategic partnerships that either extend our marketing reach or the capabilities and reach of our global go-to-market sales team.
We also plan to continue investing in strategic partnerships that either extend our marketing reach or the capabilities and reach of our global go-to-market sales team. Our success in certain markets, such as Japan, depends on strategic partnerships with key resellers.
We anticipate that our operating expenses will increase as we continue to build our sales and marketing efforts, expand our course catalog, develop our immersive learning capabilities, and invest in our technology development, including investments in generative artificial intelligence.
As we continue to build our sales and marketing efforts, expand our course catalog, develop our immersive learning capabilities, execute on our operational efficiency initiatives, and invest in our technology development, including investments in generative artificial intelligence, we anticipate our operating expenses will generally decrease as a percentage of revenue over time.
The increase in revenue for the fiscal year ended December 31, 2023 was primarily driven by the growth in our Enterprise segment, which was partially offset by a decrease in Consumer revenue during the same period.
The increase in revenue for the fiscal year ended December 31, 2024 was primarily driven by an increase in revenue from our Enterprise segment while being partially offset by a decrease in revenue from our Consumer segment.
For the fiscal year ended December 31, 2022, cash used in operating activities was $61.0 million, primarily consisting of our net loss of $153.9 million, adjusted for non-cash charges of $144.6 million and net cash outflows of $51.7 million provided by changes in our operating assets and liabilities.
For the fiscal year ended December 31, 2023, cash used in operating activities was $2.0 million, primarily consisting of our net loss of $107.3 million, adjusted for non-cash charges of $171.8 million and net cash outflows of $66.5 million provided by changes in our operating assets and liabilities.
Content costs as a percentage of segment revenue for the Enterprise and Consumer segments were 23% and 37%, respectively, for the fiscal year ended December 31, 2023, and 23% and 38%, respectively, for the fiscal year ended December 31, 2022.
Segment content costs as a percentage of segment revenue for the Enterprise and Consumer segments were 18% and 35% for fiscal year ended December 31, 2024, compared to 23% and 37% for the same period in the prior year, respectively.
Personnel costs are the most significant component of our operating expenses and consist of salaries, benefits, bonuses, stock-based compensation, and commissions. Our operating expenses also include allocated costs of facilities, information technology, depreciation, and amortization. Although our operating expenses may fluctuate from period to period, we currently expect our operating expenses to increase in absolute dollars over time.
Personnel costs are the most significant component of our operating expenses and consist of salaries, benefits, bonuses, stock-based compensation, and commissions. Our operating expenses also include allocated costs of facilities, information technology, depreciation, and amortization.
These increases were partially offset by a decrease in marketing costs of $8.3 million. Research and development. Research and development expenses for the fiscal year ended December 31, 2023 were $120.3 million, compared to $104.6 million for the same period in the prior year.
These increases were partially offset by a $2.2 million decrease in stock-based compensation expense. Research and development. Research and development expenses for the fiscal year ended December 31, 2024 were $125.4 million, compared to $120.3 million for the same period in the prior year.
In addition, in connection with any future acquisitions or strategic investments, we may pursue additional funding, which could include debt, equity or equity-linked financings, or a combination of these methods. We can provide no assurance that any additional financing will be available to us on acceptable terms.
From time to time, we may explore additional financing sources, which could include equity, equity-linked or debt financing. In addition, in connection with any future acquisitions or strategic investments, we may pursue additional funding, which could include debt, equity or equity-linked financings, or a combination of these methods.
We believe that our existing cash and cash equivalents and our expected cash flows from operations will be sufficient to meet our cash needs for at least the next 12 months. 61 Table of Contents Over the long term, we plan to continue investing in the growth and development of our platform.
We believe that our existing cash and cash equivalents and our expected cash flows from operations will be sufficient to meet our cash needs for at least the next 12 months. 67 Table of Contents As discussed above, we committed to a restructuring plan in September 2024.
As such, we recognize revenue on a straight-line basis using an estimated service period for consumer single course purchases and the contractual subscription term for UB and consumer subscription customers.
As such, we recognize revenue on a straight-line basis using an estimated service period for consumer single course purchases and the contractual subscription term for UB and consumer subscription customers. Our professional services arrangements are generally offered as fixed price contracts. The revenue associated with these contracts is recognized on a proportional performance basis.
While each of these factors presents significant opportunities for us, these factors also pose challenges that we must successfully address in order to sustain the growth of our business and enhance our results of operations.
