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

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Paragraph-level year-over-year comparison of Coursera, 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.

+758 added−732 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-22)

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

758 paragraphs added · 732 removed · 604 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

145 edited+42 added−32 removed39 unchanged
Biggest changeAND SUBSIDIARIES Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) (In thousands, except share and per share amounts) Redeemable Convertible Preferred Stock Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount Shares Amount Shares Amount Balance—December 31, 2020 75,305,400 $ 462,293 43,049,228 $ — $ 126,408 (2,747,938) $ (4,701) $ 20 $ (343,551) $ (221,824) Conversion of redeemable convertible preferred stock to common stock upon initial public offering (75,305,400) (462,293) 75,305,400 1 462,292 — — — — 462,293 Issuance of common stock upon initial public offering, net of offering costs — — 17,024,276 — 518,869 — — — — 518,869 Issuance of common stock upon exercise of options — — 8,731,889 — 32,287 — — — — 32,287 Issuance of common stock related to employee stock purchase plan — — 228,048 — 6,397 — — — — 6,397 Issuance of restricted stock awards — — 4,722 — — — — — — — Vesting of restricted stock units — — 502,135 — — — — — — — Tax withholding on vesting of restricted stock units — — (191,719) — (7,172) — — — — (7,172) Vesting of early exercise stock options — — — — 77 — — — — 77 Stock-based compensation — — — — 96,073 — — — — 96,073 Change in unrealized loss on marketable securities — — — — — — — (272) — (272) Net loss — — — — — — — — (145,215) (145,215) Balance—December 31, 2021 — $ — 144,653,979 $ 1 $ 1,235,231 (2,747,938) $ (4,701) $ (252) $ (488,766) $ 741,513 Issuance of common stock upon exercise of options — — 4,310,630 — 17,750 — — — — 17,750 Vesting of restricted stock units — — 1,940,200 — — — — — — — Tax withholding on vesting of restricted stock units — — (774,054) — (11,886) — — — — (11,886) Issuance of restricted stock awards — — 5,518 — — — — — — — Issuance of common stock related to employee stock purchase plan — — 547,334 — 6,829 — — — — 6,829 Stock-based compensation — — — — 116,192 — — — — 116,192 Change in unrealized loss on marketable securities — — — — — — — (466) — (466) Net loss — — — — — — — — (175,357) (175,357) Balance—December 31, 2022 — $ — 150,683,607 $ 1 $ 1,364,116 (2,747,938) $ (4,701) $ (718) $ (664,123) $ 694,575 Issuance of common stock upon exercise of options — — 6,621,448 1 27,314 — — — — 27,315 Vesting of restricted stock units — — 8,449,866 — — — — — — — Tax withholding on vesting of restricted stock units — — (3,485,308) — (54,122) — — — — (54,122) Repurchases of common stock — — — — — (4,829,803) (58,453) — — (58,453) Issuance of restricted stock awards — — 13,516 — — — — — — — Issuance of common stock related to employee stock purchase plan — — 615,150 — 6,031 — — — — 6,031 Stock-based compensation — — — — 116,625 — — — — 116,625 Change in unrealized gain on marketable securities — — — — — — — 777 — 777 Net loss — — — — — — — — (116,554) (116,554) Balance—December 31, 2023 — $ — 162,898,279 $ 2 $ 1,459,964 (7,577,741) $ (63,154) $ 59 $ (780,677) $ 616,194 See notes to Consolidated Financial Statements. 90 Table of Contents COURSERA, INC.
Biggest changeAND SUBSIDIARIES Consolidated Statements of Stockholders’ Equity (In thousands, except share data) Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity Shares (1) Amount Shares (1) Amount Balance—December 31, 2021 141,906,041 $ 1 $ 1,235,231 2,747,938 $ (4,701) $ (252) $ (488,766) $ 741,513 Exercise of stock options 4,310,630 — 17,750 — — — — 17,750 Vesting of restricted stock units, net of tax withholdings 1,166,146 — (11,886) — — — — (11,886) Issuance of restricted stock awards 5,518 — — — — — — — Issuance of common stock related to employee stock purchase plan 547,334 — 6,829 — — — — 6,829 Stock-based compensation — — 116,192 — — — — 116,192 Other comprehensive loss — — — — — (466) — (466) Net loss — — — — — — (175,357) (175,357) Balance—December 31, 2022 147,935,669 $ 1 $ 1,364,116 2,747,938 $ (4,701) $ (718) $ (664,123) $ 694,575 Exercise of stock options 6,621,448 1 27,314 — — — — 27,315 Vesting of restricted stock units, net of tax withholdings 4,964,558 — (54,122) — — — — (54,122) Repurchases of common stock (4,829,803) — — 4,829,803 (58,453) — — (58,453) Issuance of restricted stock awards 13,516 — — — — — — — Issuance of common stock related to employee stock purchase plan 615,150 — 6,031 — — — — 6,031 Stock-based compensation — — 116,625 — — — — 116,625 Other comprehensive income — — — — — 777 — 777 Net loss — — — — — — (116,554) (116,554) Balance—December 31, 2023 155,320,538 $ 2 $ 1,459,964 7,577,741 $ (63,154) $ 59 $ (780,677) $ 616,194 Exercise of stock options 2,462,129 — (1,061) (1,116,072) 10,438 — — 9,377 Vesting of restricted stock units, net of tax withholdings 4,572,079 — (66,075) (3,508,764) 32,815 — — (33,260) Repurchases of common stock (3,099,800) — — 3,099,800 (36,705) — — (36,705) Issuance of restricted stock awards 17,028 — (118) (12,663) 118 — — — Issuance of common stock related to employee stock purchase plan 797,554 — (1,815) (797,554) 7,459 — — 5,644 Stock-based compensation — — 115,759 — — — — 115,759 Other comprehensive loss — — — — — (59) — (59) Net loss — — — — — — (79,530) (79,530) Balance—December 31, 2024 160,069,528 $ 2 $ 1,506,654 5,242,488 $ (49,029) $ — $ (860,207) $ 597,420 (1) During the year ended December 31, 2024, we began settling equity awards with shares of our treasury stock.
We view these securities as available to support current operations and have classified all AFS debt securities as current assets. AFS debt securities are initially recorded at cost and periodically adjusted to fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheets.
We view these securities as available to support current operations and have classified all AFS debt securities as current assets. AFS debt securities are initially recorded at cost and periodically adjusted to fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income in the Consolidated Balance Sheets.
RSUs RSUs grants have a service-based vesting condition, which is satisfied generally either (i) over four years with a 25% cliff vesting period after one year and 6.25% vesting each quarter thereafter for new hires, or (ii) over four years with 6.25% vesting each quarter for new grants to existing employees.
RSUs and PSUs RSUs grants have a service-based vesting condition, which is satisfied generally either (i) over four years with a 25% cliff vesting period after one year and 6.25% vesting each quarter thereafter for new hires, or (ii) over four years with 6.25% vesting each quarter for new grants to existing employees.
The expected volatility is based on the historical volatility of our common stock over the estimated expected term of ESPP Rights. Dividend Yield —The expected dividend was assumed to be zero as we have never paid dividends and have no current plans to do so.
The expected volatility for ESPP Rights is based on the historical volatility of our common stock over the estimated expected term. Dividend Yield —The expected dividend was assumed to be zero as we have never paid dividends and have no current plans to do so.
Pursuant to the ESPP, eligible employees may purchase shares of common stock through payroll deductions at 85 percent of the lower of the market price of our common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period.
Pursuant to the ESPP, eligible employees may purchase shares of common stock through payroll deductions at 85 percent of the lower of the closing market price of our common stock on the date of commencement of the applicable offering period or on the last day of each six-month purchase period.
We amortize these costs over four years, since the commissions paid upon a contract renewal are not commensurate with the commissions paid on the initial contract, and as such, the sales contract term is not commensurate with the expected period of benefit.
We amortize these costs over four years, as the commissions paid upon a contract renewal are not commensurate with the commissions paid on the initial contract, and as such, the sales contract term is not commensurate with the expected period of benefit.
Other comprehensive income (loss), net of tax, refers to revenue, expenses, gains, and losses that under GAAP are recorded as an element of stockholders’ equity (deficit) but are excluded from net loss.
Other comprehensive income (loss), net of tax, refers to revenue, expenses, gains, and losses that, under GAAP, are recorded as an element of stockholders’ equity but are excluded from net loss.
This investment is classified within other assets in the Consolidated Balance Sheets. The carrying value of the investment was $1,701 as of December 31, 2023. Our existing equity investments are remeasured at fair value on a nonrecurring basis when an identifiable event or change in circumstance may have a significant adverse impact on its fair value.
This investment is classified within other assets in the Consolidated Balance Sheets. The carrying value of the investment was $1,701 as of December 31, 2024. Our existing equity investments are remeasured at fair value on a nonrecurring basis when an identifiable event or change in circumstance may have a significant adverse impact on its fair value.
For example, our customers do not have the ability to take possession of the software supporting our platform and, as a result, our contracts are typically accounted for as service arrangements with a single performance obligation. We have a stand-ready obligation to provide learners continuous access to our learning platform and deliver related support services for a specified term.
For example, our customers do not have the ability to take possession of the software supporting our platform, so our contracts are typically accounted for as service arrangements with a single performance obligation. We have a stand-ready obligation to provide learners with continuous access to our learning platform and deliver related support services for a specified term.
Impairment losses related to contract assets were not material during the years ended December 31, 2023, 2022, and 2021. Remaining Performance Obligations Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue in the Consolidated Balance Sheets and unbilled amounts that will be recognized as revenue in future periods.
Impairment losses related to contract assets were not material during the years ended December 31, 2024, 2023, and 2022. Remaining Performance Obligations Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue in the Consolidated Balance Sheets and unbilled amounts that will be recognized as revenue in future periods.
Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified. The allowance for credit losses and related activities were not material for the years ended December 31, 2023, 2022, and 2021. Property, Equipment, and Software, Net Property, equipment, and software, net is stated at cost, less accumulated depreciation and amortization.
Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified. The allowance for credit losses and related activities were not material for the years ended December 31, 2024, 2023, and 2022. Property, Equipment, and Software, Net Property, equipment, and software, net is stated at cost, less accumulated depreciation and amortization.
When evaluating contract modifications, we must identify the performance obligations of the modified contract and determine both the allocation of revenues to the remaining performance obligations and the period of recognition for each identified performance obligation. We generate revenue from our three reportable segments: Consumer, Enterprise, and Degrees. Refer to Note 14 for our disaggregation of revenue.
When evaluating contract modifications, we must identify the performance obligations of the modified contract and determine both the allocation of revenues to the remaining performance obligations and the period of recognition for each identified performance obligation. We generate revenue from our three reportable segments: Consumer, Enterprise, and Degrees. Refer to Note 13 for our disaggregation of revenue.
Our NOL and tax credit carryovers may be subject to annual limitations of usage, as promulgated by the Internal Revenue Service and similar state provisions, due to ownership changes that may have occurred in the past. The annual limitation may result in the expiration of NOLs and tax credits before utilization.
Our NOL and tax credit carryovers may be subject to annual usage limitations, as promulgated by the Internal Revenue Service and similar state provisions, due to ownership changes that may have occurred in the past. These annual limitations may result in the expiration of NOLs and tax credits before utilization.
Interest and penalties were not material as of December 31, 2023, 2022, and 2021. We file income tax returns subject to varying statutes of limitations. Due to our loss carryovers, the statutes of limitations remain open for all tax years since inception in our major tax jurisdictions.
Interest and penalties were not material as of December 31, 2024, 2023, and 2022. We file income tax returns subject to varying statutes of limitations. Due to our loss carryovers, the statutes of limitations remain open for all tax years since inception in our major tax jurisdictions.
Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses and certain other segment items on an interim and annual basis if they are regularly provided to the chief operating decision maker (“CODM”).
Recent Accounting Pronouncements New Accounting Pronouncements Recently Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments’ significant expenses and certain other segment items on an interim and annual basis if they are regularly provided to the chief operating decision maker (“CODM”).
The 2021 Plan provides for the granting of incentive and non-statutory stock options, RSUs and other equity-based awards.
The 2021 Plan provides for the granting of incentive and non-statutory stock options, RSUs, PSUs, and other equity-based awards.
We are generally the principal with respect to Consumer and Enterprise revenue as we control the performance obligation and are the primary obligor with respect to delivering access to course content. Additionally, we have inventory risk through recoupable advances sometimes paid to educator partners.
We are generally the principal with respect to our Consumer and Enterprise revenue arrangements as we control the performance obligation and are the primary obligor with respect to delivering access to course content. Additionally, we have inventory risk through recoupable advances sometimes paid to educator partners.
Significant items subject to such estimates, judgements, and assumptions include, but are not limited to, those related to the determination of principal versus agent and variable consideration in our revenue contracts; stock-based compensation expense; period of benefit for capitalized commissions; internal-use software costs; useful lives of long-lived assets; the carrying value of operating lease right-of-use assets; the valuation of intangible assets and income tax expense, including the valuation of deferred tax assets and liabilities, among others.
Significant items subject to such estimates, judgements, and assumptions include, but are not limited to, those related to the determination of principal versus agent and variable consideration in our revenue contracts; stock-based compensation expense; period of benefit for capitalized commissions; internal-use software costs; useful lives of long-lived assets; the carrying value of operating lease right-of-use assets; the valuation of intangible assets; loss contingencies and potential recoveries; and income tax expense, including the valuation of deferred tax assets and liabilities, among others.
As a result, we recognize only the service fee we receive from the universities as our Degrees revenue. Deferred Revenue Deferred revenue, or contract liabilities, consists of consideration recorded in advance of performance obligations being delivered and is classified as current or non-current based on the related period in which services are expected to be provided.
As a result, we recognize only the service fee we receive from the universities as our Degrees revenue. 93 Table of Contents Deferred Revenue Deferred revenue, or contract liabilities, consists of consideration recorded in advance of performance obligations being delivered and is classified as current or non-current based on the related period in which services are expected to be provided.
Deferred Partner Fees These fulfillment costs are paid to educator partners in advance of completing our performance obligations; are recorded within prepaid expenses and other current assets or other assets in the Consolidated Balance Sheets, depending on the timing of the related revenue recognition; and are amortized into cost of revenue ratably over the subscription term.
Deferred Partner Fees These fulfillment costs, which are paid to educator partners in advance of completing our performance obligations, are recorded within prepaid expenses and other current assets or other assets in the Consolidated Balance Sheets, depending on the timing of the related revenue recognition. They are then amortized into cost of revenue ratably over the subscription term.
We use the implicit rate when it is readily determinable. Otherwise, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.
We use the implicit rate when it is readily determinable. Otherwise, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options.
Consumer Revenue We generate revenue from consumers by selling access to learning content hosted on our platform. Consumer products include certifications for single courses, professional certificates, and catalog-wide subscriptions. Access to single courses are generally purchased at a fixed price for a set period of time, typically six months.
Consumer Revenue We generate revenue from consumers by selling access to learning content hosted on our platform. Consumer products include single course certifications, professional certificates, and catalog-wide subscriptions. Access to single courses is generally purchased at a fixed price for a set period of time, typically six months.
Actual results could differ from those estimates, and any such differences could be material to our Consolidated Financial Statements. Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents.
Actual results could differ from those estimates, and any such differences could be material to our Consolidated Financial Statements. 89 Table of Contents Cash, Cash Equivalents, and Restricted Cash We consider all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents.
SEGMENT AND GEOGRAPHIC INFORMATION Segment Information Our chief operating decision maker (“CODM”) is our Chief Executive Officer. For the purposes of allocating resources and assessing performance, the CODM examines three segments which are our three revenue sources: Consumer, Enterprise, and Degrees. This is also consistent with how we disaggregate revenue.
SEGMENT AND GEOGRAPHIC INFORMATION Segment Information Our chief operating decision maker (“CODM”) is our Chief Executive Officer. For the purposes of allocating resources and assessing performance, the CODM examines three segments which relate to our three revenue sources: Consumer, Enterprise, and Degrees. This is also consistent with how we disaggregate revenue.
We recognized the liability and related expenses associated with this development fund consistent with the timing of when we recognized educator partner content costs given our liability is established in the same period the revenue is recognized. The expenses have been classified in the Consolidated Statements of Operations based on the nature of the underlying spend.
We recognized the liability and related expenses associated with this development fund consistent with the timing of when we recognized educator partner content costs given our liability is established in the same period the revenue is recognized. The expenses are classified in the Consolidated Statements of Operations based on the nature of the underlying spend.
One such agreement has stipulated that certain fees earned by the educator partner are to be allocated to a development fund to be held and spent by Coursera on activities such as developing, marketing, and advertising the educator partner's content, according to a mutually agreed upon plan.
One such agreement stipulated that certain fees earned by the educator partner were to be allocated to a development fund to be held and spent by Coursera on activities such as developing, marketing, and advertising the educator partner's content, according to a mutually agreed upon plan.
We estimate and establish an allowance for refunds based on historical refund rates, which was immaterial as of December 31, 2023 and 2022. Enterprise Revenue We sell subscription licenses to businesses, organizations, governments, and educational institutions that provide their learners with the ability to enroll in courses and Specializations and receive certifications upon completion.
We estimate and establish an allowance for refunds based on historical refund rates, which was immaterial as of December 31, 2024 and 2023. Enterprise Revenue We sell subscription licenses to businesses, organizations, governments, and educational institutions. These licenses provide their learners with the ability to enroll in courses and Specializations and receive certifications upon completion.
Research and Development Expenditures for research and development of our technology and non-refundable contributions to develop educator partner content are expensed when incurred unless they qualify as internal-use software development costs. Research and development costs consist principally of personnel costs, consulting services, content development contributions, and attributed facilities costs.
Research and Development Expenditures for the research and development of our technology and non-refundable contributions to develop educator partner content are expensed when incurred, unless they qualify as internal-use software development costs. Research and development costs primarily consist of personnel costs, consulting services, content development contributions, and attributed facilities costs.
Cost of Revenue Cost of revenue consists of content costs, which are generally fees paid to educator partners, and expenses associated with the operation and maintenance of our platform.
Cost of Revenue Cost of revenue consists of content costs, which are typically fees paid to educator partners, and expenses associated with the operation and maintenance of our platform.
Stock-based compensation is generally recognized on a straight-line basis over the requisite service period, which usually matches the vesting period. Forfeitures are recognized as they occur. Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share attributable to common stockholders is computed in conformity with the two-class method required for participating securities.
Stock-based compensation is generally recognized on a straight-line basis over the requisite service period, which usually matches the vesting period. Forfeitures are recognized as they occur. Net Loss Per Share Attributable to Common Stockholders Basic and diluted net loss per share attributable to common stockholders is computed using the two-class method required for participating securities.
The CODM measures the performance of each segment primarily based on its revenue and gross profit. 113 Table of Contents Segment gross profit, as presented below, is defined as segment revenue less certain costs of revenue that represent content costs paid to educator partners.
The CODM measures the performance of each segment primarily based on its revenue and gross profit. Segment gross profit, as presented below, is defined as segment revenue less certain costs of revenue that represent content costs paid to educator partners.
We regularly review the status of each significant matter and assess its potential likelihood of loss or exposure. We record an accrual for loss contingencies for legal proceedings when we believe that an unfavorable outcome is both (i) probable and (ii) the amount or range of any possible loss is reasonably estimable.
Loss Contingencies We regularly review the status of each significant matter and assess its potential likelihood of loss or exposure. We record an accrual for loss contingencies for legal proceedings when we believe that an unfavorable outcome is both (i) probable and (ii) the amount or range of any possible loss can be reasonably estimated.
The Enterprise segment is focused on serving businesses, governmental organizations, and academic institutions by providing an online platform with access to job-relevant educational content enabling them to train, upskill, and reskill their employees, citizens, and students, faculty, and staff, respectively. The Degrees segment is primarily engaged in partnering with universities to deliver fully online bachelor’s and master’s degrees.
The Enterprise segment is focused on serving businesses, government organizations, and academic institutions by providing an online platform with access to job-relevant educational content enabling them to train, upskill, and reskill their employees, citizens, and students. The Degrees segment is primarily engaged in partnering with universities to deliver fully online bachelor’s and master’s degrees.
Expected Volatility —The expected volatility is derived from the average historical stock volatilities of several unrelated public companies within our industry that we consider to be comparable to our business, and to the extent available, our historical volatility over a period equivalent to the expected term of the stock option.
Expected Volatility —The expected volatility for stock options is derived from the average historical stock volatilities of several unrelated public companies within our industry that we consider to be comparable to our business, and to the extent available, our historical volatility over a period equivalent to the estimated expected term.
