Coursera Inc Q3 2024 Earnings Call Transcript

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

Question: Stephen Sheldon - William Blair & Co LLC - Analyst : First, is there a way to frame how much monetization in your consumer segment you're getting from AI-related courses? Is that becoming a notably bigger part of the mix? And then can you just give some more detail on where things have weakened in Consumer more recently?

Question: Stephen Sheldon - William Blair & Co LLC - Analyst : Got it. That's helpful. And maybe just a follow-up, maybe just talk about the rationale for cutting more of the cost base now and at a very high level, kind of where you might be focusing those efforts?

Question: Ryan MacDonald - Needham & Company, Inc. - Analyst : Maybe to dig a little bit deeper on some of those comments on consumer, can you talk about maybe to the extent you've got visibility into it on what's the useful life from a monetization perspective, there is for some of the content in Consumer? And then how has that changed? And as you think about that softer retention internationally, are there specific subject areas or topics where you've seen retention fall off quicker than maybe other areas than you expected?

Question: Ryan MacDonald - Needham & Company, Inc. - Analyst : Great. And then maybe following up on the enterprise segment. So obviously, a nice quarter in terms of accelerating growth in terms of logo additions, but NRR kind of continues to come down here. Can you just within the pieces of Enterprise talk about maybe where you're seeing the most softness on the spend that continues to kind of drive NRR down? And I guess, what level of visibility do we have going into fourth quarter here on sort of the renewal business and sort of close rates there?

Question: Rishi Jaluria - RBC Capital Markets - Analyst : Wonderful. Maybe I just want to continue thinking about kind of the growth rates right now and things that are causing softness. You you've helped us kind of understand a little bit of the pieces on consumer. You've talked about enterprise before and unpacked that. But if we take a step back, you do have all these secular tailwinds at your back, the changing nature of education Gen AI and the need for people to upskill and reskill maybe even some pockets of softness in the economy that we've been seeing over the past kind of two years or so I guess given all of these, why aren't we seeing higher growth rates? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 9:00PM, COUR.N - Q3 2024 Coursera Inc Earnings Call Or what would be the right way to kind of think about what needs to happen outside of a macro recovery to see those growth rates inflect upwards to at least back to double digits, maybe help us kind of understand all of those pieces there? And then I've got a quick follow-up.

Question: Rishi Jaluria - RBC Capital Markets - Analyst : Got it. Okay. That's super helpful. Maybe just a very quick follow-up because that was a very thorough answer. But just how should we be thinking about capital deployment? You've got nearly $0.75 billion of net cash on the balance sheet. Stock is trading at multiples that are sub-1 times revenue approaching 0.5 times revenue. If you are, in fact, so bullish on the business and all these different growth drivers and the path ahead, I guess, why not pull the trigger and opportunistically buy back shares at these kind of super low levels?

Question: Joshua Baer - Morgan Stanley - Analyst : A lot of the prepared remarks were more around the consumer as far as weakness. On the Q&A, definitely, we got into enterprise. So I want to make sure I understand the different business far as the change from the prior guidance. So maybe like focusing on Q4, what was implied before to what it is now, it's like 11 or 12 million lower. Like how does that get split up between the different businesses? I guess part of the question, this will be my follow-up is on the enterprise, like was there incremental churn? Or was this some of those government contracts that you had previously talked about churning. Just wondering around that drop in net retention rate, like what was incremental versus last quarter?

Question: Joshua Baer - Morgan Stanley - Analyst :

Question: Taylor McGinnis - UBS Group AG - Analyst : So first one, just on the consumer side. So I think part of the implied acceleration in the previous guide was driven by the rollout of some of the recent content launches that you guys talked about in the prepared remarks. So just one, I guess are you seeing like since those have gone live, are you seeing the traction with those that you anticipated? Is there any part of the softness maybe just not seeing like the conversion with those? And if so, curious why that might be in if there's been any delays or anything else we should keep in mind?

Question: Taylor McGinnis - UBS Group AG - Analyst : Awesome. That's super helpful. And then last one would just be you talked about like some areas that given the $30 million on the cost savings that you're going to there's going to be areas that you're going to pull back on, those look like less growth and less leverage. So when we think about the puts and takes of that combined with focusing on other areas, like any potential headwinds to revenue that could occur from that shift in any of the segments that we should consider? Or anything as we're thinking about the different segments overall with this initiative?

Question: Jeffrey Silber - BMO Capital Markets - Analyst : Okay. So I know it's late, so I'll just ask one. You had a pretty sizable adjusted EBITDA beat in the third quarter. And I guess the implied guidance for the fourth quarter it looks like you might be coming in a little bit below that. Were there any timing of expenses potentially that benefited the third quarter that you might shift into the fourth quarter?