Coursera Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Stephen Sheldon - William Blair Capital Partners - Analyst : Hey, thanks for taking my questions. Great to see the revenue growth acceleration this quarter. For the guidance, I think the guidance would imply about 8% year-over-year growth at the midpoint in the third quarter. I think below 4% growth in the fourth quarter. So effectively, deceleration against easier comps. Is there anything specific driving that assumption, as you did see acceleration this quarter in both segments? Or is it more about just factoring in that continued macro uncertainty, especially in the Enterprise segment? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, COUR.N - Q2 2025 Coursera Inc Earnings Call

Question: Stephen Sheldon - William Blair Capital Partners - Analyst : Got it. That makes sense. And then maybe just a follow-up. What are you guys seeing in terms of big tech making AI skills education a bigger priority? We saw the Microsoft's $4 billion pledge, I think announced earlier this month. And then how are you thinking about positioning Coursera to be a key COG in Big Tech's plans there? You already have a lot of them as content partners. So is there more you can do there?

Question: Stephen Sheldon - William Blair Capital Partners - Analyst : Good to hear. Thanks, Greg and Ken. And nice results. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, COUR.N - Q2 2025 Coursera Inc Earnings Call

Question: Taylor McGinnis - UBS AG - Analyst : Yeah, hi, thanks so much for taking the question. Can you hear me?

Question: Taylor McGinnis - UBS AG - Analyst : Okay. Perfect. Congrats on the quarter. Maybe just on like the consumer outperformance. So if I look at the sequential dollar growth, I think it was the strongest that we've seen in some time. And typically, for you guys, 2Q tends to be the lightest quarter. So when we look into 3Q, I guess is there any reason why sequential dollar growth couldn't be stronger? Kind of -- I think you made some comments earlier about some lighter seasonality. So could you just elaborate on that? And then the second part to the question, maybe you could talk about where you see in terms of rolling out the product and go-to-market changes in consumer and what's left to come as we think about the growth trajectory and catalysts from here?

Question: Taylor McGinnis - UBS AG - Analyst : Great, thank you guys so much.

Question: Bryan Smilek - JPMorgan Chase & Co - Analyst : Great, thanks for taking the questions. Shifting gears a bit to enterprise, good to see the NRR improve as well sequentially. Can you just talk about what you're seeing across government, business and campus? I believe you called out business and campus as brighter spots. But just curious on trends across each subvertical. And then, Greg, just shifting gears towards AI engagement with content up 36% year-on-year, 10 million-plus AI enrollments. Can you just talk about monetizing AI tools as you drive deeper engagement across both consumer and enterprise longer term? Thank you.

Question: Bryan Smilek - JPMorgan Chase & Co - Analyst : Great. Thank you both.

Question: Ryan MacDonald - Needham & Company LLC - Analyst : Thanks for taking my question. And congrats on a great quarter. Maybe just starting on the consumer gross margins a bit. It was great to see the continued improvement there, particularly on a year-over-year basis. Can you talk about how sustainable some of these improvements are and maybe how we should think about gross margins in that segment structurally now as you continue to see more demand maybe beyond some of the largest content partners moving forward? Thanks.

Question: Ryan MacDonald - Needham & Company LLC - Analyst : That makes complete sense. Greg, maybe as a follow-up. As you think about sort of learners on the platform, I continue to be impressed about the magnitude even at this scale of net new learners that you drive. If there's a few things you could pinpoint of what's really driving that or maybe demographically or geographically, like where you're seeing sort of the greatest unlock? Are there a few things you can point to other than maybe just continued demand for Gen AI content? Is it this new AI translation that's unlocking new regions? Or are the career academies now starting to sort of unlock a different segment of the population? What do you think is the greatest contributor there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, COUR.N - Q2 2025 Coursera Inc Earnings Call

Question: Ryan MacDonald - Needham & Company LLC - Analyst : Awesome, thanks for the color. Congrats again.

Question: Jeffrey Silber - Bank of Montreal - Analyst : Thank you so much. I wanted to focus a little bit more on Coursera for business. Maybe you can talk generally about L&D budgets. Are companies holding back because of the uncertainty out there? Are they opening up a little bit more? Any color would be great.

Question: Jeffrey Silber - Bank of Montreal - Analyst : All right. That's really helpful. And if I could shift gears and maybe get into the weeds a little bit. The tax bill that was signed earlier this month opened up something called a Workforce Pell. You allow to use Pell grants for what they call short-term, high-quality workforce-aligned programs. It's got to be accredited, so I realize that your corporate partners is probably not going to be eligible for it. But is it possible to see some of those funds being used through programs at your university partners?

Question: Jeffrey Silber - Bank of Montreal - Analyst : All right, I appreciate the color. Thanks so much.

Question: Yi Fu Lee - Cantor Fitzgerald LP - Analyst : Thank you for taking my questions. And congrats on the strong executed quarter. So my question revolves around the pair of new hires, most recently with Chief Data Officer, Grant and Chief Product Officer, Patrick. Greg, previously, you talked about using a more data-driven approach to manage the business. I guess, can you help us elaborate on what are the points, concrete data points you are looking to monitor to understand, hey, the business is going better fundamentally. And I also have one more follow-up for Ken on the financial side.

Question: Yi Fu Lee - Cantor Fitzgerald LP - Analyst : Hey Greg, can you just tease us on that? I understand that Coach and Translation is a hot product you guys are focusing on. Like in terms of Patrick, right, what are the -- like in terms of the road map, the things that you wanted to focus on. And then can I just squeeze one for Ken, is the gross margin side, 61% on the consumer. We've seen inflection on the enterprise side for 70%. I was wondering to help us on the modeling, Ken, like what should we expect on the optimization like going forward? We understand it's improving, it's going more positively. And there's more to go. We just want to like make sure our models are reasonable going forward.

Question: Josh Baer - Morgan Stanley & Co Ltd - Analyst : Great, thanks for the question. I wanted to dig into the Consumer Plus subscription that was called out several times. Can you kind of generalize the user or the subscriber just as far as what stage of life or stage of career, geography and then the behavior like once turning on that subscription, what courses and content are they gravitating to? Is there a way to generalize some of those behaviors?

Question: Josh Baer - Morgan Stanley & Co Ltd - Analyst : Thanks, great. And any update on scale, size of the subscription or growth?

Question: Josh Baer - Morgan Stanley & Co Ltd - Analyst : Okay. Thanks, Ken. Great quarter. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 24, 2025 / 9:00PM, COUR.N - Q2 2025 Coursera Inc Earnings Call

Question: Sarang Vora - Telsey Advisory Group LLC - Analyst : Thank you. Great quarter as well, from my side. My question is on the Coursera produced content. I know a lot of professional certificates came into this quarter and a lot of branded content came as well. But just curious on how is that pipeline developing on the Coursera produced content? And how do you see that scaling? Are there any specific areas you -- as you have progressed over the past couple of months, are there any areas you have identified for CPC? Just any color over there would be helpful. Thank you.

Question: Sarang Vora - Telsey Advisory Group LLC - Analyst : That's great. Thank you and good luck ahead. Thank you.