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What changed in Udemy, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Udemy, Inc.'s 2024 and 2025 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 2025 report.

+443 added−362 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-19)

Top changes in Udemy, Inc.'s 2025 10-K

443 paragraphs added · 362 removed · 308 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOnce an organization signs on, our Customer Success team partners closely with that organization to track progress toward business outcomes and determine opportunities for increasing adoption and usage, which can ultimately lead to customer expansions and upsells. 10 Table of Contents Seasonality Historically, we have received a higher volume of orders from new and existing Udemy Business customers in the fourth quarter of each year as a result of industry buying patterns.
Biggest changeOur Customer Success team engages pre-sale, ensuring that we understand the business objectives of that potential customer. Once an organization signs on, our Customer Success team partners closely with that organization to track progress toward business outcomes and determine opportunities for increasing adoption and usage, which can ultimately lead to customer expansions and upsells.
A recent study by the World Economic Forum found that approximately 80% employers plan to reskill and upskill their existing workers over the next five years to work better alongside AI, while workers can expect that approximately 40% of their existing skill sets will be transformed or become outdated over the same period.
A recent study by the World Economic Forum found that approximately 80% of employers plan to reskill and upskill their existing workers over the next five years to work better alongside AI, while workers can expect that approximately 40% of their existing skill sets will be transformed or become outdated over the same period.
Udemy’s platform is designed to support learners throughout their journey as they develop skills needed to achieve their professional goals and receive validation of skills proficiency through badges and certification. We provide personalized and guided skill-based learning experiences, including on-demand videos, hands-on practice and assessments. Learners can focus on career and occupational areas of their choice.
Comprehensive learning . Udemy’s platform is designed to support learners throughout their journey as they develop skills needed to achieve their professional goals and receive validation of skills proficiency through badges and certification. We provide personalized and guided skill-based learning experiences, including on-demand videos, hands-on practice and assessments. Learners can focus on career and occupational areas of their choice.
We curate our highest-quality content from our marketplace for Udemy’s enterprise SaaS platform, Udemy Business, which enables companies around the world to offer engaging and effective on-demand learning for all employees, immersive laboratory-style learning for tech teams and cohort-based learning focused on leadership development.
We curate our highest-quality content from our marketplace for Udemy’s enterprise SaaS platform, Udemy Business, which enables companies around the world to offer engaging and effective learning for all employees, immersive laboratory-style learning for tech teams and cohort-based learning focused on leadership development.
Udemy uses a rigorous content curation process that considers enterprise customer demand, learner feedback and ratings, topic relevance, course quality, and instructor engagement on our platform, including frequency of updates and interaction with learner questions. We regularly review courses in the Udemy Business catalog to ensure ratings consistently stay above a certain threshold and the topics are still relevant.
Udemy uses a rigorous content curation process that considers enterprise customer demand, learner feedback and ratings, topic relevance, course quality, and instructor engagement on our platform, including frequency of updates and interaction with learner questions. We regularly review courses in the Udemy Business collection to ensure ratings consistently stay above a certain threshold and the topics are still relevant.
We leverage that data to provide personalized course recommendations and learning paths. We also analyze enrollment data, market insights and feedback from learners to identify needed skills or new topics of focus within our content catalog and share this information with our instructors so they can continuously improve their course offerings in real time. Flexible technology platform.
We leverage that data to provide personalized course recommendations and learning paths. We also analyze enrollment data, market insights and feedback from learners to identify needed skills or new topics of focus within our content collection and share this information with our instructors so they can continuously improve their course offerings in real time. Flexible technology platform.
Historically, we have expanded from individual to team to multi-department and company-wide sales as Udemy Business’s value is proven and customers identify additional use cases. With under 10% of total available seats contracted in our existing Udemy Business customer base worldwide as of the end of 2024, we see a large opportunity for growth.
Historically, we have expanded from individual to team to multi-department and company-wide sales as Udemy Business’s value is proven and customers identify additional use cases. With under 10% of total available seats contracted in our existing Udemy Business customer base worldwide as of the end of 2025, we see a large opportunity for growth.
Instructors: We compete for instructors based on our ability to provide monetization opportunities and tools to enable instructors to create differentiated content to meet the needs of global learners.
Instructors: We compete for instructors based on our ability to provide monetization opportunities and tools to enable instructors to create differentiated content to meet the needs of millions of global learners.
When an instructor’s course is added to the Udemy Business catalog, instructors are required to agree, subject to limited exceptions, to exclusivity, which prevents them from offering any on-demand content, such as pre-recorded courses, on any competing platform in a way that directly competes with or impairs the sales of such content on our platform.
When an instructor’s course is added to the Udemy Business collection, instructors are required to agree, subject to limited exceptions, to exclusivity, which prevents them from offering any on-demand content, such as pre-recorded courses, on any competing platform in a way that directly competes with or impairs the sales of such content on our platform.
In some cases where we do not have localized content, we implement our high-touch partnership model to leverage a key local brand to help develop our content catalog and to establish a local language version of Udemy Business once the catalog meets our high-quality criteria.
In some cases where we do not have localized content, we implement our high-touch partnership model to leverage a key local brand to help develop our content collection and to establish a local language version of Udemy Business once the collection meets our high-quality criteria.
Udemy generates revenue through the following product offerings: • Per Course . Individual learners can purchase one of the more than 250,000 courses available on the Udemy marketplace to obtain lifetime access to that digital course content after enrollment.
Udemy generates revenue through the following product offerings: • Per Course . Individual learners can purchase one of the more than 290,000 courses available on the Udemy marketplace to obtain lifetime access to that digital course content after enrollment.
This exclusivity clause remains in effect for so long as an instructor’s content is included in the Udemy Business catalog, and we may continue to include content in the Udemy Business catalog for up to 12 months after an instructor elects to opt out.
This exclusivity clause remains in effect for so long as an instructor’s content is included in the Udemy Business collection, and we may continue to include content in the Udemy Business collection for up to 12 months after an instructor elects to opt out.
Udemy has a network of more than 80,000 global instructors. Instructors come to Udemy because of our scale and attractive revenue share model. Our massive audience provides us with a significant amount of learner data and incentive for instructors to come to our platform.
Udemy has a network of more than 90,000 global instructors. Instructors come to Udemy because of our scale and attractive revenue share model. Our massive audience provides us with a significant amount of learner data and incentive for instructors to come to our platform.
We have courses in 75 languages on our marketplace. For Udemy Business, we have courses in English and 15 other local languages and customers in more than 150 countries. Having local language experts creating locally relevant content is a key differentiator for Udemy.
We have courses in 78 languages on our marketplace. For Udemy Business, we have courses in English and 15 other local languages and customers in more than 150 countries. Having local language experts creating locally relevant content is a key differentiator for Udemy.
Global instructors learn about Udemy in a variety of ways including awareness campaigns and by coming to the platform as learners. We have 27,000 free courses available on our consumer marketplace. These free courses represent an important entry point for learners to experience our platform, driving cost-effective top of the funnel engagement for both consumer and Udemy Business leads.
Global instructors learn about Udemy in a variety of ways including awareness campaigns and by coming to the platform as learners. We have approximately 28,000 free courses available on our consumer marketplace. These free courses represent an important entry point for learners to experience our platform, driving cost-effective top of the funnel engagement for both consumer and Udemy Business leads.
Thus far, the team has built algorithmic and model-driven solutions at scale to provide the following capabilities: personalized and differentiated experiences for all learners, comprehensive instructor tools for content delivery and student engagement, and insights dashboards for enterprises to track employee progress. 9 Table of Contents Our market opportunity Before 2020, the majority of corporate training occurred offline.
Thus far, the team has built algorithmic and model-driven solutions at scale to provide the following capabilities: personalized and differentiated experiences for all learners, comprehensive instructor tools for content delivery and student engagement, and insights dashboards for enterprises to track employee progress. Our market opportunity Before 2020, the majority of corporate training occurred offline.
In addition, the SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding reports that we file or furnish electronically with them at www.sec.gov. 12 Table of Contents
In addition, the SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding reports that we file or furnish electronically with them at www.sec.gov. 13 Table of Contents
Once learners interact with our platform, our machine-learning algorithms recommend courses for learners to purchase based on topic, quality, instructor rating, number of enrollments, learner’s country of origin and more. The algorithms help us drive customer conversion, maximizing revenue while offering the best experience and value to learners.
Once learners interact with our platform, our 11 Table of Contents machine-learning algorithms recommend courses for learners to purchase based on topic, quality, instructor rating, number of enrollments, learner’s country of origin and more. The algorithms help us drive customer conversion, maximizing revenue while offering the best experience and value to learners.
On top of competitive health and retirement benefits, we offer WholeU benefits, a comprehensive suite to care for employees’ emotional, physical, and financial well-being. We are proud of our internal focus on learning and development and leverage the Udemy Business platform to drive upskilling and career growth within our organization.
On top of competitive health and retirement benefits, we offer WholeU benefits, a comprehensive suite to care for employees’ emotional, physical, and financial well-being. 12 Table of Contents We are proud of our internal focus on learning and development and leverage the Udemy Business platform to drive upskilling and career growth within our organization.
Our ESG efforts reflect our dedication to addressing the evolving needs of our customers, employees, shareholders, and the communities in which we operate. 11 Table of Contents Our ESG priorities are informed by feedback from stakeholders, alignment with recognized frameworks and standards, and an ongoing assessment of the risks and opportunities most relevant to our business.
Our ESG efforts reflect our dedication to addressing the evolving needs of our customers, employees, shareholders, and the communities in which we operate. Our ESG priorities are informed by feedback from stakeholders, alignment with recognized frameworks and standards, and an ongoing assessment of the risks and opportunities most relevant to our business.
We are investing in the platform and leveraging technology such as generative AI to: • drive measurable learner outcomes; • deliver more personalized learning experiences; • improve our instructors’ ability to create content more efficiently; • improve our ability to support learners through career-oriented learning journeys; and 6 Table of Contents • improve our ability to support organizations and their need to upskill and reskill their workforces efficiently, including leadership needs and cohort-based offerings.
We are investing in the platform and leveraging technology such as generative AI to: • drive measurable learner outcomes; • deliver more personalized learning experiences; • improve our instructors’ ability to create content more efficiently; • improve our ability to support learners through career-oriented learning journeys; and • improve our ability to support organizations and their need to upskill and reskill their workforces efficiently, including leadership needs and cohort-based offerings.
With a subscription to Team Plan, subscribers get access to a selection of courses included in the Udemy Business catalog, certification prep for more than 200 exams, practice tests, AI-powered coding exercises, goal-focused recommendations and analytics. • Enterprise Plan. Organizations can purchase Enterprise Plan, which offers a vast catalog of more than 29,000 high-quality courses.
With a subscription to Team Plan, subscribers get access to a selection of courses included in the Udemy Business collection, certification prep for more than 200 exams, practice tests, AI-powered coding exercises, goal-focused recommendations and analytics. • Enterprise Plan. Organizations can purchase Enterprise Plan, which offers a vast collection of more than 33,000 high-quality courses.
Organizations looking to build leadership capabilities can purchase our cohort-based leadership development platform, which enables teams to learn together through an instructor-led learning experience in a hybrid, scalable experience that can be tailored for each customer’s organizational needs. Subscription pricing for this offering is based on cohort volume and functionality.
Organizations looking to build leadership capabilities can purchase our cohort-based leadership development platform, which enables teams to learn together through an instructor- 5 Table of Contents led learning experience in a hybrid, scalable experience that can be tailored for each customer’s organizational needs. Subscription pricing for this offering is based on cohort volume and functionality.
During 2024, we had an average of 38 million monthly unique visitors, and, through the end of 2024, we’ve had over 1 billion cumulative course enrollments since inception. We believe that the volume of the data our platform collects provides meaningful insights into the behaviors and evolving needs of organizations, learners and instructors.
During 2025, we had an average of 40 million monthly unique visitors, and, through the end of 2025, we’ve had over 1 billion cumulative course enrollments since inception. We believe that the volume of the data our platform collects provides meaningful insights into the behaviors and evolving needs of organizations, learners and instructors.
The range and volume of our course catalog enables employees to support their career growth with the most relevant and effective courses and real-world skills development, and organizations across the globe to reskill and upskill their workforce.
The range and volume of our content enables employees to support their career growth with the most relevant and effective courses and real-world skills development, and organizations across the globe to reskill and upskill their workforce.
There are several macro trends that are driving this growth, specifically the increasing shift of organizations around the world to skills-based talent management practices and the rapid development of digital transformation as more professional jobs are impacted by generative AI, automation and technology.
There are several macro trends that are driving the growth in online education, specifically the increasing shift of organizations around the world to skills-based talent management practices and the rapid development of digital transformation as more professional jobs are impacted by generative AI, automation and technology.
As learners and organizations in a new geography begin to engage with us, we then have the opportunity to quickly and efficiently expand our global footprint by focusing our marketing, advertising, pricing, and language customization resources and expanding our payment options, which allows us to grow our base of individual learners and enterprises and attract new instructors who create native language courses.
As learners and organizations in a new geography begin to engage with us, we then have the opportunity to quickly and efficiently expand our global footprint by focusing our marketing, advertising, pricing, and language customization resources and expanding our payment options, which allows us to grow our base of individual learners and enterprises and attract new instructors who create native language courses. 9 Table of Contents Powerful network effects.
Powerful network effects. Udemy is one symbiotic, data-centric platform. The growing number of individual learners and enterprises on our platform attracts more instructors with diverse experiences and backgrounds to create content for in-demand topics and update existing courses. The increasing number of relevant, high-quality and up-to-date courses attracts more individual learners and enterprises.
Udemy is one symbiotic, data-centric platform. The growing number of individual learners and enterprises on our AI-powered platform attracts more instructors with diverse experiences and backgrounds to create content for in-demand topics and update existing courses. The increasing number of relevant, high-quality and up-to-date courses attracts more individual learners and enterprises.
Content that does not meet strict quality requirements will be removed from the Udemy Business catalog.
Content that does not meet strict quality requirements will be removed from the Udemy Business collection.
Udemy’s global content engine powers Udemy Business with the highest-rated content from our marketplace, proven new product capabilities and organic new business leads. Udemy Business enables organizations around the world to offer on-demand learning for all employees, immersive learning for technology teams, and cohort learning for business leaders.
Udemy’s global content engine powers Udemy Business with the highest-rated content from our marketplace, innovative AI-powered learning capabilities, and organic new business leads. Udemy Business enables organizations around the world to offer on-demand learning for all employees, immersive learning for technology teams, and cohort learning for business leaders.
In 2024, 65% of Udemy Business revenue in the Asia Pacific region was driven by partnerships with Benesse in Japan, Woongjin ThinkBig in South Korea, Sanjieke in China and FUNiX in Vietnam. In addition to our global focus, Udemy seeks to forge relationships that either extend our marketing reach or the capabilities and reach of our sales go-to-market.
In 2025, 66% of Udemy Business revenue in the Asia Pacific region was driven by partnerships with Benesse in Japan, Woongjin ThinkBig in South Korea, Sanjieke in China and FUNiX in Vietnam. In addition, Udemy seeks to forge relationships that either extend our marketing reach or the capabilities and reach of our sales go-to-market.
More learners on our platform results in a larger audience, compelling data and insights, and greater potential earnings for instructors, which in turn incentivizes more course creation and also attracts additional instructors to the platform. This flywheel resulted in an average of over 5,000 new courses added to our platform monthly during 2024. In 2024, instructors earned $190.6 million.
More learners on our platform results in a larger audience, compelling data and insights, and greater potential earnings for instructors, which in turn incentivizes more course creation and also attracts additional instructors to the platform. This flywheel resulted in an average of over 6,300 new courses added to our platform monthly during 2025. In 2025, instructors collectively earned $168 million.
In 2024, our instructors earned $190.6 million and published an average of more than 5,000 courses per month. Global distribution and reach. Our platform connects individual learners and enterprise customers with instructors across the world. In 2024, 60% of our revenue was generated outside of North America, and 85% of marketplace traffic originated from outside of the United States.
In 2025, our instructors earned $168 million and published an average of more than 6,300 courses per month. Global distribution and reach. Our platform connects individual learners and enterprise customers with instructors across the world. In 2025, 61% of our revenue was generated outside of North America, and 85% of marketplace traffic originated from outside of the United States.
Due to these efforts, 95% of employees spent time learning on our platform during the fiscal year ended December 31, 2024. Employees from around the globe participated in our Leader Development programs, including MentorU, Udemy Manager, Invested Leader and Leadership Coaching. As of December 31, 2024, we had 1,246 full-time employees.
Due to these efforts, 95% of employees spent time learning on our platform during the fiscal year ended December 31, 2025. Employees from around the globe participated in our Leader Development programs, including MentorU, Udemy Manager, Invested Leader and Leadership Coaching. As of December 31, 2025, we had 1,380 full-time employees. None of our employees are represented by unions.
Udemy Business features collections in 15 local languages, in addition to English. Non-English content accounts for more than 50% of the Udemy Business course collection. Local language courses are taught by native speakers with local context, making the content and learning experience more relevant and effective.
Non-English content accounts for more than 50% of the Udemy Business course collection. Local language courses are taught by native speakers with local context, making the content and learning experience more relevant and effective.
Udemy’s partnerships aim to drive growth across both our consumer and Udemy Business offerings, and we center our efforts on three key pillars: global expansion, extending reach and meeting our business customers in their flow of work. 5 Table of Contents Udemy has a global focus in all partnerships.
Udemy’s partnerships aim to drive growth across both our consumer and Udemy Business offerings, and we center our efforts on three key pillars: global expansion, extending reach and meeting our business customers in their flow of work. Udemy has a global focus in all partnerships. We have differentiated localized content across a wide set of regions.
As of December 31, 2024, Udemy Business NDRR was 98%, and NDRR for Udemy Business customers with at least 1,000 employees, or Udemy Business Large Customer NDRR, was 103%. This level of retention demonstrates the potential for consistent expanded growth within the existing Udemy Business customer base.
As of December 31, 2025, Udemy Business NDRR was 93%, and NDRR for Udemy Business customers with at least 1,000 employees, or Udemy Business Large Customer NDRR, was 97%. This level of retention demonstrates the potential for consistent expanded growth within the existing 6 Table of Contents Udemy Business customer base.
As of December 31, 2024, we held 16 registered trademarks in the United States and 44 registered trademarks in foreign jurisdictions, which have various expiration dates between 2025 and 2034, and we also held 3 registered patents in the United States, with various expiration dates between 2037 and 2038.