While each of these factors presents significant opportunities for us, these factors also pose challenges that we must successfully address in order to sustain the growth of our business and enhance our results of operations. 54 Table of Contents Ability to attract and engage new learners and Udemy Business customers To grow our business, we must attract new learners and UB customers efficiently and increase engagement on our platform over time.
Fiscal Year Ended December 31, 2023 2022 2021 (in thousands) Monthly average buyers 1,378 1,336 1,345 Segment revenue and segment gross profit Our revenue is generated from our UB and Consumer offerings, each of which is an individual segment of our business.
Fiscal Year Ended December 31, 2024 2023 2022 (in thousands) Monthly average buyers 1,340 1,378 1,336 Segment revenue and segment adjusted gross profit Our revenue is generated from our UB and Consumer offerings, which respectively correspond to our two operating and reportable segments, Enterprise and Consumer.
Our organic channels include those outside of our paid marketing efforts, such as a Udemy brand name internet search. Once we bring new learners onto our platform, we work to create a best-in-class experience to encourage engagement and drive learning and career outcomes.
Once we bring new learners onto our platform, we work to create a best-in-class experience to encourage engagement and drive learning and career outcomes.
We plan to reduce the instructor revenue share for our subscription offerings, which are derived as a percentage of total UB and consumer subscription revenues, from 25% today to 15% by 2026, with the first adjustment to 20% effective as of January 1, 2024. For consumer single course purchases, content costs are incurred at the time of purchase.
We are reducing the instructor revenue share for our subscription offerings, which are derived as a percentage of total UB and consumer subscription revenue, from a historical rate of 25% to 15% by 2026. The first rate adjustment to 20% was effective on January 1, 2024, and the second rate adjustment to 17.5% was effective as of January 1, 2025.
Enterprise revenue recognized from professional services was immaterial for the periods presented. Consumer revenue consists of individual course content purchases made by individual learners, as well as our consumer subscription offerings.
Enterprise revenue recognized from professional services, in which Udemy provides customers with effective support and strategic guidance to enable learners and align with business goals, was immaterial for the periods presented. 56 Table of Contents Consumer revenue consists of individual course content purchases made by individual learners, as well as our consumer subscription offerings.
Use of funds Our principal uses of cash are funding our operations, capital expenditures and working capital requirements. We have generated significant net losses from our operations as reflected in our accumulated deficit of $719.7 million as of December 31, 2023.
We can provide no assurance that any additional financing will be available to us on acceptable terms. Use of funds Our principal uses of cash are funding our operations, capital expenditures and working capital requirements. We have generated significant net losses from our operations as reflected in our accumulated deficit of $805.0 million as of December 31, 2024.
Our efforts to grow our existing relationships with our consumer learners are focused on increasing their engagement and converting free learners into buyers. New learners to our platform typically begin to engage with our free courses, which serve as a funnel to grow our total learner base and drive referrals to our paid offerings.
New learners to our platform may first engage with our free courses, which serve as a funnel to grow our total learner base and drive purchases and referrals to our paid offerings. Our efforts to grow our UB offering are focused primarily on corporate and government customers.
Impact of mix of Enterprise and Consumer segments Our mix of business among our Enterprise and Consumer segments is shifting, and this shift will continue to affect our financial performance. Enterprise segment gross margin is higher than that of Consumer, primarily driven by comparably lower content costs which are partially offset by higher customer support costs.
Impact of mix of Enterprise and Consumer segments Our mix of revenue continues to shift toward our higher-margin Enterprise segment from our Consumer segment. Our Enterprise segment’s higher gross margins are primarily driven by comparably lower content costs, though partially offset by higher customer support costs.
In addition, we expect research and development expenses as a percentage of revenue may vary from period to period depending on the timing of investments in our platform.
While research and development expenses as a percentage of revenue may vary from period to period, in part due to the timing of investments in our platform, we generally expect this percentage to decrease over the long term given our focus on operational efficiency and high-growth opportunities.
Goodwill and intangible assets We evaluate and test the recoverability of goodwill for impairment annually, during the fourth quarter, or more often if and when circumstances indicate that goodwill may not be recoverable. We also evaluate the estimated remaining useful life of intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization.
We also evaluate the estimated remaining useful life of intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization.
If our available funds are insufficient to fund these future activities or execute on our business strategies, we may raise additional capital through equity, equity-linked or debt financing, to the extent such funding sources are available. Alternatively, we may be required to reduce expenses to manage liquidity; however, any such reductions could adversely impact our business and competitive position.
