Slide 1: Earnings Presentation Q3 2024
Earnings Presentation Q3 2024 October 29, 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 Exceeded expectations for Q3 2024 Revenue and Adjusted EBITDA Delivered stronger-than-expected profitability driven by disciplined approach to operational efficiency Surpassed $500 million in Udemy Business Annual Recurring Revenue Launched new AI-enabled capabilities on Udemy’s Intellige
Slide 5: Q3 2024 financial results and highlights
Q3 2024 financial results and highlights Q3 2024 % FX Q3 2024 Change Impact Guidance ● Exceeded Revenue and Adjusted EBITDA YoY guidance ranges Revenue $195.4M 6% (2) pts $191M to $194M ● Total revenue of $195.4M increased 6% YoY, including a negative impact of 2 Gross Margin 63% 500 bps percentage p
Slide 6: Category leading enterprise software performance
Category leading enterprise software performance Annual Recurring Revenue ($M) $505M $493M $479M $466M $443M $420M Udemy Business $396M Q3 2024 ARR Increased 14% YoY Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net Dollar Retention Rate (NDRR) 1 112% 108% 106% 106% 104% 101% 99% Large Cus
Slide 7: Large and growing enterprise global customer base
Large and growing enterprise Key Q3 2024 Wins and global customer base Expansions 16,848 Udemy Business customers 50% Fortune 500 72% Nikkei 225 7Note: Data as of September 30, 2024
Slide 8: Vibrant consumer marketplace supports enterprise growth
Vibrant consumer marketplace supports enterprise growth Average Monthly Courses added Learners Visitors Total Courses per month Instructors Languages 75M 39M 250k 5k+ 75k 75 Revenue Segment Gross margin (in millions) Monthly Average Buyers (in thousands) $75.6 $74.9 $79.2 $73.8 $69.3 1,414 1,366 1,4
Slide 9: Action plan to prioritize operational efficiency
Action plan to prioritize operational efficiency Udemy is continuing to execute on its operational efficiency initiatives and expects to achieve $130 to $150 million of Adjusted EBITDA by 2026, and to deliver 20% Adjusted EBITDA margin in 2027. Collectively, efficiency actions announced through October
Slide 10: Accelerating path toward high end of Adjusted EBITDA target
Accelerating path toward high end of Adjusted EBITDA target Achievement of $50 million of cost savings from operational efficiency initiatives relative to initial target of $25 million, provides greater confidence and visibility in achieving the 20% Adjusted EBITDA margin target in 2027 Adjusted EBITDA
Slide 11: 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 12: Strategic focus shift to faster growth large enterprises
Strategic focus shift to faster growth large enterprises 3Q24 $781M Revenue Model Customers* Net Dollar 2024 Revenue Growth Estimate Unit Economics Retention 1.3M ~90% Monthly Average Consumer transactional Buyers (6)% Subscription LTV <40% N/A midpoint of >5x transactional of total guidance LTV ~10
Slide 13: Innovative new capabilities: AI Assistant & Skills Mapping
Innovative new capabilities: AI Assistant & Skills Mapping AI Assistant Skills Mapping and AI-powered learning paths Keeps learners continuously engaged, recommending Helps admins turn skill requirements into a curated relevant content and providing in-course support learning path mapped to UB cours
Slide 14: Q4 and full year 2024 outlook
Design WIP Q4 and full year 2024 outlook Q4 2024 Full Year 2024 Revenue $193 to $196 million $780 to $783 million Udemy Business 9% to 11% 16% to 18% Revenue YoY Growth Consumer (10)% to (8)% (7)% to (5)% Revenue YoY Growth Adj. EBITDA Margin* Approximately 6% Approximately 4.5% The revenue guidance
Slide 15: Key takeaways
Key takeaways Exceeded expectations for Q3 2024 Revenue and Adjusted EBITDA Delivered stronger-than-expected profitability driven by disciplined approach to operational efficiency Surpassed $500 million in Udemy Business Annual Recurring Revenue Launched new AI-enabled capabilities on Udemy’s Intellige
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