As of December 31, 2025, we held 6 registered trademarks in the United States and 48 registered trademarks in foreign jurisdictions, which have various expiration dates between 2026 and 2036, and we also held 3 registered patents in the United States, with various expiration dates between 2037 and 2038.
We will consider acquisitions that expand our international footprint and/or to acquire innovative technology that expands the immersive learning experiences we offer, with the goal of improving the learner experience and customer outcomes and ultimately increasing new customer acquisition and retention.
We will consider acquisitions that expand our international footprint and/or to acquire innovative technology that expands the immersive learning experiences we offer, with the goal of improving the learner experience and customer outcomes and ultimately increasing new customer acquisition and retention. Competition The market for developing skills is rapidly growing and highly fragmented.
Individual learners can purchase a monthly or annual Personal Plan subscription with access to more than 13,000 courses across hundreds of professional and personal skills. Monthly and annual Personal Plan subscription pricing vary by region. • Professional Services.
Individual learners can purchase a monthly or annual Personal Plan subscription with access to more than 28,000 courses across hundreds of professional and personal skills, AI-powered career pathways, and certification preparation programs. Monthly and annual Personal Plan subscription pricing vary by region. • Professional Services.
We believe many of today's learning platforms have a number of shortcomings, including relevance, quality, breadth, scalability, and affordability of content. Udemy’s platform is designed to address these shortcomings by effectively connecting global learners with up-to-date knowledge from experts and practitioners around the world. Our global platform supports learners, instructors and enterprise customers.
We believe many of today's learning platforms have a number of shortcomings, including relevance, quality, breadth, scalability, and affordability of content. Udemy’s platform is designed to address these shortcomings by effectively connecting global learners with up-to-date knowledge from experts and practitioners around the world. Udemy has positioned itself at the forefront of AI-driven workforce transformation.
Through relationships with key brands and regional leaders that have reach and scale in their own right, we are able to increase the awareness and adoption of our offerings. Additionally, customers need data integrations in order to assess ROI, adoption and other key metrics.
Through relationships with key brands and regional leaders that have reach and scale in their own right, we are able to increase the awareness and adoption of our offerings.
We have a differentiated localized content catalog across a wide set of regions. Combined with our go-to-market and Customer Success approach, we increase our speed to market and local penetration by partnering with regional resell and co-sell partners to connect customers with Udemy Business in their local language.
Combined with our go-to-market and Customer Success approach, we increase our speed to market and local penetration by partnering with regional resell and co-sell partners to connect customers with Udemy Business in their local language.
Udemy is powered by a flywheel effect where instructors are encouraged to create relevant, high-quality content that attracts more learners and Udemy Business customers to the platform.
On average, top courses were updated five times by top instructors on Udemy in 2025. Udemy is powered by a flywheel effect where instructors are encouraged to create relevant, high-quality content that attracts more learners and Udemy Business customers to the platform.
Learners can purchase lifetime access to individual courses or subscribe through monthly and annual plans, which offer unlimited access to more than 13,000 of Udemy’s top-rated courses. Udemy’s marketplace also offers 27,000 free courses, which are an important source of conversion to paid enrollments.
Learners can purchase lifetime access to individual courses or subscribe through monthly and annual plans, which offer unlimited access to more than 28,000 of Udemy’s top-rated courses, including AI skills pathways, career specific journeys, and certification preparation programs. Udemy’s marketplace also offers approximately 28,000 free courses, which are an important source of conversion to paid enrollments.
We use advanced technology applications, such as personalized promotions, lifecycle marketing and content personalization, to help tailor our platform for our learners. 8 Table of Contents Our technology and research and development Udemy’s technology features a modern architecture designed to support our continued growth at scale.
We use advanced technology applications, such as personalized promotions, lifecycle marketing and content personalization, to help tailor our platform for our learners. Our technology and research and development Udemy’s technology features a modern architecture designed to support our continued growth at scale. We leverage AI and machine learning to enhance learner personalization, increase conversion and support customer retention.
Once we reach a steady volume of leads to Udemy Business, we build local go-to-market sales teams to help grow and expand our customer base. We also may partner with local companies.
These investments drive higher traffic, enrollments and revenue for our direct-to-consumer business, as well as leads for Udemy Business. Once we reach a steady volume of leads to Udemy Business, we build local go-to-market sales teams to help grow and expand our customer base. We also may partner with local companies.
We believe that we are positioned favorably because of our ability to attract learners across the globe, provide data and insights to help instructors enhance content to retain learners, and offer an attractive shared revenue model. Our competitive advantages The traditional publisher model used by some competitors can be slow moving and reactive.
We believe that we are positioned favorably because of our ability to attract learners across the globe, provide data and insights to help instructors enhance content to retain learners, and offer an attractive shared revenue model.
Organizations looking to build leadership capabilities can separately purchase a subscription to our cohort learning development platform. 2 Table of Contents Our platform and product offerings Udemy’s platform provides individual learners and organizations all over the world with access to high-quality and relevant content created by instructors across technology, business and soft skills, and personal development topics.
Our platform and product offerings Udemy’s platform provides individual learners and organizations all over the world with access to high-quality and relevant content created by instructors across technology, business and soft skills, and personal development topics.
Udemy Business customers : We compete for customers based on our high-quality, engaging and relevant content, the breadth and depth of that content across the full range of core business functions and advanced product features that optimize self-paced learning and enable organizations to effectively drive programmatic learning.
Our AI-powered personalization, career pathways, and certification partnerships create competitive advantages in delivering measurable career advancement outcomes. 8 Table of Contents Udemy Business customers : We compete for enterprise customers based on our high-quality, engaging and relevant content, the breadth and depth of that content across the full range of core business functions and advanced product features that optimize self-paced learning and enable organizations to effectively drive programmatic learning.
Increase overall Udemy brand awareness. We are continuing to invest in growing brand awareness globally. Udemy’s brand awareness is relatively low, representing a significant opportunity, and this is consistent with the category as a whole. Our brand marketing is designed to increase awareness of Udemy through online and offline campaigns that drive media coverage, social sharing and more word-of-mouth virality.
Increase overall Udemy brand awareness. We are continuing to invest in growing brand awareness globally to position Udemy as a leader in AI-powered skills development. Our brand marketing is designed to increase awareness of Udemy through online and offline campaigns that drive media coverage, social sharing and more word-of-mouth virality.
We have developed a strong outbound lead-generation process with effective account-based marketing operations, allowing us to target, develop and nurture key accounts in large organizations. Continue international expansion and localization. Udemy is accessible in more than 180 countries with courses in 75 languages.
We have developed a strong outbound lead-generation process with effective account-based marketing operations, allowing us to target, develop and nurture key accounts in large organizations.
Udemy’s differentiated feedback loops enable instructors to gain insights directly from learners that help to improve the quality and relevance of content, and our platform is designed to facilitate instructors making frequent, real-time updates to their courses. On average, top courses were updated five times by top instructors on Udemy in 2024.
Our learners benefit from the local context provided by native language instructors, further enhancing the learner experience. Udemy’s differentiated feedback loops enable instructors to gain insights directly from learners that help to improve the quality and relevance of content, and our platform is designed to facilitate instructors making frequent, real-time updates to their courses.
Skills are becoming increasingly important for the way organizations are defining work, deploying talent, managing careers, and valuing employees. As skills required for most professional roles evolve or become obsolete overtime, developing a culture of continuous learning and improvement has never been more critical.
As skills required for most professional roles evolve or become obsolete overtime, developing a culture of continuous learning and improvement has never been more critical.
Learners can access content from numerous local experts from around the world and in their preferred language. Udemy provides a comprehensive and immersive learning experience through tests, Q&As, and other interactive activities.
Learners can access content from numerous local experts from around the world and in their preferred language. Udemy provides a comprehensive and immersive learning experience through tests, Q&As, and other interactive activities. In 2025, we transformed our consumer business with a subscription-first strategy that delivers superior outcomes for learners and improved unit economics for Udemy.
Udemy’s differentiated business model, compelling revenue share incentive and access to nearly 77 million learners attracts instructors from around the world. The Udemy Consumer marketplace consists of more than 250,000 courses in 75 languages. Millions of people learn on the Udemy platform from real-world experts in topics ranging from technology, business and soft skills, to personal development.
The Udemy Consumer marketplace consists of more than 290,000 courses in 78 languages. Millions of people learn on the Udemy platform from real-world experts in topics ranging from technology, business and soft skills, to personal development.
As of December 31, 2024, Udemy Business offers global companies annual or multi-year subscription access on a per-seat basis to a catalog of more than 29,000 courses in 15 local languages, in addition to English. Udemy Business provides access to its platform through Team and Enterprise subscription plans and offers the ability to add on Udemy Business Pro services.
As of December 31, 2025, Udemy Business offers global companies annual or multi-year subscription access on a per-seat basis to a collection of more than 33,000 courses in 15 local languages, in addition to English.
We build deep, trusted customer relationships at all levels with a specific focus on the C-suite, and our engagements support upskilling and reskilling across hybrid and remote workplaces. With our dynamic product portfolio from on-demand and immersive learning to a tailored cohort experience for leadership development, Udemy Business supports skill development at all levels of the organization.
With our dynamic product portfolio from on-demand and immersive learning to a tailored cohort experience for leadership development, Udemy Business supports skill development at all levels of the organization.
Our massive and growing network of instructors, learners and organizations enables us to create significant value for all customers. Our instructors create fresh, relevant content for our learners and organizations, including immersive learning experiences. Instructors are able to monetize their knowledge and receive learner feedback on their content.
Our instructors create fresh, relevant content for our learners and organizations, including immersive learning experiences. Instructors are able to monetize their knowledge and receive learner feedback on their content. That data and insights allow us to experiment and iterate on our product.
On average, our instructors publish more than 5,000 courses a month on our platform. 7 Table of Contents High-quality, relevant and up-to-date content. Udemy’s differentiated feedback loop between learners and instructors ensures that we are able to maintain the high-quality courses on in-demand topics to meet the needs of learners.
Udemy’s differentiated feedback loop between learners and instructors ensures that we are able to maintain the high-quality courses on in-demand topics to meet the needs of learners.
We leverage AI and machine learning to enhance learner personalization, increase conversion and support customer retention. Our global distribution platform enables learners, instructors and organizations around the world to achieve their goals and desired outcomes. We aim to provide world-class experiences for all learners by focusing on the following pillars: Scaled integrated platform.
Our global distribution platform enables learners, instructors and organizations around the world to achieve their goals and desired outcomes. We aim to provide world-class experiences for all learners by focusing on the following pillars: Scaled integrated platform. Our massive and growing network of instructors, learners and organizations enables us to create significant value for all customers.
We recognize revenue for consumer individual course purchases over an estimated service period of four months, while revenue for consumer subscriptions is recognized over the corresponding subscription term.
We also have traditionally seen increased bookings in the Consumer segment as the result of various holiday promotions offered in the fourth quarter. We recognize revenue for consumer individual course purchases over an estimated service period of four months, while revenue for consumer subscriptions is recognized over the corresponding subscription term.
Udemy produces curated learning paths focused on key domains and skill sets. We also allow organizations to author their own custom learning paths. Extensive integrations. We are evolving our comprehensive learning platform using an API-first approach. This starts by looking at our business as a set of key entities and capabilities, and we define modular, interoperable APIs to represent them.
Udemy leverages AI to produce curated learning paths focused on key domains and skill sets. We also allow organizations to author their own custom learning paths. Extensive integrations. We are evolving our comprehensive learning platform using an API-first approach.
That data and insights allow us to experiment and iterate on our product. Organizations are empowered to upskill and reskill employees with our learning content. Udemy leverages generative AI to enable more personalized learning experiences and provides valuable data and strategic insights related to employee’s learning trends, skills acquisition and progress toward goals. Comprehensive learning .
Organizations are empowered to upskill and reskill employees with our learning content, which can be integrated into the flow of work through our MCP server. Udemy leverages generative AI to enable more personalized learning experiences, such as our Role Play simulations, and provides valuable data and strategic insights related to employee’s learning trends, skills acquisition and progress toward goals.
Our marketplace encourages engagement between learners and instructors, including course enrollment, consumption and Q&As. The volume and frequency of this engagement allows us to generate meaningful insights and provide real-time feedback and analytics for our instructors and enterprise customers. Udemy leverages AI and machine learning throughout its platform.
The volume and frequency of this engagement allows us to generate meaningful insights and provide real-time feedback and analytics for our instructors and enterprise customers. Udemy leverages AI and machine learning throughout its platform. Our AI capabilities now extend beyond content recommendation to include career pathway guidance and enterprise workflow integration through our MCP server.
We believe our operating model benefits from several competitive advantages: Comprehensive global course catalog . We provide access to over 250,000 courses, including over 115,000 non-English language courses. This extensive library covers a broad range of topics, including technical skills, business and soft skills, and personal development.
We provide access to over 290,000 courses, including over 122,000 non-English language courses, and 5,500 courses focused on AI skills. This extensive library covers a broad range of topics, including technical skills, business and soft skills, and personal development.
Udemy’s learning marketplace enables tens of thousands of instructors to develop, distribute and enhance content that reaches Udemy’s broad global audience of nearly 77 million learners. Udemy leverages technology, including artificial intelligence (“AI”), as well as data and insights, to deliver personalized, immersive and effective learning experiences.
Udemy’s learning marketplace enables tens of thousands of instructors to develop, distribute and enhance content that reaches Udemy’s broad global audience of nearly 84 million learners.
This approach also supports an expanding set of third-party ecosystem integrations, through industry standard interoperability with learning management systems and learning experience platforms, as well as other key business systems and tools. Powerful data. We leverage a wealth of data to drive customer outcomes.
It powers our first-party applications that include our customer-facing Udemy.com website, our Udemy Business web experience, our native mobile applications and new experiences. This approach also supports an expanding set of third-party ecosystem integrations, through industry standard interoperability with learning management systems and learning experience platforms, as well as other key business systems and tools.
Our platform is purpose-built to empower instructors with data insights and innovative technology to meet the specific needs of learners and organizations in order to help them achieve their career goals and desired business outcomes, respectively. Our products are designed to deliver measurable incremental value, which ultimately creates upselling or expansion opportunities.
Our platform is purpose-built to empower instructors with data insights, AI-assisted content creation tools, and innovative technology to deliver measurable outcomes that directly support career advancement for individuals and tangible business outcomes for organizations. Our products are designed to deliver measurable incremental value, which ultimately creates upselling or expansion opportunities.
Today, most global companies are experiencing massive organizational change and are looking for a strong partner to help them navigate that change and achieve their desired business outcomes.
Over time, we have been successful in retaining and expanding our customer relationships. Customer success and expansion The success and satisfaction of our customers is our North Star for Udemy. Today, most global companies are experiencing massive organizational change and are looking for a strong partner to help them navigate that change and achieve their desired business outcomes.
Item 1. Business Our mission Udemy’s mission is to transform lives through learning. About Udemy Udemy is a global learning company whose online platform empowers organizations and individuals with flexible and effective professional skill acquisition, development and validation.
Item 1. Business Our mission Udemy’s mission is to transform lives through learning. About Udemy Udemy is a global learning company, which underwent a strategic transformation in 2025. Udemy’s AI-powered skills acceleration platform empowers organizations and individuals with flexible, measurable, and outcome-driven learning experiences.
When subscribed to a Personal Plan, an individual learner will have unlimited access to the curated subscription catalog during the subscription term, including immersive learning experiences such as practice tests and coding exercises. Udemy Business Global organizations recognize the need for upskilling and reskilling capabilities to ensure their workforce is agile, resilient and competitive in a rapidly changing environment.
When subscribed to a Personal Plan, an individual learner will have unlimited access to the curated subscription content during the subscription term, including immersive learning experiences such as Role Play scenarios, practice tests, certification pathways and coding exercises.
Our platform is designed to meet the needs of our audience of nearly 77 million learners and over 80,000 instructors that come to us for professional and personal skills development.
Consumer Udemy’s direct-to-consumer marketplace, which is a destination for on-demand content taught by expert instructors in their respective fields. Our platform is designed to meet the needs of our audience of more than 84 million learners and over 90,000 instructors that come to us for professional and personal skills development.
Udemy’s highly-effective and cost-efficient method of online learning across a variety of disciplines is designed to meet the corporate learning needs within today’s hybrid and remote work cultures. Our business model Udemy has two symbiotic operating and reportable segments: Enterprise, or Udemy Business (63% of 2024 revenue), and Consumer, or our direct-to-consumer marketplace (37% of 2024 revenue).
The increase in work-from-home flexibility has accelerated a corporate shift to digital training solutions worldwide. Udemy’s highly-effective and cost-efficient method of online learning across a variety of disciplines is designed to meet the corporate learning needs within today’s hybrid and remote work cultures.
We believe that our dual focus on organizational and individual skills development places us at the forefront of addressing the evolving needs of the modern workplace. As automation and technological innovation accelerates changes in the workforce, there is a growing need to offer more flexible training to continuously re-skill and upskill workforces to keep up with the pace of change.
As automation and technological innovation accelerates changes in the workforce, there is a growing need to offer more flexible training to continuously re-skill and upskill workforces to keep up with the pace of change. Skills are becoming increasingly important for the way organizations are defining work, deploying talent, managing careers, and valuing employees.
We continue to make investments in our global partner ecosystem to support direct and indirect revenue channels that help enable us to scale with agility across the global marketplace. 3 Table of Contents Udemy has curated more than 29,000 of the most highly-rated and relevant courses for in-demand skills from its extensive content catalog on its marketplace to meet the needs of its Udemy Business customers in over 150 countries.
Udemy has curated more than 33,000 of the most highly-rated and relevant courses for in-demand skills from its extensive content collection on its marketplace to meet the needs of its Udemy Business customers in over 150 countries. Udemy Business features collections in 15 local languages, in addition to English.
Many business leaders around the world believe the need for new skills is their largest business challenge and, for employees, opportunities for development have become an important factor that determines workplace satisfaction. Hybrid work, distributed teams and the rapid pace of change mean organizations can no longer rely on in-person training alone.
Udemy Business Global organizations recognize the need for upskilling and reskilling capabilities to ensure their workforce is agile, resilient and competitive in a rapidly changing environment. Many business leaders around the world believe the need for new skills is their largest business challenge and, for employees, opportunities for development have become an important factor that determines workplace satisfaction.
Udemy enables learners to gain the knowledge and skills they need to attain in-demand jobs, further their career, and improve their well-being. Our library of more than 250,000 free and paid courses is created by over 80,000 instructors and covers a wide range of topics, including technology, business and soft skills, and personal development.