Over the long term, we plan to continue investing in the growth and development of our platform. If our available funds are insufficient to fund these future activities or execute on our business strategies, we may raise additional capital through equity, equity-linked or debt financing, to the extent such funding sources are available.
For the fiscal year ended December 31, 2023, Enterprise and Consumer revenue was $420.6 million and $308.3 million, respectively, representing 58% and 42% of total revenue, respectively, compared to $314.0 million and $315.1 million, respectively, representing 50% and 50% of total revenue, respectively, for the same period in the prior year.
For the fiscal year ended December 31, 2024, Enterprise revenue was $494.5 million, or 63% of total revenue, compared to $420.6 million, or 58% of total revenue, for the same period in the prior year.
Pace of adoption of cloud-based skill development solutions Our ability to grow our learner base and drive market adoption of our platform is affected by the overall demand for cloud-based skill development solutions.
Any investments we make to facilitate our future growth, whether organically or through acquisitions or strategic partnerships, will occur in advance of the benefits from such investments. Pace of adoption of cloud-based skill development solutions Our ability to grow our learner base and drive market adoption of our platform is affected by the overall demand for cloud-based skill development solutions.
Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected. The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are described below.
We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.
The decreases in our NDRR metrics were driven by lower rates of upsells and expansion, which were negatively impacted by longer sales cycles in light of overall economic factors. 58 Table of Contents December 31, 2023 2022 2021 Udemy Business net dollar retention rate 106 % 115 % 118 % Udemy Business Large Customer net dollar retention rate 113 % 123 % 124 % Monthly average buyers A buyer is a consumer who purchases a course or subscription through our direct-to-consumer offering.
December 31, 2024 2023 2022 Udemy Business net dollar retention rate 98 % 106 % 115 % Udemy Business Large Customer net dollar retention rate 103 % 113 % 123 % 64 Table of Contents Monthly average buyers A buyer is a consumer who purchases a course or subscription through our direct-to-consumer offering.
General and administrative expenses for the fiscal year ended December 31, 2023 were $93.9 million, compared to $99.1 million for the same period in the prior year.
The $5.1 million increase was primarily due to a $3.0 million increase in software subscriptions and allocated costs and a $2.0 million increase in personnel-related expenses. General and administrative. General and administrative expenses for the fiscal year ended December 31, 2024 were $96.2 million, compared to $93.9 million for the same period in the prior year.
See Note 2 to our consolidated financial statements for a description of our other significant accounting policies. Revenue recognition We recognize revenue using the five steps outlined in Accounting Standards Codification (“ASC”) 606. We derive revenue from contracts with consumer and UB customers for access to our online learning platform and related services.
The critical accounting policies requiring estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are described below. See Note 2 to our consolidated financial statements for a description of our other significant accounting policies. Revenue recognition We recognize revenue using the five steps outlined in Accounting Standards Codification (“ASC”) Topic 606.
The increase in gross margin was primarily due to a shift in mix of revenue toward our Enterprise segment, which has comparatively lower content costs as a percentage of revenue than the Consumer segment.
The increase in gross margin was primarily due to the reduction in instructor revenue share for all subscription offerings, the continued shift in mix of revenue toward our Enterprise segment, and the decrease in customer support costs as a percentage of revenue.
Cost of revenue, gross profit and gross margin Fiscal Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Cost of revenue $ 309,598 $ 275,320 $ 34,278 12 % Gross profit 419,339 353,777 65,562 19 % Gross margin 58 % 56 % Cost of revenue for the fiscal year ended December 31, 2023 was $309.6 million, compared to $275.3 million for the same period in the prior year, which represents an increase of $34.3 million, or 12%.
Cost of revenue, gross profit and gross margin Fiscal Year Ended December 31, Change 2024 2023 $ % (in thousands, except percentages) Cost of revenue 294,625 309,598 $ (14,973) (5) % Gross profit 491,940 419,339 $ 72,601 17 % Gross margin 63 % 58 % Cost of revenue for the fiscal year ended December 31, 2024, was $294.6 million, compared to $309.6 million for the same period in the prior year.
For the fiscal year ended December 31, 2022, net cash used in investing activities was $173.2 million, primarily as a result of our $158.5 million purchase of marketable securities, $5.0 million purchase of strategic investments, and $14.2 million related to capitalized internal-use software costs.
Investing activities For the fiscal year ended December 31, 2024, net cash provided by investing activities was $1.1 million, primarily as a result of $352.8 million of proceeds received from the maturity of marketable securities, which was partially offset by $336.9 million in purchases of marketable securities and $12.5 million related to capitalized internal-use software costs.