We do not separate lease and non-lease components and do not recognize ROU assets and operating lease liabilities that arise from leases with an initial lease term of 12 months or less.
We do not separate lease and non-lease components and do not recognize ROU assets and operating lease liabilities arising from leases with an initial lease term of 12 months or less.
Such costs are amortized on a straight-line basis over the estimated useful life of the related asset, which is approximately two to five years, and are recorded within cost of revenue in the Consolidated Statements of Operations.
Such costs are amortized on a straight-line basis over the estimated useful life of the related asset, typically two to five years, and are recorded within cost of revenue in the Consolidated Statements of Operations.
For the years ended December 31, 2023, 2022, and 2021, income tax benefits realized related to stock-based awards vested and exercised were $1,326, $387, and $968 due to cumulative losses and valuation allowances.
For the years ended December 31, 2024, 2023, and 2022, income tax benefits realized related to stock-based awards vested and exercised were $551, $1,326, and $387 due to cumulative losses and valuation allowances.
Under the 401(k) Plan, participating employees may elect to contribute up to 100% of their eligible compensation, subject to certain limitations. The 401(k) Plan provides for a discretionary employer-matching contribution. We made matching contributions of $1,710 and $1,791 to the 401(k) Plan for the years ended December 31, 2023 and 2022.
Under the 401(k) Plan, participating employees may elect to contribute up to 100% of their eligible compensation, subject to certain limitations. The 401(k) Plan provides for a discretionary employer-matching contribution. We made matching contributions of $1,611, $1,710, and $1,791 to the 401(k) Plan for the years ended December 31, 2024, 2023, and 2022. 109 Table of Contents 12.
Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling price. We combine performance obligations when an individual performance obligation does not have standalone value to our customer.
Contracts with multiple performance obligations require an allocation of the transaction price to each performance obligation based on each one’s relative standalone selling price. We combine performance obligations when an individual performance obligation does not have standalone value to our customer.
As a result, there were no credit or non-credit impairment losses recorded during the years ended December 31, 2023, 2022, or 2021. Investments Measured at Fair Value on a Nonrecurring Basis In August 2023, we acquired an approximate 7% ownership interest in a privately held company, which is measured and accounted for using the fair value measurement alternative basis.
There were no credit or non-credit impairment losses recorded during the years ended December 31, 2024, 2023, or 2022. 98 Table of Contents Investments Measured at Fair Value on a Nonrecurring Basis In August 2023, we acquired an approximate 7% ownership interest in a privately held company, which is measured and accounted for using the fair value measurement alternative basis.
In addition, impairment of an ROU asset and other lease related assets, including leasehold improvements, furniture and fixtures, and computer equipment, that results from entering into a sublease arrangement is recognized in the Consolidated Statements of Operations in the period the sublease agreement is executed.
Additionally, any impairment of an ROU asset and other lease-related assets, including leasehold improvements, furniture and fixtures, and computer equipment, resulting from entering into a sublease arrangement is recognized in the Consolidated Statements of Operations in the period the sublease agreement is executed.
Specializations are a series of courses offered by the same educator partner, and learners are provided access to these courses on a month-to-month subscription basis. Coursera Plus is our catalog-wide consumer subscription product, sold in monthly or annual subscriptions.
Professional certificates are a series of courses offered by the same educator partner, with learners provided access on a month-to-month subscription basis. Coursera Plus is our catalog-wide consumer subscription product, sold in monthly or annual subscriptions.
At contract inception, we assess the performance obligations, or deliverables, we have agreed to provide in the contract and determine if they are individually distinct or if they should be combined with other performance obligations.
Consumer customers are required to pay in advance. At contract inception, we assess the performance obligations, or deliverables, we have agreed to provide in the contract and determine if they are individually distinct or if they should be combined with other performance obligations.
Stock-based awards include restricted stock units (“RSUs”), stock options, and restricted stock awards as well as stock purchase rights granted to employees under our employee stock purchase plan (“ESPP Rights”). The fair value of RSUs and restricted stock awards is based on the fair value of our common stock on the grant date.
Stock-based awards include restricted stock units (“RSUs”), stock options, performance stock units (“PSUs”) and restricted stock awards as well as stock purchase rights granted to employees under our employee stock purchase plan (“ESPP Rights”). 95 Table of Contents The fair value of RSUs, PSUs, and restricted stock awards is based on the fair value of our common stock on the grant date.
If not utilized, certain of the federal and state NOLs will expire at various dates beginning in 2031, while the federal research and development tax credit carryforwards will expire in various amounts beginning in 2033. State research and development tax credit carryforwards can be carried forward indefinitely.
If not utilized, certain federal and state NOLs will begin to expire at various dates beginning in 2036 and 2031, respectively, while the federal research and development tax credit carryforwards will start to expire in various amounts beginning in 2033. State research and development tax credit carryforwards can be carried forward indefinitely.
We partner with university and industry partners (collectively, “educator partners”) to bring quality higher education to a broad range of individuals, businesses, organizations, and governments. We also sell directly to institutions, including employers, colleges and universities, organizations, and governments, to enable their employees, students, and citizens to gain critical skills aligned to job markets.
We partner with university and industry partners (collectively, “educator partners”) to deliver quality adult education to a wide range of individuals, businesses, organizations, and governments. We also sell directly to institutions, including employers, colleges and universities, organizations, and governments, enabling their employees, students, and citizens to gain critical skills aligned with job markets.
Our cash and cash equivalents consist of cash and money market funds at financial institutions, and are stated at cost, which approximates fair value because of their immediate or short-term maturities. Our restricted cash primarily consists of a letter of credit required to fulfill our corporate headquarters’ operating lease agreement.
Our cash and cash equivalents consist of cash and money market funds at financial institutions, and are stated at cost, which approximates fair value because of their immediate or short-term maturities. Our restricted cash primarily consists of letters of credit required to fulfill certain operating lease agreements.
EMPLOYEE BENEFIT PLANS Stock Incentive Plans In 2013, we adopted the Coursera, Inc. Stock Incentive Plan (the “Stock Incentive Plan”) and in 2014, adopted the Coursera, Inc. 2014 Executive Stock Incentive Plan (together, the “Predecessor Plans”), pursuant to which we granted a combination of incentive and non-statutory stock options and RSUs.
EMPLOYEE BENEFIT PLANS Stock Incentive Plans In 2014, we adopted the Coursera, Inc. 2014 Executive Stock Incentive Plan, pursuant to which we granted a combination of incentive and non-statutory stock options and RSUs.
Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock option or ESPP Rights.
Risk-Free Interest Rate —The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock option or ESPP Rights.
The activity related to the unrecognized tax benefits was as follows: Year Ended December 31, 2023 2022 2021 Gross unrecognized tax benefits—beginning of period $ 16,371 $ 12,539 $ 7,477 Increases related to tax positions taken during current year 5,052 3,641 4,850 Increases related to tax positions taken during prior years 1,163 248 220 Decreases related to tax positions taken during prior years (51) (57) (8) Gross unrecognized tax benefits—end of period $ 22,535 $ 16,371 $ 12,539 We recognize interest and penalties related to unrecognized tax benefits in income tax expense.
The activity related to the unrecognized tax benefits was as follows: Year Ended December 31, 2024 2023 2022 Gross unrecognized tax benefits—beginning of period $ 22,535 $ 16,371 $ 12,539 Increases related to tax positions taken during current year 2,264 5,052 3,641 Increases related to tax positions taken during prior years 405 1,163 248 Decreases related to tax positions taken during prior years (2,484) (51) (57) Gross unrecognized tax benefits—end of period $ 22,720 $ 22,535 $ 16,371 We recognize interest and penalties related to unrecognized tax benefits in income tax expense.
We estimate the fair value of stock options and ESPP Rights using the Black-Scholes option-pricing model, which requires the use of the following assumptions: Expected Term —The expected term represents the period that our stock-based awards are expected to be outstanding. For option grants considered to be “plain vanilla,” we determine the expected term using the simplified method.
We estimate the fair value of stock options and ESPP Rights using the Black-Scholes option-pricing model, which requires the use of the following assumptions: Expected Term —The expected term represents the period that our stock-based awards are expected to be outstanding.
INVESTMENTS Investments Measured at Fair Value on a Recurring Basis The following table summarizes our investments measured at fair value on a recurring basis by balance sheet classification and investment type: December 31, 2023 December 31, 2022 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value - Level 1 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value - Level 1 Cash equivalents—money market funds $ 186,396 $ — $ — $ 186,396 $ 304,750 $ — $ — $ 304,750 Cash equivalents—U.S.
INVESTMENTS Investments Measured at Fair Value on a Recurring Basis The following table summarizes our investments measured at fair value on a recurring basis by balance sheet classification and investment type: December 31, 2024 December 31, 2023 Amortized Cost Fair Value - Level 1 Amortized Cost Fair Value - Level 1 Cash equivalents—money market funds $ 174,227 $ 174,227 $ 186,396 $ 186,396 Cash equivalents—U.S.
Description of Business Coursera is an online learning platform that connects learners, educators, and institutions with the goal of providing world-class educational content that is affordable, accessible, and relevant. We combine content, data, and technology into a platform that is customizable and extensible to both individual learners and institutions.
Description of Business Coursera is an online learning platform that aims to provide world-class, affordable, accessible, and relevant educational content by connecting learners, educators, and institutions. We combine content, data, and technology into a platform that is customizable and extensible to both individual learners and institutions.
During the years ended December 31, 2023 and 2022, we had ESPP Rights Resets that resulted in modification charges of $3,119 and $9,047, which are being recognized ratably over the new offering periods. Stock Options We may grant stock options at prices not less than the grant date fair value.
During the years ended December 31, 2024, 2023, and 2022, we had ESPP Rights Resets that resulted in modification charges of $6,112, $3,119, and $9,047, which are being recognized ratably over the new offering periods. 106 Table of Contents Stock Options We grant stock options at prices equal to the grant date fair value.
Content fees earned by DeepLearning.AI during the years ended December 31, 2023, 2022, and 2021 were $7,401, $5,679, and $6,558, and were recorded within cost of revenue in the Consolidated Statements of Operations. As of December 31, 2023 and 2022, outstanding educator partner payables related to this content sourcing agreement were $3,895 and $1,223. 14.
Content fees earned by DeepLearning.AI during the years ended December 31, 2024, 2023, and 2022 were $8,577, $7,401, and $5,679, and were recorded within cost of revenue in the Consolidated Statements of Operations. As of December 31, 2024 and 2023, outstanding educator partner payables related to this content sourcing agreement were $4,137 and $3,895. 13.
Concentrations of Risk Financial instruments that potentially subject us to concentration of credit risk consist of cash, cash equivalents, and marketable securities. We only invest in high-credit-quality instruments and maintain our cash equivalents and marketable securities in fixed-income securities. We place our cash primarily with domestic financial institutions that are federally insured within statutory limits.
We only invest in high-credit-quality instruments and maintain our cash equivalents and marketable securities in fixed-income securities. We place our cash primarily with domestic financial institutions that are federally insured within statutory limits.
Given the procedural posture and the nature of such litigation matter, it is not possible to reasonably estimate the probability that we will ultimately prevail or be held liable for the violations alleged in this complaint, nor is it possible to reasonably estimate the loss, if any, or range of loss that could result from this matter.
With respect to the remaining claimants, it is not possible to reasonably estimate the probability that we will ultimately prevail or be held liable for the alleged violations, nor is it possible to reasonably estimate the loss, if any, or range of loss that could result from these matters, given the procedural posture and the nature of such matters.
AND SUBSIDIARIES Consolidated Statements of Comprehensive Loss (In thousands) Year Ended December 31, 2023 2022 2021 Net loss $ (116,554) $ (175,357) $ (145,215) Change in unrealized gain (loss) on marketable securities, net of tax 777 (466) (272) Comprehensive loss $ (115,777) $ (175,823) $ (145,487) See notes to Consolidated Financial Statements. 89 Table of Contents COURSERA, INC.
AND SUBSIDIARIES Consolidated Statements of Comprehensive Loss (In thousands) Year Ended December 31, 2024 2023 2022 Net loss $ (79,530) $ (116,554) $ (175,357) Change in unrealized (loss) gain on marketable securities, net of tax (59) 777 (466) Comprehensive loss $ (79,589) $ (115,777) $ (175,823) See notes to Consolidated Financial Statements. 86 Table of Contents COURSERA, INC.
The CODM does not use segment-level asset information to assess performance and make decisions regarding resource allocation, and we do not track our long-lived assets by segment. The geographic identification of these assets is set forth below.
The CODM does not use segment-level asset information to assess performance and make decisions regarding resource allocation, and we do not track our long-lived assets by segment.
For the years ended December 31, 2023, 2022, and 2021, we did not have any customers that accounted for 10% or more of our revenue. As of December 31, 2023 we had one customer that accounted for 10% of our net accounts receivable balance that has since been collected within typical business terms.
For the years ended December 31, 2024, 2023, and 2022, we did not have any customers that accounted for more than 10% of our revenue. As of December 31, 2024 and 2023, we had one customer that accounted for 12% and 10% of our net accounts receivable balance, both of which were collected within typical business terms.
The aggregate intrinsic value of stock options exercised was $72,649, $57,311, and $296,635 for the years ended December 31, 2023, 2022, and 2021. The weighted-average grant date fair value of options granted for the years ended December 31, 2023, 2022, and 2021 was $8.41, $7.26, and $16.23.
The aggregate intrinsic value of stock options exercised was $21,386, $72,649, and $57,311 for the years ended December 31, 2024, 2023, and 2022. The weighted-average grant date fair value of options granted for the years ended December 31, 2024, 2023, and 2022 was $4.39, $8.41, and $7.26.
The complaint alleges, among other things, that without consent or knowledge of the plaintiff, Coursera disclosed the video viewing history and certain other information of the plaintiff to a third-party company and made similar disclosures without the knowledge or consent of other unidentified users.
The complaint asserted claims for alleged violations of the Video Privacy Protection Act (“VPPA”), and alleged, among other things, that without consent or knowledge of the plaintiff, Coursera disclosed the video viewing history and certain other information of the plaintiff to a third-party company and made similar disclosures without the knowledge or consent of other unidentified users.
No matching contributions were made during the year ended December 31, 2021. 13. RELATED PARTY TRANSACTIONS We have a content sourcing agreement with DeepLearning.AI Corp (“DeepLearning.AI”), which was entered into in the normal course of business and under standard terms. Dr. Andrew Ng, one of our co-founders and Chairman of our board of directors owns DeepLearning.AI.
RELATED PARTY TRANSACTIONS We have a content sourcing agreement with DeepLearning.AI Corp (“DeepLearning.AI”), which was entered into in the normal course of business and under standard terms. Dr. Andrew Ng, one of our co-founders and Chairman of our Board owns DeepLearning.AI.
All significant intercompany balances and transactions have been eliminated in consolidation. 92 Table of Contents Use of Estimates The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and related disclosures as of the date of the Consolidated Financial Statements, as well as the reported amounts of revenue and expenses during the reporting period.
Use of Estimates The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and related disclosures as of the date of the Consolidated Financial Statements, as well as the reported amounts of revenue and expenses during the reporting period.
Stock-Based Compensation Expense A summary of the weighted-average assumptions we utilized to record stock-based compensation expense for stock options granted is as follows: Year Ended December 31, 2023 2022 2021 Fair value of common stock $ 14.72 $ 12.80 $ 29.99 Risk-free interest rate 3.7 % 3.1 % 1.3 % Expected term (in years) 6.1 6.1 6.2 Expected volatility 57.3 % 57.7 % 57.1 % Dividend yield — % — % — % The following table summarizes the assumptions used in estimating the fair value of ESPP Rights: Year Ended December 31, 2023 2022 2021 Risk-free interest rate 3.9% - 5.5% 1.4% - 4.6% 0.0% - 0.5% Expected term (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 39.2% - 61.0% 59.4% - 76.5% 48.3% - 61.9% Dividend yield —% —% —% Stock-based compensation expense is classified in the Consolidated Statements of Operations as follows: Year Ended December 31, 2023 2022 2021 Cost of revenue $ 2,593 $ 3,089 $ 2,092 Research and development 49,931 48,779 42,783 Sales and marketing 31,299 30,092 25,992 General and administrative 31,352 28,703 20,316 Restructuring related charges (5,605) 122 — Total $ 109,570 $ 110,785 $ 91,183 We capitalized $7,055, $5,407, and $4,890 of stock-based compensation related to our internal-use software during the years ended December 31, 2023, 2022, and 2021. 112 Table of Contents As of December 31, 2023, there was a total of $14,626 unrecognized employee compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of approximately 1.9 years.
Stock-Based Compensation Expense A summary of the weighted-average assumptions we utilized to record stock-based compensation expense for stock options granted is as follows: Year Ended December 31, 2024 2023 2022 Fair value of common stock $ 7.81 $ 14.72 $ 12.80 Risk-free interest rate 3.5 % 3.7 % 3.1 % Expected term (in years) 6.1 6.1 6.1 Expected volatility 56.2 % 57.3 % 57.7 % Dividend yield — % — % — % The following table summarizes the assumptions used in estimating the fair value of ESPP Rights: Year Ended December 31, 2024 2023 2022 Risk-free interest rate 4.2% - 5.4% 3.9% - 5.5% 1.4% - 4.6% Expected term (in years) 0.5 - 2.0 0.5 - 2.0 0.5 - 2.0 Expected volatility 40.2% - 72.3% 39.2% - 61.0% 59.4% - 76.5% Dividend yield —% —% —% 108 Table of Contents Stock-based compensation expense is classified in the Consolidated Statements of Operations as follows: Year Ended December 31, 2024 2023 2022 Cost of revenue $ 2,657 $ 2,593 $ 3,089 Research and development 41,846 49,931 48,779 Sales and marketing 28,104 31,299 30,092 General and administrative 35,477 31,352 28,703 Restructuring related charges — (5,605) 122 Total $ 108,084 $ 109,570 $ 110,785 We capitalized $7,675, $7,055, and $5,407 of stock-based compensation related to our internal-use software during the years ended December 31, 2024, 2023, and 2022.
In connection with this effort, on November 9, 2022, we enacted a plan to reduce our global workforce to better align our cost structure and personnel needs with our business objectives, growth opportunities, and operational priorities.
In November 2022, we enacted a plan to reduce our global workforce to better align our cost structure and personnel needs with our planned business objectives, growth opportunities, and operational priorities at the time.
We amortize our finite-lived intangible assets on a straight-line basis over an estimated useful life of two to six years. Amortization of content assets and developed technology is included in cost of revenue, and assembled workforce is included in research and development, both in the Consolidated Statements of Operations.
We amortize our finite-lived intangible assets on a straight-line basis over their estimated useful lives, which range from two to six years. The amortization of content assets and developed technology is included in cost of revenue in the Consolidated Statements of Operations.
In addition, the functional currency of our international subsidiaries is U.S. dollars. Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured to the functional currency at period-end exchange rates. Foreign currency transaction gains and losses resulting from remeasurement are recognized within other expense, net in the Consolidated Statements of Operations.
We remeasure monetary assets and liabilities denominated in currencies other than the functional currency to the functional currency at period-end exchange rates. Foreign currency transaction gains and losses resulting from this remeasurement are recognized within other expense, net in the Consolidated Statements of Operations.
An allowance for credit losses is established based on our assessment of the collectibility of accounts receivable by considering various factors, including the age of each outstanding invoice, each customer’s expected ability to pay, the collection history with each customer, current economic conditions, and reasonable and supportable forecasts of future economic conditions over the life of the receivable, when applicable, to determine whether a specific allowance is appropriate.
This assessment considers various factors, including the age of each outstanding invoice, each customer’s expected ability to pay, the collection history with each customer, current economic conditions, and reasonable and supportable forecasts of future economic conditions over the life of the receivable, when applicable, to determine whether a specific allowance is appropriate.
As of December 31, 2023, we had remaining performance obligations of $320,936 and expect to recognize approximately 68% as revenue over the next 12 months and the remainder thereafter.
As of December 31, 2024, we had remaining performance obligations of $333,214 and expect to recognize approximately 70% as revenue over the next 12 months and the remainder thereafter.
RESTRUCTURING RELATED CHARGES We have been reducing our expenses, focusing our efforts, and prioritizing investments in key initiatives that are expected to drive long-term, sustainable growth.
RESTRUCTURING RELATED CHARGES As we refine our business strategy and hone our focus, we have also been reducing our expenses and prioritizing investments in key initiatives that are expected to drive long-term, sustainable growth.