Our library of more than 290,000 free and paid courses is created by over 90,000 instructors and covers a wide range of topics, including technology, business and soft skills, and personal development. Our marketplace encourages engagement between learners and instructors, including course enrollment, consumption and Q&As.
Other niche marketplace models cannot effectively serve the enterprise learner who needs to develop both technical and professional skills. Udemy’s platform, in contrast, offers a comprehensive suite of skills development tools required to support learners and organizations in achieving their career goals and business outcomes, respectively.
Our competitive advantages Udemy’s platform offers a comprehensive suite of skills development tools required to support learners and organizations in achieving their career goals and business outcomes, respectively. We believe our operating model benefits from several competitive advantages: Comprehensive global content marketplace .
Large enterprise customers, defined as those with at least 1,000 employees, currently represent approximately 75% of Udemy Business revenue, and the cohort is growing at a significantly faster rate than the SMB cohort. Historically, Udemy has executed successfully in this cohort, with stronger pipeline build, larger deal sizes, higher retention, more upsell opportunities, and better unit economics.
Large enterprise customers, defined as those with at least 1,000 employees, represented approximately 74% of Udemy Business revenue during the fiscal year ended December 31, 2025, and the cohort is growing at a significantly faster rate than the SMB cohort.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeMoreover, regulators in the United States, the E.U., and in other jurisdictions in which we operate may introduce new regulatory regimes or modify existing regulatory regimes, including in ways that increase potential liability for information or content available on or through our platform or the content moderation decisions we make with respect to our platform, or which impose additional obligations to monitor such information or content, which could increase our costs.
Biggest changeHowever, the availability, scope, and application of such frameworks, defenses, and statutes varies across the many jurisdictions in which we operate, and the applicable limitations on immunity, requirements to maintain immunity, and moderation efforts required in the many jurisdictions in which we operate may affect our ability to rely on these frameworks and defenses, or create uncertainty regarding liability for content posted to our platform. 23 Table of Contents Moreover, regulators in the United States, the E.U., and in other jurisdictions in which we operate may introduce new regulatory regimes or modify existing regulatory regimes, including in ways that increase potential liability for information or content available on or through our platform or the content moderation decisions we make with respect to our platform, or which impose additional obligations to monitor such information or content, which could increase our costs.
Further, if our employees, contractors or other agents input inappropriate or confidential information into an AI system, our business data and operations could be compromised or otherwise disrupted. The legal and regulatory frameworks governing artificial intelligence continue to evolve rapidly. For example, the E.U. Artificial Intelligence Act (the “E.U.
Further, if our employees, contractors or other agents input inappropriate or confidential information into an AI system, our business data and operations could be compromised or otherwise disrupted. The legal and regulatory frameworks governing AI continue to evolve rapidly. For example, the E.U. Artificial Intelligence Act (the “E.U.
Among other things, these provisions: • provide that our board of directors is expressly authorized to make, alter or repeal our bylaws; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide that the authorized number of directors may be changed only by resolution of the board of directors; • provide that all vacancies on our board of directors and all newly created directorships may only be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director, except as otherwise required by law, our governing documents or resolution of our board of directors, and subject to the rights of the holders of our preferred stock; • establish that our board of directors is divided into three classes, with each class serving staggered three-year terms; 42 Table of Contents • provide that a director may only be removed from the board of directors by the stockholders for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding capital stock entitled to vote in the election of directors; • prohibit cumulative voting (therefore allowing the holders of a plurality of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); • require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • provide that special meetings of our stockholders may be called only by the board of directors acting pursuant to a resolution adopted by the majority of the entire board of directors, the Chairperson of the board of directors, our Chief Executive Officer or our President; • provide that, unless we otherwise consent in writing, a state or federal court located within the State of Delaware shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws, or (4) any action asserting a claim against us governed by the internal affairs doctrine; • provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act; and • require a super-majority vote of stockholders to amend some of the provisions described above.
Among other things, these provisions: • provide that our board of directors is expressly authorized to make, alter or repeal our bylaws; • authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval; • provide that the authorized number of directors may be changed only by resolution of the board of directors; • provide that all vacancies on our board of directors and all newly created directorships may only be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director, except as otherwise required by law, our governing documents or resolution of our board of directors, and subject to the rights of the holders of our preferred stock; • establish that our board of directors is divided into three classes, with each class serving staggered three-year terms; 45 Table of Contents • provide that a director may only be removed from the board of directors by the stockholders for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding capital stock entitled to vote in the election of directors; • prohibit cumulative voting (therefore allowing the holders of a plurality of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); • require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; • require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings; • provide that special meetings of our stockholders may be called only by the board of directors acting pursuant to a resolution adopted by the majority of the entire board of directors, the Chairperson of the board of directors, our Chief Executive Officer or our President; • provide that, unless we otherwise consent in writing, a state or federal court located within the State of Delaware shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws, or (4) any action asserting a claim against us governed by the internal affairs doctrine; • provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act; and • require a super-majority vote of stockholders to amend some of the provisions described above.
These kinds of transactions involve numerous risks, including the following: • difficulties in realizing the anticipated economic, operational and other benefits of the acquisition or strategic investment successfully or in a timely manner; • failure of businesses we acquire or invest in to achieve anticipated revenue, earnings, or cash flow; • diversion of management’s attention or other resources from our existing business; • any inability to maintain the key customers, business relationships, suppliers, and brand potential of businesses we acquire or invest in; • uncertainty of entry into businesses or geographies in which we have limited or no prior experience or in which competitors have stronger positions; • unanticipated or greater costs than expected associated with pursuing acquisitions or investments; • difficulties in, or costs associated with, any integration process, such as challenges associated with assigning or transferring acquired intellectual property or intellectual property licenses; integrating and auditing financial statements of acquired companies that have not historically prepared financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”); and integrating the workforce of acquired companies and the potential loss of key employees of the acquired companies; • responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, such as liabilities arising out of the failure to maintain effective privacy, data protection and cybersecurity controls, and liabilities arising out of the failure to comply with applicable laws and regulations, including tax laws; • inability to maintain our culture and values, ethical standards, controls, procedures, and policies; and • asset write-offs and impairments of goodwill and intangible assets in connection with any acquisition or strategic investment, as well as any inability to accurately forecast such impacts.
These kinds of transactions involve numerous risks, including the following: • difficulties in realizing the anticipated economic, operational and other benefits of the acquisition or strategic investment successfully or in a timely manner; • failure of businesses we acquire or invest in to achieve anticipated revenue, earnings, or cash flow; • diversion of management’s attention or other resources from our existing business; • any inability to maintain the key customers, business relationships, suppliers, and brand potential of businesses we acquire or invest in; • uncertainty of entry into businesses or geographies in which we have limited or no prior experience or in which competitors have stronger positions; • unanticipated or greater costs than expected associated with pursuing acquisitions or investments; 25 Table of Contents • difficulties in, or costs associated with, any integration process, such as challenges associated with assigning or transferring acquired intellectual property or intellectual property licenses; integrating and auditing financial statements of acquired companies that have not historically prepared financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”); and integrating the workforce of acquired companies and the potential loss of key employees of the acquired companies; • responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, such as liabilities arising out of the failure to maintain effective privacy, data protection and cybersecurity controls, and liabilities arising out of the failure to comply with applicable laws and regulations, including tax laws; • inability to maintain our culture and values, ethical standards, controls, procedures, and policies; and • asset write-offs and impairments of goodwill and intangible assets in connection with any acquisition or strategic investment, as well as any inability to accurately forecast such impacts.
Moreover, our consumer pricing model and methodology has been, and may in the future become, subject to legal challenge under applicable federal or state laws, regulations, and guidelines relating to promotional pricing practices. Our results of operations may be adversely affected by any of the foregoing, and we may have increased difficulty achieving or maintaining profitability.
Moreover, our consumer pricing model and methodology has been, and may in the future become, subject to legal challenge under applicable federal or state laws, regulations, and guidelines relating to promotional pricing practices. Our results of operations may be adversely affected by any of the foregoing, and consequently we may have increased difficulty achieving or maintaining profitability.
As the market for our learning platform develops, 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 UB 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 develops, 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 UB customers at the same price or based on the same pricing or subscription models we have historically used, or for contract lengths consistent with our historical averages.
Any disclosures relating to an actual or perceived cybersecurity attack or other security breach or incident suffered by us or any of our third-party service providers, or other third parties on which we rely, could lead to negative publicity and any such disclosures, or any belief that a cybersecurity attack, or a security breach or incident, has impacted us, our platform, or our service providers, or other third parties on which we rely, may cause our learners, instructors, or UB customers to lose confidence in the security of our platform and the effectiveness of the cybersecurity measures we and our service providers utilize. 30 Table of Contents Further, any limitations of liability provisions in our customer and user agreements, contracts with third-party service providers, or other contracts may not be enforceable or adequate or otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or incident or other security-related matter.
Any disclosures relating to an actual or perceived cybersecurity attack or other security breach or incident suffered by us or any of our third-party service providers, or other third parties on which we rely, could lead to negative publicity and any such disclosures, or any belief that a cybersecurity attack, or a security breach or incident, has impacted us, our platform, or our service providers, or other third parties on which we rely, may cause our learners, instructors, or UB customers to lose confidence in the security of our platform and the effectiveness of the cybersecurity measures we and our service providers utilize. 33 Table of Contents Further, any limitations of liability provisions in our customer and user agreements, contracts with third-party service providers, or other contracts may not be enforceable or adequate or otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or incident or other security-related matter.
There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our services. 29 Table of Contents While we have taken measures to protect our own proprietary and confidential information, as well as the personal data and confidential information that we otherwise process, and measures to protect our platform, we, our third-party service providers, other third parties on which we rely, and the networks and systems used in our business, including those of third-party service providers, have been subject to, and we, our service providers and our platform may in the future be subject to, cybersecurity attacks or other security breaches or incidents.
There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our services. 32 Table of Contents While we have taken measures to protect our own proprietary and confidential information, as well as the personal data and confidential information that we otherwise process, and measures to protect our platform, we, our third-party service providers, other third parties on which we rely, and the networks and systems used in our business, including those of third-party service providers, have been subject to, and we, our service providers and our platform may in the future be subject to, cybersecurity attacks or other security breaches or incidents.
This exclusive forum provision would not apply to any action brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. 43 Table of Contents Our amended and restated bylaws also provide that, to the fullest extent permitted by applicable law and unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act against any person in connection with any offering of our securities.
This exclusive forum provision would not apply to any action brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction. 46 Table of Contents Our amended and restated bylaws also provide that, to the fullest extent permitted by applicable law and unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act against any person in connection with any offering of our securities.
Our recent loss of “emerging growth company” status has required additional attention from management and will result in increased costs to us, which could include higher legal fees, accounting fees and fees associated with investor relations activities, among others.
Our loss of “emerging growth company” status has required additional attention from management and will result in increased costs to us, which could include higher legal fees, accounting fees and fees associated with investor relations activities, among others.
Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our business, financial condition, and results of operations. 36 Table of Contents Risks related to financial reporting, taxation, and operations as a public company If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, lead to a decline in the market price of our common stock.
Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our business, financial condition, and results of operations. 39 Table of Contents Risks related to financial reporting, taxation, and operations as a public company If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, lead to a decline in the market price of our common stock.
We rely on our brand and trademarks to identify our platform and to differentiate our platform and services from those of our competitors, and if we are unable to adequately protect our trademarks, third parties may use our brand names or trademarks similar to ours in a manner that may cause confusion in the market, which could decrease the value of our brand and adversely affect our business and competitive advantages. 34 Table of Contents We hold a small number of issued patents and thus have a limited ability to exclude or prevent our competitors from implementing technology, methods, and processes similar to our own.
We rely on our brand and trademarks to identify our platform and to differentiate our platform and services from those of our competitors, and if we are unable to adequately protect our trademarks, third parties may use our brand names or trademarks similar to ours in a manner that may cause confusion in the market, which could decrease the value of our brand and adversely affect our business and competitive advantages. 37 Table of Contents We hold a small number of issued patents and thus have a limited ability to exclude or prevent our competitors from implementing technology, methods, and processes similar to our own.
DPF, the UK DPF Extension, and the Swiss-U.S. DPF. The EU-U.S. DPF already has been the subject of legal challenge, however, and more generally, these frameworks may be subject to legal challenges from privacy advocacy groups or others.
DPF, the UK DPF Extension, and the Swiss-U.S. DPF. The EU-U.S. DPF has been the subject of legal challenge, however, and more generally, these frameworks may be subject to legal challenges from privacy advocacy groups or others.
Alternatively, if a court were to find either exclusive forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could have a material adverse effect on our business, financial condition, and results of operations. 44 Table of Contents
Alternatively, if a court were to find either exclusive forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could have a material adverse effect on our business, financial condition, and results of operations. 47 Table of Contents
These uncertainties include: • maintaining and increasing a base of learners, instructors, and UB customers using our platform; • successfully competing with existing and future participants in the market for online learning solutions; • successfully expanding our business in existing markets and entering new markets and geographies; • anticipating and responding to market and broader economic conditions; • avoiding interruptions or disruptions in the service of our platform; • accurately forecasting our revenue and operating expenses on a quarterly and annual basis; • maintaining and enhancing the value of our reputation and brand; • attracting, hiring, and retaining qualified personnel to manage our operations and further develop our platform; • effectively managing growth in our operations, including personnel; and 13 Table of Contents • successfully implementing and executing our business strategies.
These uncertainties include: • maintaining and increasing a base of learners, instructors, and UB customers using our platform; • successfully competing with existing and future participants in the market for online learning solutions; • successfully expanding our business in existing markets and entering new markets and geographies; • anticipating and responding to market and broader economic conditions; • avoiding interruptions or disruptions in the service of our platform; • accurately forecasting our revenue and operating expenses on a quarterly and annual basis; • maintaining and enhancing the value of our reputation and brand; • attracting, hiring, and retaining qualified personnel to manage our operations and further develop our platform; • effectively managing growth in our operations, including personnel; and • successfully implementing and executing our business strategies.
Furthermore, many of our current and potential competitors may have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do. 35 Table of Contents Intellectual property litigation, including litigation related to content available on our platform, could result in significant costs and adversely affect our business, financial condition, results of operations, and reputation.
Furthermore, many of our current and potential competitors may have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do. 38 Table of Contents Intellectual property litigation, including litigation related to content available on our platform, could result in significant costs and adversely affect our business, financial condition, results of operations, and reputation.
These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, and results of operations. 37 Table of Contents Unanticipated changes in our effective tax rate and additional tax liabilities, including as a result of our international operations or implementation of new tax rules, could harm our future results of operations.
These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, and results of operations. 40 Table of Contents Unanticipated changes in our effective tax rate and additional tax liabilities, including as a result of our international operations or implementation of new tax rules, could harm our future results of operations.
New investors in such issuances could also receive rights senior to those of holders of our common stock. 41 Table of Contents If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our industry, or if they change their recommendation regarding our common stock adversely, the market price and trading volume of our common stock could decline.
New investors in such issuances could also receive rights senior to those of holders of our common stock. 44 Table of Contents If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our industry, or if they change their recommendation regarding our common stock adversely, the market price and trading volume of our common stock could decline.
If our learners encounter difficulty accessing or using, or if they choose not to use, our mobile platform, our business and results of operations may be adversely affected. 33 Table of Contents Internet search engines drive traffic to our platform and, if we fail to appear prominently in search results, our growth rate could decline and our business, financial condition and results of operations could be adversely affected.
If our learners encounter difficulty accessing or using, or if they choose not to use, our mobile platform, our business and results of operations may be adversely affected. 36 Table of Contents Internet search engines drive traffic to our platform and, if we fail to appear prominently in search results, our growth rate could decline and our business, financial condition and results of operations could be adversely affected.
We believe that our ability to successfully compete depends on a range of factors, both within and beyond our control, including: • the availability or development of alternative online learning platforms that are more compelling to learners, instructors, or organizations than ours; • changes in pricing policies and terms offered by our competitors or by us, including the 2024 change to our instructor revenue sharing model; • the ability to adapt to or compete with new technologies and changes in requirements of our learners, instructors, and UB customers; • the ability to adapt to disruptive innovation that may significantly alter or transform the competitive landscape, such as natural language processing, artificial intelligence and machine learning; • costs associated with acquiring and retaining learners, instructors, and UB customers; • the ability of our current and future competitors to establish relationships with customers; • industry consolidation and the number and rate of new entrants; • difficulties with software development that could delay or prevent the development, introduction or implementation of platform modifications and enhancements; and • costs associated with improving and maintaining our platform.
We believe that our ability to successfully compete depends on a range of factors, both within and beyond our control, including: • the availability or development of alternative online learning platforms that are more compelling to learners, instructors, or organizations than ours; • changes in pricing policies and terms offered by our competitors or by us, including changes to our instructor revenue sharing model; • the ability to adapt to or compete with new technologies and changes in requirements of our learners, instructors, and UB customers; • the ability to adapt to disruptive innovation that may significantly alter or transform the competitive landscape, such as natural language processing, AI and machine learning; • costs associated with acquiring and retaining learners, instructors, and UB customers; • the ability of our current and future competitors to establish relationships with customers; • industry consolidation and the number and rate of new entrants; • difficulties with software development that could delay or prevent the development, introduction or implementation of platform modifications and enhancements; and • costs associated with improving and maintaining our platform.
If these or other market participants introduce new or improved delivery of online education and technology-enabled services that are more compelling or widely accepted than ours, our ability to grow our revenue and achieve profitability could suffer. The emergence of enhanced generative artificial intelligence capabilities could provide competitors with an advantage.
If these or other market participants introduce new or improved delivery of online education and technology-enabled services that are more compelling or widely accepted than ours, our ability to grow our revenue and achieve profitability could suffer. The emergence of enhanced generative AI capabilities could provide competitors with an advantage.
Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing could adversely affect our business, financial condition, and results of operations. 25 Table of Contents Our sales to government clients expose us to additional risks.
Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing could adversely affect our business, financial condition, and results of operations. Our sales to government clients expose us to additional risks.
In addition, the investments we make in our sales and marketing organizations will occur in advance of experiencing benefits from such investments, making it difficult to determine in a timely manner if we are efficiently allocating our resources in these areas. If we are not able to maintain and enhance our brand, our reputation and business may suffer.
In addition, the investments we make in our sales and marketing organizations will occur in advance of experiencing benefits from such investments, making it difficult to determine in a timely manner if we are efficiently allocating our resources in these areas. 22 Table of Contents If we are not able to maintain and enhance our brand, our reputation and business may suffer.
