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1. Company Snapshot

1.a. Company Description

Udemy, Inc.operates a marketplace platform for teaching and learning skills in the United States and internationally.The company offers technical and business skills, and personal development courses for individual learners and enterprise customers.


Its platform provides 49 million learners with access to approximately 180,000 courses through direct-to-consumer or Udemy Business offerings in approximately 75 languages.The company's courses offer learning objectives, such as reskilling or upskilling in technology and business, and soft skills, as well as learners receive access to interactive learning tools comprising quizzes, exercises, and instructor questions-and-answers.Udemy, Inc.


was incorporated in 2010 and is headquartered in San Francisco, California.

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1.b. Last Insights on UDMY

Udemy's recent performance has been negatively impacted by a downgrade from Truist to Hold from Buy, citing lower revenue estimates and concerns about the company's large enterprise and international exposure. Additionally, the analyst notes the discretionary nature of spending on online learning and upskilling efforts, which may affect the company's profitability.

1.c. Company Highlights

2. Udemy's Q3 2025 Earnings: A Strong Pivot to Subscription Revenue

Udemy reported a revenue of $189 million, beating its guidance, with a consolidated subscription revenue growth of 8% year-over-year, reaching 74% of total revenue. The company's adjusted EBITDA was $24 million, or 12% margin, marking 15 consecutive quarters of better-than-expected adjusted EBITDA. Earnings per share (EPS) came in at $0.13, surpassing estimates of $0.1. The company's gross margin and operating expenses also showed improvement. For the fourth quarter, Udemy expects total revenue of $191 million to $194 million, with a midpoint of $192.5 million.

Publication Date: Nov -12

📋 Highlights
  • Subscription Revenue Growth: Consolidated subscription revenue rose 8% YoY to 74% of total revenue, driven by 43% YoY growth in Consumer subscriptions and $7M net new ARR in Udemy Business.
  • Financial Performance: Adjusted EBITDA reached $24M (12% margin) for Q3, with 15 consecutive quarters exceeding guidance, and 2025 guidance raised to $92M–$94M.
  • Strategic Pivot: Udemy accelerates subscription-first model, expecting double-digit subscription growth by 2026, despite slower near-term segment growth from strategic investments.
  • Enterprise Stabilization: Udemy Business pipeline grew QoQ, with stable net dollar retention and strong expansion deals, while 2025 EBITDA guidance reflects confidence in enterprise recovery.
  • AI and Platform Investments: Over 10,000 AI Role Plays launched, with plans to tier monetization in 2024, and focus on skills mastery, partnerships, and certification integration with institutions.

Segment Performance

The Udemy Business segment revenue grew 5% year-over-year, generating $7 million of net new annual recurring revenue (ARR). The Consumer segment surpassed its full-year paid subscribers target, with revenue from subscriptions increasing 43% year-over-year. The company's focus on subscription customers, which are considered its best customers, is driving this growth. As Hugo Sarrazin, CEO, noted, "subscription customers are our best customers," highlighting the strength of the enterprise business.

Guidance and Outlook

Udemy is raising its full-year 2025 adjusted EBITDA guidance to a range of $92 million to $94 million or 12% margin at the midpoint. Looking ahead to 2026, the company expects consolidated subscription revenue growth to be closer to double digits and to account for approximately 3/4 of total revenue. Analysts estimate next year's revenue growth at 2.5%, indicating a potential slowdown in growth.

Valuation

Udemy's current valuation metrics show a P/S Ratio of 0.98 and an EV/EBITDA of -311.34, indicating that the market is pricing in significant growth expectations. With a P/E Ratio of -211.52, the company's current valuation is largely dependent on its ability to continue delivering strong revenue growth and improving profitability. The company's ROE and ROIC are negative, at -1.73% and -4.79% respectively, highlighting the need for continued improvement in profitability.

Investment Strategy

Udemy is accelerating its pivot to a subscription-first approach, investing in differentiating its offering in AI and LLMs, and building an end-to-end platform for skills acquisition, mastery, and validation. The company is making a deliberate EBITDA versus growth trade-off, prioritizing growth over near-term profitability. As Sarah Blanchard, CFO, mentioned, they expect to see an inflection point in the middle of next year where subscription revenue growth will start to outpace the decline on the Transactional side.