For purposes of this calculation, redeemable convertible preferred stock, common stock options, RSUs, and ESPP Rights are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for the periods presented. 99 Table of Contents Comprehensive Loss Comprehensive loss includes net loss and other comprehensive income (loss), net of tax.
In this calculation, common stock options, RSUs, PSUs, and ESPP Rights are considered to be common stock equivalents. However, they have been excluded from the calculation of diluted net loss per share attributable to common stockholders due to their anti-dilutive effect for the periods presented. Comprehensive Loss Comprehensive loss includes net loss and other comprehensive income (loss), net of tax.
These stock options generally expire 10 years from the grant date. Incentive stock options and non-statutory stock options generally vest ratably over a four-year service period.
Typically, these stock options expire ten years from the grant date and vest ratably over a four-year service period.
AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2023 2022 2021 Cash flows from operating activities: Net loss $ (116,554) $ (175,357) $ (145,215) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 22,270 18,503 14,757 Stock-based compensation expense 109,570 110,785 91,183 (Accretion) amortization of marketable securities (13,811) (895) 501 Impairment of long-lived assets 3,062 6,124 — Other 1,496 1,088 (448) Changes in operating assets and liabilities: Accounts receivable, net (14,763) (20,598) 5,863 Prepaid expenses and other assets (17,003) (18,290) (5,697) Operating lease right-of-use assets 4,868 4,839 5,301 Accounts payable and accrued expenses 33,971 17,893 16,322 Accrued compensation and other liabilities 3,073 3,409 7,670 Operating lease liabilities (7,853) (5,841) (6,336) Deferred revenue 21,313 20,289 17,845 Net cash provided by (used in) operating activities 29,639 (38,051) 1,746 Cash flows from investing activities: Purchases of marketable securities (121,756) (593,770) (241,758) Proceeds from maturities of marketable securities 530,000 375,000 204,981 Purchases of property, equipment, and software (1,147) (1,578) (1,554) Capitalized internal-use software costs (15,254) (12,299) (12,090) Purchase of minority interest (1,701) — — Purchases of content assets (5,344) (1,377) (1,188) Net cash provided by (used in) investing activities 384,798 (234,024) (51,609) Cash flows from financing activities: Proceeds from exercise of stock options 27,315 17,586 31,766 Proceeds from employee stock purchase plan 6,031 6,829 6,397 Proceeds from initial public offering, net of offering costs — — 525,284 Payments for repurchases of common stock (58,453) — — Payment of tax withholding on vesting of restricted stock units (54,122) (11,886) (7,172) Payment of deferred offering costs — (295) (6,119) Net cash (used in) provided by financing activities (79,229) 12,234 550,156 Net increase (decrease) in cash, cash equivalents, and restricted cash 335,208 (259,841) 500,293 Cash, cash equivalents, and restricted cash— Beginning of period 322,878 582,719 82,426 Cash, cash equivalents, and restricted cash— End of period $ 658,086 $ 322,878 $ 582,719 Supplemental disclosure of cash flow information: Cash paid for income taxes $ 6,383 $ 4,064 $ 2,837 Supplemental disclosure of noncash investing and financing activities: Stock-based compensation capitalized as internal-use software costs $ 7,055 $ 5,407 $ 4,890 Unpaid deferred offering costs $ — $ — $ 295 See notes to Consolidated Financial Statements. 91 Table of Contents COURSERA, INC.
AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net loss $ (79,530) $ (116,554) $ (175,357) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 25,082 22,270 18,503 Stock-based compensation expense 108,084 109,570 110,785 Accretion of marketable securities (235) (13,811) (895) Impairment losses 2,226 3,062 6,124 Other 788 1,496 1,088 Changes in operating assets and liabilities: Accounts receivable, net 7,210 (14,763) (20,598) Prepaid expenses and other assets 2,472 (17,003) (18,290) Operating lease right-of-use assets 4,810 4,868 4,839 Accounts payable and accrued expenses (2,321) 33,971 17,893 Accrued compensation and other liabilities 12,138 3,073 3,409 Operating lease liabilities (6,569) (7,853) (5,841) Deferred revenue 21,206 21,313 20,289 Net cash provided by (used in) operating activities 95,361 29,639 (38,051) Cash flows from investing activities: Purchases of marketable securities — (121,756) (593,770) Proceeds from maturities of marketable securities 66,000 530,000 375,000 Purchases of property, equipment, and software (1,585) (1,147) (1,578) Capitalized internal-use software costs (17,219) (15,254) (12,299) Purchase of minority interest — (1,701) — Purchases of content assets (17,295) (5,344) (1,377) Net cash provided by (used in) investing activities 29,901 384,798 (234,024) Cash flows from financing activities: Proceeds from exercise of stock options 9,377 27,315 17,586 Proceeds from employee stock purchase plan 5,644 6,031 6,829 Payments for repurchases of common stock (36,705) (58,453) — Payments for tax withholding on vesting of restricted stock units (33,260) (54,122) (11,886) Payment of deferred offering costs — — (295) Net cash (used in) provided by financing activities (54,944) (79,229) 12,234 Net increase (decrease) in cash, cash equivalents, and restricted cash 70,318 335,208 (259,841) Cash, cash equivalents, and restricted cash— Beginning of period 658,086 322,878 582,719 Cash, cash equivalents, and restricted cash— End of period $ 728,404 $ 658,086 $ 322,878 Supplemental disclosure of cash flow information: Cash paid for income taxes, net of refunds $ 5,311 $ 6,383 $ 4,064 Supplemental disclosure of noncash investing and financing activities: Stock-based compensation capitalized as internal-use software costs $ 7,675 $ 7,055 $ 5,407 Unpaid purchases of content assets $ 2,232 $ 1,311 $ — Right-of-use asset obtained in exchange for operating lease liability $ 3,038 $ — $ — See notes to Consolidated Financial Statements. 88 Table of Contents COURSERA, INC.
The federal NOL carryforwards generated after December 31, 2017 have an indefinite carryforward period and are subject to an 80% deduction limitation based upon taxable income prior to NOL deduction. Of the total federal NOL carryforwards as of December 31, 2023, $405,529 are carried forward indefinitely, but are limited to 80% of taxable income.
The federal NOL carryforwards generated after December 31, 2017 have an indefinite carryforward period and are subject to an 80% deduction limitation based upon taxable income prior to NOL deduction.
INCOME TAXES The components of loss before income tax were as follows: Year Ended December 31, 2023 2022 2021 Domestic $ (118,481) $ (177,649) $ (148,343) Foreign 7,298 7,012 5,254 Total $ (111,183) $ (170,637) $ (143,089) 105 Table of Contents Income tax expense consisted of the following: Year Ended December 31, 2023 2022 2021 Current taxes: Federal $ — $ — $ — State 3 189 11 Foreign 4,977 4,872 3,025 Total current $ 4,980 $ 5,061 $ 3,036 Deferred taxes: Federal $ — $ — $ — State — — — Foreign 391 (341) (910) Total deferred $ 391 $ (341) $ (910) Total income tax expense $ 5,371 $ 4,720 $ 2,126 The reconciliation between the statutory U.S. federal income tax rate and our effective tax rate as a percentage of loss before income taxes was as follows: Year Ended December 31, 2023 2022 2021 U.S federal income taxes at statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 2.7 % 2.1 % 4.3 % Foreign income taxes at rates other than the U.S. rate (3.5) % (1.8) % (0.7) % Change in valuation allowance (28.7) % (19.8) % (47.3) % Research and development credits 8.2 % 3.5 % 7.3 % Stock-based compensation (5.4) % (4.4) % 13.3 % Foreign inclusions — % (3.7) % — % Other 0.9 % 0.3 % 0.6 % Effective income tax rate (4.8) % (2.8) % (1.5) % 106 Table of Contents Significant components of our deferred tax assets and liabilities consisted of the following: December 31, 2023 December 31, 2022 Deferred tax assets: Net operating loss carryforwards $ 130,849 $ 112,003 Capitalized research and development costs 51,940 29,047 Research and development credits 42,764 31,248 Stock-based compensation 11,160 22,196 Lease liabilities 1,512 3,312 Deferred revenue 937 1,058 Accruals and reserves 813 743 Gross deferred tax assets 239,975 199,607 Valuation allowance (225,513) (185,606) Total deferred tax assets $ 14,462 $ 14,001 Deferred tax liabilities: Deferred commissions (6,768) (5,586) Depreciation and amortization (5,810) (5,086) Operating lease ROU assets (1,070) (2,172) Total deferred tax liabilities $ (13,648) $ (12,844) Net deferred tax assets $ 814 $ 1,157 Based on the weight of the available evidence, which includes our historical operating losses, lack of taxable income, and the accumulated deficit, we have a full valuation allowance against our U.S. federal and state deferred tax assets as of December 31, 2023 and 2022.
INCOME TAXES The components of loss before income tax were as follows: Year Ended December 31, 2024 2023 2022 Domestic $ (84,004) $ (118,481) $ (177,649) Foreign 5,503 7,298 7,012 Total $ (78,501) $ (111,183) $ (170,637) 101 Table of Contents Income tax expense consisted of the following: Year Ended December 31, 2024 2023 2022 Current taxes: State $ 708 $ 3 $ 189 Foreign 42 4,977 4,872 Total current $ 750 $ 4,980 $ 5,061 Deferred taxes: Foreign $ 279 $ 391 $ (341) Total deferred $ 279 $ 391 $ (341) Total income tax expense $ 1,029 $ 5,371 $ 4,720 The reconciliation between the statutory U.S. federal income tax rate and our effective tax rate as a percentage of loss before income taxes was as follows: Year Ended December 31, 2024 2023 2022 U.S federal income taxes at statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit (2.4) % 2.7 % 2.1 % Foreign income taxes at rates other than the U.S. rate 1.1 % (3.5) % (1.8) % Change in valuation allowance 1.3 % (28.7) % (19.8) % Research and development credits 5.8 % 8.2 % 3.5 % Stock-based compensation (17.4) % (5.4) % (4.4) % Foreign inclusions (10.7) % — % (3.7) % Other — % 0.9 % 0.3 % Effective income tax rate (1.3) % (4.8) % (2.8) % 102 Table of Contents Significant components of our deferred tax assets and liabilities consisted of the following: December 31, 2024 December 31, 2023 Deferred tax assets: Net operating loss carryforwards $ 112,197 $ 130,849 Capitalized research and development costs 69,957 51,940 Research and development credits 47,508 42,764 Stock-based compensation 6,769 11,160 Lease liabilities 715 1,512 Deferred revenue 783 937 Accruals and reserves 1,290 813 Gross deferred tax assets 239,219 239,975 Valuation allowance (224,375) (225,513) Total deferred tax assets $ 14,844 $ 14,462 Deferred tax liabilities: Deferred commissions (6,614) (6,768) Depreciation and amortization (6,779) (5,810) Operating lease ROU assets (689) (1,070) Partnership income (233) — Total deferred tax liabilities $ (14,315) $ (13,648) Net deferred tax assets $ 529 $ 814 Based on the weight of the available evidence, which includes our historical operating losses, lack of taxable income, and the accumulated deficit, we have a full valuation allowance against our U.S. federal and state deferred tax assets as of December 31, 2024 and 2023.
AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except share and per share data) Year Ended December 31, 2023 2022 2021 Revenue $ 635,764 $ 523,756 $ 415,287 Cost of revenue 305,993 192,277 165,818 Gross profit 329,771 331,479 249,469 Operating expenses: Research and development 160,077 165,134 135,410 Sales and marketing 222,771 227,676 179,337 General and administrative 98,325 105,900 77,785 Restructuring related charges (5,806) 10,149 — Total operating expenses 475,367 508,859 392,532 Loss from operations (145,596) (177,380) (143,063) Interest income, net 34,432 9,144 320 Other expense, net (19) (2,401) (346) Loss before income taxes (111,183) (170,637) (143,089) Income tax expense 5,371 4,720 2,126 Net loss $ (116,554) $ (175,357) $ (145,215) Net loss per share—basic and diluted $ (0.77) $ (1.21) $ (1.28) Weighted average shares used in computing net loss per share—basic and diluted 150,957,814 145,263,726 113,587,523 See notes to Consolidated Financial Statements. 88 Table of Contents COURSERA, INC.
AND SUBSIDIARIES Consolidated Statements of Operations (In thousands, except share and per share data) Year Ended December 31, 2024 2023 2022 Revenue $ 694,674 $ 635,764 $ 523,756 Cost of revenue 323,261 305,993 192,277 Gross profit 371,413 329,771 331,479 Operating expenses: Research and development 132,048 160,077 165,134 Sales and marketing 234,908 222,771 227,676 General and administrative 108,734 98,325 105,900 Restructuring related charges 8,942 (5,806) 10,149 Total operating expenses 484,632 475,367 508,859 Loss from operations (113,219) (145,596) (177,380) Interest income, net 36,726 34,432 9,144 Other expense, net (2,008) (19) (2,401) Loss before income taxes (78,501) (111,183) (170,637) Income tax expense 1,029 5,371 4,720 Net loss $ (79,530) $ (116,554) $ (175,357) Net loss per share—basic and diluted $ (0.51) $ (0.77) $ (1.21) Weighted average shares used in computing net loss per share—basic and diluted 157,370,977 150,957,814 145,263,726 See notes to Consolidated Financial Statements. 85 Table of Contents COURSERA, INC.
REVENUE Contract Balances Contract assets and liabilities were as follows: December 31, 2023 December 31, 2022 January 1, 2022 Contract assets: Billed accounts receivable, net of allowance for credit losses $ 62,407 $ 45,337 $ 22,286 Unbilled accounts receivable 5,011 8,397 12,110 Total contract assets $ 67,418 $ 53,734 $ 34,396 Contract liabilities: Deferred revenue $ 140,089 $ 118,777 $ 98,488 Total contract liabilities $ 140,089 $ 118,777 $ 98,488 Revenue recognized during the years ended December 31, 2023, 2022, and 2021 that was included in the corresponding deferred revenue balance at the beginning of each year was $116,002, $92,806, and $74,775.
REVENUE Contract Balances Contract assets and liabilities were as follows: December 31, 2024 December 31, 2023 January 1, 2023 Contract assets: Billed accounts receivable, net of allowance for credit losses $ 55,384 $ 62,407 $ 45,337 Unbilled accounts receivable 4,301 5,011 8,397 Total contract assets $ 59,685 $ 67,418 $ 53,734 Contract liabilities: Deferred revenue $ 161,296 $ 140,089 $ 118,777 Total contract liabilities $ 161,296 $ 140,089 $ 118,777 97 Table of Contents Revenue recognized during the years ended December 31, 2024, 2023, and 2022, which was included in the corresponding deferred revenue balance at the beginning of each year, was $137,061, $116,002, and $92,806.
We dispute the claims and intend to vigorously defend against them. 109 Table of Contents Indemnifications In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for the potential of general indemnification obligations.
We dispute the claims and intend to vigorously defend against them. Legal fees related to these matters were $1,466 during the year ended December 31, 2024. 105 Table of Contents Indemnifications In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for the potential of general indemnification obligations.
CONSOLIDATED BALANCE SHEET COMPONENTS Restricted Cash The reconciliation of cash, cash equivalents, and restricted cash was as follows: December 31, 2023 December 31, 2022 December 31, 2021 Cash and cash equivalents $ 656,321 $ 320,817 $ 580,658 Restricted cash, current — 487 — Restricted cash, non-current 1,765 1,574 2,061 Total cash, cash equivalents, and restricted cash $ 658,086 $ 322,878 $ 582,719 Property, Equipment, and Software, Net Property, equipment, and software, net consisted of the following: Estimated Useful Lives December 31, 2023 December 31, 2022 Internal-use software and website development 2 - 5 years $ 73,881 $ 53,215 Computer equipment and purchased software 2 years 4,405 4,662 Leasehold improvements Shorter of useful life or remaining lease term 6,923 6,567 Furniture and fixtures 5 years 2,757 2,714 Total property, equipment, and software 87,966 67,158 Less accumulated depreciation and amortization (57,558) (40,062) Property, equipment, and software, net $ 30,408 $ 27,096 The following table presents depreciation and amortization expense related to property, equipment, and software as well as the portion of amortization expense related to internal-use software and website development that is recorded within cost of revenue in the Consolidated Statements of Operations: Year Ended December 31, 2023 2022 2021 Depreciation and amortization expense $ 19,276 $ 15,865 $ 12,513 Amortization expense for internal-use software and website development 16,894 13,128 9,675 Intangible Assets, Net Intangible assets, net consisted of the following: December 31, 2023 December 31, 2022 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Content assets $ 12,982 $ (3,558) $ 9,424 $ 6,821 $ (1,971) $ 4,850 Developed technology 8,446 (6,150) 2,296 8,446 (4,743) 3,703 Assembled workforce — — — 181 (181) — Intangible assets $ 21,428 $ (9,708) $ 11,720 $ 15,448 $ (6,895) $ 8,553 103 Table of Contents Capitalization of content assets and amortization expense for intangible assets was as follows: Year Ended December 31, 2023 2022 2021 Capitalization of content assets $ 6,161 $ 1,100 $ 1,765 Amortization expense for intangible assets 2,994 2,638 2,244 As of December 31, 2023, the weighted-average remaining amortization period was 1.6 years for developed technology and 3.8 years for content assets.
CONSOLIDATED BALANCE SHEET COMPONENTS Restricted Cash The reconciliation of cash, cash equivalents, and restricted cash was as follows: December 31, 2024 December 31, 2023 December 31, 2022 Cash and cash equivalents $ 726,125 $ 656,321 $ 320,817 Restricted cash, current 1,574 — 487 Restricted cash, non-current 705 1,765 1,574 Total cash, cash equivalents, and restricted cash $ 728,404 $ 658,086 $ 322,878 Property, Equipment, and Software, Net Property, equipment, and software, net consisted of the following: Estimated Useful Lives December 31, 2024 December 31, 2023 Internal-use software and website development 2 - 5 years $ 94,592 $ 73,881 Computer equipment and purchased software 2 years 4,667 4,405 Leasehold improvements Shorter of useful life or remaining lease term 696 6,923 Furniture and fixtures 5 years 519 2,757 Total property, equipment, and software 100,474 87,966 Less accumulated depreciation and amortization (63,575) (57,558) Property, equipment, and software, net $ 36,899 $ 30,408 The following table presents depreciation and amortization expense related to property, equipment, and software as well as the portion of amortization expense related to internal-use software and website development that is recorded within cost of revenue in the Consolidated Statements of Operations: Year Ended December 31, 2024 2023 2022 Depreciation and amortization expense $ 19,664 $ 19,276 $ 15,865 Amortization expense for internal-use software and website development 17,745 16,894 13,128 99 Table of Contents Intangible Assets, Net Intangible assets, net consisted of the following: December 31, 2024 December 31, 2023 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Content assets $ 31,202 $ (7,567) $ 23,635 $ 12,982 $ (3,558) $ 9,424 Developed technology 8,446 (7,560) 886 8,446 (6,150) 2,296 Intangible assets $ 39,648 $ (15,127) $ 24,521 $ 21,428 $ (9,708) $ 11,720 Capitalization of content assets and amortization expense for intangible assets was as follows: Year Ended December 31, 2024 2023 2022 Capitalization of content assets $ 18,219 $ 6,161 $ 1,100 Amortization expense for intangible assets 5,418 2,994 2,638 As of December 31, 2024, the weighted-average remaining amortization period was 0.6 years for developed technology and 4.1 years for content assets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn particular, risks associated with our business include, among others, the following, any of which could have an adverse effect on our business, financial condition, results of operations, or prospects: • Our historical growth may not be indicative of our current or future growth; 18 Table of Contents • Fluctuations in our quarterly and annual revenue and operating results could cause our stock price to fluctuate and the value of your investment to decline; • Our limited operating history makes it difficult to predict our future financial and operating results; • The nascency and market adoption of online learning solutions and generative AI, which may not grow or evolve as we expect or lead to increased demand for our offerings; • Changes in contractual terms with our educational partners, including with respect to pricing or contract length, could materially and adversely affect our business, financial condition, and results of operations; • Our ability to maintain and expand our partnerships with our university and industry partners; • Our ability to attract and retain learners; • Our ability to manage the growth of our business both in terms of scale and complexity; • Changes in our contract terms, including our pricing models, for our offerings, which in turn could impact our operating results; • Our learners’ expansion beyond our freemium offerings and free trials available on our platform; • Our ability to successfully expand our international operations, including growing our worldwide educator partner and learner base, and to manage the risks presented by such operations; • Our ability to launch new offerings and services to learners to grow our business; • We have incurred significant net losses since inception, and we may not achieve or maintain profitability in the future; • Our ability to generate sufficient revenue from a new offering to offset our costs of the offering; • Our ability to compete effectively; • Our and our educator partners’ ability to comply with international, federal, and state education laws and regulations, including applicable state authorizations for their programs; • Our educator partners’ ability to obtain timely approval from applicable regulatory agencies to offer new programs, make substantive changes to existing programs, or expand programs into or within certain jurisdictions; • Any changes to the validation or applicability of the United States (“U.S.”) Department of Education “Dear Colleague” Letter (“DCL”), on which our business model relies; • Our educator partners’ ability to maintain institutional or programmatic accreditation for their programs; • Changes in laws, regulations, accounting principles, or government spending policies or budget priorities that impact our business; • Any disclosure of sensitive information about our partners, their employees, or our learners, whether due to cyberattack or otherwise; • Any failure to obtain, maintain, protect, and enforce our intellectual property (“IP”) and proprietary rights and successfully defend against claims of infringement, misappropriation, or other violations of third-party IP; • Any disruption or failure of our platform or operations, including as a result of geopolitical crises, natural disasters, public health crises, or other catastrophic events; • Litigation or regulatory proceedings could adversely impact our business and financial condition, including exposing us to significant monetary damages or limiting our ability to operate our business; and • Risks related to our status as a Delaware public benefit corporation (“PBC”) or Certified B Corporation that may negatively impact our financial performance or reputation. 19 Table of Contents Risks Related to Our Business and Industry Our historical growth may not be indicative of our future growth, and our revenue growth rate may decline compared to prior years.