We cannot assure you that none of our employees and agents will take actions in violation of applicable law, for which we may be ultimately held responsible. These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions.
We cannot assure you that none of our employees and agents will take actions in violation of applicable law, for which we may be ultimately held responsible. 28 Table of Contents These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions.
Our values motivate everything we do, and we accordingly intend to focus on the long-term sustainability of our business and platform. We may take actions that we believe will benefit our business and our ecosystem and, therefore, our stockholders over a period of time, even if those actions do not maximize short- or medium-term financial results.
Our values motivate everything we do, and we accordingly intend to focus on the long-term sustainability of our business and platform. We may take actions that we believe will benefit our business and our ecosystem and, therefore, our stockholders over a period of time, even if those actions do not maximize short- or medium-term 29 Table of Contents financial results.
Cybersecurity attacks may take the form of denial of service attacks, attacks using ransomware or other malware, or other attacks, and can come from insider threats as well as individual hackers, criminal groups, and state-sponsored organizations. These sources have used artificial intelligence and machine learning to launch more automated, targeted and sophisticated attacks against targets.
Cybersecurity attacks may take the form of denial of service attacks, attacks using ransomware or other malware, or other attacks, and can come from insider threats as well as individual hackers, criminal groups, and state-sponsored organizations. These sources have used AI and machine learning to launch more automated, targeted and sophisticated attacks against targets.
Many of these similar state privacy laws have taken effect or will take effect in coming years, creating the potential for a patchwork of overlapping but different state laws and for a trend of increasingly stringent privacy legislation in the U.S., which could increase our potential liability and adversely affect our business, financial condition, and results of operations.
Many of these state privacy laws have taken effect or will take effect in coming years, creating a patchwork of overlapping but different state laws and reflecting a trend of increasingly stringent privacy legislation in the U.S., which could increase our potential liability and adversely affect our business, financial condition, and results of operations.
They can also implement social engineering techniques to induce our employees, contractors, or customers to disclose passwords or other sensitive information or take other actions to gain access to data, and these social engineering attacks have become more sophisticated as attackers leverage artificial intelligence and “deepfake” technologies to craft increasingly convincing fraudulent communications and scenarios.
They can also implement social engineering techniques to induce our employees, contractors, or customers to disclose passwords or other sensitive information or take other actions to gain access to data, and these social engineering attacks have become more sophisticated as attackers leverage AI and “deepfake” technologies to craft increasingly convincing fraudulent communications and scenarios.
Factors that may contribute to the variability of our quarterly and annual results include, but are not limited to: • our ability to attract and retain learners, instructors, and enterprises that use our platform in a cost-effective manner; • our ability to accurately forecast revenue and operating expenses; • the effects of increased competition on our business; • the impact of worldwide economic conditions, including the resulting effect on consumer and business spending on online learning solutions; • our ability to successfully expand in existing markets and successfully enter new markets and manage the risks associated with doing so; • our ability to successfully leverage our resellers and other strategic relationships to market and sell our products; • changes in learner or customer behavior with respect to online learning solutions; • increases in marketing, sales, and other operating expenses that we may incur to grow and acquire new learners, instructors, and customers; • the revenue mix between our consumer and UB offerings; • our ability to maintain an adequate rate of growth and effectively manage that growth; • the effects of changes in search engine placement and prominence; • our ability to keep pace with technology changes in our industry; • the success of our sales and marketing efforts; • our ability to protect, maintain, and enforce our intellectual property rights; • costs associated with defending claims, including intellectual property infringement claims, and related judgments or settlements; • changes in governmental or other regulations affecting our business; • interruptions in service and any related impact on our business, reputation, or brand; • the attraction and engagement of qualified employees and key personnel; • our ability to choose and effectively manage third-party service providers; • the effects of natural or man-made catastrophic events, including wars and other armed conflicts, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East; • the impact of actual or anticipated public health emergencies, such as an outbreak of an epidemic or pandemic; 14 Table of Contents • potential volatility in our gross margins, including due to revenue mix shifts between our Enterprise and Consumer segments, changes in our pricing policies, increased use of subscriptions in our Consumer segment, and timing differences between recognition of revenue and related content costs for courses; • the effectiveness of our internal controls over financial reporting; • the impact of payment processor costs and procedures; and • changes in our tax rates or exposure to additional tax liabilities.
Factors that may contribute to the variability of our quarterly and annual results include, but are not limited to: • the Merger, the pendency of the Merger, or the failure to complete the Merger; • our ability to attract and retain learners, instructors, and enterprises that use our platform in a cost-effective manner; • our ability to accurately forecast revenue and operating expenses; • the effects of increased competition on our business; • the impact of worldwide economic conditions, including the resulting effect on consumer and business spending on online learning solutions; • our ability to successfully expand in existing markets and successfully enter new markets and manage the risks associated with doing so; • our ability to successfully leverage our resellers and other strategic relationships to market and sell our products; • changes in learner or customer behavior with respect to online learning solutions; • increases in marketing, sales, and other operating expenses that we may incur to grow and acquire new learners, instructors, and customers; • the revenue mix between our consumer and UB offerings; 17 Table of Contents • our ability to maintain an adequate rate of growth and effectively manage that growth; • the effects of changes in search engine placement and prominence; • our ability to keep pace with technology changes in our industry; • the success of our sales and marketing efforts; • our ability to protect, maintain, and enforce our intellectual property rights; • costs associated with defending claims, including intellectual property infringement claims, and related judgments or settlements; • changes in governmental or other regulations affecting our business; • actual or anticipated changes in international trade policies, including those resulting from tariffs, trade barriers and other trade regulations, as well as the actual or anticipated effect of such policies on us and our customers; • interruptions in service and any related impact on our business, reputation, or brand; • the attraction and engagement of qualified employees and key personnel; • our ability to choose and effectively manage third-party service providers; • the effects of natural or man-made catastrophic events, including wars and other armed conflicts, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East; • the impact of actual or anticipated public health emergencies, such as an outbreak of an epidemic or pandemic; • potential volatility in our gross margins, including due to revenue mix shifts between our Enterprise and Consumer segments, changes in our pricing policies, increased use of subscriptions in our Consumer segment, and timing differences between recognition of revenue and related content costs for courses; • the effectiveness of our internal controls over financial reporting; • the impact of payment processor costs and procedures; and • changes in our tax rates or exposure to additional tax liabilities.
As of December 31, 2024, our directors, executive officers, and holders of more than 5% of our outstanding common stock, together with their respective affiliates, beneficially owned shares representing approximately 54% of our outstanding common stock.
As of December 31, 2025, our directors, executive officers, and holders of more than 5% of our outstanding common stock, together with their respective affiliates, beneficially owned shares representing approximately 54% of our outstanding common stock.
Moreover, any attempts to rehabilitate our reputation and brand recognition may be costly and time-consuming, and there can be no assurance that any such efforts will ultimately be successful. 19 Table of Contents We could face liability, or our reputation might be harmed, as a result of courses posted to our platform.
Moreover, any attempts to rehabilitate our reputation and brand recognition may be costly and time-consuming, and there can be no assurance that any such efforts will ultimately be successful. We could face liability, or our reputation might be harmed, as a result of courses posted to our platform.
We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies. 39 Table of Contents We could be adversely impacted by the effects of inflation.
We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies. 42 Table of Contents We could be adversely impacted by the effects of inflation.
Factors that could cause fluctuations in the trading price of our common stock include the following: • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales of shares of our common stock by us or our stockholders; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new services or platform features; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; • rumors and market speculation involving us or other companies in our industry; 40 Table of Contents • actual or anticipated changes in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • actual or perceived privacy or security breaches or other incidents; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, services, or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any significant change in our management; • general economic conditions and slow or negative growth of our markets; and • other events or factors, including those resulting from wars and other armed conflicts, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East, incidents of terrorism, natural disasters, public health emergencies, or natural disasters, as well as responses to any of these events.
Factors that could cause fluctuations in the trading price of our common stock include the following: • the Merger, the pendency of the Merger, or the failure to complete the Merger; • price and volume fluctuations in the overall stock market from time to time; • volatility in the trading prices and trading volumes of technology stocks; • changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular; • sales of shares of our common stock by us or our stockholders; • failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors; • the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new services or platform features; • the public’s reaction to our press releases, other public announcements, and filings with the SEC; 43 Table of Contents • rumors and market speculation involving us or other companies in our industry; • actual or anticipated changes in our results of operations; • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally; • litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors; • actual or perceived privacy or security breaches or other incidents; • developments or disputes concerning our intellectual property or other proprietary rights; • announced or completed acquisitions of businesses, services, or technologies by us or our competitors; • new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • changes in accounting standards, policies, guidelines, interpretations, or principles; • any significant change in our management; • actual or anticipated changes in international trade policies, including those resulting from tariffs, trade barriers and other trade regulations, as well as the actual or anticipated effect of such policies on us and our customers; • general economic conditions and slow or negative growth of our markets; and • other events or factors, including those resulting from wars and other armed conflicts, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East, incidents of terrorism, natural disasters, public health emergencies, or natural disasters, as well as responses to any of these events.
Various U.S. states, including California and Colorado, have also recently adopted laws and regulations applicable to the development and use of AI systems and outputs, and U.S. federal AI legislation has also been introduced in the Senate. Such laws and regulations will have a material impact on the adoption and use of AI systems.
Various U.S. states, including California and Colorado, have also recently adopted laws and regulations applicable to the development and use of AI systems and outputs, and U.S. federal legislation addressing AI has also been introduced. Such laws and regulations will have a material impact on the adoption and use of AI systems.
Any of these events could have a negative impact on our business, financial condition, and results of operations. 20 Table of Contents Our revenue, results of operations, and financial condition could be negatively affected by general economic conditions. Our business is sensitive to trends in the general economy, which is unpredictable.
Any of these events could have a negative impact on our business, financial condition, and results of operations. Our revenue, results of operations, and financial condition could be negatively affected by general economic conditions. Our business is sensitive to trends in the general economy, which is unpredictable.
This exposure is the result of selli ng in multiple currencies and operating in foreign countries where the functional currency is the local currency. During the fiscal year ended December 31, 2024, 27% of our sales were denominated in currencies other than U.S. dollars, including euros, Indian rupees, British pounds sterling, Brazilian reais, and Japanese yen.
This exposure is the result of selli ng in multiple currencies and operating in foreign countries where the functional currency is the local currency. During the fiscal year ended December 31, 2025, 26% of our sales were denominated in currencies other than U.S. dollars, including euros, Indian rupees, British pounds sterling, Brazilian reais, and Japanese yen.
We may not be able to effectively adapt our operations to avoid disruptions arising from the occurrence of such events, and our business could be affected adversely as a result. Our business could be harmed if we fail to manage our growth effectively.
We may not be able to effectively adapt our operations to avoid disruptions arising from the occurrence of such events, and our business could be affected adversely as a result. 24 Table of Contents Our business could be harmed if we fail to manage our growth effectively.
If learners or instructors are unable to access our platform within a reasonable amount of time, or at all, our business will be harmed. Applicable regulations that permit ISPs to limit internet consumption could harm our business.
If learners or instructors are unable to access our platform within a reasonable amount of time, or at all, our business will be harmed. 34 Table of Contents Applicable regulations that permit ISPs to limit internet consumption could harm our business.
In addition, if these providers increase the fees they charge us, our operating expenses could increase. The laws and regulations related to payments are complex and vary across different jurisdictions in the United States and globally. As a result, we are required to spend significant time and effort to comply with those laws and regulations.
In addition, if these providers increase the fees they charge us, our operating expenses could increase. 35 Table of Contents The laws and regulations related to payments are complex and vary across different jurisdictions in the United States and globally. As a result, we are required to spend significant time and effort to comply with those laws and regulations.
In turn, if instructors perceive that our platform lacks an adequate learner audience, instructors may be less willing to provide content for our platform, and the experience of learners could be further negatively impacted.
In turn, if instructors perceive that our platform lacks an adequate learner audience, instructors may be less 18 Table of Contents willing to provide content for our platform, and the experience of learners could be further negatively impacted.
Managing a global organization requires significant resources and management attention. We currently maintain operations outside of the United States, including in Ireland, Turkey, India, Australia, and Mexico, and we plan to expand our international operations in the future.
Managing a global organization requires significant resources and management attention. We currently maintain operations outside of the United States, including in Ireland, Turkey, India, Australia, and Mexico, and we may expand our international operations in the future.
In response, California and several other U.S. states have implemented their own open internet or net neutrality rules, and in 2024, the FCC voted to reinstate, with certain modifications, its open internet rules.
In response, California and several other U.S. states have implemented their own open internet or net neutrality rules. In 2024, the FCC voted to reinstate, with certain modifications, its open internet rules; however, in January 2025, the U.S.
Similar limitations may apply under state tax laws. In addition, California has recently enacted a temporary suspension on the use of state NOLs in the taxable years beginning in 2024, 2025 and 2026, which would adversely affect us if we earn taxable income in the impacted taxable years. Other state tax limitations may also apply.
Similar limitations may apply under state tax laws. In addition, in June 2024, California enacted a temporary suspension on the use of state NOLs in the taxable years 2024, 2025 and 2026, which would adversely affect us if we earn taxable income in the impacted taxable years. Other state tax limitations may also apply.
These risks include: • the cost and resources required to localize our services, which requires the translation of our websites into foreign languages and adaptation for local practices and regulatory requirements; • competition with local market participants who understand the local market better than we do or who have pre-existing relationships with our potential learners and UB customers in those markets; • greater reliance on third-party resellers and other commercial partners for the distribution and marketing of our offerings; • legal uncertainty regarding the operations of our platform and our liability for the content and services provided by our instructors, including as a result of evolving local laws or a lack of clear precedent of applicable law; • the burdens of complying with a wide variety of foreign laws and legal standards; • lack of familiarity with and unexpected changes in foreign regulatory requirements; • adapting to variations in methods of payment from learners and UB customers; • difficulties in managing and staffing international operations; • fluctuations in currency exchange rates; • potentially adverse tax consequences, including the complexities of foreign value added tax systems, digital services tax and restrictions on the repatriation of earnings; • increased financial accounting and reporting burdens and complexities and difficulties in implementing and maintaining adequate internal controls; • political, social, and economic instability abroad, wars and other armed conflicts, terrorist attacks, and security concerns in general, including Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East; • reduced or varied protection for intellectual property rights in some countries; and • higher telecommunications and internet service provider costs.
These risks include: • the cost and resources required to localize our services, which requires the translation of our websites into foreign languages and adaptation for local practices and regulatory requirements; • competition with local market participants who understand the local market better than we do or who have pre-existing relationships with our potential learners and UB customers in those markets; • greater reliance on third-party resellers and other commercial partners for the distribution and marketing of our offerings; • legal uncertainty regarding the operations of our platform and our liability for the content and services provided by our instructors, including as a result of evolving local laws or a lack of clear precedent of applicable law; • the burdens of complying with a wide variety of foreign laws and legal standards; 26 Table of Contents • lack of familiarity with and unexpected changes in foreign regulatory requirements; • adapting to variations in methods of payment from learners and UB customers; • difficulties in managing and staffing international operations; • fluctuations in currency exchange rates; • risks associated with foreign tax regimes, trade tariffs, foreign investment restrictions or requirements, or similar issues, which could negatively impact international adoption of our offerings; • potentially adverse tax consequences, including the complexities of foreign value added tax systems, digital services tax and restrictions on the repatriation of earnings; • increased financial accounting, reporting, and other regulatory burdens and complexities, as well as difficulties in implementing and maintaining adequate internal controls over the same; • political, social, and economic instability abroad, wars and other armed conflicts, terrorist attacks, and security concerns in general, including Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East; • reduced or varied protection for intellectual property rights in some countries; and • higher telecommunications and internet service provider costs.
If we fail to maintain and expand our relationships with UB customers, our ability to grow our business and revenue will suffer. Revenue from our Enterprise segment represented 63%, 58%, and 50%, of total revenue during the fiscal years ended December 31, 2024, 2023, and 2022, respectively.
If we fail to maintain and expand our relationships with UB customers, our ability to grow our business and revenue will suffer. Revenue from our Enterprise segment represented 66%, 63%, and 58% of total revenue during the fiscal years ended December 31, 2025, 2024, and 2023 respectively.
We generated 60%, 60%, and 59% of our total revenue outside of North America during the fiscal years ended December 31, 2024, 2023, and 2022, respectively. Based on our instructor registration records, we estimate that a majority of our instructors are located outside the United States.
We generated 61%, 60%, and 60% of our total revenue outside of North America during the fiscal years ended December 31, 2025, 2024, and 2023, respectively. Based on our instructor registration records, we estimate that a majority of our instructors are located outside the United States.
Current and potential competitors (including any new entrants into the market) may enjoy substantial competitive advantages over us, such as greater name recognition, longer operating histories, market- or industry-specific knowledge, more successful marketing capabilities, more successful adaptation to or integration of emerging technologies such as artificial intelligence, and substantially greater financial, technical, and other resources than we have.
Current and potential competitors (including any new entrants into the market) may enjoy substantial competitive advantages over us, such as greater name recognition, longer operating histories, market- or industry-specific knowledge, more successful marketing capabilities, more successful adaptation to or integration of emerging technologies such as AI, and substantially greater financial, technical, and other 20 Table of Contents resources than we have.
We compete for learners, enterprise customers, and instructors: • Learners : We compete for learners based on our course catalog, instructors, and learning tools. • UB customers : We compete for customers based on our up-to-date content, the breadth and depth of that content across the full range of core business functions, and advanced product features that optimize self-paced learning and enable organizations to effectively drive programmatic learning. • Instructors : We compete for instructors based on our ability to promote monetization opportunities.
We compete for learners, enterprise customers, and instructors: • Learners : We compete for learners based on our course collection, instructors, and learning tools (including AI-powered features). • UB customers : We compete for customers based on our up-to-date content, the breadth and depth of that content across the full range of core business functions, and advanced product features and integrations that optimize self-paced learning and enable organizations to effectively drive programmatic learning. • Instructors : We compete for instructors based on our ability to promote monetization opportunities.
We expect our losses to continue in the near-term as we continue to make targeted investments towards growing our business and operating as a public company.
We may incur losses in the near-term as we continue to make targeted investments towards growing our business and operating as a public company.
Our actual liabilities may exceed our estimates of losses. We may also experience an unexpectedly large number of claims that result in costs or liabilities in excess of our projections, which could cause us to record additional expenses.
We may also experience an unexpectedly large number of claims that result in costs or liabilities in excess of our projections, which could cause us to record additional expenses.
