Udemy (NASDAQ: UDMY) reported its fourth‑quarter and full‑year 2025 financial results on February 5, 2026. Total revenue for the year was $789.8 million, unchanged from the prior year, while Q4 revenue fell 3% to $194.0 million, reflecting a shift away from one‑time course purchases toward subscription plans. The company’s subscription revenue grew 8% to $194.0 million, now representing 24% of total revenue, underscoring the continued emphasis on recurring revenue streams.
Net income turned positive for the full year, posting $3.8 million versus an $85.3 million loss in 2024. In Q4, however, the company recorded a $2.3 million net loss, an improvement from the $9.9 million loss in Q4 2024. The earnings beat was driven by disciplined cost management and a favorable mix shift toward higher‑margin subscription revenue, which offset the decline in transactional sales. Non‑GAAP earnings per share of $0.12 surpassed analyst consensus of $0.095, a beat of $0.025 or 26%.
Adjusted EBITDA for the year reached $95.3 million, a 700‑basis‑point expansion from $43.0 million in 2024, and an over‑120% year‑over‑year increase. Q4 adjusted EBITDA was $21.4 million, up 100 basis points from $20.3 million in Q4 2024. The margin expansion reflects operational leverage and pricing power in the subscription business, as well as cost efficiencies achieved through the company’s scale‑up initiatives.
Segment performance highlights a mixed picture. Udemy Business revenue grew 6% to $524.1 million, driven by a 6% increase in enterprise customers and a 13% rise in annual recurring revenue. Consumer revenue, however, declined 9% to $265.8 million, with Q4 consumer revenue at $146.8 million, up 7% YoY, but still lower than the $159.5 million in Q4 2024. The decline in consumer revenue is attributed to the company’s strategic de‑emphasis on one‑time course purchases and the resulting shift toward subscription plans. Net Dollar Retention for large enterprise customers stabilized at 97%, indicating healthy retention amid the transition.
Management emphasized the company’s progress toward a subscription‑first model. President and CEO Hugo Sarrazin noted that “subscription revenue now represents 72% of total revenue, and we added nearly 50,000 paid subscribers in Q4, bringing the total to more than 340,000.” He also highlighted that the company achieved its first full‑year of positive net income and exceeded adjusted EBITDA guidance, expanding the margin by 700 basis points. The CEO underscored that the pending merger with Coursera will create significant synergies, but the company is maintaining a cautious outlook and has not provided forward guidance due to the merger’s uncertainty.
Market reaction to the results was muted, reflecting investor focus on the Coursera merger rather than the earnings themselves. Analysts noted that while the company beat earnings expectations, the flat revenue growth and Q4 decline in consumer sales tempered enthusiasm. The company’s strategic pivot to subscriptions and the expected synergies from the merger remain key factors for long‑term investors.
The earnings release is a high‑importance event, as it provides new financial data, confirms a turnaround in profitability, and offers insight into the company’s strategic direction amid a major merger. Investors will likely adjust their models to account for the flat revenue trajectory, the shift in revenue mix, and the impact of the Coursera deal.
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