Biggest changeIn particular, risks associated with our business include, among others, the following, any of which could have an adverse effect on our business, financial condition, results of operations, or prospects: • our historical growth may not be indicative of our future growth; • fluctuations in our quarterly and annual revenue and operating results could cause our stock price to fluctuate and the value of your investment to decline; • the evolution of our offerings coupled with our limited operating history makes it difficult to predict our future financial and operating results; • the nascency and market adoption of online learning solutions and generative AI, which may not grow or evolve as we expect, or lead to increased demand for our offerings; • changes in contractual terms with our educator partners, including with respect to pricing or contract length; • our ability to maintain and expand our partnerships with our educator partners; • our ability to attract and retain learners, including converting freemium learners to paid learners; • our ability to manage the growth of our business both in terms of scale and complexity; • changes in our contract terms, including our pricing models, for our offerings; • our ability to successfully expand our international operations, including growing our worldwide educator partner and learner base, and to manage the risks presented by such operations; • our ability to launch new offerings and services to learners to grow our business; • our ability to achieve or maintain profitability in the future; • our ability to improve operational efficiencies and operating costs, including through restructuring and expense reduction initiatives; • our ability to attract and retain key personnel and manage leadership transitions; • our ability to generate sufficient revenue from new offerings to offset our costs of the offerings; • our ability to compete effectively; • the impact of potential changes in laws and regulations applicable to us, our educator partners, learners, and customers, including changes to government spending policies or budget priorities that impact our business; • our, and our educator partners’, ability to comply with international, federal, and state education laws and regulations, including applicable state authorizations for their programs; • our educator partners’ ability to obtain timely approval from applicable regulatory agencies to offer new programs, make substantive changes to existing programs, or expand programs into or within certain jurisdictions; • any changes to the validation or applicability of the United States (“U.S.”) Department of Education “Dear Colleague” Letter (“DCL”), on which our Degrees business model relies; • our educator partners’ ability to maintain institutional or programmatic accreditation for their programs; • any disclosure of sensitive information about our learners, customers, educator partners, or their employees, whether due to cyberattack or otherwise; • any failure to obtain, maintain, protect, and enforce our intellectual property (“IP”) and proprietary rights and successfully defend against claims of infringement, misappropriation, or other violations of third-party IP; • any disruption or failure of our platform or operations, including as a result of geopolitical crises, natural disasters, public health crises, or other catastrophic events; • litigation or regulatory proceedings could adversely impact our business and financial condition, including exposing us to significant monetary damages or limiting our ability to operate our business; and 17 Table of Contents • risks related to our status as a Delaware public benefit corporation (“PBC”) or Certified B Corporation that may negatively impact our financial performance or reputation.
In addition, as we develop and roll out new offerings, or expand existing offerings, we will need to develop pricing and contract models for these offerings that appeal to customers and learners over time, and we may not be successful in doing so.
In addition, as we develop and roll out new offerings, or expand existing offerings, we will need to develop pricing and contract models for these offerings that appeal to learners and customers over time, and we may not be successful in doing so.
We invest significant resources in these new programs from the beginning of our relationship with an educator partner, including marketing and other learner acquisition costs to attract and fill enrollment cohorts for a program, and in some cases, content development grants to assist our partners as they invest resources preparing content for an online medium.
We invest significant resources in these new programs from the beginning of our relationship with an educator partner, including marketing and other learner acquisition costs to attract and fill enrollment cohorts for a program, and in some cases, content development grants to assist our educator partners as they invest resources preparing content for an online medium.
If we are unable to hire, develop, and retain talented sales or marketing personnel, if our new sales or marketing personnel are unable to achieve desired productivity levels in a reasonable period of time (including as a result of working remotely), or if our sales and marketing programs are not effective, or if expected sales and marketing programs by our educator partners do not materialize or are not effective, our ability to broaden our customer base and achieve broader market acceptance of our platform could be harmed.
If we are unable to hire, develop, and retain talented sales or marketing personnel, if our new sales or marketing personnel are unable to achieve desired productivity levels in a reasonable period of time (including as a result of working remotely), if our sales and marketing programs are not effective, or if expected sales and marketing programs by our educator partners do not materialize or are not effective, our ability to broaden our customer base and achieve broader market acceptance of our platform could be harmed.
For example, we have elected to share publicly certain information about our ESG initiatives and information, and our commitment to the recruitment, engagement, and retention of a diverse workforce.
For example, we have elected to publicly share certain information about our ESG initiatives and information, and our commitment to the recruitment, engagement, and retention of a diverse workforce.
Unless we choose to seek authorization in our own name, which we have not done to date, the loss of or failure by an educator partner to obtain a necessary state authorization would, among other things, limit our ability to deliver content to learners in that state, either for degree or non-degree programs, render the partner and its learners in that state ineligible to participate in Title IV or other financial aid programs, diminish the attractiveness of the educator partner’s programs, and ultimately compromise our ability to generate revenue.
Unless we choose to seek authorization in our own name, which we have not done to date, the loss of or failure by an educator partner to obtain a necessary state authorization would, among other things, limit our ability to deliver content to learners in that state, either for degree or non-degree programs, render the educator partner and its learners in that state ineligible to participate in Title IV or other financial aid programs, diminish the attractiveness of the educator partner’s programs, and ultimately compromise our ability to generate revenue.
If we or our educator partners fail to obtain or maintain necessary authorizations, or we or our educator partners violate applicable laws and regulations, learners in relevant programs could be adversely affected, we could lose our ability to operate in that state or international market, and our ability to generate revenue would be adversely affected.
If we, or our educator partners, fail to obtain or maintain necessary authorizations or violate applicable laws and regulations, learners in relevant programs could be adversely affected, we could lose our ability to operate in that state or international market, and our ability to generate revenue would be adversely affected.
The penalties for failing to comply with these requirements can be severe, including rendering the subscription contract null and void, and allowing the consumer to treat any services provided under such a contract as a gift, and any failure to comply with these requirements may constitute violations of more general consumer protection laws, which could subject us to third-party lawsuits, regulatory fines, or other action or liability, and we expect to incur ongoing costs of compliance.
The penalties for failing to comply with these requirements can be severe, including rendering the subscription contract null and void, and allowing the consumer to treat any services provided under such a contract as a gift, and any failure to comply with these requirements may constitute violations of more general consumer protection laws, which could subject us to third-party lawsuits, regulatory fines, or other action or liability, and we expect to incur ongoing compliance costs.
Each institution that participates in Title IV programs agrees, as a condition of its eligibility to participate in those programs, that it will not “provide any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity who is engaged in any student recruitment or admission activity, or in making decisions regarding the award of Title IV program funds.” The vast majority of our U.S.-based university partners, and a some of our non-U.S. university partners, participate in the Title IV programs.
Each institution that participates in Title IV programs agrees, as a condition of its eligibility to participate in those programs, that it will not “provide any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity who is engaged in any student recruitment or admission activity, or in making decisions regarding the award of Title IV program funds.” The vast majority of our U.S.-based university partners, and some of our non-U.S. university partners, participate in the Title IV programs.
Bribery Act, as well as other similar anti-bribery, anti-kickback laws, and anti-money laundering regulations. These laws and regulations generally prohibit companies and their employees and intermediaries from authorizing, offering, providing, and accepting improper payments or benefits for improper purposes. These laws also require that we keep accurate books and records and maintain compliance procedures designed to prevent any such actions.
Bribery Act, as well as other similar anti-bribery, anti-kickback laws, and anti-money laundering regulations. These laws and regulations generally prohibit companies, their employees, and their intermediaries from authorizing, offering, providing, and accepting improper payments or benefits for improper purposes. These laws also require that we keep accurate books and records and maintain compliance procedures designed to prevent any such actions.
In addition, the expense of litigation and the timing of these expenses from period to period are difficult to estimate, subject to change, and could adversely affect our financial condition and results of operations.
In addition, litigation expense and the timing of these expenses from period to period are difficult to estimate, subject to change, and could adversely affect our financial condition and results of operations.
In addition, sustained or recurring disruptions in our platform or its underlying technology could adversely affect our and our educator partners’ compliance with applicable regulations and accrediting body standards. Further, if we fail to accurately predict the rate or timing of the growth of our platform, we may be required to incur significant additional costs to maintain reliability.
In addition, sustained or recurring disruptions in our platform or its underlying technology could adversely affect our, or our educator partners’, compliance with applicable regulations and accrediting body standards. Further, if we fail to accurately predict the rate or timing of our platform growth, we may be required to incur significant additional costs to maintain reliability.
Further, the software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, be compromised or experience outages, or such processors may impose additional authentication, validation, or other requirements.
Further, the software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, be compromised, experience outages, or such processors may impose additional authentication, validation, or other requirements.
Any of these risks could cause us to lose our ability to accept online payments, conduct other payment transactions, or make it difficult for our customers to make payments to us, any of which could make our platform less convenient and attractive and harm our ability to attract and retain educator partners and learners.
Any of these risks could cause us to lose our ability to accept online payments, conduct other payment transactions, or make it difficult for our customers to make payments to us, any of which could make our platform less convenient and attractive and harm our ability to attract and retain learners, customers, and educator partners.
In many jurisdictions, enforcement actions and consequences for non-compliance with protection, privacy, and information security laws and regulations are rising. In the U.S., possible consequences for non-compliance include enforcement actions in response to rules and regulations promulgated under the authority of federal agencies and state attorneys general and legislatures and consumer protection agencies.
In many jurisdictions, enforcement actions and consequences for non-compliance with protection, privacy, and information security laws and regulations are rising. In the U.S., possible consequences for non-compliance include enforcement actions in response to rules and regulations promulgated under the authority of federal agencies, state attorneys general, legislatures, and consumer protection agencies.
In many cases, the ultimate tax determination is uncertain because it is not clear how existing statutes apply to our business. Federal, state, local, or foreign jurisdictions may seek to impose additional reporting, recordkeeping, or indirect tax collection obligations on businesses like ours that facilitate e-commerce. For example, in 2018, the U.S.
In many cases, the ultimate tax determination is uncertain because it is not clear how existing statutes may apply to our business. Federal, state, local, or foreign jurisdictions may seek to impose additional reporting, recordkeeping, or indirect tax collection obligations on businesses like ours that facilitate e-commerce. For example, in 2018, the U.S.
Our amended and restated certificate of incorporation and bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the Chairman of our board of directors, our President, or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed only for cause; • provide that vacancies on our board of directors may be filled by a majority of directors then in office, even if less than a quorum; and • require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and bylaws include provisions that: • authorize our Board to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our Board that may be senior to our common stock; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our Board, the Chairman of our Board, our President, or our Chief Executive Officer; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our Board; • establish that our Board is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed only for cause; • provide that vacancies on our Board may be filled by a majority of directors then in office, even if less than a quorum; and • require the approval of our Board or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
For example, there is a risk that AI-generated information may be inaccurate or misleading, or not appropriately attribute authors or creators for their work (including if used in the context of course content creation), or that students may use generative AI to draft written assignments or for other projects, any of which, absent sufficient and cost-effective methods to detect and prevent such risks, may devalue or undervalue the certificates and other credentials offered through our platform due to the actual or perceived threat of increased plagiarism or cheating, concerns of academic integrity, or appropriate and permissible use of AI.
For example, there is a risk that AI-generated information may be inaccurate or misleading, or not appropriately attribute authors or creators for their work (including if used in the context of content creation), or that students may use generative AI to draft written assignments or for other projects, any of which, absent sufficient and cost-effective methods to detect and prevent such risks, may devalue or undervalue the certificates and other credentials offered through our platform due to the actual or perceived threat of increased plagiarism or cheating, concerns of academic integrity, or appropriate and permissible use of AI.
If such tax or other laws, rules, or regulations are amended, or if new laws, rules, or regulations are enacted, the results could increase our tax payments or other obligations, prospectively or retrospectively, subject us to interest and penalties, decrease the demand for our services if we pass on such costs to our educator partners or learners, result in increased costs to update or expand our technological or administrative infrastructure, or effectively limit the scope of our business activities if we decided not to conduct business in particular jurisdictions.
If such tax or other laws, rules, or regulations are amended, or if new laws, rules, or regulations are enacted, the results could increase our tax payments or other obligations, prospectively or retrospectively, subject us to interest and penalties, decrease the demand for our services if we pass on such costs to our learners, customers, or educator partners, result in increased costs to update or expand our technological or administrative infrastructure, or effectively limit the scope of our business activities if we decided not to conduct business in particular jurisdictions.
Acquisitions involve many risks, including the following: • an acquisition may negatively affect our results of operations and financial condition because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including IP claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel, or operations of any entity or business that we acquire, particularly if key personnel of the acquired entity or business decide not to work for us; • an acquisition may disrupt our ongoing business and distract our management; • an acquisition may result in a delay or reduction of customer purchases for both us and the entity or business we acquired due to customer uncertainty about continuity and effectiveness of service; • an acquisition may involve entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; 35 Table of Contents • we may face challenges inherent in effectively managing an increased number of employees in diverse locations; • we may experience strain on our financial and managerial controls and reporting systems and procedures; • our use of cash to pay for acquisitions would limit other potential uses for our cash; • if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business; • we may incur impairment charges related to potential write-downs of acquired assets or goodwill; and • to the extent that we issue a significant amount of equity or equity-based securities in connection with an acquisition, existing stockholders may be diluted.
Acquisitions involve many risks, including the following: • an acquisition may negatively affect our results of operations and financial condition because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including IP claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; • we may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel, or operations of any entity or business that we acquire, particularly if key personnel of the acquired entity or business decide not to work for us; • an acquisition may disrupt our ongoing business and distract our management; • an acquisition may result in a delay or reduction of customer purchases for both us and the entity or business we acquired due to customer uncertainty about continuity and effectiveness of service; • an acquisition may involve entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; • we may face challenges inherent in effectively managing an increased number of employees in diverse locations; • we may experience strain on our financial and managerial controls and reporting systems and procedures; • our use of cash to pay for acquisitions would limit other potential uses for our cash; • if we incur debt to fund such acquisitions, such debt may subject us to material restrictions on our ability to conduct our business; • we may incur impairment charges related to potential write-downs of acquired assets or goodwill; and • to the extent that we issue a significant amount of equity or equity-based securities in connection with an acquisition, existing stockholders may be diluted.
Alternatively, if a court were to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, and results of operations and result in a diversion of the time and resources of our management and board of directors.
Alternatively, if a court were to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, and results of operations and result in a diversion of the time and resources of our management and Board.
Our business may face increased scrutiny related to these activities, including from the investment community, and our failure to achieve progress in these areas on a timely basis, or at all, could impact our ability to hire and retain employees, increase our educator partner base, reelect our board of directors, or attract and retain certain types of investors, which could adversely affect our reputation, business, and financial performance.
Our business may face increased scrutiny related to these activities, including from the investment community, and our failure to achieve progress in these areas on a timely basis, or at all, could impact our ability to hire and retain employees, increase our educator partner base, reelect our Board, or attract and retain certain types of investors, which could adversely affect our reputation, business, and financial performance.
Additionally, the vast majority of our U.S.-based college and university partners participate in the federal student financial assistance programs under Title IV of the Higher Education Act of 1965, as amended (respectively, “Title IV” and “HEA”), and are subject to extensive regulation by the U.S. Department of Education (“DOE”), as well as various state agencies, licensing boards, and accrediting agencies.
Additionally, the vast majority of our U.S.-based university partners participate in the federal student financial assistance programs under Title IV of the Higher Education Act of 1965, as amended (respectively, “Title IV” and “HEA”), and are subject to extensive regulation by the U.S. Department of Education (“DOE”), as well as various state agencies, licensing boards, and accrediting agencies.
Further, even U.S.-based higher education institutions could lose a necessary authorization either because it lapses or is revoked by a state agency. Such partners could also lack, or lose, the ability to participate in a reciprocity agreement that provides the basis for their authorization in multiple states. For example, California higher education institutions currently do not participate in SARA.
Further, even U.S.-based higher education institutions could lose a necessary authorization either because it lapses or is revoked by a state agency. Such educator partners could also lack, or lose, the ability to participate in a reciprocity agreement that provides the basis for their authorization in multiple states. For example, California higher education institutions currently do not participate in SARA.
If we are not able to provide our educator partners with the functionality to deliver a rewarding experience on mobile devices, their ability to attract learners to their programs may be harmed and, consequently, our business may suffer. As new mobile devices and mobile features are released, we may encounter problems in developing or supporting apps for them.
If we are not able to provide our customers and educator partners with the functionality to deliver a rewarding experience on mobile devices, their ability to attract learners to their programs may be harmed and, consequently, our business may suffer. As new mobile devices and features are released, we may encounter problems in developing or supporting apps for them.
Our commitment to pursuing long-term value for the Company and its stockholders, potentially at the expense of short- or medium-term performance, may have a material adverse effect on the trading price of our common stock, including making ownership of our common stock less appealing to investors who are focused on returns over a shorter time horizon.
Our commitment to pursuing long-term value for the Company and its stockholders, potentially at the expense of short- or medium-term performance, may have a material adverse effect on our stock price, including making ownership of our common stock less appealing to investors who are focused on returns over a shorter time horizon.
As the market for our learning platform grows (if ever), as new competitors introduce competitive applications or services, or as we enter into new international markets, we may be unable to attract new customers at the same price or based on the same pricing models we have historically used, or for contract lengths consistent with our historical averages.
As the market for our learning platform grows (if ever), as new competitors introduce competitive applications or services, or as we enter into new international markets, we may be unable to attract new learners or customers at the same price or based on the same pricing models we have historically used, or for contract lengths consistent with our historical averages.
If we violate the misrepresentation rule, or similar federal and state regulatory requirements, we could face fines, sanctions, and other liabilities. Under our contracts with U.S.-based college and university partners, we are required to comply with other regulations promulgated by the DOE and comparable state laws that affect our marketing activities, including the misrepresentation rule.
If we violate the misrepresentation rule, or similar federal and state regulatory requirements, we could face fines, sanctions, and other liabilities. Under our contracts with U.S.-based university partners, we are required to comply with other regulations promulgated by the DOE and comparable state laws that affect our marketing activities, including the misrepresentation rule.
In addition, we believe that our status as a PBC and our commitment to providing global access to flexible and affordable world-class learning that supports personal development, career advancement, and economic opportunity distinguish us from our competitors and promote a relationship among our educator partners, learners, and employees founded on trust.
In addition, we believe that our status as a PBC and our commitment to providing global access to flexible and affordable world-class learning that supports personal development, career advancement, and economic opportunity distinguish us from our competitors and promote a relationship founded on trust among our learners, customers, educator partners, and employees.
In addition, our employees, our educator partners, or third parties acting at our direction may knowingly or inadvertently make use of social media in ways that could lead to the loss or infringement of IP, as well as the public disclosure of proprietary, confidential, or sensitive personal information of our business, employees, learners, educator partners, or others.
In addition, our employees, our educator partners, or third parties acting at our direction may knowingly or inadvertently make use of social media in ways that could lead to the loss or infringement of IP, as well as the public disclosure of proprietary, confidential, or sensitive personal information of our business, employees, learners, customers, educator partners, or others.