Risks related to our business and operations We have a history of losses, and we may not be able to generate sufficient revenue to achieve or maintain profitability in the future.
Risks related to our business and operations We have a history of losses, and we may not be able to generate sufficient revenue to increase or sustain profitability in the future.
If we are not able to achieve and maintain profitability, the value of our company and our common stock could decline significantly, and you could lose some or all of your investment. We operate in an emerging and dynamic market, which makes it difficult to evaluate our prospects and future results of operations.
If we are not able to do so, the value of our company and our common stock could decline significantly, and you could lose some or all of your investment. 16 Table of Contents We operate in an emerging and dynamic market, which makes it difficult to evaluate our prospects and future results of operations.
We rely on third-party payment processors to process payments made by learners and customers, and to instructors, on our platform. We have engaged third-party service providers to perform underlying card processing, currency exchange, identity verification, and fraud analysis services.
Our payments system depends on third-party providers and is subject to evolving laws and regulations. We rely on third-party payment processors to process payments made by learners and customers, and to instructors, on our platform. We have engaged third-party service providers to perform underlying card processing, currency exchange, identity verification, and fraud analysis services.
We may not be able to successfully deploy artificial intelligence, machine learning, and other evolving technologies. We leverage generative artificial intelligence (“AI”), machine learning (“ML”), and other evolving technologies throughout our business, including to enhance our platform and offerings.
We may not be able to successfully deploy AI, machine learning, and other evolving technologies. We leverage generative AI, machine learning, and other evolving technologies throughout our business, including to enhance our platform and offerings.
We strive to build meaningful connections with instructors, ranging from those that are well known and have created extensively to those that have just begun the process of creating courses. As of December 31, 2024, we had relationships with over 80,000 instructors.
We strive to build meaningful connections with instructors, ranging from those that are well known and have created extensively to those that have just begun the process of creating courses. As of December 31, 2025, we had relationships with more than 91,000 instructors.
Compliance with these laws and regulations may affect our ability to deploy AI systems in our business or integrate AI features into our platform, require changes to our operations and processes, result in heightened compliance burdens and costs, or expose us to additional legal liabilities, any of which could negatively impact our business, financial condition, or operating results. 31 Table of Contents Interruptions or performance problems associated with our technology and infrastructure could adversely affect our business and results of operations.
Compliance with these laws and regulations may affect our ability to deploy AI systems in our business or integrate AI features into our platform, require changes to our operations and processes, result in heightened compliance burdens and costs, or expose us to additional legal liabilities, any of which could negatively impact our business, financial condition, or operating results.
Even if we successfully execute on our operational efficiency measures, these measures may not be sufficient to ensure our investments and other expenses keep pace with our revenue. As a result, we can provide no assurance as to whether or when we will achieve profitability.
Even if we successfully execute on our operational efficiency measures, these measures may not be sufficient to ensure our investments and other expenses keep pace with our revenue. As a result, we can provide no assurance as to whether we can increase or sustain profitability in the future.
For example, in November 2023 we announced changes to our instructor revenue share model, which became effective at the beginning of 2024; these changes, together with any future changes we may announce in the future, could result in instructor attrition.
For example, in November 2023 we announced changes to our instructor revenue share model, which changes became fully effective in January 2026; these changes, together with any future changes we may announce in the future, could result in instructor attrition.
Inadequate self-insurance accruals or insurance coverage for employee healthcare benefits could have an adverse effect on our business, financial results or financial condition. Beginning in 2023, we became self-insured for certain medical benefits, up to certain stop-loss limits. We accrue these costs based on known claims and estimates of incurred but not reported claims.
Inadequate self-insurance accruals or insurance coverage for employee healthcare benefits could have an adverse effect on our business, financial results or financial condition. We self-insure for certain medical benefits, up to certain stop-loss limits. We accrue these costs based on known claims and estimates of incurred but not reported claims. Our actual liabilities may exceed our estimates of losses.
Changes with respect to any of these matters may lead to additional costs and increase our risk exposure. 27 Table of Contents Additionally, we are or may become subject to laws, rules, and regulations regarding cross-border transfers of personal data, including transfers of personal data outside the EEA, Switzerland and the United Kingdom.
Changes with respect to the UK’s data protection regime, its adequacy status, or related matters may lead to additional costs and increase our risk exposure. 30 Table of Contents Additionally, we are or may become subject to laws, rules, and regulations regarding cross-border transfers of personal data, including transfers of personal data outside the EEA, Switzerland and the United Kingdom.
Our ability to retain UB customers and expand our deployments with them may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with our platform, the quality and timeliness of our customer success and customer support services, our prices, the prices and features of competing solutions, customers’ spending levels, sufficient adoption of our platform by our customers’ constituents, and customers’ satisfaction with new feature releases, any of which could cause our revenue to decline or grow less quickly than anticipated, which would harm our business, financial condition, and results of operations.
Our ability to retain UB customers and expand our deployments with them may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with our platform, the quality and timeliness of our customer success and customer support services, our prices, the prices and features of competing solutions, customers’ spending levels, sufficient adoption of our platform by our customers’ constituents, and customers’ satisfaction with new feature releases, any of which could cause our revenue to decline or grow less quickly than anticipated, which would harm our business, financial condition, and results of operations. 19 Table of Contents We operate in a highly competitive market, and we may not be able to compete successfully against current and future competitors.
The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability. 23 Table of Contents Our strategic and other relationships with partners overseas may also subject us to additional regulatory scrutiny in the United States and other jurisdictions.
Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability. Our strategic and other relationships with partners overseas may also subject us to additional regulatory scrutiny in the United States and other jurisdictions.
Amazon Web Services may take actions beyond our control that could seriously harm our business, including discontinuing or limiting access to Amazon Web Services, increasing pricing terms, terminating our contract, establishing more favorable terms with one or more of our competitors, and modifying or interpreting its terms of service or other policies in a manner that impacts our ability to administer our business and operations. 32 Table of Contents Our payments system depends on third-party providers and is subject to evolving laws and regulations.
Amazon Web Services may take actions beyond our control that could seriously harm our business, including discontinuing or limiting access to Amazon Web Services, increasing pricing terms, terminating our contract, establishing more favorable terms with one or more of our competitors, and modifying or interpreting its terms of service or other policies in a manner that impacts our ability to administer our business and operations.
These provisions, alone or together, could delay, discourage, or prevent a transaction involving a change in control of our company.
These provisions, alone or together, could delay, discourage, or prevent a transaction, including the proposed Merger with Coursera, involving a change in control of our company.
In addition, as we introduce new products, or improve existing ones, we may not be successful in developing appealing pricing and contract models for these products. Pricing and contract length decisions may also impact the mix of adoption among our offerings and negatively impact our overall revenue. Competition may also require us to make substantial price concessions.
In addition, as we introduce new products, or improve existing ones, we may not be successful in developing appealing pricing, subscription and contract models for these products. Decisions we make may also impact the mix of adoption among our offerings, including the mix between subscription- and transaction-based offerings, and negatively impact our overall revenue and results.
We operate in a highly competitive market, and we may not be able to compete successfully against current and future competitors. We operate in a highly competitive environment, as the market for online learning is relatively new, fragmented, and rapidly evolving, with limited barriers to entry.
We operate in a highly competitive environment, as the market for online learning is relatively new, fragmented, and rapidly evolving, with limited barriers to entry.
As a global platform with learners and instructors in over 180 countries, w e are subject to a wide range of laws and regulations regarding consumer protection, advertising, electronic marketing, privacy, data protection and cybersecurity, data localization requirements, online services, freedom of speech, labor, real estate, taxation, intellectual property ownership and infringement, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing.
As a global platform with learners and instructors in over 180 countries, w e are subject to a wide range of laws and regulations regarding consumer protection, advertising, electronic marketing, privacy, data protection and cybersecurity, data localization requirements, online services, freedom of speech, labor, real estate, taxation, intellectual property ownership and infringement, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing. 27 Table of Contents The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly laws outside the U.S., and compliance with laws, regulations and similar requirements may be burdensome and expensive.
We cannot predict the outcome of any litigation or whether the FCC order or state initiatives regulating providers will be modified, overturned, or vacated by legal action, federal legislation, or the degree to which this repeal would adversely affect our business, if at all.
We cannot predict whether Congress will enact federal net neutrality legislation, or whether state initiatives regulating providers will be modified, overturned, or vacated by legal action, or the degree to which the current regulatory uncertainty would adversely affect our business, if at all.
As a result, if we are unable to retain existing learners and instructors, even if such losses are offset by an increase in revenue resulting from new learners and instructors, it could harm our growth prospects and have a material adverse effect on our business, financial condition, and results of operations. 15 Table of Contents Our platform relies on a limited number of instructors who create a significant portion of the most popular content on our platform, and the loss of these instructor relationships could adversely affect our business, financial condition, and results of operations.
As a result, if we are unable to retain existing learners and instructors, even if such losses are offset by an increase in revenue resulting from new learners and instructors, it could harm our growth prospects and have a material adverse effect on our business, financial condition, and results of operations.
On June 28, 2021, the European Commission announced a decision of “adequacy” concluding that the United Kingdom ensures an equivalent level of data protection to the GDPR, generally permitting personal data transfers from the European Economic Area (the “EEA”) to the United Kingdom. This adequacy determination must, however, be renewed after four years and is subject to modification or revocation.
On June 28, 2021, the European Commission announced a decision of “adequacy” concluding that the United Kingdom ensures an equivalent level of data protection to the GDPR, generally permitting personal data transfers from the European Economic Area (the “EEA”) to the United Kingdom.
Furthermore, we may have to pay cash, incur debt or issue equity or equity-linked securities to finance any acquisitions or investments, which could also adversely affect our financial condition or the trading price of our securities, and the sale of equity or equity-linked securities could result in dilution to our stockholders. 22 Table of Contents We may need to raise additional funds to pursue our growth strategy or continue operations, and we may be unable to raise capital when needed or on acceptable terms.
Furthermore, we may have to pay cash, incur additional debt or issue equity or equity-linked securities to finance any acquisitions or investments, which could also adversely affect our financial condition or the trading price of our securities, and the sale of equity or equity-linked securities could result in dilution to our stockholders.
Consequently, stockholders must rely on sales of their shares of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
Further, our ability to pay dividends on our capital stock in the future is limited by contractual restrictions under the terms of the Merger Agreement. Consequently, stockholders must rely on sales of their shares of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
For example: • we may choose to prohibit certain content from our platform that we believe is inconsistent with our values even though we could benefit financially from the sale of that content; • we may choose to revise our policies in ways that we believe will be beneficial to our learners, instructors, and UB customers in the long term even though the changes may be perceived unfavorably among our existing learners, instructors, and customers; or • we may take actions, such as locating our servers in low-impact data centers, that reduce our environmental footprint even though these actions may be more costly than other alternatives. 26 Table of Contents Increased scrutiny and changing expectations from regulators, investors, customers, employees, and others regarding our environmental, social and governance practices and reporting could cause us to incur additional costs, devote additional resources and expose us to additional risks, which could adversely impact our reputation, customer acquisition and retention, access to capital and employee retention.
For example: • we may choose to prohibit certain content from our platform that we believe is inconsistent with our values even though we could benefit financially from the sale of that content; • we may choose to revise our policies in ways that we believe will be beneficial to our learners, instructors, and UB customers in the long term even though the changes may be perceived unfavorably among our existing learners, instructors, and customers; or • we may take actions, such as locating our servers in low-impact data centers, that reduce our environmental footprint even though these actions may be more costly than other alternatives.
Requiring tax reporting or collection could decrease learner or instructor activity, which would harm our business, and could require us to incur substantial costs in order to comply, including costs associated with tax calculation, collection, and remittance and audit requirements, which could make our offerings less attractive and could adversely affect our business, financial condition, and results of operations. 38 Table of Contents Also, tax rules of certain countries, including the United States, generally require payors to report payments to unrelated parties to the applicable taxing authority and to withhold a percentage of certain amounts and remit such amounts to the applicable taxing authority.
Requiring tax reporting or collection could decrease learner or instructor activity, which would harm our business, and could require us to incur substantial costs in order to comply, including costs associated with tax calculation, collection, and 41 Table of Contents remittance and audit requirements, which could make our offerings less attractive and could adversely affect our business, financial condition, and results of operations.
In addition, various countries regulate the import of certain technology and have enacted or could enact laws that could limit our ability to provide learners access to our platform or could limit our learners’ ability to access or use our services in those countries. 24 Table of Contents Although we take precautions to prevent our platform from being provided in violation of such laws and regulations, our platform could nevertheless be provided inadvertently in violation of such laws.
In addition, various countries regulate the import of certain technology and have enacted or could enact laws that could limit our ability to provide learners access to our platform or could limit our learners’ ability to access or use our services in those countries.
Competition may intensify as our competitors raise additional capital or as new participants, including established companies, enter the markets in which we compete.
Competition may intensify as our competitors raise additional capital or as new participants, including established companies, enter the markets in which we compete. Our ability to grow our business and achieve profitability could be impaired if we cannot compete successfully.
We incurred net losses of $85.3 million, $107.3 million, and $153.9 million during the fiscal years ended December 31, 2024, 2023, and 2022, respectively, and, as of December 31, 2024, we had an accumulated deficit of $805.0 million.
We reported net income (loss) of $3.8 million, $(85.3) million, and $(107.3) million during the fiscal years ended December 31, 2025, 2024, and 2023, respectively, and, as of December 31, 2025, we had an accumulated deficit of $801.2 million.
If we fail to attract new employees or fail to retain and motivate our current employees, our business and future growth prospects could be adversely affected. Acquisitions and other strategic investments may expose us to significant risks, any of which could materially and adversely affect our business, financial condition, and results of operations.
Acquisitions and other strategic investments may expose us to significant risks, any of which could materially and adversely affect our business, financial condition, and results of operations.
We may need to change our pricing model for our platform’s offerings, which in turn could adversely impact our results of operations. We have in the past, and expect that we may in the future, need to change our pricing model or target contract length from time to time.
We have in the past, and expect that we may in the future, need to change the pricing, subscription, and contract models for our platform’s offerings from time to time.
As of January 1, 2023, the CPRA expanded the CCPA with additional requirements that may impact our business and establishes a regulatory agency dedicated to enforcing the law. Several states in the U.S. have proposed or enacted their own privacy laws, many of which contain obligations similar to the CCPA and CPRA.
As of January 1, 2023, the CPRA expanded the CCPA with additional requirements that may impact our business and establishes a regulatory agency dedicated to enforcing the law.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards, in collaboration with our Legal, Information Security, and Information Technology Departments and management. Personnel at all levels and departments are made aware of our cybersecurity policies through required trainings.
Biggest changeIn February 2026, our CISO separated from service and we appointed an interim CISO to undertake the responsibilities of the role. As part of our overall risk management system, we monitor and test our safeguards and train our employees on these safeguards, in collaboration with our Legal, Information Security, and Information Technology Departments and management.
The Audit Committee receives updates at least twice a year from management, including our CISO, on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, control maturity assessments, and relevant internal and industry cybersecurity incidents. 46 Table of Contents Our CISO and our management Risk Committee, consisting of our executive leadership team, are responsible for overseeing our cybersecurity risk management processes.
The Audit Committee receives updates at least twice a year from management, including our CISO, on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, control maturity assessments, and relevant internal and industry cybersecurity incidents. 49 Table of Contents Our CISO and our management Risk Committee, consisting of our executive leadership team, are responsible for overseeing our cybersecurity risk management processes.
Under our incident reporting process, cybersecurity incidents are reported, and then reviewed by senior members of our information security, internal audit and legal department, who then evaluate and, if appropriate, escalate any incidents immediately to our Audit Committee. 47 Table of Contents
Under our incident reporting process, cybersecurity incidents are reported, and then reviewed by senior members of our information security, internal audit and legal department, who then evaluate and, if appropriate, escalate any incidents immediately to our Audit Committee. 50 Table of Contents
From time to time, we engage outside consultants in connection with our risk assessment processes. These service providers assist us with evaluating, designing and implementing our cybersecurity policies and procedures, as well as monitoring and testing our safeguards.
Personnel at all levels and departments are made aware of our cybersecurity policies through required trainings. From time to time, we engage outside consultants in connection with our risk assessment processes. These service providers assist us with evaluating, designing and implementing our cybersecurity policies and procedures, as well as monitoring and testing our safeguards.
We devote significant resources and designate high-level personnel, including our Chief Information Security Officer and Head of Information Technology (“CISO”), who reports to our Chief Financial Officer and Chief Technology Officer, to manage the risk assessment and mitigation process. Our CISO has over 25 years of industry experience, including serving in similar roles overseeing cybersecurity programs at other companies.
We devote significant resources and designate high-level personnel, including our Chief Information Security Officer (“CISO”), who reports to our Chief Financial Officer and Chief Technology Officer, to manage the risk assessment and mitigation process.
In addition, our CISO has held Certified Information Systems Security Professional (CISSP), Information Systems Security Management Professional (ISSMP) and Certified Information Security Auditor (CISA) credentials for over a decade. Our CISO also currently holds the National Association of Corporate Directors (NACD) CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University.
Our CISO during fiscal year 2025 had over 25 years of industry experience, including serving in similar roles overseeing cybersecurity programs at other companies, and held Certified Information Systems Security Professional (CISSP), Information Systems Security Management Professional (ISSMP), and Certified Information Security Auditor (CISA) credentials, as well as the National Association of Corporate Directors (NACD) CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe maintain co-working or other short-term office spaces in Austin, Texas; Gurugram, Chennai and Mumbai, India; Istanbul and Ankara, Turkey; and Mexico City, Mexico, through co-working leases or similar arrangements. We believe that our facilities are suitable to meet our current needs.
Biggest changeWe maintain co-working or other short-term office spaces in Austin, Texas; Gurugram, Chennai and Mumbai, India; Istanbul, Turkey; and Mexico City, Mexico, through co-working leases or similar arrangements. We believe that our facilities are suitable to meet our current needs.
Item 2. Properties Our corporate headquarters, consisting of approximately 59,000 square feet of office space in San Francisco, California, is leased through June 2029. We also lease additional office space in locations around the world, including Denver, Colorado; Dublin, Ireland; and Melbourne, Australia.
Item 2. Properties Our corporate headquarters, consisting of approximately 59,000 square feet of office space in San Francisco, California, is leased through June 2029. We also lease additional office space in locations around the world, including Denver, Colorado; Dublin, Ireland; Ankara, Turkey; and Melbourne, Australia.
