Slide 1: Earnings Presentation Q2 2024
Earnings Presentation Q2 2024 1
Slide 2: Safe Harbor Notice
Safe Harbor Notice This presentation and any accompanying oral commentary include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements other than those of historical fact, including information concer
Slide 3: Transforming lives through learning
Transforming lives through learning
Slide 4: Key takeaways
Key takeaways Solid Q2 2024 results that met or exceeded expectations Strategic shift to focus on faster growth and highest margin opportunities Focus on Large Customer cohort accelerates operational efficiencies, enabling Udemy to achieve $130M to $150M of Adjusted EBITDA in 2026 Uniquely positioned
Slide 5: Q2 2024 financial results and highlights
Q2 2024 financial results and highlights Q2 2024 % Change FX Q2 2024 ● Absent the higher-than-anticipated FX headwind, YoY Impact Guidance Udemy would have exceeded the high end of its revenue guidance range for Q2. Revenue $194.4M 9% (2) pts $192M to $195M ● Udemy Business (UB) revenue increased 19%
Slide 6: Best-in-class enterprise software performance
Best-in-class enterprise software performance Annual Recurring Revenue ($M) $493M $479M $466M $443M $420M $372M $396M Udemy Business $350M Q2 2024 ARR $316M Increased 17% YoY Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net Dollar Retention Rate (NDRR)1 118% 117% 115% 112%
Slide 7: Large and growing enterprise global customer base
Large and growing enterprise Key Q2 2024 Wins and global customer base Expansions 16,595 Enterprise customers 50% Fortune 500 72% Nikkei 225 7Note: Data as of June 30, 2024
Slide 8: Vibrant consumer marketplace supports enterprise growth
Vibrant consumer marketplace supports enterprise growth Q2’24 revenue Monthly average buyers $73.8M (4)% Y/Y 1.29M (4)% Y/Y Revenue Segment Gross margin (in millions) Monthly Average Buyers (in thousands) $76.6 $75.6 $74.9 $79.2 $73.8 1,338 1,414 1,366 1,442 1,286 54% 53% 51% 55% 56% Q2’23 Q3’23 Q4’
Slide 9: Action plan to accelerate operational efficiency
Action plan to accelerate operational efficiency Udemy is accelerating its operational efficiency initiatives to achieve $130 to $150M of Adjusted EBITDA by 2026, and expect to deliver 20% Adjusted EBITDA margin in 2027. Collectively, efficiency actions announced today will generate $25 million in annua
Slide 10: Key initiatives to drive revenue growth
Key initiatives to drive revenue growth Reallocating resources Expanding penetration Supporting growth upmarket toward large within existing customer through strategic enterprise companies base of large enterprise partnerships customers ● ~5k Udemy Business ● <10% penetration of ● Strengthens global
Slide 11: Strategic focus shift to faster growth large enterprises
Strategic focus shift to faster growth large enterprises 2Q24 $779M Revenue Model Customers* Net Dollar 2024 Revenue Growth Estimate Unit Economics Retention 1.3M ~90% Monthly Average Consumer transactional Buyers (7)% Subscription LTV <40% N/A midpoint of >5x transactional of total guidance LTV ~10
Slide 12: Q3 and full year 2024 outlook
Design WIP Q3 and full year 2024 outlook Q3 2024 Full Year 2024 Revenue $191 to $194 million $776 to $782 million Udemy Business N/A 16% to 18% Revenue YoY Growth Consumer N/A (8)% to (6)% Revenue YoY Growth Adj. EBITDA Margin* 200 to 300 bps 250 to 350 bps The revenue guidance range above assumes h
Slide 13: Bridge: 2024 revenue guidance (Q1 to Q2 Update)
Bridge: 2024 revenue guidance (Q1 to Q2 Update) $800M $779M $11M $6M $4M FY24 Consumer Enterprise FX FY24 guidance revenue revenue impact guidance midpoint midpoint May ‘24 July ‘24 13
Slide 14: Accelerating path toward high end of Adjusted EBITDA target
Accelerating path toward high end of Adjusted EBITDA target Udemy expects to achieve the high end of its long–term Adjusted EBITDA margin target of 15% to 20% ahead of plan through a combination of Gross Margin improvements, primarily from the instructor revenue share change and revenue mix shift to
Slide 15: Key takeaways
Key takeaways Solid Q2 2024 results that met or exceeded expectations Strategic shift to focus on faster growth and highest margin opportunities Focus on Large Customer cohort accelerates operational efficiencies, enabling Udemy to achieve $130M to $150M of Adjusted EBITDA in 2026 Uniquely positioned
Slide 16: Appendix
Appendix 16
Slide 17: Key Business Metrics Definitions
Key Business Metrics Definitions A buyer is a consumer who purchases a course or subscription through our direct-to-consumer offering. Monthly average buyers is calculated as the average of Monthly Average Buyers monthly buyers during a particular period, such as a fiscal year. We count the total numbe
Slide 18: GAAP to Non-GAAP Gross Margin
GAAP to Non-GAAP Gross Margin 1 We calculate gross margin as gross profit divided by revenue for the same period 18 2 We calculate non-GAAP gross margin as non-GAAP gross profit divided by revenue for the same period
Slide 19: GAAP to Non-GAAP Net Loss
GAAP to Non-GAAP Net Loss 19 1 For periods presented with a non-GAAP net loss, we have excluded the effect of potentially dilutive securities as their inclusion would be anti-dilutive
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 1 We calculate net loss margin as net loss divided by revenue for the same period 20 2 We calculate adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period