We believe that focusing on the long-term best interests of our Company as a PBC and our consideration of all of our stakeholders, including our stockholders, learners, educator partners, employees, the communities in which we operate, and other stakeholders we may identify from time to time, is essential to the long-term success of our Company and to long-term stockholder value.
We believe that focusing on the long-term best interests of our Company as a PBC and our consideration of all of our stakeholders, including our stockholders, learners, customers, educator partners, employees, the communities in which we operate, and other stakeholders we may identify from time to time, is essential to the long-term success of our Company and to long-term stockholder value.
Further, any reputational damage resulting from breach of our security measures could create distrust of our Company by prospective educator partners or learners. We and our third-party service providers may not have the resources or technical sophistication to anticipate or prevent all such cyberattacks.
Further, any reputational damage resulting from breach of our security measures could create distrust of our Company by prospective learners, customers, or educator partners. We, and our third-party service providers, may not have the resources or technical sophistication to anticipate or prevent all such cyberattacks.
We also collect and store certain personal data provided by our educator partners, learners, and potential learners, such as names, email addresses, and other data pertaining to their activity on our platform. The collection, transmission, and storage of such information is subject to stringent legal and regulatory obligations.
We also collect and store certain personal data provided by our customers, educator partners, learners, and potential learners, such as names, email addresses, and other data pertaining to their activity on our platform. The collection, transmission, and storage of such information is subject to stringent legal and regulatory obligations.
Some companies that have experienced volatility in the trading price of their stock have been the subject of securities class action litigation. If we are the subject of such litigation, it could result in substantial costs and could divert our management’s attention and resources, which could adversely affect our business.
Some companies that have experienced volatility in their stock price have been the subject of securities class action litigation. If we are the subject of such litigation, it could result in substantial costs and could divert our management’s attention and resources, which could adversely affect our business.
Even if such claims are without merit, they could cause reputational harm, cause us to incur significant defense costs, result in the termination of our Title IV participating partner agreements, and negatively impact our ability to enter into new agreements.
Even if such claims are without merit, they could cause reputational harm, cause us to incur significant defense costs, result in the termination of our Title IV participating university partner agreements, and negatively impact our ability to enter into new agreements.
As laws and regulations evolve to govern the use of these channels, the failure by us, our employees, our partners, or third parties acting at our direction to comply with applicable laws and regulations in the use of these channels could adversely affect our reputation or subject us to fines or other penalties.
As laws and regulations evolve to govern the use of these channels, the failure by us, our employees, our educator partners, or third parties acting at our direction to comply with applicable laws and regulations in the use of these channels could adversely affect our reputation or subject us to fines or other penalties.
In addition, if the market for technology stocks, education stocks, or the stock market in general experiences a loss of investor confidence, whether due to any of the foregoing factors or otherwise, the price of our common stock could decline for reasons unrelated to our business, results of operations, or financial condition.
In addition, if the market for technology stocks, education stocks, or the stock market in general experiences a loss of investor confidence, whether due to any of the foregoing factors or otherwise, our stock price could decline for reasons unrelated to our business, results of operations, or financial condition.
We may issue additional common stock, convertible securities, or other equity in the future. We also expect to issue common stock to our employees, directors, and other service providers pursuant to our equity incentive plans. Such issuances will be dilutive to investors and could cause the price of our common stock to decline.
We may issue additional common stock, convertible securities, or other equity in the future. We also expect to issue common stock to our employees, directors, and other service providers pursuant to our equity incentive plans. Such issuances will be dilutive to investors and could cause our stock price to decline.
These and other factors may cause our revenue and operating results to fall below our expectations or the expectations of market analysts and investors in future periods, which could cause the market price of our common stock to decline substantially. Any decline in the market price of our common stock would cause the value of your investment to decline.
These and other factors may cause our revenue and operating results to fall below our expectations or the expectations of market analysts and investors in future periods, which could cause our stock price to decline substantially. Any decline in our stock price would cause the value of your investment to decline.
For example, if a natural disaster, power outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may be difficult for us to continue our business for a period of time.
For example, if a natural disaster, power outage, connectivity issue, or other event occurred that impacted our employees’ ability to work remotely, it may be difficult for us to continue components of our business for a period of time.
The smaller screen size and reduced functionality associated with some mobile devices may make the use of our platform more difficult or our educator partners may believe that online learning through such mobile devices is not effective.
The smaller screen size and reduced functionality associated with some mobile devices may make the use of our platform more difficult or our customers and educator partners may believe that online learning through such mobile devices is not effective.
Any failure or perceived failure by us to comply with our privacy policies, our privacy or data protection obligations to learners or other third parties, or our privacy or data protection legal obligations, or any compromise of security that results in the unauthorized access, release, use, or transfer of sensitive information, which may include personal data or other data, may result in governmental enforcement actions, litigation, or public statements against us by consumer advocacy groups or others and could cause learners to lose trust in us, which could have an adverse effect on our business.
Any failure or perceived failure by us to comply with our privacy policies, our privacy or data protection obligations to learners or other third parties, or our privacy or data protection legal obligations, or any compromise of security that results in the unauthorized access, release, use, or transfer of sensitive information, which may include personal data or other data, may result in government enforcement actions, litigation, or public statements against us by consumer advocacy groups or others and could cause learners to lose trust in us, which could have an adverse effect on our business.
Our quarterly and annual revenue and operating results have fluctuated from period to period and may do so in the future, which could cause our stock price to fluctuate and the value of your investment to decline.
Our quarterly and annual revenue and operating results have historically fluctuated from period to period, and may do so in the future, which could cause our stock price to fluctuate and the value of your investment to decline.
Any such increases in volume could result in delays to various approvals our educator partners request, and any such delays could in turn delay the timing of our ability to generate revenue from their programs. 40 Table of Contents Our educator partners, both U.S. and international, may be required to be authorized in certain states to offer online programs, engage in advertising or recruiting and operate externships, internships, technical training, or other forms of field experience, depending on state and international laws.
Any such increases in volume could result in delays to various approvals our educator partners request, and any such delays could in turn delay the timing of our ability to generate revenue from their programs. 37 Table of Contents Our educator partners, both U.S. and international, may be required to be authorized in certain states to offer online programs, engage in advertising or recruiting and operate externships, internships, technical training, or other forms of field experience, depending on state and international laws.
Information concerning us, our educator partners, or learners, whether accurate or not, may be posted on social media platforms at any time and may have an adverse impact on our brand, reputation, or business.
Information concerning us, our learners, customers. or educator partners, whether accurate or not, may be posted on social media platforms at any time and may have an adverse impact on our brand, reputation, or business.
The applicable rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning, directly or indirectly, 5% or more of the stock of a company, as well as changes in ownership arising from new issuances of stock by the company.
The applicable rules generally operate by focusing on changes in ownership among stockholders considered by the rules as owning, directly or indirectly, 5% or more of the stock, as well as changes in ownership arising from new issuances of stock by the company.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management.
These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board, which is responsible for appointing the members of our management.
Any delay or prevention of a change of control transaction or changes in our management could cause our stock price to decline or could prevent or deter a transaction that you might support. 58 Table of Contents The exclusive forum provision in our organizational documents may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims.
Any delay or prevention of a change of control transaction or changes in our management could cause our stock price to decline or could prevent or deter a transaction that you might support. 55 Table of Contents The exclusive forum provision in our organizational documents may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits with respect to such claims.
Although our business has experienced significant growth in the past, we cannot provide any assurance that our business or revenue will continue to grow at the same rate or at all in the future.
Although our business has experienced significant growth in past years, we cannot provide any assurance that our business or revenue will continue to grow at the same rate or at all in the future.
In addition, this perception or any further governmental investigation could serve as the impetus for more restrictive legislation or regulation, which could limit our future business opportunities. Moreover, allegations of abuse of federal financial aid funds and other statutory violations against for-profit higher education companies could negatively impact our ability to succeed due to increased regulation and decreased demand.
In addition, this perception or any further government investigation could serve as the impetus for more restrictive legislation or regulation, which could limit our future business opportunities. Moreover, allegations of abuse of federal financial aid funds and other statutory violations against for-profit higher education companies could negatively impact our ability to succeed due to increased regulation and decreased demand.
A violation of this rule or other federal or state regulations applicable to our marketing activities by an employee or agent performing services for educator partners could damage our reputation, result in the termination of educator partner agreements, require us to pay fines or other monetary penalties, and require us to pay the fees associated with indemnifying an educator partner from private claims or government investigations.
A violation of this rule or other federal or state regulations applicable to our marketing activities by an employee or agent performing services for educator partners could damage our reputation, result in the termination of educator partner agreements, require us to pay fines or other monetary penalties, injunctions or other remedies and require us to pay the fees associated with indemnifying an educator partner from private claims or government investigations.
As a service provider to higher education institutions both in the U.S. and internationally, either directly or indirectly through our arrangements with educator partners, we are required to comply with certain education laws and regulations. 41 Table of Contents Our platform is also subject to various requirements relating to accessibility for learners with disabilities.
As a service provider to higher education institutions both in the U.S. and internationally, either directly or indirectly through our arrangements with educator partners, we are required to comply with certain education laws and regulations. 38 Table of Contents Our platform is also subject to various requirements relating to accessibility for learners with disabilities.
If the DOE or a court determined that our business model or even the practices of a subcontractor did not meet the bundled services exception, we could have contractual obligations to our Title IV participating university partners, such as indemnifying a partner from private claims or government investigations or demands for repayment of Title IV program funds.
If the DOE or a court determined that our business model or even the practices of a subcontractor did not meet the bundled services exception, we could have contractual obligations to our Title IV participating university partners, such as indemnifying an educator partner from private claims or government investigations or demands for repayment of Title IV program funds.
If we are unable to develop educational content that addresses learners’ and partners’ needs, or enhance and improve our platform in a timely manner, or if we fail to provide adequate safeguards and quality assurance related to the use of new technological advancements, we may not be able to maintain or increase market acceptance and use of our platform.
If we are unable to develop educational content that addresses learners’ and customers’ needs, or enhance and improve our platform in a timely manner, or if we fail to provide adequate safeguards and quality assurance related to the use of new technological advancements, we may not be able to maintain or increase market acceptance and use of our platform.
In addition, there may be scamming or phishing attempts, such as impersonating our personnel or our educator partners’ personnel, in an effort to obtain personal information from our learners or otherwise make inappropriate use of our platform, which could expose us to liability, reduce learner and educator partner satisfaction with our platform, or damage our reputation.
In addition, there may be scamming or phishing attempts, such as impersonating our personnel, our customers’ personnel, or our educator partners’ personnel, in an effort to obtain personal information from our learners or otherwise make inappropriate use of our platform, which could expose us to liability, reduce learner, customer, and educator partner satisfaction with our platform, or damage our reputation.
Market adoption of online learning solutions and generative AI are relatively new and may not grow or evolve as we expect or lead to increased demand for our offerings, which may harm our business and results of operations. Our future success will depend in part on the growth, if any, in the demand for online learning solutions.
Market adoption of online learning solutions and generative AI are relatively new and may not grow, evolve as we expect, or lead to increased demand for our offerings, which may harm our business and results of operations. Our future success will depend, in part, on the growth of demand for online learning solutions.
Moreover, if we do not effectively manage the growth of our business and operations globally, the quality of our platform could suffer, which would negatively affect our reputation, results of operations, and overall business. 25 Table of Contents We may change the contract terms, including our pricing models, for our offerings, which in turn could impact our operating results.
Moreover, if we do not effectively manage the growth of our business and operations globally, the quality of our platform could suffer, which would negatively affect our reputation, results of operations, and overall business. 22 Table of Contents We may change the contract terms, including our pricing models, for our offerings, which in turn could impact our operating results.
If we cannot quickly and efficiently scale our sales and marketing teams and technology teams, which includes the hiring and training of new employees, we may not be successful in attracting potential learners to our platform, which would negatively impact our ability to generate revenue, and our educator partners and learners could lose confidence in our platform.
If we cannot quickly and efficiently scale our sales, marketing, and technology teams, which includes the hiring and training of new employees, we may not be successful in attracting potential learners and customers to our platform, which would negatively impact our ability to generate revenue, and our educator partners could lose confidence in us.
Some for-profit online school operators have been subject to governmental investigations alleging the misuse of public funds, financial irregularities, and failure to achieve positive outcomes for learners, including the inability to obtain employment in their fields, or to earn sufficient income to repay debt incurred for their education.
Some for-profit online school operators have been subject to government investigations alleging the misuse of public funds, financial irregularities, and failure to achieve positive outcomes for learners, including the inability to obtain employment in their fields, or to earn sufficient income to repay debt incurred for their education.
As a result, directors and officers may encounter perceived or actual conflicts of interest involving us and other entities with which they are or become affiliated, including matters that involve corporate opportunities. For example, a portfolio company of a director-affiliated venture fund may become a competitor of ours or a potential strategic partner.
As a result, directors and officers may encounter perceived or actual conflicts of interest involving us and other entities with which they are or become affiliated, including matters that involve corporate opportunities. A portfolio company of a director-affiliated venture fund may become a competitor of ours or a potential strategic partner.
We work with our educator partners to deliver a broad portfolio of educational content and credentials on our platform. For our Consumer and Enterprise offerings, we incur content costs in the form of fees paid to educator partners. In addition, our Degrees revenue is based on a percentage of the total tuition paid by Degrees students.
We collaborate with our educator partners to deliver a broad portfolio of educational content and credentials on our platform. For our Consumer and Enterprise offerings, we incur content costs in the form of fees paid to educator partners. In addition, our Degrees revenue is based on a percentage of the total tuition paid by Degrees students.
If these few situations, or any additional misconduct, cause all online learning programs to be viewed unfavorably by the public or policymakers, we may find it difficult to enter into or renew agreements with our educator partners or attract additional learners for their programs.
If these few situations, or any additional misconduct, cause all online learning programs to be viewed unfavorably by the public or policymakers, we may find it difficult to enter into or renew agreements with our educator partners or attract additional learners and customers for their programs.
Therefore, we may be subject to the possibility of increased derivative litigation, which would require the attention of our management, and, as a result, may adversely impact our management’s ability to effectively execute our strategy. Additionally, any such derivative litigation may be costly, which may harm our financial condition and results of operations.
Therefore, we may be subject to the possibility of increased derivative litigation, which would require management ’ s attention, and, as a result, may adversely impact our management’s ability to effectively execute our strategy. Additionally, any such derivative litigation may be costly, which may harm our financial condition and results of operations.
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 and partners are dissatisfied with their experience on our platform, they may stop accessing our content and may stop referring others to us.
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, customers. and educator partners are dissatisfied with their experience on our platform, they may stop accessing our content and may stop referring others to us.
If we fail to integrate our platform with new third-party applications and software that our learners and educator partners can utilize, we may not be able to offer the functionality that they need, which would negatively impact our ability to generate revenue and adversely impact our business.
If we fail to integrate our platform with new third-party applications and software that our learners, customers, and educator partners utilize, we may not be able to offer the functionality that they need, which would negatively impact our ability to generate revenue and adversely impact our business.
Similarly, we may also incur significant upfront and servicing costs for contracts that are not renewed, or which the customer seeks to terminate early, even in the absence of a breach on our part or contractual terms permitting an early termination.
Similarly, we may also incur significant upfront costs for contracts that are not renewed, or for which the customer seeks to terminate early, even in the absence of a breach on our part or contractual terms permitting an early termination.
As a result, if the guidance is rescinded or amended, such changes may materially and adversely impact our business and operations as we may need to alter or replace the current tuition revenue-sharing models in our agreements with Title IV participating university partners.
If the guidance is rescinded or amended, such changes may materially and adversely impact our business and operations as we may need to alter or replace the current tuition revenue-sharing models in our agreements with Title IV participating university partners.
Any failure or perceived failure by us or any third parties with which we do business to comply with these laws, rules, and regulations, or with other obligations to which we or such third parties are or may become subject, may result in actions against us by governmental entities or private claims and litigation.
Any failure or perceived failure by us or any third parties with which we do business to comply with these laws, rules, and regulations, or with other obligations to which we or such third parties are or may become subject, may result in actions against us by government entities or private claims and litigation.
These broad market fluctuations, as well as general economic, political, and market conditions, such as recessions or inflation, may cause declines in the market price of our common stock, and you may not realize any return on your investment in us and may lose some or all of your investment.
These broad market fluctuations, as well as general economic, political, and market conditions, such as recessions or inflation, may cause declines in our stock price, and you may not realize any return on your investment in us and may lose some or all of your investment.
Our ability to broaden our customer base, particularly our Enterprise customer base, and achieve broader market acceptance of our platform, will depend to a significant extent on the ability of our sales and marketing organizations to work together to increase our sales pipeline and cultivate customer and educator partner relationships to drive revenue growth.
Our ability to broaden our customer base, particularly our Enterprise customer base, and achieve broader market acceptance of our platform, will depend to a significant extent on the ability of our sales and marketing organizations to work together to increase our sales pipeline and cultivate customer relationships to drive revenue growth.
The Israel-Hamas war has resulted in significant military activity in the Middle East, which may further escalate regional instability and could disrupt our operations and the business of our significant customers, educator partners, and learners in the Middle East and North Africa region, which could negatively impact our results of operations.
The Israel-Hamas war has resulted in significant military activity in the Middle East, which may further escalate regional instability and could disrupt our operations and the business of our significant customers, educator partners, and learners in the Middle East and North Africa regions, which could negatively impact our results of operations.
In the event of a conflict between the interests of our stockholders and the interests of our specific public benefit or our other stakeholders, our directors must only make informed and disinterested decisions that serve a rational purpose; thus, there is no guarantee such a conflict would be resolved in favor of our stockholders, which could harm our business, results of operations, and financial condition, which in turn could cause our stock price to decline. 60 Table of Contents Our focus on the long-term best interests of our Company as a PBC and our consideration of all of our stakeholders, including our stockholders, learners, educator partners, employees, the communities in which we operate, and other stakeholders that we may identify from time to time, may conflict with short- or medium-term financial interests and business performance, which may negatively impact the value of our common stock.
In the event of a conflict between the interests of our stockholders and the interests of our specific public benefit or our other stakeholders, our directors must only make informed and disinterested decisions that serve a rational purpose; thus, there is no guarantee such a conflict would be resolved in favor of our stockholders, which could harm our business, results of operations, and financial condition, which in turn could cause our stock price to decline. 57 Table of Contents Our focus on the long-term best interests of our Company as a PBC and our consideration of all of our stakeholders, including our stockholders, learners, customers, educator partners, employees, the communities in which we operate, and other stakeholders that we may identify from time to time, may conflict with short- or medium-term financial interests and business performance, which may negatively impact our stock price.
These errors, defects, disruptions, breaches, or other performance problems with our platform could damage our or our educator partners’ reputations, decrease educator partner and learner satisfaction and retention, negatively impact our ability to attract new learners and educator partners, and could result in large indemnity payments to learners and educator partners for losses suffered or incurred in connection with any such defects or errors on our platform, or other liabilities relating to or arising from our platform.
These errors, defects, disruptions, breaches, or other performance problems with our platform could damage our, or our educator partners’, reputations, decrease learner, customer, or educator partner satisfaction and retention, negatively impact our ability to attract new learners, customers, and educator partners, and could result in large indemnity payments to them for losses suffered or incurred in connection with any such defects or errors on our platform, or other liabilities relating to or arising from our platform.
If any of these results occurs, it could hurt our ability to generate revenue from that program. Our activities are subject to international, federal, and state education accessibility, consumer protection laws and regulations, and other requirements.
If any of these results occur, it could hurt our ability to generate revenue from that program. Our activities are subject to international, federal, and state education accessibility, consumer protection laws and regulations, and other requirements.
Our success depends on our ability to provide learners with the information, outcomes, academic credit, and certifications they seek, which in turn depends on the quantity, quality, and format of the educational content provided by our partners.
Our success depends on our ability to provide learners and customers with the information, outcomes, academic credit, and certifications they seek, which in turn depends on the quantity, quality, and format of the educational content provided by our educator partners.
Any of these factors could negatively impact our ability to increase our educator partner base and grow their programs, which would make it difficult to continue growing our business and could negatively affect our stock price. Our growth strategy may contemplate acquisitions, and we may be unsuccessful in executing, implementing, integrating, or leveraging such acquisitions.
Any of these factors could negatively impact our ability to increase our educator partner base and grow their programs, which would make it difficult to continue growing our business and could negatively affect our stock price. 31 Table of Contents Our growth strategy may contemplate acquisitions, and we may be unsuccessful in executing, implementing, integrating, or leveraging such acquisitions.