We anticipate that suitable additional or alternative space would be available at commercially reasonable terms for future expansion, as needed. 48 Table of Contents
We anticipate that suitable additional or alternative space would be available at commercially reasonable terms for future expansion, as needed. 51 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. 49 Table of Contents Item 4. Mine Safety Disclosures Not applicable. 50 Table of Contents PART II.
Biggest changeRegardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. 52 Table of Contents Item 4. Mine Safety Disclosures Not applicable. 53 Table of Contents PART II.
Removed
Video Privacy Protection Act class action complaint and threatened arbitration demands On December 12, 2022, a putative class action complaint captioned Mohamed Saleh v.
Removed
Udemy, Inc., was filed against us, alleging violations of the Video Privacy Protection Act (the “VPPA”) and claiming that Udemy violated the VPPA by knowingly sharing personally identifiable information about the viewing history of Udemy courses with an advertiser. The complaint is currently pending in the United States District Court for the District of New Jersey, Case No. 2:23-cv-02207.
Removed
The complaint seeks declaratory relief, injunctive relief, statutory, liquidated, and punitive damages, as well as reasonable attorney fees and costs. On August 30, 2023, we filed a motion to compel arbitration and on March 21, 2024, the motion was granted and the matter stayed pending individual arbitration.
Removed
In addition, several law firms have threatened to file individual arbitration demands against us on behalf of approximately 20,000 purported Udemy learners. The firms threaten claims similar to those in the class action complaint described above arising under the VPPA and/or California state privacy laws.
Removed
Udemy has resolved the claims of approximately 6,000 of these purported learners for an immaterial amount. We intend to vigorously defend ourselves in these matters. Other legal proceedings We are subject to other legal proceedings and claims that arise in the ordinary course of business from time to time, as well as governmental and other regulatory investigations and proceedings.
Removed
In addition, third parties may from time to time assert claims against us in the form of letters and other communications. We are not currently a party to any legal proceedings that, if determined adversely to us, would, in our opinion, have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Removed
Future litigation may be necessary to defend ourselves and our business partners and to determine the scope, enforceability, and validity of third-party proprietary rights, or to establish our proprietary rights.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table summarizes share repurchase activity during the fourth quarter of 2024: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be repurchased under the program (in thousands) October 1, 2024 - October 31, 2024 1,091,031 $ 7.68 1,091,031 $ 334 November 1, 2024 - November 30, 2024 41,811 8.00 41,811 — December 1, 2024 - December 31, 2024 — — — — Total 1,132,842 $ 7.70 1,132,842 $ — Securities authorized for issuance under equity compensation plans Refer to Item 8, Note 11 – Stockholders' equity for information on securities authorized for issuance. 51 Table of Contents Stock performance graph The following shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any of our other filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Biggest changeThe following table summarizes share repurchase activity during the fourth quarter of 2025: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be repurchased under the program (in thousands) October 1, 2025 - October 31, 2025 1,088,694 $ 6.70 1,088,694 $ 14,386 November 1, 2025 - November 30, 2025 1,911,497 5.15 1,911,497 4,539 December 1, 2025 - December 31, 2025 873,118 5.20 873,118 — Total 3,873,309 $ 5.60 3,873,309 18,925 Securities authorized for issuance under equity compensation plans Refer to Item 8, Note 12 – Stockholders' equity for information on securities authorized for issuance. 54 Table of Contents Stock performance graph The following shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any of our other filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s 500 Index ("S&P 500 Index") and the Nasdaq Computer Index (“Nasdaq Computer Index”) since our IPO on October 29, 2021 through December 31, 2024, assuming an initial investment of $100.
The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor’s 500 Index ("S&P 500 Index") and the Nasdaq Computer Index (“Nasdaq Computer Index”) since our IPO on October 29, 2021 through December 31, 2025, assuming an initial investment of $100.
Stockholders As of December 31, 2024, there were 35 registered stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Recent sales of unregistered equity securities None.
Stockholders As of December 31, 2025, there were 31 registered stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Recent sales of unregistered equity securities None.
Issuer Purchases of Equity Securities In 2024, our Board of Directors approved a share repurchase program, which authorized the purchase of up to $150 million of Udemy common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions.
Issuer Purchases of Equity Securities In 2025, our Board of Directors approved a share repurchase program, which authorized the purchase of up to $50 million of Udemy common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions.
October 29, 2021 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Udemy $ 100.00 $ 71.05 $ 38.36 $ 53.53 $ 29.93 S&P 500 Index $ 100.00 $ 103.76 $ 83.37 $ 103.57 $ 127.71 Nasdaq Computer $ 100.00 $ 105.56 $ 67.79 $ 112.86 $ 153.89 52 Table of Contents Item 6. [Reserved] 53 Table of Contents
October 29, 2021 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 December 31, 2025 Udemy $ 100.00 $ 71.05 $ 38.36 $ 53.53 $ 29.93 $ 21.27 S&P 500 Index $ 100.00 $ 103.76 $ 83.37 $ 103.57 $ 127.71 $ 149.74 Nasdaq Computer $ 100.00 $ 105.56 $ 67.79 $ 112.86 $ 153.89 $ 197.89 55 Table of Contents Item 6. [Reserved] 56 Table of Contents
Removed
The share repurchase program was completed in November 2024.
Added
During fiscal year ended December 31, 2025, the Company repurchased 7,971,500 shares for an aggregate total of $50.2 million, inclusive of direct costs incurred. This share repurchase program was completed in December 2025.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. [Reserved] 53 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 54 Item 7A. Qualitative and Quantitative Disclosures about Market Risk 73 Item 8.
Biggest changeItem 6. [Reserved] 56 Item 7 . Management's Discussion and Analysis of Financial Condition and Results of Operations 57 Item 7A . Quantitative and Qualitative Disclosures about Market Risk 78 Item 8.
Financial Statements and Supplementary Data 74 Consolidated Balance Sheets 77 Consolidated Statements of Operations 78 Consolidated Statements of Comprehensive Loss 79 Consolidated Statements of Stockholders’ Equity 80 Consolidated Statements of Cash Flows 81 Notes to Consolidated Financial Statements 83
Financial Statements and Supplementary Data 79 Consolidated Balance Sheets 82 Consolidated Statements of Operations 83 Consolidated Statements of Comprehensive Income (Loss) 84 Consolidated Statements of Stockholders’ Equity 85 Consolidated Statements of Cash Flows 86 Notes to Consolidated Financial Statements 88

Item 7. Management's Discussion & Analysis

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

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Biggest changeResults are as follows (in thousands, except share and per share amounts): Fiscal Year Ended December 31, 2024 2023 2022 Revenue $ 786,565 $ 728,937 $ 629,097 Cost of revenue (1)(2) 294,625 309,598 275,320 Gross profit 491,940 419,339 353,777 Operating expenses (1)(2) Sales and marketing 342,946 316,738 301,347 Research and development 125,438 120,335 104,556 General and administrative 96,199 93,898 99,064 Restructuring charges 16,685 10,263 — Total operating expenses 581,268 541,234 504,967 Loss from operations (89,328) (121,895) (151,190) Other income (expense), net Interest income 19,666 20,670 5,548 Interest expense 379 (518) (1,251) Other expense, net (11,655) (1,898) (4,696) Total other income (expense), net 8,390 18,254 (399) Net loss before taxes (80,938) (103,641) (151,589) Income tax provision (4,350) (3,653) (2,286) Net loss $ (85,288) $ (107,294) $ (153,875) Net loss per share Basic and diluted $ (0.56) $ (0.71) $ (1.09) Weighted-average shares used in computing net loss per share Basic and diluted 151,320,497 150,098,776 140,873,504 59 Table of Contents (1) Includes stock-based compensation expense as follows (in thousands): Fiscal Year Ended December 31, 2024 2023 2022 Cost of revenue $ 6,887 $ 7,006 $ 5,360 Sales and marketing 28,665 30,859 29,054 Research and development 27,046 26,301 20,850 General and administrative 27,584 30,672 26,029 Restructuring charges (160) 1,208 — Total stock-based compensation expense $ 90,022 $ 96,046 $ 81,293 (2) Includes amortization of intangible assets as follows (in thousands): Fiscal Year Ended December 31, 2024 2023 2022 Cost of revenue $ 1,880 $ 2,900 $ 2,900 Sales and marketing 915 1,208 1,366 Total amortization of intangible assets $ 2,795 $ 4,108 $ 4,266 The following table summarizes our results of operations as a percentage of revenue for each of the periods indicated: Fiscal Year Ended December 31, 2024 2023 2022 Revenue 100 % 100 % 100 % Cost of revenue 37 42 44 Gross profit 63 58 56 Operating expenses Sales and marketing 44 43 48 Research and development 16 17 17 General and administrative 12 13 15 Restructuring charges 2 1 — Total operating expenses 74 74 80 Loss from operations (11) (16) (24) Other income (expense), net Interest income 3 3 1 Interest expense — — — Other expense, net (2) — (1) Total other income (expense), net 1 3 — Net loss before taxes (10) (13) (24) Income tax provision (1) (1) — Net loss (11) % (14) % (24) % 60 Table of Contents Comparison of the fiscal years ended December 31, 2024 and 2023 Revenue Fiscal Year Ended December 31, Change 2024 2023 $ % Revenue (in thousands, except percentages) Enterprise $ 494,458 $ 420,646 $ 73,812 18 % Consumer 292,107 308,291 (16,184) (5) % Total revenue $ 786,565 $ 728,937 $ 57,628 8 % Revenue for the fiscal year ended December 31, 2024, was $786.6 million, compared to $728.9 million for the same period in the prior year, which represents an increase of $57.6 million, or 8%.
Biggest changeResults are as follows (in thousands): Fiscal Year Ended December 31, 2025 2024 2023 Revenue $ 789,844 $ 786,565 $ 728,937 Cost of revenue (1)(2) 271,438 294,625 309,598 Gross profit 518,406 491,940 419,339 Operating expenses (1)(2) Sales and marketing 326,451 342,946 316,738 Research and development 101,513 125,438 120,335 General and administrative 93,020 96,199 93,898 Restructuring charges 1,578 16,685 10,263 Total operating expenses 522,562 581,268 541,234 Loss from operations (4,156) (89,328) (121,895) Other income (expense), net Interest income 14,208 19,666 20,670 Interest expense (734) 379 (518) Other expense, net (981) (11,655) (1,898) Total other income, net 12,493 8,390 18,254 Net income (loss) before taxes 8,337 (80,938) (103,641) Income tax provision 4,530 4,350 3,653 Net income (loss) $ 3,807 $ (85,288) $ (107,294) (1) Includes stock-based compensation expense as follows (in thousands): Fiscal Year Ended December 31, 2025 2024 2023 Cost of revenue $ 6,748 $ 6,887 $ 7,006 Sales and marketing 22,074 28,665 30,859 Research and development 18,385 27,046 26,301 General and administrative 21,547 27,584 30,672 Restructuring charges $ — $ (160) $ 1,208 Total stock-based compensation expense $ 68,754 $ 90,022 $ 96,046 (2) Includes amortization of intangible assets as follows (in thousands): Fiscal Year Ended December 31, 2025 2024 2023 Cost of revenue $ — $ 1,880 $ 2,900 Sales and marketing 918 915 1,208 Research and development 563 — — Total amortization of intangible assets $ 1,481 $ 2,795 $ 4,108 63 Table of Contents The following table summarizes our results of operations as a percentage of revenue for each of the periods indicated: Fiscal Year Ended December 31, 2025 2024 2023 Revenue 100 % 100 % 100 % Cost of revenue 34 37 42 Gross profit 66 63 58 Operating expenses Sales and marketing 41 44 43 Research and development 13 16 17 General and administrative 12 12 13 Restructuring charges — 2 1 Total operating expenses 66 74 74 Loss from operations — (11) (16) Other income (expense), net Interest income 1 3 3 Interest expense — — — Other expense, net — (2) — Total other income, net 1 1 3 Net income (loss) before taxes 1 (10) (13) Income tax provision 1 1 1 Net income (loss) — % (11) % (14) % Comparison of the fiscal years ended December 31, 2025 and 2024 Revenue Fiscal Year Ended December 31, Change 2025 2024 $ % Revenue (in thousands, except percentages) Enterprise $ 524,074 $ 494,458 $ 29,616 6 % Consumer 265,770 292,107 (26,337) (9) % Total revenue $ 789,844 $ 786,565 $ 3,279 — % Revenue for the fiscal year ended December 31, 2025, was $789.8 million, compared to $786.6 million for the prior year, which represents an increase of $3.3 million, or 0.4%.
Other expense, net Other expense, net consists of foreign currency transaction gains and losses, as well as changes in the valuation of strategic investments, if any. Income tax provision Our income tax provision consists primarily of income taxes in certain foreign jurisdictions in which we conduct business.
Other income (expense), net Other expense, net consists of foreign currency transaction gains and losses, as well as changes in the valuation of strategic investments, if any. Income tax provision Our income tax provision consists primarily of income taxes in certain foreign jurisdictions in which we conduct business.
Financing activities For the fiscal year ended December 31, 2024, net cash used in financing activities was $171.7 million, driven by repurchases of common stock of $150.3 million and $30.8 million in taxes paid related to net share settlement of employee equity awards.
For the fiscal year ended December 31, 2024, net cash used in financing activities was $171.7 million, driven by $150.3 million in repurchases of common stock and $30.8 million in taxes paid related to net share settlement of employee equity awards.
The valuation allowance is driven by our overall loss position, and we will not be able to utilize any of these favorable tax attributes until we are in a taxable income position. When we begin to consistently operate in a taxable income position, we may release portions of the valuation allowance to recognize and use those tax attributes.
The valuation allowance is driven by our historical overall loss position, and we will not be able to utilize any of these favorable tax attributes until we are consistently in a taxable income position. When we begin to consistently operate in a taxable income position, we may release portions of the valuation allowance to recognize and use those tax attributes.
However, it is difficult to predict customer adoption rates and demand, the future growth rate and size of the market for cloud-based skill development solutions, or the entry of competitive solutions. Components of results of operations Revenue We recognize revenue from contracts with UB customers and paid consumer learners by delivering access to our online learning platform.
However, it is difficult to predict customer adoption rates and demand, the future growth rate and size of the market for cloud-based skill development solutions, or the entry of competitive solutions. Components of results of operations Revenue We recognize revenue from contracts with UB customers and paid consumer learners by delivering access to our skill development platform.
Until then, we expect to maintain this full valuation allowance until it becomes more likely than not that the deferred tax assets will be realized. 58 Table of Contents Results of operations The following table summarizes our results of operations for the periods presented. The results below are not necessarily indicative of results to be expected for future periods.
Until then, we expect to maintain this full valuation allowance until it becomes more likely than not that the deferred tax assets will be realized. 62 Table of Contents Results of operations The following table summarizes our results of operations for the periods presented. The results below are not necessarily indicative of results to be expected for future periods.
Restructuring charges Our restructuring charges consist primarily of personnel expenses, such as employee severance, benefits costs, and stock-based compensation, as well as other direct and incremental costs incurred as a result of non-recurring restructuring activities that we committed to during the third quarter of 2024 and the first quarter of 2023.
Restructuring charges Our restructuring charges consist primarily of personnel expenses, such as employee severance, benefits costs, and stock-based compensation, as well as other direct and incremental costs incurred as a result of non-recurring restructuring activities that we committed to during the third quarter of 2024.
We believe UB Large Customer NDRR reflects our ability to retain and expand our footprint with larger organizations, who present greater opportunities for us to retain and grow revenue given the wider range of potential use cases and land-and-expand opportunities.
We believe UB Large Customer NDRR reflects our ability to retain and expand our footprint with larger organizations, who present greater opportunities for us to retain and grow revenue given the wider range of potential use cases and expansion opportunities.
Recent accounting pronouncements See Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recently issued accounting pronouncements. 72 Table of Contents
Recent accounting pronouncements See Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding recently issued accounting pronouncements. 77 Table of Contents
Historically, we have expanded from individual to department to multi-department to enterprise-wide sales as our value is proven. Building upon this success, we believe a significant opportunity exists for us to acquire new UB customers and expand our existing UB customers’ use of our platform by identifying new use cases and increasing the size of existing deployments.
Historically, we have expanded from individual department to multi-department to enterprise-wide sales as our value is proven. Building upon this success, we believe a significant opportunity exists for us to acquire new UB customers and expand our existing UB customers’ license count by identifying new use cases and increasing the size of existing deployments.
Future grants or modifications of stock-based awards that require the use of complex valuation models may cause us to alter or refine the estimates and assumptions described above, which could impact future stock-based compensation expense. Income taxes We are subject to income taxes in the United States and numerous foreign jurisdictions.
Future grants or modifications of stock-based awards that require the use of complex 76 Table of Contents valuation models may cause us to alter or refine the estimates and assumptions described above, which could impact future stock-based compensation expense. Income taxes We are subject to income taxes in the United States and numerous foreign jurisdictions.
The increase in revenue for the fiscal year ended December 31, 2024 was primarily driven by an increase in revenue from our Enterprise segment while being partially offset by a decrease in revenue from our Consumer segment.
The increase in revenue for the fiscal year ended December 31, 2025 was primarily driven by an increase in revenue from our Enterprise segment while being partially offset by a decrease in revenue from our Consumer segment.
Access to the Udemy platform represents a series of distinct services as we continually provide access to course content and fulfill our obligation to the UB customer over the subscription term. Because the series of distinct services represents a single performance obligation that is satisfied over time, we recognize revenue ratably over the contractual subscription term.
Access to the Udemy platform represents a series of distinct services as we continually provide access to skill development content and fulfill our obligation to the UB customer over the subscription term. Because the series of distinct services represents a single performance obligation that is satisfied over time, we recognize revenue ratably over the contractual subscription term.
A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023 is presented below.
A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2025 compared to the fiscal year ended December 31, 2024 is presented below.
We are the principal with respect to revenue generated from sales to UB and consumer customers as we control the performance obligation and are the primary obligor with respect to delivering our customers access to the course content. Cost of revenue Cost of revenue primarily consists of content costs, which are the payments to our instructors.
We are the principal with respect to revenue generated from sales to UB and consumer customers as we control the performance obligation and are the primary obligor with respect to delivering our customers access to the course content. 60 Table of Contents Cost of revenue Cost of revenue primarily consists of content costs, which are the payments to our instructors.
Interest income Interest income consists primarily of interest income earned on our cash equivalents and short-term investments, including amortization of premiums and accretion of discounts related to our available-for-sale marketable securities, net of associated fees. Interest expense Interest expense consists primarily of interest expense related to certain indirect tax reserves.