3. NewsRoom

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Udemy and Emtrain Partner to Provide One-Stop Shop for Compliance Excellence and Workplace Culture Training Amid Rising Regulatory Pressure

Nov -20

Source: businesswire.com

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Inside the AI Blind Spot: New Udemy Research Warns That Awareness Is Rising But Readiness Is Not

Nov -13

Source: businesswire.com

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Udemy and HSM Partner to Empower Brazil's Workforce with AI-Powered Learning

Nov -12

Source: businesswire.com

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Udemy, Inc. (UDMY) Q3 2025 Earnings Call Transcript

Oct -30

Source: seekingalpha.com

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Udemy (UDMY) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -29

Source: zacks.com

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Udemy, Inc. (UDMY) Beats Q3 Earnings and Revenue Estimates

Oct -29

Source: zacks.com

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Udemy Reports Third Quarter 2025 Results

Oct -29

Source: businesswire.com

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Udemy, Inc. $UDMY Shares Purchased by Cwm LLC

Oct -29

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.31%)

6. Segments

Enterprise

Expected Growth: 12%

Udemy's Enterprise segment growth is driven by increasing demand for online learning platforms, expansion into new markets, and strategic partnerships. The 12% growth rate is also attributed to the rise of remote work, need for upskilling, and Udemy's ability to provide customized learning solutions to businesses.

Consumer

Expected Growth: 8%

Udemy's 8% growth in the consumer segment is driven by increasing demand for online learning, expansion into new markets, and a growing user base. Additionally, the rise of the gig economy and need for upskilling/reskilling contribute to the growth. Furthermore, Udemy's user-friendly platform, diverse course offerings, and competitive pricing also attract more consumers.

7. Detailed Products

Udemy for Business

A corporate learning platform that provides access to a curated collection of Udemy courses, allowing businesses to upskill and reskill their employees.

Udemy Marketplace

A platform that allows instructors to create and sell online courses on a wide range of subjects, from programming and technology to art and design.

Udemy Pro

A subscription-based service that provides access to a library of courses, allowing individuals to learn new skills and advance their careers.

8. Udemy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Udemy's courses are substitutable with other online learning platforms, but the company's strong brand recognition and large course offerings mitigate this threat.

Bargaining Power Of Customers

Udemy's customers have limited bargaining power due to the company's large user base and diverse course offerings, making it difficult for individual customers to negotiate prices.

Bargaining Power Of Suppliers

Udemy's suppliers, primarily instructors, have limited bargaining power due to the company's large instructor base and the ease of finding alternative instructors.

Threat Of New Entrants

The online learning platform market is highly competitive, and new entrants can easily replicate Udemy's business model, posing a significant threat to the company.

Intensity Of Rivalry

The online learning platform market is highly competitive, with many established players, resulting in intense rivalry among companies like Udemy, Coursera, and edX.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.91%
Debt Cost 7.20%
Equity Weight 98.09%
Equity Cost 14.49%
WACC 14.35%
Leverage 1.95%

11. Quality Control: Udemy, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
American Public Education

A-Score: 4.9/10

Value: 4.9

Growth: 5.4

Quality: 5.7

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Universal Technical Institute

A-Score: 4.9/10

Value: 3.3

Growth: 6.3

Quality: 6.1

Yield: 0.0

Momentum: 9.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Lincoln Educational Services

A-Score: 4.5/10

Value: 4.1

Growth: 5.0

Quality: 4.0

Yield: 0.0

Momentum: 9.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Coursera

A-Score: 4.4/10

Value: 6.9

Growth: 6.0

Quality: 3.1

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
Udemy

A-Score: 3.9/10

Value: 6.4

Growth: 5.8

Quality: 4.1

Yield: 0.0

Momentum: 3.5

Volatility: 3.3

1-Year Total Return ->

View Full Report
Stock-Card
Chegg

A-Score: 3.7/10

Value: 9.6

Growth: 2.9

Quality: 3.4

Yield: 0.0

Momentum: 5.5

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.24$

Current Price

5.24$

Potential

-0.00%

Expected Cash-Flows