The loss or suspension of an educator partner’s accreditation or other adverse action by their institutional accreditor would render the institution or its program ineligible to participate in Title IV programs or similar government funding programs that may be in place and available to students enrolled at our Degrees partners based in and outside of the U.S.
The loss or suspension of an educator partner’s accreditation or other adverse action by their institutional accreditor would render the institution or its program ineligible to participate in Title IV programs or similar government funding programs that may be in place and available to our Degrees students based in and outside of the U.S.
If our actual performance does not meet or exceed our guidance or analyst or investor expectations, the trading price of our common stock is likely to decline. 57 Table of Contents We do not intend to pay dividends on our common stock for the foreseeable future, so any returns on your investment will be limited to changes in the value of our common stock.
If our actual performance does not meet or exceed our guidance or analyst or investor expectations, our stock price is likely to decline. 54 Table of Contents We do not intend to pay dividends on our common stock for the foreseeable future, so any returns on your investment will be limited to changes in the value of our common stock.
There can be no assurance that online programs, such as those offered on our platform, will ever achieve significant market acceptance, and universities and organizations may therefore decline to engage with our platform.
There can be no assurance that online degree programs, such as those offered on our platform, will ever achieve significant market acceptance, and universities may therefore decline to engage with our platform.
Moreover, the laws governing rights of publicity and privacy, and the laws governing faculty ownership of educational content, are imprecise and adjudicated on a case-by-case basis, such that the enforcement of agreements to transfer the necessary rights is unclear.
Moreover, the laws governing rights of publicity and privacy, and the laws governing instructor ownership of educational content, are imprecise and adjudicated on a case-by-case basis, such that the enforcement of agreements to transfer the necessary rights is unclear.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe also require employees and contractors to undergo information security awareness training. In addition, to mitigate the financial impact of cybersecurity incidents, we maintain insurance to help cover losses resulting from such potential incidents. We maintain a risk-based approach to identify and oversee cybersecurity risks, including risks presented by authorized service providers who have access to our systems or information.
Biggest changeWe also require employees and contractors to undergo annual information security awareness training. In addition, to mitigate the financial impact of cybersecurity incidents, we maintain insurance to help cover losses resulting from such potential incidents.
Our board of directors (the “Board”) is responsible for monitoring and assessing strategic risk exposure, and our audit committee has been designated with the responsibility of overseeing our technology and information security, including cybersecurity, policies and practices, and the internal controls regarding information security.
Our board of directors is responsible for monitoring and assessing strategic risk exposure, and our audit committee has been designated with the responsibility of overseeing our technology and information security, including cybersecurity, policies and practices, and the internal controls regarding information security.
For more information regarding our cybersecurity related risks, refer to our risk factors included in Part I, Item 1A of this Form 10-K. 62 Table of Contents
For more information regarding our cybersecurity related risks, refer to our risk factors included in Part I, Item 1A of this Form 10-K.
Our Senior Vice President of Engineering provides quarterly updates to the audit committee on these topics, as well as cybersecurity risk exposure and steps taken to monitor and mitigate such exposure. The Board receives reports from management on our information security and cybersecurity matters on an annual basis.
Our CTO provides quarterly updates to the audit committee on these topics, as well as cybersecurity risk exposure and steps taken to monitor and mitigate such exposure. The board of directors receives reports from management on our information security and cybersecurity matters on an annual basis.
Our information security team is led by our Senior Vice President of Engineering and our Head of Information Security, who together have over 35 years of technology industry experience and expertise in information security, cybersecurity, and distributed systems.
Our information security team is led by our Senior Vice President, Chief Technology Officer (“CTO”) and our Vice President, Information Security, who together have over 36 years of technology industry experience and expertise in information security, cybersecurity, and distributed systems.
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We maintain a risk-based approach to identify and oversee cybersecurity risks, including risks presented by authorized service providers who have access to our systems or information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also anticipate that suitable additional or alternative space, including those under lease options, will be available at commercially reasonable terms for future expansion.
Biggest changeWe also anticipate that suitable additional or alternative space, including those under lease options, will be available at commercially reasonable terms for future expansion. 59 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings For information regarding legal proceedings, refer to Note 9, “Commitments and Contingencies”, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, which is incorporated by reference into this Part I, Item 3. Item 4. Mine Safety Disclosures None. 63 Table of Contents PART II
Biggest changeItem 3. Legal Proceedings For information regarding legal proceedings, refer to Note 9, “Commitments and Contingencies”, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, which is incorporated by reference into this Part I, Item 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThere has been no material change in the planned use of proceeds from the IPO as described in our Prospectus for the IPO filed with the SEC, pursuant to Rule 424(b)(4), on March 31, 2021. 64 Table of Contents Issuer Purchases of Equity Securities On April 26, 2023, our board of directors approved a share repurchase program with authorization to purchase up to $95 million of our common stock with no expiration date (the “Repurchase Program”).
Biggest changeIn total, we received net proceeds of $525.3 million after deducting underwriting discounts and commissions. There has been no material change in the planned use of proceeds from the IPO as described in our Prospectus for the IPO filed with the SEC, pursuant to Rule 424(b)(4), on March 31, 2021.
Stock Performance Graph The graph below shows the cumulative total return to our stockholders since our IPO on March 31, 2021 through December 31, 2023, in comparison to the Nasdaq Composite Index and the S&P North American Technology Software Index, assuming an initial investment of $100 and reinvestment of dividends, if any.
Stock Performance Graph The graph below shows the cumulative total return to our stockholders since our IPO on March 31, 2021 through December 31, 2024, in comparison to the NASDAQ Composite Index and the S&P North American Technology Software Index, assuming an initial investment of $100 and reinvestment of dividends, if any.
The actual number of holders of our common stock is greater than the number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or by other nominees.
Holders of Record As of February 14, 2025, there were 74 holders of record of our common stock. The actual number of holders of our common stock is greater than the number of record holders and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or by other nominees.
Use of Proceeds On April 5, 2021, we completed our initial public offering of common stock, in which we sold 14,664,776 shares and certain selling stockholders sold 1,065,224 shares (the “IPO”).
Use of Proceeds On April 5, 2021, we completed our initial public offering of common stock, in which we sold 14,664,776 shares and certain selling stockholders sold 1,065,224 shares. On April 19, 2021, the underwriters exercised in full the right to purchase 2,359,500 additional shares of common stock from us (together, the “IPO”).
The stockholder return shown on the graph below represents past performance and is not indicative of, nor intended to forecast, future performance of our common stock. 3/31/2021 6/30/2021 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 Coursera $100.00 $87.91 $70.33 $54.31 $51.20 $31.51 $23.96 $26.29 $25.60 $28.93 $41.53 $43.04 Nasdaq Composite Index $100.00 $109.49 $109.07 $118.10 $107.35 $83.26 $79.83 $79.01 $92.26 $104.08 $99.79 $113.32 S&P North American Technology Software Index $100.00 $114.75 $118.25 $119.57 $102.67 $80.24 $74.76 $76.27 $91.23 $104.08 $102.59 $121.37 This performance graph shall not be deemed “soliciting material” or to be “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. 65 Table of Contents Item 6. [Reserved] Not applicable.
The stockholder return shown on the graph below represents past performance and is not indicative of, nor intended to forecast, future performance of our common stock. 61 Table of Contents December 31, Initial 2021 2022 2023 2024 Coursera $100.00 $54.31 $26.29 $43.04 $18.89 NASDAQ Composite Index $100.00 $118.10 $79.01 $113.32 $145.78 S&P North American Technology Software Index $100.00 $119.57 $76.27 $121.37 $151.15 This performance graph shall not be deemed “soliciting material” or to be “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.
Removed
Prior to that date, there was no public trading market for our common stock. Holders of Record As of February 15, 2024, there were 91 holders of record of our common stock.
Added
Issuer Purchases of Equity Securities On April 26, 2023, our board of directors approved a share repurchase program with authorization to purchase up to $95 million of our common stock , excluding commissions and fees. We funded these share repurchases with our existing cash and cash equivalents and completed the purchase authorization on May 7, 2024.
Removed
The shares were sold at a price to the public of $33.00 per share for net proceeds to us of $452.5 million after deducting underwriting discounts and commissions of $31.5 million. Net proceeds to the selling stockholders were $32.9 million after deducting underwriting discounts and commissions.
Added
During the years ended December 31, 2024 and 2023, we repurchased an aggregate of 3,099,800 shares of our common stock for $36.7 million and 4,829,803 shares of our common stock for $58.5 million.
Removed
We did not receive any of the proceeds from the sale of our common stock by the selling stockholders. On April 19, 2021, the underwriters exercised in full the right to purchase 2,359,500 additional shares of common stock from us, resulting in additional net proceeds of $72.8 million after deducting underwriting discounts and commissions of $5.1 million.
Removed
All of the shares issued and sold in the IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-253932), which was declared effective by the United States Securities and Exchange Commission (“SEC”) on March 30, 2021. Morgan Stanley & Co. LLC and Goldman Sachs & Co.
Removed
LLC acted as representatives of the underwriters for the offering. We incurred offering expenses of approximately $6.4 million. Upon completion of the sale of the shares of our common stock referenced in the preceding sentences, the IPO terminated.
Removed
We may repurchase shares of 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.
Removed
The Repurchase Program may be suspended or discontinued at any time and does not obligate us to acquire any amount of common stock. We funded share repurchases under the Repurchase Program with our existing cash and cash equivalents. There were no share repurchases during the fourth quarter of 2023.

Item 7. Management's Discussion & Analysis

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

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Biggest changeYear Ended December 31, 2023 2022 2021 (in thousands) Revenue $ 635,764 $ 523,756 $ 415,287 Cost of revenue (1) 305,993 192,277 165,818 Gross profit 329,771 331,479 249,469 Operating expenses: Research and development (1) 160,077 165,134 135,410 Sales and marketing (1) 222,771 227,676 179,337 General and administrative (1) 98,325 105,900 77,785 Restructuring related charges (1) (5,806) 10,149 — Total operating expenses 475,367 508,859 392,532 Loss from operations (145,596) (177,380) (143,063) Other income (expense): Interest income, net 34,432 9,144 320 Other expense, net (19) (2,401) (346) Loss before income taxes (111,183) (170,637) (143,089) Income tax expense 5,371 4,720 2,126 Net loss $ (116,554) $ (175,357) $ (145,215) (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ 2,593 $ 3,089 $ 2,092 Research and development 49,931 48,779 42,783 Sales and marketing 31,299 30,092 25,992 General and administrative 31,352 28,703 20,316 Restructuring related charges (5,605) 122 — Total stock-based compensation expense $ 109,570 $ 110,785 $ 91,183 70 Table of Contents The following table summarizes our results of operations as a percentage of revenue: Year Ended December 31, 2023 2022 2021 Revenue 100 % 100 % 100 % Cost of revenue 48 37 40 Gross profit 52 63 60 Operating expenses: Research and development 25 32 32 Sales and marketing 35 43 43 General and administrative 16 20 19 Restructuring related charges (1) 2 — Total operating expenses 75 97 94 Loss from operations (23) (34) (34) Other income (expense): Interest income, net 6 2 — Other expense, net — — — Loss before income taxes (17) (32) (34) Income tax expense 1 1 1 Net loss (18) % (33) % (35) % Comparison of the Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Revenue: Consumer $ 365,221 $ 295,583 $ 69,638 24 % Enterprise 219,542 181,284 38,258 21 % Degrees 51,001 46,889 4,112 9 % Total revenue $ 635,764 $ 523,756 $ 112,008 21 % Revenue for the year ended December 31, 2023 was $635.8 million, compared to $523.8 million for the year ended December 31, 2022.
Biggest changeYear Ended December 31, 2024 2023 2022 (in thousands) Revenue $ 694,674 $ 635,764 $ 523,756 Cost of revenue (1) 323,261 305,993 192,277 Gross profit 371,413 329,771 331,479 Operating expenses: Research and development (1) 132,048 160,077 165,134 Sales and marketing (1) 234,908 222,771 227,676 General and administrative (1) 108,734 98,325 105,900 Restructuring related charges (1) 8,942 (5,806) 10,149 Total operating expenses 484,632 475,367 508,859 Loss from operations (113,219) (145,596) (177,380) Other income (expense): Interest income, net 36,726 34,432 9,144 Other expense, net (2,008) (19) (2,401) Loss before income taxes (78,501) (111,183) (170,637) Income tax expense 1,029 5,371 4,720 Net loss $ (79,530) $ (116,554) $ (175,357) 67 Table of Contents (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 2,657 $ 2,593 $ 3,089 Research and development 41,846 49,931 48,779 Sales and marketing 28,104 31,299 30,092 General and administrative 35,477 31,352 28,703 Restructuring related charges — (5,605) 122 Total stock-based compensation expense $ 108,084 $ 109,570 $ 110,785 The following table summarizes our results of operations as a percentage of revenue: Year Ended December 31, 2024 2023 2022 Revenue 100 % 100 % 100 % Cost of revenue 47 48 37 Gross profit 53 52 63 Operating expenses: Research and development 19 25 32 Sales and marketing 34 35 43 General and administrative 15 16 20 Restructuring related charges 1 (1) 2 Total operating expenses 69 75 97 Loss from operations (16) (23) (34) Other income (expense): Interest income, net 5 6 2 Other expense, net — — — Loss before income taxes (11) (17) (32) Income tax expense — 1 1 Net loss (11) % (18) % (33) % Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, Change 2024 2023 $ % (in thousands, except percentages) Revenue: Consumer $ 398,094 $ 365,221 $ 32,873 9 % Enterprise 238,865 219,542 19,323 9 % Degrees 57,715 51,001 6,714 13 % Total revenue $ 694,674 $ 635,764 $ 58,910 9 % 68 Table of Contents Revenue for the year ended December 31, 2024 was $694.7 million, an increase of $58.9 million , or 9%, from $635.8 million for the prior year.
Ability to attract and engage new learners, Enterprise customers, and Degrees students. In order to grow our business, we must attract new learners, Enterprise customers, and Degrees students efficiently and increase engagement on our platform over time.
Ability to attract and engage new learners, Enterprise customers, and Degrees students. In order to grow our business, we must attract learners, Enterprise customers, and Degrees students efficiently and increase engagement on our platform over time.
We earn a service fee that is determined as a percentage of the total tuition collected from Degrees students, net of refunds. University partners typically collect the tuition from Degrees students. We have a stand-ready obligation to provide services throughout the period that the degree content is hosted on our platform.
We earn a service fee, determined as a percentage of the total tuition collected from Degrees students, net of refunds. University partners typically collect the tuition from Degrees students. We have a stand-ready obligation to provide services throughout the period that the degree content is hosted on our platform.
(“GAAP”). The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. 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.
The preparation of these Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. 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.
For the year ended December 31, 2023, net cash provided by operating activities was $29.6 million, primarily resulting from (i) a one-time benefit arising from the timing of content fee payments associated with the extension of our multi-year agreement with our largest educator partner, (ii) revenue growth paired with the results of our expense reduction initiative resulting in improved operational leverage, (iii) an increase in cash collections, (iv) a decrease in professional services fees, offset by (v) an increase in our paid marketing spend.
Net cash provided by operating activities for the year ended December 31, 2023 was $29.6 million, primarily the result of (i) a one-time benefit arising from the timing of content fee payments associated with the extension of our multi-year agreement with our largest educator partner, (ii) revenue growth paired with the results of our expense reduction initiative resulting in improved operational leverage, (iii) an increase in cash collections, and (iv) a decrease in professional services fees, offset by (v) an increase in our paid marketing spend.
Our main source of operating cash is payments received from our customers. Our primary use of cash from operating activities is for personnel-related expenses, partner fees, marketing and advertising expenses, indirect taxes, and third-party cloud infrastructure expenses.
Our main source of operating cash is payments received from our customers. Our primary use of cash from operating activities is for personnel-related expenses, educator partner fees, marketing and advertising expenses, indirect taxes, and third-party cloud infrastructure expenses.
If we are unable to raise additional capital when desired and on terms acceptable to us, our business, results of operations, and financial condition could be materially and adversely affected. Contractual Obligations and Commitments Our estimated future obligations as of December 31, 2023 include both current and long-term obligations.
If we are unable to raise additional capital when desired and on terms acceptable to us, our business, results of operations, and financial condition could be materially and adversely affected. Contractual Obligations and Commitments Our estimated future obligations as of December 31, 2024 include both current and long-term obligations.
We are typically the principal with respect to revenue generated from sales to Consumer and Enterprise customers as we control the performance obligation and are responsible for delivering access to content. Degrees revenue is generated from contracts with university partners to host and deliver their online bachelor’s and master’s degrees or postgraduate diplomas.
We typically serve as the principal for revenue generated from sales to Consumer and Enterprise customers, as we control the performance obligation and are responsible for delivering content access. Degrees revenue is generated from contracts with university partners to host and deliver their online bachelor’s and master’s degrees or postgraduate diplomas.
Under our operating leases, as described in Note 6, “Leases”, to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, we have a current obligation of $6.6 million and an immaterial long-term obligation.
Under our operating leases, as described in Note 6, “Leases”, to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, we have an immaterial current obligation and a long-term obligation of $3.0 million.
It includes the following sections: • Overview • Factors Affecting Our Performance • Impact of Macroeconomic Conditions • Components of Results of Operations • Results of Operations • Liquidity and Capital Resources • Key Business Metrics and Non-GAAP Financial Measures • Critical Accounting Estimates • Recent Accounting Pronouncements In this section of the Form 10-K, we discuss our financial condition and results of operations for the years ended December 31, 2023 and 2022.
It includes the following sections: • Overview • Recent Developments • Factors Affecting Our Performance • Impact of Macroeconomic Conditions • Components of Results of Operations • Results of Operations • Liquidity and Capital Resources • Key Business Metrics and Non-GAAP Financial Measures • Critical Accounting Estimates • Recent Accounting Pronouncements In this section of the Form 10-K, we discuss our financial condition and results of operations for the years ended December 31, 2024 and 2023.
We calculate “Net Retention Rate” as of a period end by starting with the ARR from all Paid Enterprise Customers as of the 12 months prior to such period end (“Prior Period ARR”). We then calculate the ARR from these same Paid Enterprise Customers as of the current period end (“Current Period ARR”).
We calculate “Net Retention Rate” for a period by starting with the ARR from all Paid Enterprise Customers as of the 12 months prior to such period end, or “Prior Period ARR”. We then calculate the ARR from these same Paid Enterprise Customers as of the current period end, or “Current Period ARR”.
Segment gross profit represents segment revenue less content costs paid to educator partners; segment gross margin is the quotient of segment gross profit divided by segment revenue. Content costs only apply to the Consumer and Enterprise segments as there is no content cost attributable to the Degrees segment.
Segment gross profit represents segment revenue less content costs paid to educator partners; segment gross margin is the quotient of segment gross profit and segment revenue. Content costs only apply to the Consumer and Enterprise segments as there is no content cost attributable to the Degrees segment.
Content costs as a percentage of revenue for Enterprise and Consumer vary based on the content mix of each segment. Operating Expenses Operating expenses consist of research and development, sales and marketing, and general and administrative expenses.
Content costs as a percentage of revenue for the Consumer and Enterprise segments can vary based on the content mix of each segment. Operating Expenses Operating expenses consist of research and development, sales and marketing, and general and administrative expenses.
Our financial condition and results of operations for the years ended December 31, 2022 and 2021 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on February 23, 2023.
Our financial condition and results of operations for the years ended December 31, 2023 and 2022 can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on February 22, 2024.
Our Net Retention Rate for Paid Enterprise Customers is expected to fluctuate in future periods due to a number of factors, including the growth of our revenue base, the penetration within our Paid Enterprise Customer base, expansion of products and features, and our ability to retain our Paid Enterprise Customers.
Our Net Retention Rate for Paid Enterprise Customers is expected to fluctuate in future periods due to a number of factors, including the growth of our revenue base, the penetration within our Paid Enterprise Customer base, expansion of products and features, and our ability to retain and expand the relationships with our Paid Enterprise Customers.
Our business and results of operations will depend in part on our ability to retain and expand usage of our platform within our existing customer base. Our measured investment in growth. We are actively managing our investments to support the future growth of our business using a measured approach.
Our business and results of operations will depend, in part, on our ability to retain and expand platform usage within our existing customer base. Our measured investment in growth. We are actively managing our investments with a measured approach to support future business growth.
In the event that we need to borrow funds or issue additional equity, we cannot assure you that any such additional financing will be available on terms acceptable to us, if at all. In addition, any future borrowings may result in additional restrictions on our business and any issuance of additional equity would result in dilution to investors.