Interest income Interest income consists primarily of interest income earned on our cash equivalents and short-term investments, including amortization of premiums and accretion of discounts related to our available-for-sale marketable securities, net of associated fees. Interest expense Interest expense consists primarily of interest expense related to our revolving credit facility and certain indirect tax reserves.
We presently expect that revenue from our Enterprise segment will continue to grow faster than our Consumer segment, which will be beneficial to our overall margins. 55 Table of Contents Ability to expand our international footprint We currently generate a majority of our revenue outside North America.
We presently expect that revenue from our Enterprise segment will continue to grow faster than our Consumer segment, which will be beneficial to our overall margins. Ability to expand our international footprint We currently generate a majority of our revenue outside North America.
As such, we recognize revenue on a straight-line basis using an estimated service period for consumer single course purchases and the contractual subscription term for UB and consumer subscription customers. Our professional services arrangements are generally offered as fixed price contracts. The revenue associated with these contracts is recognized on a proportional performance basis.
As such, we recognize revenue on a straight-line basis using an estimated service period for consumer single course 75 Table of Contents purchases and the contractual subscription term for UB and consumer subscription customers. Our professional services arrangements are generally offered as fixed price contracts. The revenue associated with these contracts is recognized on a proportional performance basis.
Enterprise revenue recognized from professional services, in which Udemy provides customers with effective support and strategic guidance to enable learners and align with business goals, was immaterial for the periods presented. 56 Table of Contents Consumer revenue consists of individual course content purchases made by individual learners, as well as our consumer subscription offerings.
Enterprise revenue recognized from professional services, in which Udemy provides customers with effective support and strategic guidance to enable learners and align with business goals, was immaterial for the periods presented. Consumer revenue consists of individual content purchases made by individual learners, as well as our consumer subscription offerings.
Restricted cash totaled $1.2 million and consists of cash deposited with financial institutions held as collateral for our obligations under various facility leases. Marketable securities are comprised of investments in U.S. government securities with an original maturity greater than 90 days at the date of purchase.
Restricted cash totaled $0.4 million and consists of cash deposited with financial institutions held as collateral for our obligations under various facility leases. Marketable securities are comprised of investments in U.S. government securities with an original maturity greater than 90 days at the date of purchase.
A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our prior year Form 10-K, which was filed with the SEC on February 26, 2024.
A discussion regarding our financial condition and results of operations for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023 can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our prior year Form 10-K, which was filed with the SEC on February 19, 2025.
Income tax expense for the fiscal years ended December 31, 2024 and 2023, was primarily comprised of foreign and state taxes.
Income tax expense for the fiscal years ended December 31, 2025 and 2024, was primarily comprised of foreign and state taxes.
Fiscal Year Ended December 31, 2024 2023 2022 (in thousands) Monthly average buyers 1,340 1,378 1,336 Segment revenue and segment adjusted gross profit Our revenue is generated from our UB and Consumer offerings, which respectively correspond to our two operating and reportable segments, Enterprise and Consumer.
Fiscal Year Ended December 31, 2025 2024 2023 (in thousands) Monthly average buyers 1,275 1,340 1,378 Segment revenue and segment adjusted gross profit Our revenue is generated from our UB and Consumer offerings, which respectively correspond to our two operating and reportable segments, Enterprise and Consumer.
As we drive a greater portion of our revenue through our deployments with UB customers, we expect that our revenue will continue to grow significantly, but the price we charge UB customers per seat may decline, which could reduce margins in the future.
Over the long term, as we drive a greater portion of our revenue through our deployments with UB customers, we expect that our revenue will continue to grow, but the price we charge UB customers per seat may decline, which could reduce margins in the future.
We define adjusted EBITDA as net loss, adjusted to exclude: • interest income; • interest expense; • provision for income taxes; • depreciation and amortization; • stock-based compensation expense; • other expense, net; and • restructuring charges.
We define adjusted EBITDA as net income (loss), adjusted to exclude: • interest income; • interest expense; • provision for income taxes; • depreciation and amortization; • stock-based compensation expense; • other expense, net; • restructuring charges; and • acquisition related costs.
We expect cost of revenue as a percentage of revenue to generally decrease, as we increase the percentage of revenue derived from our UB offering and decrease the instructor revenue share percentage. Operating expenses Operating expenses consist of sales and marketing, research and development, general and administrative expenses, and restructuring charges.
We expect cost of revenue as a percentage of revenue to generally decrease, as we increase the percentage of revenue derived from our subscription offerings and decrease the instructor revenue share percentage. Operating expenses Operating expenses consist of sales and marketing, research and development, general and administrative expenses, and restructuring charges.
Under our operating leases, as noted in the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data", Note 6 – Leases, we have a current obligation of $2.5 million and a long-term obligation of $8.3 million.
Under our operating leases, as noted in the consolidated financial statements included in Part II, Item 8, "Financial Statements and Supplementary Data", Note 7 – Leases, we have a current obligation of $4.5 million and a long-term obligation of $5.7 million.
As we continue to build our sales and marketing efforts, expand our course catalog, develop our immersive learning capabilities, execute on our operational efficiency initiatives, and invest in our technology development, including investments in generative artificial intelligence, we anticipate our operating expenses will generally decrease as a percentage of revenue over time.
As we continue to build our sales and marketing efforts, expand our content collection, develop our immersive learning capabilities, execute on our operational efficiency initiatives, and invest in our technology development, including investments in generative AI, we anticipate our operating expenses will generally decrease as a percentage of revenue over time.
Additionally, we had $12.0 million of non-cancelable contractual commitments with our third-party cloud infrastructure agreement for fiscal year 2025. Refer to Note 7 – Commitments and contingencies, to the consolidated financials included in Part II, Item 8, "Financial Statements and Supplementary Data", for more information.
Additionally, we had $15.1 million of non-cancelable contractual commitments with our third-party cloud infrastructure agreement for fiscal year 2026. Refer to Note 8 – Commitments and contingencies to the consolidated financials included in Part II, Item 8, "Financial Statements and Supplementary Data", for more information.
December 31, 2024 2023 2022 (in thousands) Udemy Business annual recurring revenue $ 516,945 $ 465,997 $ 371,727 Udemy Business Net Dollar Retention Rate and Udemy Business Large Customer Net Dollar Retention Rate We disclose UB Net Dollar Retention Rate, or UB NDRR, as a measure of revenue growth for all UB customers within our Enterprise segment, including UB Large Customers, which we define as companies with at least 1,000 employees.
As of December 31, 2025 2024 2023 (in thousands) Udemy Business annual recurring revenue $ 539,973 $ 516,945 $ 465,997 67 Table of Contents Udemy Business Net Dollar Retention Rate and Udemy Business Large Customer Net Dollar Retention Rate We disclose UB Net Dollar Retention Rate, or UB NDRR, as a measure of revenue growth for all UB customers within our Enterprise segment, including UB Large Customers, which we define as companies with at least 1,000 employees.
Our efforts to grow our existing relationships with our consumer learners are focused on increasing their engagement and converting free learners first into purchasers of individuals courses, and then into subscribers.
Our efforts to grow our existing relationships with our consumer learners are focused on increasing their engagement and converting free learners first into purchasers of individual courses, and then into monthly or annual subscribers.
From time to time, we may explore additional financing sources, which could include equity, equity-linked or debt financing. In addition, in connection with any future acquisitions or strategic investments, we may pursue additional funding, which could include debt, equity or equity-linked financings, or a combination of these methods.
In addition, in connection with any future acquisitions or strategic investments, we may pursue additional funding, which could include debt, equity or equity-linked financings, or a combination of these methods.
When we offer content as part of the UB and consumer subscription offerings, our instructors agree to distribute such content exclusively through our platform, which we believe demonstrates our ability to increase the value of our platform through unique content.
When we offer content as part of the UB and consumer subscription offerings, our instructors agree to distribute such content exclusively through our platform, which we believe demonstrates our ability to increase the value of our platform through unique content. We view the breadth and diverse expertise of our instructors as one of our competitive advantages.
For consumer single course purchases, content costs are incurred at the time of purchase. As consumer course content revenue is recognized ratably over an estimated service period of four months, consumer gross margins are lower in the period of purchase, and higher in the remaining periods of the estimated service period over which revenue is recognized.
As consumer course content revenue is recognized ratably over an estimated service period of four months, consumer gross margins are lower in the period of purchase, and higher in the remaining periods of the estimated service period over which revenue is recognized.
The following table summarizes our cash flows for the periods indicated (in thousands): Fiscal Year Ended December 31, 2024 2023 2022 Net cash provided by (used in): Operating activities $ 53,043 $ (2,005) $ (60,957) Investing activities 1,077 (24,972) (173,227) Financing activities (171,749) 19,195 14,755 Effect of foreign exchange rates on cash flows (116) 20 (25) Net decrease in cash, cash equivalents and restricted cash $ (117,745) $ (7,762) $ (219,454) Operating activities Cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization, amortization of deferred sales commissions, as well as the effect of changes in operating assets and liabilities during each period.
The following table summarizes our cash flows for the periods indicated (in thousands): Fiscal Year Ended December 31, 2025 2024 2023 Net cash provided by (used in): Operating activities $ 87,659 $ 53,043 $ (2,005) Investing activities 20,629 1,077 (24,972) Financing activities (68,464) (171,749) 19,195 Effect of foreign exchange rates on cash flows 238 (116) 20 Net increase (decrease) in cash, cash equivalents and restricted cash $ 40,062 $ (117,745) $ (7,762) Operating activities Cash provided by operating activities mainly consists of our net income (loss), adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization, amortization of deferred sales commissions, as well as the effect of changes in operating assets and liabilities during each period.
Investing activities For the fiscal year ended December 31, 2024, net cash provided by investing activities was $1.1 million, primarily as a result of $352.8 million of proceeds received from the maturity of marketable securities, which was partially offset by $336.9 million in purchases of marketable securities and $12.5 million related to capitalized internal-use software costs.
Investing activities For the fiscal year ended December 31, 2025, net cash provided by investing activities was $20.6 million, primarily as a result of $222.4 million of proceeds received from the maturity and sale of marketable securities, which was partially offset by $182.6 million in purchases of marketable securities, $11.9 million related to capitalized software costs, $5.8 million in purchases of property and equipment, and $1.5 million for payments related to asset acquisitions. 74 Table of Contents For the fiscal year ended December 31, 2024, net cash provided by investing activities was $1.1 million, primarily as a result of $352.8 million of proceeds received from the maturity of marketable securities, which was partially offset by $336.9 million in purchases of marketable securities and $12.5 million related to capitalized internal-use software costs.
Segment content costs as a percentage of segment revenue for the Enterprise and Consumer segments were 18% and 35% for fiscal year ended December 31, 2024, compared to 23% and 37% for the same period in the prior year, respectively.
Segment content costs as a percentage of segment revenue for the Enterprise and Consumer segments were 16% and 32% for the fiscal year ended December 31, 2025, respectively, compared to 18% and 35% for the prior year, respectively.
Overview Our mission is to transform lives through learning. We believe traditional skills development and validation methods are fast becoming outdated. Technological advancements and novel industries have significantly altered the types of skills required of workers, and lifelong training and continuous skills acquisition are becoming the norm.
Overview Our mission is to transform lives through learning. We believe traditional skills development and validation methods are fast becoming outdated. Technological advancements, such as generative artificial intelligence (“AI”), have significantly altered the types of skills required of workers across nearly every industry and role, and lifelong training and continuous skills acquisition are becoming the norm.
We curate the highest-quality content from our marketplace for Udemy’s enterprise SaaS platform, Udemy Business (UB), which enables companies around the world to offer effective on-demand learning for employees, immersive laboratory-style learning for tech teams, and cohort-based learning focused on leadership development.
Based on ratings and reviews from enrolled learners on our marketplace, we curate our highest-quality content for Udemy’s enterprise software-as-a-service (SaaS) platform, Udemy Business (“UB”), which enables companies around the world to offer effective on-demand skills development solutions for employees, immersive laboratory-style learning for technology teams, and cohort-based learning focused on leadership development.
We cannot be certain our revenue will grow sufficiently to offset our operating expense increases. As a result, we may need to raise additional funds to support our operations, and such funding may not be available to us on acceptable terms, if at all.
As a result, we may need to raise additional funds to support our operations, and such funding may not be available to us on acceptable terms, if at all.
Principal versus agent — In order to determine whether revenue should be reported as gross or net of either payments to third-party instructors or amounts retained by reseller partners who sell access to Enterprise subscription offerings, we evaluated whether we are the principal for sales of our consumer and UB offerings. 70 Table of Contents Determining whether we are the principal involves making key judgments about whether Udemy controls the contracted services before being transferred to the end customer.
Principal versus agent — In order to determine whether revenue should be reported as gross or net of either payments to third-party instructors or amounts retained by reseller partners who sell access to Enterprise subscription offerings, we evaluated whether we are the principal for sales of our consumer and UB offerings.
Sales and marketing expenses for the fiscal year ended December 31, 2024 were $342.9 million, compared to $316.7 million for the same period in the prior year.
Sales and marketing expenses for the fiscal year ended December 31, 2025 were $326.5 million, compared to $342.9 million in the prior year.
Ability to source in-demand content from our instructors We believe that learners and UB customers are attracted to Udemy largely because of the high quality and wide selection of content our instructors offer. Continuing to source in-demand content and credentials from our instructors will be an important factor in attracting learners and UB customers and growing our revenue over time.
Ability to source in-demand content from our instructors We believe that learners and UB customers are attracted to Udemy largely because of the high quality and wide selection of content our instructors offer.
Fiscal Year Ended December 31, 2024 2023 2022 (in thousands, except percentages) Enterprise segment revenue $ 494,458 $ 420,646 $ 314,038 Enterprise segment adjusted gross profit $ 361,673 $ 283,419 $ 209,461 Enterprise segment adjusted gross margin 73 % 67 % 67 % Consumer segment revenue $ 292,107 $ 308,291 $ 315,059 Consumer segment adjusted gross profit $ 159,357 $ 163,766 $ 165,805 Consumer segment adjusted gross margin 55 % 53 % 53 % For the fiscal year ended December 31, 2024, the improvement in Enterprise segment adjusted gross margin was primarily due to the reduction in instructor revenue share from 25% to 20% for all subscription offerings, which was effective on January 1, 2024.
Fiscal Year Ended December 31, 2025 2024 2023 (in thousands except percentages) Enterprise segment revenue $ 524,074 $ 494,458 $ 420,646 Enterprise segment adjusted gross profit $ 394,920 $ 361,673 $ 283,419 Enterprise segment adjusted gross margin 75 % 73 % 67 % Consumer segment revenue $ 265,770 $ 292,107 $ 308,291 Consumer segment adjusted gross profit $ 151,493 $ 159,357 $ 163,766 Consumer segment adjusted gross margin 57 % 55 % 53 % For the fiscal year ended December 31, 2025, the increase in Enterprise segment adjusted gross margin was primarily due to the reduction in instructor revenue share from 20% to 17.5% for all subscription offerings, which was effective on January 1, 2025.
Off-balance sheet arrangements During the periods presented, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. 69 Table of Contents Contractual obligations and commitments Our estimated future obligations as of December 31, 2024, include both current and long term obligations.
Off-balance sheet arrangements During the periods presented, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
We also plan to continue investing in strategic partnerships that either extend our marketing reach or the capabilities and reach of our global go-to-market sales team. Our success in certain markets, such as Japan, depends on strategic partnerships with key resellers.
We also plan to continue investing in strategic partnerships that either extend our marketing reach or the capabilities and reach of our global go-to-market sales team.
We define adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period. 66 Table of Contents The following table provides a reconciliation of net loss, the most directly comparable GAAP financial measure, to adjusted EBITDA (in thousands): Fiscal Year Ended December 31, 2024 2023 2022 Net loss $ (85,288) $ (107,294) $ (153,875) Adjusted to exclude the following: Interest income (19,666) (20,670) (5,548) Interest expense (379) 518 1,251 Income tax provision 4,350 3,653 2,286 Depreciation and amortization 25,421 24,588 21,216 Stock-based compensation expense 90,182 94,838 81,293 Other expense, net 11,655 1,898 4,696 Restructuring charges 16,685 10,263 — Adjusted EBITDA $ 42,960 $ 7,794 $ (48,681) The following table provides a reconciliation of net loss margin, the most directly comparable GAAP financial measure, to adjusted EBITDA margin (in thousands, except percentages): Fiscal Year Ended December 31, 2024 2023 2022 Revenue $ 786,565 $ 728,937 $ 629,097 Net loss $ (85,288) $ (107,294) $ (153,875) Net loss margin (11) % (15) % (24) % Revenue $ 786,565 $ 728,937 $ 629,097 Adjusted EBITDA $ 42,960 $ 7,794 $ (48,681) Adjusted EBITDA margin 5 % 1 % (8) % Net loss decreased by $22.0 million in the fiscal year ended December 31, 2024, compared to the same period in the prior year.
We define adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period. 70 Table of Contents The following table provides a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to adjusted EBITDA (in thousands): Fiscal Year Ended December 31, 2025 2024 2023 Net income (loss) $ 3,807 $ (85,288) $ (107,294) Adjusted to exclude the following: Interest income (14,208) (19,666) (20,670) Interest expense 734 (379) 518 Income tax provision 4,530 4,350 3,653 Depreciation and amortization 25,359 25,421 24,588 Stock-based compensation expense 68,754 90,182 94,838 Other expense, net 981 11,655 1,898 Restructuring charges 1,578 16,685 10,263 Acquisition-related costs 3,729 — — Adjusted EBITDA $ 95,264 $ 42,960 $ 7,794 The following table provides a reconciliation of net income (loss) margin, the most directly comparable GAAP financial measure, to adjusted EBITDA margin (in thousands, except percentages): Fiscal Year Ended December 31, 2025 2024 2023 Revenue $ 789,844 $ 786,565 $ 728,937 Net income (loss) $ 3,807 $ (85,288) $ (107,294) Net income (loss) margin 0 % (11) % (15) % Revenue $ 789,844 $ 786,565 $ 728,937 Adjusted EBITDA $ 95,264 $ 42,960 $ 7,794 Adjusted EBITDA margin 12 % 5 % 1 % Net income (loss) improved by $89.1 million during the fiscal year ended December 31, 2025, compared to the prior year.
Content costs for the Enterprise and Consumer segments were $89.6 million and $102.7 million for the fiscal year ended December 31, 2024, respectively, compared to $95.8 million and $113.7 million for the same period in the prior year, respectively.
Content costs for the Enterprise and Consumer segments were $84.5 million and $85.0 million for the fiscal year ended December 31, 2025, respectively, compared to $89.6 million and $102.7 million in the prior year, respectively.
