Coursera’s first quarter was marked by stronger-than-expected revenue growth and significant operating margin improvement, leading to a positive market response. Management attributed the quarter’s results to effective product and marketing campaigns, successful expansion of the course catalog, and noticeable gains from AI-driven learning experiences. CEO Greg Hart highlighted the addition of over 7 million new learners, stating that the company’s efforts to improve the learner journey and content breadth are “helping to drive a better learner experience.”
Is now the time to buy COUR? Find out in our full research report (it’s free).
Coursera (COUR) Q1 CY2025 Highlights:
- Revenue: $179.3 million vs analyst estimates of $175.3 million (6.1% year-on-year growth, 2.3% beat)
- Adjusted EPS: $0.12 vs analyst estimates of $0.08 (52.6% beat)
- Adjusted EBITDA: $18.7 million vs analyst estimates of $10.36 million (10.4% margin, 80.5% beat)
- Revenue Guidance for the full year is $725 million at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for the full year is $50.75 million at the midpoint, below analyst estimates of $51.02 million
- Operating Margin: -8%, up from -17.6% in the same quarter last year
- Annual Recurring Revenue: $231.2 million at quarter end, up 2.2% year on year
- Paying Users : 175.3 million, up 26.8 million year on year
- Billings: $208.1 million at quarter end, up 15.1% year on year
- Market Capitalization: $1.34 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Coursera’s Q1 Earnings Call
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Brian Spillak (JPMorgan): Asked CEO Greg Hart which business areas offer the most opportunity for growth. Hart cited product innovation, content expansion, and improved go-to-market strategies as top priorities, expecting consumer segment improvements to appear first.
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Stephen Sheldon (William Blair): Inquired about content expansion opportunities and the role of Coursera-produced content. Hart discussed plans for a more nimble content engine, including increased investment in proprietary content and targeting areas like healthcare.
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Rishi Jaluria (RBC): Questioned the rationale for integrating the degrees product into the consumer segment. CFO Ken Hahn clarified the move was to align with internal management practices and not to obscure performance, emphasizing transparency with historical data provided.
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Josh Baer (Morgan Stanley): Sought insight on the pace and timing of workforce reskilling trends. Hart noted the long-term need for upskilling but acknowledged near-term uncertainty due to macroeconomic factors, with inflection points varying by industry.
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Ryan MacDonald (Needham): Asked about the expected payback period for current investments. CFO Ken Hahn indicated that while some go-to-market and content initiatives should yield near-term benefits, others, especially in product innovation, may take longer to impact revenue.
Catalysts in Upcoming Quarters
As we look to future quarters, our team will be monitoring (1) the adoption rates and engagement metrics for new AI-powered features like Coursera Coach and audio dubbing, (2) the progress and effectiveness of recently launched content and professional certificates, and (3) trends in enterprise customer demand as companies evaluate workforce upskilling investments amid macroeconomic uncertainty. Continued expansion in high-growth international markets and success in converting registered learners to paying customers will also be critical benchmarks.
Coursera currently trades at $8.36, up from $7.68 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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