Revenue from single course purchases is recognized ratably over the estimated service period, which is four months from the date of enrollment, while revenue from consumer subscriptions is recognized ratably over the contractual subscription term. 50 Table of Contents We are the principal with respect to revenue generated from sales to UB and consumer customers as we control the performance obligation and are the primary obligor with respect to delivering our customers access to the course content.
We are the principal with respect to revenue generated from sales to UB and consumer customers as we control the performance obligation and are the primary obligor with respect to delivering our customers access to the course content. Cost of revenue Cost of revenue primarily consists of content costs, which are the payments to our instructors.
These changes were partially offset by a negative impact from foreign currency exchange rates. For the fiscal year ended December 31, 2023, total Consumer revenue decreased by $6.8 million, or 2%, compared to the same period in the prior year. The decrease was primarily due to a decrease in revenue from single course purchases.
For the fiscal year ended December 31, 2024, Consumer revenue was $292.1 million, or 37% of total revenue, compared to $308.3 million, or 42% of total revenue, for the same period in the prior year. The $16.2 million, or 5%, decrease in Consumer revenue was primarily due to a decrease in revenue recognized from single course purchases.
Our network of 75,000 instructors have created over 220,000 courses in 75 languages that cover a wide range of topics, including technology, business, soft skills, and personal development. Share repurchase On February 14, 2024, our Board of Directors approved a share repurchase program (the “Repurchase Program”) with authorization to purchase up to $100 million of Udemy common stock.
Our network of over 80,000 instructors have created over 250,000 courses in 75 languages that cover a wide range of topics, including technology, business, soft skills, and personal development.
The improvement in adjusted EBITDA was driven by the growth in revenue outpacing the growth in operating expenses, excluding stock-based compensation expense and restructuring charges. Liquidity and capital resources As of December 31, 2023, our principal sources of liquidity were cash, cash equivalents and restricted cash of $309.6 million and marketable securities of $171.4 million.
The improvement in adjusted EBITDA was largely driven by the reduction in the instructor revenue share for all subscription offerings. Liquidity and capital resources As of December 31, 2024, our principal sources of liquidity were cash, cash equivalents and restricted cash of $191.8 million and marketable securities of $163.8 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe also held $171.4 million of marketable securities, consisting of investments in various U.S. government securities. In addition, we had $4.0 million of restricted cash, primarily due to the outstanding letter of credit related to the operating lease agreement for our corporate headquarters.
Biggest changeWe also held $163.8 million of marketable securities, consisting of investments in various U.S. government securities. In addition, we had $1.2 million of restricted cash, primarily consisting of cash deposited with financial institutions held as collateral for our obligations under various facility leases.
Given the above facts and circumstances, hypothetical changes in interest rates of 100 basis points would not result in a material increase or decrease of either the market value of our portfolio of cash equivalents and marketable securities as of December 31, 2023, or interest income earned from our portfolio during the fiscal year ended December 31, 2023.
Given the above facts and circumstances, hypothetical changes in interest rates of 100 basis points would not result in a material increase or decrease of either the market value of our portfolio of cash equivalents and marketable securities as of December 31, 2024, or interest income earned from our portfolio during the fiscal year ended December 31, 2024.
We did not hold any long-term debt during the fiscal years ended December 31, 2023, 2022, or 2021. Our cash and cash equivalents are held for working capital purposes.
We did not hold any long-term debt during the fiscal years ended December 31, 2024, 2023, or 2022. Our cash and cash equivalents are held for working capital purposes.
Quantitative and Qualitative Disclosures About Market Risk Interest rate sensitivity As of December 31, 2023 we had $305.6 million of cash and cash equivalents, which includes money market funds, certain U.S. government securities purchased with original maturities of less than 90 days, on demand deposits, and amounts in transit from certain payment processors for credit and debit card transactions.
Quantitative and Qualitative Disclosures About Market Risk Interest rate sensitivity As of December 31, 2024 we had $190.6 million of cash and cash equivalents, which includes money market funds, certain U.S. government securities purchased with original maturities of less than 90 days, time and on demand deposits, and amounts in transit from certain payment processors for credit and debit card transactions.
As such, a hypothetical 10% increase or decrease in current exchange rates would not have had a material impact on income or expense for the fiscal year ended December 31, 2023. 67 Table of Contents
As such, a hypothetical 10% increase or decrease in current exchange rates would not have had a material impact on income or expense for the fiscal years ended December 31, 2024 or 2023. 73 Table of Contents

Other UDMY 10-K year-over-year comparisons