New learners to our platform may first engage with our free courses, which serve as a funnel to grow our total learner base and drive purchases and referrals to our paid offerings. Our efforts to grow our UB offering are focused primarily on corporate and government customers.
New learners to our platform may first engage with our free courses, which serve as a funnel to grow our total learner base and drive purchases of our paid offerings, including UB referrals and consumer subscription offerings.
The reduction in content costs as a percentage of revenue was primarily driven by the reduction in instructor revenue share from 25% to 20% for all subscription offerings, which became effective on January 1, 2024.
The reduction in content costs as a percentage of revenue was primarily driven by the reduction in instructor revenue share from 20% to 17.5% for all subscription offerings, which became effective on January 1, 2025, as well as the continued mix shift from single course purchases to subscription purchases in our Consumer segment.
Other contractual obligations primarily consisted of commitments related to our third-party cloud infrastructure provider, paid advertising and sponsorship vendors, and software subscriptions to support operations in the ordinary course of business. As of December 31, 2024, we had $19.9 million of other purchase obligations with remaining terms in excess of one year.
Other contractual obligations generally consist of commitments to third-party cloud infrastructure providers, software subscriptions, and other service agreements to support operations in the ordinary course of business. As of December 31, 2025, we had $27.9 million of other purchase obligations with remaining terms in excess of one year.
The decrease of $15.0 million, or 5%, across the comparative periods was driven by a $17.2 million decrease in content costs and was partially offset by a $2.4 million increase in amortization of capitalized software.
The decrease of $23.2 million, or 8%, across the comparative periods was driven by a $22.8 million decrease in content costs and a $1.9 million decrease in amortization of intangible assets, which were partially offset by a $0.8 million increase in amortization of capitalized software.
In our Enterprise segment, customer support costs increased by $0.6 million, and other segment items, comprised of payment processing fees and hosting costs, increased by $1.1 million, as compared to the same period in the prior year.
In our Enterprise segment, customer support costs and other segment items were generally consistent with those costs incurred the prior year. In our Consumer segment, other segment items, comprised of payment processing fees and hosting costs, decreased by $1.2 million as compared to the prior year.
We believe that continued investment in our platform is important to our future growth and to maintain and attract learners and UB customers to our platform.
Research and development costs also include contracted services, supplies, and other miscellaneous expenses. We believe that continued investment in our platform is important to our future growth and to maintain and attract learners and UB customers to our platform.
Monthly average buyers purchasing single courses, as well as the amount of revenue recognized in the current period that was deferred from course purchases in the prior period, each decreased across the comparative periods. Foreign currency exchange rates also contributed to the decrease.
The decrease in transactional and other revenue is primarily attributable to a decrease in monthly average buyers purchasing single courses, the amount of revenue recognized in the current period that was deferred from course purchases in the prior period, and foreign currency exchange rates.
In particular, we believe that our UB Large Customers, which we define as companies with at least 1,000 employees, present the most significant opportunities for us to retain and grow revenue over time, given the wider range of potential use cases and land-and-expand opportunities.
In particular, we believe that our UB Large Customers, which we define as companies with at least 1,000 employees, present the most significant opportunities for us to retain and grow revenue over time, given the wider range of potential use cases and expansion opportunities. 58 Table of Contents We often enter into customized contractual arrangements with our UB customers in which we offer more favorable pricing terms in exchange for larger total contract values that accompany larger deployments and longer terms.
We can provide no assurance that any additional financing will be available to us on acceptable terms. Use of funds Our principal uses of cash are funding our operations, capital expenditures and working capital requirements. We have generated significant net losses from our operations as reflected in our accumulated deficit of $805.0 million as of December 31, 2024.
We can provide no assurance that any additional financing will be available to us on acceptable terms. 73 Table of Contents Use of funds Our principal uses of cash are funding our operations, capital expenditures and working capital requirements.
Our investment in growth We are actively investing in our business as we believe that we are only just beginning to penetrate our market opportunity. We are prioritizing resources for high-growth opportunities through expanding and deepening our opportunities with larger enterprise customers, further penetrating our existing customer base, and pursuing strategic partnerships.
We are prioritizing resources for high-growth opportunities through expanding and deepening our opportunities with larger enterprise customers, further penetrating our existing customer base, and pursuing strategic partnerships and acquisitions.
We are reducing the instructor revenue share for our subscription offerings, which are derived as a percentage of total UB and consumer subscription revenue, from a historical rate of 25% to 15% by 2026. The first rate adjustment to 20% was effective on January 1, 2024, and the second rate adjustment to 17.5% was effective as of January 1, 2025.
We are reducing the instructor revenue share for our subscription offerings, which are derived as a percentage of total UB and consumer subscription revenue, to 15% by 2026.
The $5.1 million increase was primarily due to a $3.0 million increase in software subscriptions and allocated costs and a $2.0 million increase in personnel-related expenses. General and administrative. General and administrative expenses for the fiscal year ended December 31, 2024 were $96.2 million, compared to $93.9 million for the same period in the prior year.
The $23.9 million decrease was primarily due to a $15.1 million decrease in personnel-related expenses and a $8.7 million decrease in stock-based compensation expense. General and administrative. General and administrative expenses for the fiscal year ended December 31, 2025 were $93.0 million, compared to $96.2 million in the prior year.
Impact of mix of Enterprise and Consumer segments Our mix of revenue continues to shift toward our higher-margin Enterprise segment from our Consumer segment. Our Enterprise segment’s higher gross margins are primarily driven by comparably lower content costs, though partially offset by higher customer support costs.
Our Enterprise segment’s higher gross margins are primarily driven by comparably lower content costs, though partially offset by higher customer support costs. The mix of customer acquisition methods in our Consumer segment will substantially impact our financial performance.
These changes were offset by a $58.3 million increase in deferred contract costs, due to continued expansion in our Enterprise business, $5.8 million in outflows due to changes in our operating lease liabilities, and a $4.6 million increase in prepaid and other assets.
Cash outflows due to changes in operating assets and liabilities were primarily driven by $58.3 million in additions to deferred contract costs, attributable to continued expansion in our Enterprise business.
Cost of revenue, gross profit and gross margin Fiscal Year Ended December 31, Change 2024 2023 $ % (in thousands, except percentages) Cost of revenue 294,625 309,598 $ (14,973) (5) % Gross profit 491,940 419,339 $ 72,601 17 % Gross margin 63 % 58 % Cost of revenue for the fiscal year ended December 31, 2024, was $294.6 million, compared to $309.6 million for the same period in the prior year.
Cost of revenue, gross profit and gross margin Fiscal Year Ended December 31, Change 2025 2024 $ % (in thousands, except percentages) Cost of revenue 271,438 294,625 $ (23,187) (8) % Gross profit 518,406 491,940 $ 26,466 5 % Gross margin 66 % 63 % Cost of revenue for the fiscal year ended December 31, 2025, was $271.4 million, compared to $294.6 million for the prior year.
We also evaluate the estimated remaining useful life of intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization.
Goodwill and intangible assets We evaluate and test the recoverability of goodwill for impairment annually, during the fourth quarter, or more often if and when circumstances indicate that goodwill may not be recoverable. We also evaluate the estimated remaining useful life of intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization.
Over the long term, we plan to continue investing in the growth and development of our platform. If our available funds are insufficient to fund these future activities or execute on our business strategies, we may raise additional capital through equity, equity-linked or debt financing, to the extent such funding sources are available.
If our available funds are insufficient to fund these future activities or execute on our business strategies, we may raise additional capital through equity, equity-linked or debt financing, to the extent such funding sources are available. Alternatively, we may be required to reduce expenses to manage liquidity; however, any such reductions could adversely impact our business and competitive position.
Our primary use of cash from operating activities are for personnel-related expenses, instructor payments, advertising and marketing expenses, indirect taxes, and third-party cloud infrastructure expenses. 68 Table of Contents For the fiscal year ended December 31, 2024, cash provided by operating activities was $53.0 million, primarily consisting of our net loss of $85.3 million, adjusted for non-cash charges of $185.7 million and net cash outflows of $47.4 million provided by changes in our operating assets and liabilities.
Our main source of operating cash is payments received from our customers. Our primary use of cash from operating activities are for personnel-related expenses, instructor payments, advertising and marketing expenses, indirect taxes, and third-party cloud infrastructure expenses. For the fiscal year ended December 31, 2025, cash provided by operating activities was $87.7 million.
The majority of the charges recognized were made up of $15.5 million in personnel-related costs, consisting of one-time severance payments, salary and wages earned over required retention periods, and other benefits . In comparison, as a result of the restructuring activities announced in February 2023, we recognized restructuring charges of $10.3 million during the fiscal year ended December 31, 2023.
As a result of the strategic restructuring activities announced in September 2024, we recognized $1.6 million and $16.7 million of restructuring charges during the fiscal years ended December 31, 2025 and 2024, respectively . The restructuring charges primarily consisted of one-time severance payments, salary and wages earned over required retention periods, and other benefits.
ARR represents the annualized value of our UB customer contracts on the last day of a given period. Only revenue from closed UB contracts with active seats as of the last day of the period are included. The increase in UB ARR was primarily driven by an increase in the number of UB customers.
Only revenue from closed UB contracts with active seats as of the last day of the period are included. The increase in UB ARR was primarily driven by an increase in the average deal size for new customers, and was partially offset by churn outpacing expansion across all existing customers.
We believe that our existing cash and cash equivalents and our expected cash flows from operations will be sufficient to meet our cash needs for at least the next 12 months. 67 Table of Contents As discussed above, we committed to a restructuring plan in September 2024.
We believe that our existing cash and cash equivalents and our expected cash flows from operations will be sufficient to meet our cash needs for at least the next 12 months. In May 2025, we entered into a credit agreement with Citibank and certain other financial institutions.
We consider all available evidence, both positive and negative, including historical levels of income, expectations, and risks associated with estimates of future taxable income in assessing the need for a valuation allowance. 71 Table of Contents Goodwill and intangible assets We evaluate and test the recoverability of goodwill for impairment annually, during the fourth quarter, or more often if and when circumstances indicate that goodwill may not be recoverable.
We consider all available evidence, both positive and negative, including historical levels of income, expectations, and risks associated with estimates of future taxable income in assessing the need for a valuation allowance.
Net cash provided by operating activities increased by $55.0 million for the fiscal year ended December 31, 2024, compared to fiscal year ended December 31, 2023, primarily due to lower net loss after adjusting for non-cash charges, and the timing of certain accounts payable, accrued expenses and other liabilities activities, including restructuring costs accrued in the current period and payments made on certain tax and other reserves in the prior period.
Net cash provided by operating activities increased by $34.6 million for the fiscal year ended December 31, 2025, compared to the same period in the prior year, primarily due to the increase in net income, which was partially offset by the timing of changes in certain operating assets and liabilities, including accounts payable, accrued expenses and other liabilities activities, which includes restructuring costs accrued for in prior periods, and deferred revenue.
While sales and marketing expenses as a percentage of revenue may vary from period to period, in part due to the extent and timing of sales and marketing initiatives, we generally expect this percentage to decrease over the long term given our focus on sales efficiency and our land-and-expand strategy.
While sales and marketing expenses as a percentage of revenue may vary from period to period, in part due to the extent and timing of sales and marketing initiatives, we generally expect this percentage to decrease over the long term given our focus on sales efficiency and our expansion strategy. 61 Table of Contents Research and development Our research and development expenses consist primarily of personnel-related costs, including stock-based compensation, costs related to the ongoing management, maintenance, and expansion of features and services offered on our platform, and amortization of assembled workforce intangible assets acquired through asset acquisitions.
These increases were partially offset by a $2.2 million decrease in stock-based compensation expense. Research and development. Research and development expenses for the fiscal year ended December 31, 2024 were $125.4 million, compared to $120.3 million for the same period in the prior year.
These decreases were partially offset by a $5.9 million increase in amortization of deferred contract costs and a $3.2 million increase in software subscriptions and allocated costs. Research and development. Research and development expenses for the fiscal year ended December 31, 2025 were $101.5 million, compared to $125.4 million in the prior year.
For the fiscal year ended December 31, 2024, Enterprise revenue was $494.5 million, or 63% of total revenue, compared to $420.6 million, or 58% of total revenue, for the same period in the prior year.
For the fiscal year ended December 31, 2025, Enterprise segment revenue was $524.1 million, or 66% of total revenue, compared to $494.5 million, or 63% of total revenue, for the prior year. The $29.6 million, or 6%, increase in Enterprise segment revenue was primarily driven by increases in UB subscription revenues of $30.0 million.
While each of these factors presents significant opportunities for us, these factors also pose challenges that we must successfully address in order to sustain the growth of our business and enhance our results of operations. 54 Table of Contents Ability to attract and engage new learners and Udemy Business customers To grow our business, we must attract new learners and UB customers efficiently and increase engagement on our platform over time.
Key factors impacting our performance We believe that the growth of our business and our future success are dependent upon many factors. While each of these factors presents significant opportunities for us, these factors also pose challenges that we must successfully address in order to sustain the growth of our business and enhance our results of operations.
We are focused on investing in initiatives which will drive operational efficiency while focusing resources on high-growth opportunities, and as a result we anticipate our operating expenses will generally decrease as a percentage of revenue over time. 57 Table of Contents Sales and marketing Our sales and marketing expenses consist primarily of personnel-related costs, including stock-based compensation, marketing costs, sponsorship and brand costs, costs related to customer and instructor acquisition, amortization of deferred contract costs, and amortization of trade name and customer relationship intangible assets acquired through business combinations.
We are focused on investing in initiatives which will drive operational efficiency while focusing resources on high-growth opportunities, and as a result we anticipate our operating expenses will generally decrease as a percentage of revenue over time.
The $9.9 million decrease in total other income, net was primarily driven by an increase of $8.5 million of impairment charges related to our strategic investments when compared to the prior year, and a $1.0 million decrease in interest and accretion income on our existing cash, cash equivalents, and marketable securities portfolio.
The $4.1 million increase in total other income, net was primarily driven by an impairment charge of $10.3 million recognized on our strategic investments in the fiscal year ended December 31, 2024, which was partially offset by a $5.5 million decrease in interest and accretion income on our existing cash, cash equivalents, and marketable securities portfolio. 66 Table of Contents Income tax provision Fiscal Year Ended December 31, Change 2025 2024 $ % (in thousands, except percentages) Income tax provision $ 4,530 $ 4,350 $ 180 4 % For the fiscal year ended December 31, 2025, we recognized income tax expense of $4.5 million, compared to $4.4 million for the prior year.
Ability to retain and expand our existing learner and customer relationships Our business and results of operations will depend on our ability to continue to drive higher usage of our platform within our existing customer base and our ability to add new customers.
Ability to retain and expand our existing learner and customer relationships Our business and results of operations will depend on our ability to drive greater retention and expansion within our existing customer base and expand adoption of our subscription offerings within our existing learner base. Our efforts to grow our UB offering are focused primarily on corporate and government customers.
We have generally incurred operating losses and generated negative cash flows from operations as we have invested in growing our business. Our operating cash requirements may increase in the future as we continue to invest in the development of our platform and the growth of our business.
Our operating cash requirements may increase in the future as we continue to invest in the development of our platform and the growth of our business. We cannot be certain our revenue will grow sufficiently to offset our operating expense increases.
We acquire a substantial portion of our learners via organic channels and also use paid marketing to further enhance the growth of our learner base. Our organic channels include those outside of our paid marketing efforts, such as a Udemy brand name internet search.
Ability to attract and engage new learners and Udemy Business customers To grow our business, we must attract new learners and UB customers efficiently and increase engagement on our platform over time. We acquire a substantial portion of our learners via organic channels and also use paid marketing to further enhance the growth of our learner base.

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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 changeForeign currency risk The Company’s reporting currency is the U.S. dollar. We determine the functional currency for each of our foreign subsidiaries by reviewing their operations and currencies used in their primary economic environments.
Biggest changeWe did not hold any debt during the fiscal years ended December 31, 2025 or 2024. Foreign currency risk The Company’s reporting currency is the U.S. dollar. We determine the functional currency for each of our foreign subsidiaries by reviewing their operations and currencies used in their primary economic environments.
Given the above facts and circumstances, hypothetical changes in interest rates of 100 basis points would not result in a material increase or decrease of either the market value of our portfolio of cash equivalents and marketable securities as of December 31, 2024, or interest income earned from our portfolio during the fiscal year ended December 31, 2024.
Given the above facts and circumstances, hypothetical changes in interest rates of 100 basis points would not result in a material increase or decrease of either the market value of our portfolio of cash equivalents and marketable securities as of December 31, 2025, or interest income earned from our portfolio during the fiscal year ended December 31, 2025.
Quantitative and Qualitative Disclosures About Market Risk Interest rate sensitivity As of December 31, 2024 we had $190.6 million of cash and cash equivalents, which includes money market funds, certain U.S. government securities purchased with original maturities of less than 90 days, time and on demand deposits, and amounts in transit from certain payment processors for credit and debit card transactions.
Quantitative and Qualitative Disclosures About Market Risk Interest rate sensitivity As of December 31, 2025 we had $231.5 million of cash and cash equivalents, which includes money market funds, certain U.S. government securities purchased with original maturities of less than 90 days, time and on demand deposits, and amounts in transit from certain payment processors for credit and debit card transactions.
As such, a hypothetical 10% increase or decrease in current exchange rates would not have had a material impact on income or expense for the fiscal years ended December 31, 2024 or 2023. 73 Table of Contents
As such, a hypothetical 10% increase or decrease in current exchange rates would not have had a material impact on income or expense for the fiscal years ended December 31, 2025 or 2024. 78 Table of Contents
We also held $163.8 million of marketable securities, consisting of investments in various U.S. government securities. In addition, we had $1.2 million of restricted cash, primarily consisting of cash deposited with financial institutions held as collateral for our obligations under various facility leases.
We also held $127.3 million of marketable securities, consisting of investments in various U.S. government securities. We had $0.4 million of restricted cash, primarily consisting of cash deposited with financial institutions held as collateral for our obligations under various facility leases. Our cash and cash equivalents are held for working capital purposes.
Removed
We did not hold any long-term debt during the fiscal years ended December 31, 2024, 2023, or 2022. Our cash and cash equivalents are held for working capital purposes.
Added
We are subject to market risk exposure related to changes in interest rates on borrowings under our revolving credit facility. Interest on borrowings under the revolving credit facility is based on Term SOFR or alternate base rate, in each case plus an applicable margin. At December 31, 2025, we had no borrowings outstanding under the revolving credit facility.

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