If we need to borrow funds or issue additional equity, we cannot assure you that any such additional financing will be available on terms acceptable to us, if at all. Moreover, any future borrowings may result in additional restrictions on our business and any issuance of additional equity would result in dilution to investors.
Recent Accounting Pronouncements Refer to Note 2, “Significant Accounting Policies”, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for a discussion of recent accounting pronouncements. 81 Table of Contents
Recent Accounting Pronouncements Refer to Note 2, “Significant Accounting Policies”, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for a discussion of recent accounting pronouncements.
These expenses include the cost of servicing both paid learner and educator partner support requests, content translation and captioning, hosting and bandwidth costs, amortization of acquired technology, internal-use software and content assets, customer payment processing fees, depreciation, and facilities costs. Content costs only apply to Consumer and Enterprise offerings; there are no content costs attributable to our Degrees offering.
These expenses include the cost of servicing support requests from both paid learners and educator partners, content translation and captioning, hosting and bandwidth costs, amortization of acquired technology, internal-use software, and content assets, customer payment processing fees, and facilities costs. Content costs only apply to Consumer and Enterprise offerings. There are no content costs attributable to our Degrees offering.
We expect to maintain this full valuation allowance until it becomes more likely than not that the deferred tax assets will be realized. 69 Table of Contents Results of Operations The following table summarizes our results of operations, which are not necessarily indicative of results to be expected for future periods.
We expect to maintain this full valuation allowance until it becomes more likely than not that the deferred tax assets will be realized. Results of Operations The following table summarizes our results of operations, which are not necessarily indicative of future results.
Our research and development expenses primarily consist of personnel and personnel-related costs, including stock-based compensation expense, and costs related to the ongoing management, maintenance, and expansion of content, features, and services offered on our platform. We believe that continued investment in our platform is important to our future growth and to maintain and attract partners and learners to our platform.
Our research and development expenses primarily consist of personnel and personnel-related costs, including stock-based compensation expense, and costs related to the ongoing management, maintenance, and expansion of content, features, and services offered on our platform. We believe that continued investment in our platform is important for future growth and for maintaining and attracting educator partners and learners.
We believe that our existing cash, cash equivalents, and marketable securities and our expected cash flows from operations will be sufficient to meet our cash needs for at least the next 12 months.
We believe that our existing cash and cash equivalents, along with our expected cash flows from operations, will be sufficient to meet our cash needs for at least the next 12 months.
Through both our on-platform and off-platform marketing efforts, we engage our free learners by highlighting key features that encourage conversion to our paid offerings, including paid subscriptions. These efforts include campaigns targeting existing learners, personalized recommendations, and performance marketing on the internet. Ability to expand our international footprint.
We engage our free learners through both our on-platform and off-platform marketing efforts, highlighting premium features that encourage conversion to our paid offerings, such as subscriptions. These efforts include campaigns targeting existing learners, personalized recommendations, and performance marketing on the internet. Ability to expand our international footprint.
We see a significant opportunity to expand our offerings into other regions, particularly in 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 as part of our strategy to grow our customer and learner base.
We see a significant opportunity to expand our offerings into regions with large, underserved adult learning populations. As part of our growth strategy, we have invested, and plan to continue investing in marketing efforts to support our international expansion and grow our customer and learner base.
We believe that the number of registered learners is an important factor in the growth of our business and future revenue trends.
We believe that the number of registered learners is an important indicator of the growth of our business and future revenue trends.
Our purchase obligations as of December 31, 2023 were approximately $23.1 million, which primarily consisted of our commitments to purchase certain services. As described in Note 9, “Commitments and Contingencies”, to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, we have a current obligation of $9.9 million and a long-term obligation of $13.2 million.
Our purchase obligations as of December 31, 2024 were approximately $13.3 million, which primarily consisted of our commitments to purchase certain services. As described in Note 9, “Commitments and Contingencies”, to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K, we had a current obligation of $10.4 million and a long-term obligation of $2.9 million.
Cost of Revenue Cost of revenue consists of content costs in the form of fees paid to educator partners and expenses associated with the operation and maintenance of our platform.
Cost of Revenue Cost of revenue consists of content costs, which are fees paid to educator partners, and expenses associated with the operation and maintenance of our platform.
Investing Activities For the year ended December 31, 2023, net cash provided by investing activities was $384.8 million primarily resulting from proceeds from maturities of marketable securities, partially offset by purchases of marketable securities, capitalized internal-use software costs, purchases of property, equipment and software, and purchases of content assets.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2024 was $29.9 million, primarily the result of proceeds from the maturities of marketable securities, partially offset by purchases of content assets, purchases of capitalized internal-use software costs, and purchases of property, equipment, and software. 72 Table of Contents Net cash provided by investing activities for the year ended December 31, 2023 was $384.8 million, primarily the result of proceeds from maturities of marketable securities, partially offset by purchases of marketable securities, capitalized internal-use software costs, purchases of property, equipment, and software, and purchases of content assets.
These key business metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with GAAP, and may differ from similarly titled metrics or measures presented by other companies.
These key business metrics and non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”), and may differ from similarly titled metrics or measures presented by other companies.
To be the platform of choice for educator partners, we continue to invest in increasing the size and engagement of our learner base, developing a suite of academic integrity features (e.g., identity verification and anti-plagiarism detection), improving recommendation and personalization features, developing marketing capabilities that drive higher conversion into paid offerings, and improving the analytics tools available for learners, educators, organizations, and institutions.
To be the platform of choice for educator partners, we continue to invest in increasing the size and engagement of our learner base, developing AI-powered product innovations (e.g., Course Builder and Coach), providing a suite of academic integrity features (e.g., identity verification and anti-plagiarism detection), improving recommendation and personalization features, engaging in marketing efforts that drive higher conversion into paid offerings, and enhancing the analytics tools available for learners, educators, organizations, and institutions.
As of December 31, 2023, approximately 142 million learners are registered on our platform to engage with a wide range of offerings from industry microcredentials, including entry-level Professional Certificates, to bachelor’s and master’s degree programs. Coursera serves learners where and how they want to learn—in their homes, through their employers, through their colleges and universities, and through government-sponsored programs.
As of December 31, 2024, we had approximately 168 million registered learners on our platform. Our learners engage with a wide range of offerings from industry microcredentials, including entry-level Professional Certificates, to bachelor’s and master’s degree programs. Coursera serves learners where and how they want to learn—in their homes, through their employers, through their academic institutions, and through government-sponsored programs.
December 31, 2023 2022 Paid Enterprise Customers 1,369 1,149 YoY growth 19 % Net Retention Rate for Paid Enterprise Customers We disclose Net Retention Rate for Paid Enterprise Customers as a supplemental measure of our Enterprise revenue growth.
December 31, 2024 2023 Paid Enterprise Customers 1,612 1,369 YoY growth 18 % Net Retention Rate for Paid Enterprise Customers We disclose Net Retention Rate for Paid Enterprise Customers as a supplemental measure of our Enterprise revenue growth.
Our sales and marketing expenses primarily consist of personnel and personnel-related costs, including stock-based compensation expense, as well as costs related to acquiring learners, customers, and educator partners, support efforts, and marketing. Sales and marketing expenses also include hosting and bandwidth costs. We expect sales and marketing expenses to increase in absolute dollars as our business grows.
Our sales and marketing expenses primarily consist of personnel and personnel-related costs, including stock-based compensation expense, as well as costs related to acquiring learners, customers, and educator partners, support efforts, and marketing. Sales and marketing expenses also include hosting and bandwidth costs.
Year Ended December 31, 2023 2022 Net Retention Rate for Paid Enterprise Customers 98 % 108 % YoY change (9) % 77 Table of Contents Segment Revenue We generate revenue from our three reportable segments: Consumer, Enterprise, and Degrees.
Year Ended December 31, 2024 2023 Net Retention Rate for Paid Enterprise Customers 87 % 98 % YoY change (11) % 74 Table of Contents Segment Revenue We generate revenue from our three reportable segments: Consumer, Enterprise, and Degrees.
Our operating lease obligations as of December 31, 2023 were approximately $6.8 million, which consist of facility lease payments remaining on those agreements through their staggered expiration concluding in 2025. We have office facility operating leases in the U.S., Canada, the United Kingdom, India, Bulgaria, the United Arab Emirates, and the Kingdom of Saudi Arabia.
Our operating lease obligations as of December 31, 2024 were approximately $4.7 million, which consisted of facility lease payments remaining on those agreements through their staggered expiration concluding in 2030. We have office facility operating leases in the U.S., Canada, the United Kingdom, India, the United Arab Emirates, and the Kingdom of Saudi Arabia.
The increase was primarily driven by a 20% increase in the average total number of registered learners resulting in more paid learners, a 19% increase in the avera ge total number of Paid Enterprise Customers, and a 22% increase in the number of Degrees students.
Revenue growth was primarily driven by a 19% increase in the average total number of registered learners, resulting in more paid learners, an 18% increase in the average total number of Paid Enterprise Customers, and a 22% increase in the number of Degrees students.
Personnel costs are the most significant component of our operating expenses and consist of salaries, stock-based compensation expense, payroll taxes, commissions, bonus, and benefits. Our operating expenses also include marketing and advertising expenses, consulting and services expenses, office expenses, depreciation and amortization, and facilities costs. 68 Table of Contents Research and development.
Personnel costs, which include salaries, stock-based compensation expense, payroll taxes, commissions, bonuses, and benefits, make up the most significant component of our operating expenses. Our operating expenses also include marketing and advertising expenses, consulting and services expenses, office expenses, depreciation and amortization, and facilities costs. Research and development.
Content costs for the Consumer segment were $172.2 million and $81.3 million for the years ended December 31, 2023 and 2022, with content costs as a percentage of revenue of 47% and 27% for the same periods.
Content costs for the Consumer segment were $183.8 million and $172.2 million for the years ended December 31, 2024 and 2023, with content costs as a percentage of revenue of 46% and 47% for the same periods.
Cash Flows The following table summarizes our cash flows: Year Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ 29,639 $ (38,051) $ 1,746 Net cash provided by (used in) investing activities 384,798 (234,024) (51,609) Net cash (used in) provided by financing activities (79,229) 12,234 550,156 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 335,208 $ (259,841) $ 500,293 Operating Activities Cash provided by (used in) operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation expense and depreciation and amortization, as well as the effect of changes in operating assets and liabilities during each period.
Cash Flows The following table summarizes our cash flows: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ 95,361 $ 29,639 $ (38,051) Net cash provided by (used in) investing activities 29,901 384,798 (234,024) Net cash (used in) provided by financing activities (54,944) (79,229) 12,234 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 70,318 $ 335,208 $ (259,841) Operating Activities Cash provided by (used in) operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation expense, depreciation and amortization, accretion of marketable securities, and impairment losses, as well as the effect of changes in operating assets and liabilities during each period.
We expect general and administrative expenses to increase in absolute dollars as our business grows. In addition, we expect general and administrative expenses as a percentage of revenue to vary from period to period but generally decrease over the long term. Restructuring related charges .
In addition, we expect general and administrative expenses as a percentage of revenue to vary from period to period but generally decrease over the long term. 66 Table of Contents Restructuring related charges .
For purposes of determining our Degrees student count, we include all the students that are matriculated in a degree program and who are enrolled in one or more courses in such a degree program during the period. If a degree term spans across multiple quarters, the student is counted as active in all quarters of the degree term.
If a degree term spans across multiple quarters, the student is counted as active in all quarters of the degree term. For purposes of determining our Degrees student count, we do not include students who are matriculated in the degree but are not enrolled in a course in that period.
The $4.1 million increase in revenue was primarily attributable to $6.6 million in revenue from an increase in the number of Degrees students, partially offset by a decrease of $2.5 million due to lower revenue per student resulting from student growth in lower priced regions.
This increase was primarily attributable to $11.8 million in revenue from an increase in the number of Degrees students, partially offset by a decrease of $5.1 million due to lower revenue per student resulting from fewer new Degrees students in our higher-priced regions.
Year Ended December 31, 2023 2022 2021 (in thousands, except percentages) Consumer revenue $ 365,221 $ 295,583 $ 246,187 YoY growth 24 % 20 % Enterprise revenue $ 219,542 $ 181,284 $ 120,429 YoY growth 21 % 51 % Degrees revenue $ 51,001 $ 46,889 $ 48,671 YoY growth 9 % (4) % Total revenue $ 635,764 $ 523,756 $ 415,287 YoY growth 21 % 26 % Segment Gross Profit We monitor segment gross profit as a key metric to help us evaluate the financial performance of our individual segments.
Year Ended December 31, 2024 2023 2022 (in thousands, except percentages) Consumer revenue $ 398,094 $ 365,221 $ 295,583 YoY growth 9 % 24 % Enterprise revenue $ 238,865 $ 219,542 $ 181,284 YoY growth 9 % 21 % Degrees revenue $ 57,715 $ 51,001 $ 46,889 YoY growth 13 % 9 % Total revenue $ 694,674 $ 635,764 $ 523,756 YoY growth 9 % 21 % Segment Gross Profit We monitor segment gross profit as a key metric to help us evaluate the financial performance of our individual segments.
It also includes amortization of premiums and accretion of discounts related to our marketable securities. Interest income varies each reporting period based on our average balance of cash, cash equivalents, and marketable securities during the period as well as market interest rates. Other Expense, Net Other expense, net primarily consists of foreign exchange gains (losses).
The amount varies each reporting period based on our average balance of cash, cash equivalents, and marketable securities during the period, as well as market interest rates. Other Expense, Net Other expense, net primarily consists of foreign exchange gains (losses) and impairment charges related to equity investments.
The following table provides a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA: Year Ended December 31, 2023 2022 2021 (in thousands, except percentages) Net loss $ (116,554) $ (175,357) $ (145,215) Depreciation and amortization 22,270 18,503 14,757 Interest income, net (34,432) (9,144) (320) Income tax expense 5,371 4,720 2,126 Other expense, net 19 2,401 346 Stock-based compensation expense 115,175 110,663 91,183 Payroll tax expense related to stock-based compensation 3,957 1,120 1,643 Restructuring related charges (5,806) 10,149 — Adjusted EBITDA $ (10,000) $ (36,945) $ (35,480) Net loss margin (18) % (33) % (35) % Adjusted EBITDA Margin (2) % (7) % (9) % Free Cash Flow Free Cash Flow is calculated as net cash provided by (used in) operating activities, less cash used for purchases of property, equipment, and software, capitalized internal-use software costs, and purchases of content assets as we consider these capital expenditures necessary to support our ongoing operations.
The following table provides a reconciliation of net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA: Year Ended December 31, 2024 2023 2022 (in thousands, except percentages) Net loss $ (79,530) $ (116,554) $ (175,357) Depreciation and amortization 25,082 22,270 18,503 Interest income, net (36,726) (34,432) (9,144) Income tax expense 1,029 5,371 4,720 Other expense, net 2,008 19 2,401 Stock-based compensation expense 108,084 115,175 110,663 Payroll tax expense related to stock-based compensation 2,991 3,957 1,120 M&A related transaction costs 3,369 — — Significant and non-recurring legal matters 6,258 — — Restructuring related charges 8,942 (5,806) 10,149 Adjusted EBITDA $ 41,507 $ (10,000) $ (36,945) Net loss margin (11) % (18) % (33) % Adjusted EBITDA Margin 6 % (2) % (7) % Free Cash Flow We define Free Cash Flow as net cash provided by (used in) operating activities, less purchases of property, equipment, and software, capitalized internal-use software costs, and purchases of content assets as we consider these capital expenditures necessary to support our ongoing operations.
New learners typically begin to engage with our free courses on our platform, which serves as a funnel to grow our total learner base and drive referrals to our other offerings, including our paid offerings.
Ability to convert free learners to paid learners. New learners typically start by engaging with our free courses on our platform, serving as a funnel to grow our total learner base and drive referrals to our other offerings, including our paid offerings.
We have a full valuation allowance against our U.S. federal and state deferred tax assets as the realization of the full amount of these deferred tax assets is uncertain, including net operating loss carryforwards and tax credits primarily related to research and development.
Income Tax Expense Income tax expense primarily consists of state and foreign income taxes for jurisdictions in which we conduct business. We maintain a full valuation allowance against our U.S. federal and state deferred tax assets as the realization of these deferred tax assets, including net operating loss carryforwards and tax credits primarily related to research and development, is uncertain.
We believe that learners and enterprises are attracted to Coursera largely because of the high quality and wide selection of content provided by our educator partners. Continuing to source in-demand content and credentials from our educator partners—from courses to degrees—is important to attract learners and increase our revenue over time.
Ability to source in-demand content from our educator partners. We believe that learners and enterprises are attracted to Coursera largely because of the high quality and wide selection of content provided by our educator partners.
Research and development expenses for the year ended December 31, 2023 were $160.1 million, compared to $165.1 million for the year ended December 31, 2022.
Research and development expenses for the year ended December 31, 2024 were $132.0 million, compared to $160.1 million for the prior year.
As a result, we expect research and development expenses to increase in absolute dollars. In addition, we expect research and development expenses as a percentage of revenue to vary from period to period but generally decrease over the long term. Sales and marketing .
We expect sales and marketing expenses as a percentage of revenue to vary from period to period but generally decrease over the long term. General and administrative .
Year Ended December 31, 2023 2022 2021 (in millions, except percentages) New Registered Learners 23.7 21.5 20.8 Total Registered Learners 141.9 118.1 96.9 Total Registered Learners year-over-year ("YoY") growth 20 % 22 % Number of Degrees Students We count the total number of Degrees students for each period.
Year Ended December 31, 2024 2023 2022 (in millions) New Registered Learners 26.3 23.7 21.5 December 31, 2024 2023 (in millions, except percentages) Total Registered Learners 168.2 141.9 Total Registered Learners year-over-year (“YoY”) growth 19 % Number of Degrees Students We count the total number of Degrees students for each period.
For the year ended December 31, 2023, approximately 94% of our total Enterprise segment revenue was generated from our Paid Enterprise Customers. We believe that the number of Paid Enterprise Customers and our ability to increase this number is an important indicator of the growth of our Enterprise business and future Enterprise segment revenue trends.
We believe that the number of Paid Enterprise Customers and our ability to increase this number is an important indicator of the growth of our Enterprise business and future Enterprise segment revenue trends.
For purposes of determining our Paid Enterprise Customer count, we exclude our Enterprise customers who do not purchase Coursera via our direct sales force, which include organizations engaging on our platform through our Coursera for Teams offering or through our channel partners.
For purposes of determining our Paid Enterprise Customer count, we exclude our Enterprise customers who do not purchase Coursera via our direct sales force, including organizations engaging on our platform through our Coursera for Teams offering or through our channel partners. For the year ended December 31, 2024, approximately 94% of Enterprise revenue was generated from our Paid Enterprise Customers.
You should review the disclosure under the heading "Risk Factors" under Part I, Item 1A in this Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.
You should review the disclosure under the heading "Risk Factors" under Part I, Item 1A in this Form 10-K for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements. 62 Table of Contents Organization of Information Management’s discussion and analysis provides a narrative on our financial performance and condition that should be read in conjunction with the accompanying Consolidated Financial Statements.
Financing Activities For the year ended December 31, 2023, net cash used in financing activities was $79.2 million, primarily resulting from payments for repurchases of common stock and payments for tax withholding on vesting of RSUs, partially offset by proceeds from exercise of stock options and proceeds from employee stock purchase plan. 75 Table of Contents For the year ended December 31, 2022, net cash provided by financing activities was $12.2 million, primarily resulting from proceeds from exercise of stock options and proceeds from employee stock purchase plan, offset by payments for tax withholding on vesting of RSUs and payment of deferred offering costs.
Financing Activities Net cash used in financing activities for the years ended December 31, 2024 and 2023 was $54.9 million and $79.2 million, primarily the result of payments for repurchases of common stock and payments for tax withholdings on vesting of RSUs, partially offset by proceeds from exercise of stock options and proceeds from the employee stock purchase plan.
Refer to Note 15, “Restructuring Related Charges”, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for further information.
Refer to Note 11, “Employee Benefit Plans,” in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K for additional information.
Enterprise segment gross margin decreased to 68% from 70% when comparing those same periods due to an increase in content costs from the extension of the multi-year agreement with our largest educator partner described above. 78 Table of Contents Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we have included non-GAAP gross profit, non-GAAP net income (loss), non-GAAP net income (loss) per share, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow, which are non-GAAP financial measures, because they are key measures used by our management to help us analyze our financial results, establish budgets and operational goals for managing our business, evaluate our performance, and make strategic decisions.
Non-GAAP Financial Measures In addition to our results determined in accordance with GAAP, we have included non-GAAP gross profit, non-GAAP net income (loss), non-GAAP net income (loss) per share, Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow, which are non-GAAP financial measures, because they are key measures used by our management to help us analyze our financial results, establish budgets and operational goals for managing our business, evaluate our performance, and make strategic decisions.
Cash provided by operating activities increased by $67.7 million during the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the timing of (i) content fees payable to our largest educator partner resulting from the extension of our multi-year agreement with them and (ii) customer invoicing and collections.
Cash provided by operating activities increased by $65.7 million during the year ended December 31, 2024, compared to the prior year, primarily the resulting of (i) improved operating leverage, (ii) an improvement in the timing of accounts receivables collections, and (iii) the timing of vendor prepayments, partially offset by (iv) the timing of content fees payable to our largest educator partner resulting from the prior year extension of our multi-year agreement with them.
Year Ended December 31, 2023 2022 2021 (in thousands, except percentages) Consumer gross profit $ 193,001 $ 214,305 $ 161,510 Consumer segment gross margin % 53 % 73 % Enterprise gross profit $ 150,384 $ 126,573 $ 81,253 Enterprise segment gross margin % 68 % 70 % Degrees gross profit $ 51,001 $ 46,889 $ 48,671 Degrees segment gross margin % 100 % 100 % Consumer segment gross margin decreased to 53% in the year ended December 31, 2023 from 73% in the year ended December 31, 2022.
Year Ended December 31, 2024 2023 2022 (in thousands, except percentages) Consumer gross profit $ 214,335 $ 193,001 $ 214,305 Consumer segment gross margin % 54 % 53 % Enterprise gross profit $ 163,877 $ 150,384 $ 126,573 Enterprise segment gross margin % 69 % 68 % Degrees gross profit $ 57,715 $ 51,001 $ 46,889 Degrees segment gross margin % 100 % 100 % Consumer segment gross margin increased to 54% in the year ended December 31, 2024, up from 53% in the prior year.
The following tables provide a reconciliation of GAAP gross profit and GAAP net loss, the most directly comparable GAAP financial measure, to non-GAAP gross profit and non-GAAP net income (loss): Year Ended December 31, 2023 2022 2021 (in thousands) Gross profit $ 329,771 $ 331,479 $ 249,469 Stock-based compensation expense 2,593 3,089 2,092 Amortization of stock-based compensation capitalized as internal-use software costs 5,039 3,134 1,113 Payroll tax expense related to stock-based compensation 115 28 64 Non-GAAP gross profit $ 337,518 $ 337,730 $ 252,738 Year Ended December 31, 2023 2022 2021 (in thousands) Net loss $ (116,554) $ (175,357) $ (145,215) Stock-based compensation expense 115,175 110,663 91,183 Amortization of stock-based compensation capitalized as internal-use software costs 5,039 3,134 1,113 Payroll tax expense related to stock-based compensation 3,957 1,120 1,643 Restructuring related charges (5,806) 10,149 — Non-GAAP net income (loss) $ 1,811 $ (50,291) $ (51,276) Weighted-average shares used in computing net loss per share—basic 150,957,814 145,263,726 113,587,523 Effect of dilutive securities (1) 15,626,795 — — Weighted-average shares used in computing non-GAAP net income (loss) per share—diluted 166,584,609 145,263,726 113,587,523 Net loss per share—basic and diluted $ (0.77) $ (1.21) $ (1.28) Non-GAAP net income (loss) per share—diluted $ 0.01 $ (0.35) $ (0.45) (1) For periods presented with a non-GAAP net loss, we have excluded the effect of potentially dilutive securities as their inclusion would be anti-dilutive. 79 Table of Contents Adjusted EBITDA and Adjusted EBITDA Margin Adjusted EBITDA and Adjusted EBITDA Margin are key measures used by our management to help us analyze our financial results, establish budgets and operational goals for managing our business, evaluate our performance, and make strategic decisions.
The following tables provide a reconciliation of GAAP gross profit and GAAP net loss, the most directly comparable GAAP financial measure, to non-GAAP gross profit and non-GAAP net income (loss): Year Ended December 31, 2024 2023 2022 (in thousands) Gross profit $ 371,413 $ 329,771 $ 331,479 Stock-based compensation expense 2,657 2,593 3,089 Amortization of stock-based compensation capitalized as internal-use software costs 5,473 5,039 3,134 Payroll tax expense related to stock-based compensation 89 115 28 Non-GAAP gross profit $ 379,632 $ 337,518 $ 337,730 Year Ended December 31, 2024 2023 2022 (in thousands, except share and per share data) Net loss $ (79,530) $ (116,554) $ (175,357) Stock-based compensation expense 108,084 115,175 110,663 Amortization of stock-based compensation capitalized as internal-use software costs 5,473 5,039 3,134 Payroll tax expense related to stock-based compensation 2,991 3,957 1,120 M&A related transaction costs 3,369 — — Significant and non-recurring legal matters 6,258 — — Restructuring related charges 8,942 (5,806) 10,149 Non-GAAP net income (loss) $ 55,587 $ 1,811 $ (50,291) Weighted-average shares used in computing net loss per share—basic 157,370,977 150,957,814 145,263,726 Effect of dilutive securities (1) 7,050,544 15,626,795 — Weighted-average shares used in computing non-GAAP net income (loss) per share—diluted 164,421,521 166,584,609 145,263,726 Net loss per share—basic and diluted $ (0.51) $ (0.77) $ (1.21) Non-GAAP net income (loss) per share—diluted $ 0.34 $ 0.01 $ (0.35) (1) For periods presented with a non-GAAP net loss, we have excluded the effect of potentially dilutive securities as their inclusion would be anti-dilutive.
We provide a broad range of learning content and credentials, including Clips, Guided Projects, Specializations, courses, and certificates that can build towards a broader course of study such as a degree or postgraduate diploma.
We provide a broad range of learning content and credentials, including Clips, Guided Projects, Specializations, courses, and certificates that can build towards a broader course of study such as a degree or postgraduate diploma. Our go-to-market strategy centers on efficiently attracting learners to our platform through world-class branded content and credentials, while promoting personalized pathways to jobs and degree programs.
Interest income, net was higher during the year ended December 31, 2023 compared to the year ended December 31, 2022 due to a rise in interest rates and our average rate of return on investments in U.S. Treasury securities. The fluctuations in other expense, net primarily reflect changes in unrealized foreign exchange losses and gains for the periods presented.
Interest income, net was higher during the year ended December 31, 2024, compared to the prior year, due to higher interest rates and our average rate of return on investments in U.S. Treasury securities.
For services that have been delivered under these arrangements as of December 31, 2023, we record related liabilities within other accounts payable and accrued expenses in the Consolidated Balance Sheets, which are excluded from the purchase obligation amount.
For services that have been delivered under these arrangements as of December 31, 2024, we recorded related liabilities within other accounts payable and accrued expenses in the Consolidated Balance Sheets, which are excluded from the purchase obligation amount. 71 Table of Contents Share Repurchase Program On April 26, 2023, our Board approved a share repurchase program with authorization to purchase up to $95 million of our common stock, excluding commissions and fees.
We believe that our reach, scale, and reputation provide an attractive value proposition for leading organizations and institutions to partner with Coursera to develop and distribute content and credentials.
Continuing to source in-demand content and credentials from our educator partners is important to attract learners and grow our revenue over time. 64 Table of Contents We believe that our reach, scale, and reputation provide an attractive value proposition for leading organizations and institutions to partner with Coursera to develop and distribute content and credentials.
Income Tax Expense Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Income tax expense $ 5,371 $ 4,720 $ 651 14 % For the year ended December 31, 2023, we recognized income tax expense of $5.4 million, compared to $4.7 million for the year ended December 31, 2022.
Income Tax Expense Year Ended December 31, Change 2024 2023 $ % (in thousands, except percentages) Income tax expense $ 1,029 $ 5,371 $ (4,342) (81) % Income tax expense for the year ended December 31, 2024 was $1.0 million, compared to $5.4 million for the prior year.
Cost of Revenue, Gross Profit, and Gross Margin Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Cost of revenue $ 305,993 $ 192,277 $ 113,716 59 % Gross profit $ 329,771 $ 331,479 $ (1,708) (1) % Gross margin 52 % 63 % Cost of revenue for the year ended December 31, 2023 was $306.0 million, compared to $192.3 million for the year ended December 31, 2022.
Cost of Revenue, Gross Profit, and Gross Margin Year Ended December 31, Change 2024 2023 $ % (in thousands, except percentages) Cost of revenue $ 323,261 $ 305,993 $ 17,268 6 % Gross profit $ 371,413 $ 329,771 $ 41,642 13 % Gross margin 53 % 52 % Cost of revenue for the year ended December 31, 2024 was $323.3 million, compared to $306.0 million for the prior year.
Since our inception, we have financed our operations primarily through proceeds from issuance of redeemable convertible preferred stock, our IPO, and cash generated from business operations. Our principal uses of cash in recent periods include the funding of our business operations, investments in our internal-use software, purchases of content assets, and repurchases of our common stock, as discussed below.
Since our inception, we have financed our operations primarily through proceeds from the issuance of redeemable convertible preferred stock, our IPO, and cash generated from business operations.
Content costs for the Enterprise segment were $69.2 million and $54.7 million for the years ended December 31, 2023 and 2022, with content costs as a percentage of revenue of 32% and 30% for the same periods. Content costs as a percentage of revenue were higher mainly due to the extension of a multi-year agreement with our largest educator partner.
Content costs for the Enterprise segment were $75.0 million and $69.2 million for the years ended December 31, 2024 and 2023, with content costs as a percentage of revenue of 31% and 32% for the same periods. Content costs as a percentage of revenue for both segments decreased due to a shift to lower-cost content.
We consider Free Cash Flow to be a liquidity measure that provides useful information to management and investors in understanding and evaluating our liquidity and future ability to generate cash that can be used for strategic opportunities, including investing in our business and strengthening our balance sheet, but it is not intended to represent the residual cash flow available for discretionary expenditures. 80 Table of Contents The following table provides a reconciliation of net cash provided by (used in) operating activities, the most directly comparable GAAP financial measure, to Free Cash Flow: Year Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ 29,639 $ (38,051) $ 1,746 Less: purchases of property, equipment, and software (1,147) (1,578) (1,554) Less: capitalized internal-use software costs (15,254) (12,299) (12,090) Previously reported Free Cash Flow $ (51,928) $ (11,898) Less: purchases of content assets (5,344) (1,377) (1,188) Free Cash Flow $ 7,894 $ (53,305) $ (13,086) Critical Accounting Estimates Our Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the U.S.
The following table provides a reconciliation of net cash provided by (used in) operating activities, the most directly comparable GAAP financial measure, to Free Cash Flow: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ 95,361 $ 29,639 $ (38,051) Less: purchases of property, equipment, and software (1,585) (1,147) (1,578) Less: capitalized internal-use software costs (17,219) (15,254) (12,299) Less: purchases of content assets (17,295) (5,344) (1,377) Free Cash Flow $ 59,262 $ 7,894 $ (53,305) 77 Table of Contents Critical Accounting Estimates Our Consolidated Financial Statements have been prepared in accordance with GAAP.
Ability to retain and expand our Enterprise customer relationships. Our efforts to grow our Enterprise segment are focused primarily on business, academic, government, and other institutional customers. We believe a significant opportunity exists to expand our customers’ use of our platform by identifying new use cases that increase the size of deployments.
Ability to retain and expand our Enterprise customer relationships. Our efforts to grow our Enterprise segment are focused primarily on business, academic, government, and other institutional customers.
Restructuring related charges for the year ended December 31, 2023 were $(5.8) million primarily relating to the reversal of stock-based compensation expense for the forfeitures of RSUs and stock options resulting from our global workforce reduction initiated in November 2022, compared to $10.1 million for the year ended December 31, 2022 mainly consisting of personnel expenses, such as employee severance and benefits costs, related to this global workforce reduction.
Restructuring related charges for the year ended December 31, 2024 were $8.9 million, compared to $(5.8) million for the prior year. For 2024, the expenses primarily consist of personnel expenses, such as employee severance and benefits costs, related to our expense reduction initiatives initiated in January and October 2024.
The Degrees student count is affected by the seasonality of the school class cycles, combined with the underlying growth interacting with those trends.
We believe that the number of Degrees students is an important indicator of the growth of our Degrees business and future Degrees segment revenue trends. 73 Table of Contents The Degrees student count is affected by the seasonality of the school class cycles, combined with the underlying growth interacting with those trends.
Instead, in the Degrees segment, we earn a Degrees service fee based on a percentage of the total online student tuition collected by the university partner.
Instead, in the Degrees segment, we earn a Degrees service fee based on a percentage of the total online student tuition collected by the university partner. Content costs, which are the largest individual cost of our revenue, contractually vary as a percentage of revenue between our Consumer and Enterprise offerings, and are not applicable to our Degrees offering.
We typically incur content costs in the form of a fee paid to our educator partners, determined as a percentage of total revenue generated from their content. We do not incur any content costs for our Degrees offerings, since our university partners compensate us with a percentage of learner tuition. Ability to convert free learners to paid learners.
We typically incur content costs for our Consumer and Enterprise offerings in the form of a fee paid to our educator partners, determined as a percentage of total revenue generated from their content. Starting in 2025, we will compensate our educator partners based on the level of learner engagement their content generates, rather than learner completion rates.
Our restructuring related charges primarily consist of personnel expenses, such as employee severance and benefits costs, and stock-based compensation expense related to the reduction of our global workforce initiated in November 2022. Interest Income, Net Interest income, net primarily consists of interest income earned on our cash, cash equivalents, and marketable securities.
Our restructuring related charges consist of costs associated with our restructuring and expense reduction initiatives and are primarily personnel expenses, such as employee severance and benefits costs, net of the reversal of stock-based compensation expense from forfeitures .
Other Income, Net Year Ended December 31, Change 2023 2022 $ % (in thousands, except percentages) Interest income, net $ 34,432 $ 9,144 $ 25,288 277 % Other expense, net (19) (2,401) 2,382 (99) % Total other income, net $ 34,413 $ 6,743 $ 27,670 nm Total other income, net for the year ended December 31, 2023 primarily reflected interest income earned on cash, cash equivalents, and marketable securities.
Other Income, Net Year Ended December 31, Change 2024 2023 $ % (in thousands, except percentages) Interest income, net $ 36,726 $ 34,432 $ 2,294 7 % Other expense, net (2,008) (19) (1,989) nm Total other income, net $ 34,718 $ 34,413 $ 305 1 % 70 Table of Contents Total other income, net for the year ended December 31, 2024 was primarily comprised of interest income earned on cash and cash equivalents.
For quarter-over-quarter fluctuations, the number of Degrees students fluctuates in part because the academic terms for each degree program often begins and/or ends within different calendar quarters, and the frequency with which each degree program is offered within a given year varies. 2023 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Number of Degrees Students 18,095 19,068 20,432 22,025 16,481 17,460 17,723 18,103 YoY growth 10 % 9 % 15 % 22 % 76 Table of Contents Paid Enterprise Customers We count the total number of Paid Enterprise Customers at the end of each period.
For quarter-over-quarter fluctuations, the number of Degrees students fluctuates in part because the academic terms for each degree program often begin and/or end within different calendar quarters, and the frequency with which each degree program is offered within a given year varies.
Given that content costs are the largest individual cost of our revenue, and that these costs contractually vary as a percentage of revenue between our Consumer and Enterprise offerings while there are no content costs attributable to our Degrees offering, mix shifts between our three segments is expected to be a significant driver of our overall gross margin, financial performance, and profitability.
Therefore, shifts in the mix between our three segments are expected to be a significant driver of our overall gross margin, financial performance, and profitability.
The remaining Consumer revenue in the year ended December 31, 2023 of $253.0 million is attributable to learners that were registered on our platform as of December 31, 2022, thus retaining 86% of the revenue from those registered learners.
New learners who registered after December 31, 2023, contributed $107.5 million to Consumer revenue of $398.1 million for the year ended December 31, 2024. The remaining $290.6 million of Consumer revenue was attributable to learners who were registered on our platform as of December 31, 2023, representing an 80% retention of revenue from those registered learners.
Acquisitions of new customers drove $34.5 million of the increase, and the remaining increase of $3.8 million was attributable to growth from existing customers. 71 Table of Contents For the year ended December 31, 2023, total Degrees revenue increased by $4.1 million, or 9%, compared to the year ended December 31, 2022.
Enterprise revenue for the year ended December 31, 2024 increased by $19.3 million, or 9%, from the prior year, attributable to an increase in new customers. Acquisitions of new customers drove an increase of $27.1 million, offset by a $7.8 million decrease due to contraction of existing customer spend.

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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 changeOur primary objective is to minimize the potential risk of principal loss. Based on our investment positions as of December 31, 2023 and 2022, a hypothetical 100 basis point increase in interest rates across all maturities would have resulted in a $0.5 million and $2.4 million incremental decline in the fair value of the portfolio.
Biggest changeTreasury securities and U.S. government-backed money market funds, with maturities of one year or less. 78 Table of Contents Based on our investment positions as of December 31, 2024 and 2023, a hypothetical 100 basis point increase or decrease in interest rates across all maturities would have resulted in a $0.6 million and $0.5 million incremental decline or improvement in the fair value of our portfolio.
However, such losses would only be realized if we sold the investments prior to their maturities.
However, such hypothetical losses would only be realized if we sold the investments prior to their maturities.
We also maintain foreign-currency denominated cash and cash equivalents in our foreign entities to support their ongoing operations. Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our Consolidated Statements of Operations.
We also maintain foreign-currency denominated cash and cash equivalents in our foreign subsidiaries to support their ongoing operations. Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our Consolidated Statements of Operations.
Based on the balance of our cash, cash equivalents, and marketable securities as of December 31, 2023 and 2022, a hypothetical 100 basis point increase or decrease in interest rates would have resulted in a $7.2 million and $7.8 million increase or decrease in our interest income on an annualized basis.
Based on the balance of our cash, cash equivalents, and marketable securities as of December 31, 2024 and 2023, a hypothetical 100 basis point increase or decrease in interest rates would have resulted in a $7.3 million and $7.2 million increase or decrease in our interest income on an annualized basis.
Foreign Currency Risk Our reporting currency and the functional currency of our wholly owned foreign subsidiaries is the U.S. dollar. As the majority of our sales are denominated in U.S. dollars, our revenue is not typically exposed to significant foreign currency risk.
Foreign Currency Risk Our reporting currency and the functional currency of our wholly owned foreign subsidiaries is the U.S. dollar. As the majority of our sales are denominated in U.S. dollars, paid in advance, or billed in advance, our revenue is not typically exposed to significant foreign currency risk.
Interest Rate Risk Our exposure to interest rate changes relates primarily to our investment portfolio. Although we are exposed to global interest rate fluctuations, U.S. interest rate fluctuations tend to affect our interest income the most, impacting the interest earned on our cash, cash equivalents, and marketable securities as well as the fair value of those securities.
Interest Rate Risk Our exposure to interest rate changes primarily relates to our investment portfolio. Although we are exposed to global interest rate fluctuations, U.S. interest rate fluctuations tend to have the most significant impact on our interest income, affecting the interest earned on our cash, cash equivalents, and marketable securities as well as the fair value of those securities.
Conversely, our operating expenses are typically denominated in the local currencies of the countries in which our operations are located. These can be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the British pound sterling, Canadian dollar, and Indian rupee.
Conversely, our operating expenses are typically denominated in the local currencies of the countries where our operations are located, exposing us to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Canadian dollar, British pound sterling, and Indian rupee.
Our investment policy and strategy are focused on preserving capital and supporting our liquidity requirements. We use a combination of internal and external management to execute our investment strategy and achieve our investment objectives. We typically invest in highly-rated securities, such as U.S. Treasury securities, with original maturities between three months and one year.
Our investment policy and strategy are focused on preserving capital and supporting our liquidity requirements. We use a combination of internal and external management to execute our investment strategy and achieve our investment objectives, typically investing in highly-rated securities, such as U.S.
A 10% increase or decrease in current exchange rates would have resulted in an impact of $3.4 million and $5.6 million on our Consolidated Financial Statements for the years ended December 31, 2023 and 2022. 82 Table of Contents
A 10% increase or decrease in current exchange rates would have resulted in an impact of $1.2 million and $3.4 million on our loss before income taxes in our Consolidated Financial Statements for the years ended December 31, 2024 and 2023. 79 Table of Contents

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