Coursera Inc Q3 2025 Earnings Call Transcript

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

Question: Josh Baer - Morgan Stanley & Co Ltd - Analyst : Great. Thanks for the question. And Ken, it's been great working together over the years. I know it's early, but I did want to ask about any takeaways you have from the start of the open AI embedded app and the integration there. Just anything around usage and engagement or expectations. 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 23, 2025 / 9:00PM, COUR.N - Q3 2025 Coursera Inc Earnings Call And then the follow-up is on the financial side. What is the economic arrangement there? And how are you thinking about potential financial impact?

Question: Josh Baer - Morgan Stanley & Co Ltd - Analyst : All very helpful. And on sales and marketing, the percentage of revenue increased year-over-year. Just hoping you could walk through some of the top priorities on sales and marketing investments and how you're assessing the returns on that spend.

Question: Bryan Smilek - JPMorgan Chase & Co - Analyst : Thank you, Ken, for the great partnership throughout the years. Just curious more so on the 4Q revenue outlook, totally appreciate consumer continues to grow well and really unchanged macro outlook for enterprise. Just curious, looking ahead, what drives the durability of the consumer growth here, perhaps around the double-digit percent? And I guess, like, can you just give a bit more color on what drives the declines more near term in terms of growth deceleration into 4Q? 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 23, 2025 / 9:00PM, COUR.N - Q3 2025 Coursera Inc Earnings Call

Question: Bryan Smilek - JPMorgan Chase & Co - Analyst : Great. And then I just had a quick question just around CapEx overall. I believe a few quarters ago, really entering 2025, we had discussed about up to $20 million in purchases of content assets and the free cash flow clearly has come in nicely, and I imagine some of that is also driven by just AI content gains in terms of production. But just curious how will you balance free cash flow growth going forward with incremental content investments and is there anything just to keep in mind from a free cash flow perspective?

Question: Stephen Sheldon - William Blair Capital Partners - Analyst : So maybe for either Greg or Ken, just can you just talk some more about the factors driving the continued consumer acceleration this quarter. And on the international side, it sounds like you're starting to find the right localized pricing versus volume mix. Is that fair? And if so, could that be a factor kind of supporting continued strong growth in consumer over the coming years as you optimize that balance and monetization?

Question: Stephen Sheldon - William Blair Capital Partners - Analyst : Very helpful. And then just following up in enterprise, NRR moved back to touch this quarter after a few quarters of stabilization. So just curious how do trends look across the different end markets there between business, government campus and how is overall corporate spending towards learning played into that? Has there been any additional softening there in recent months where it's getting hard to retain existing and sell now? I guess, what are you seeing on the kind of budgetary side?

Question: Ryan MacDonald - Needham & Company LLC - Analyst : Ken, best of luck. It was great working with you. Greg, maybe to start on the fourth quarter implied EBITDA guidance for margin. Can you just talk about sort of the key areas where you're investing here and then -- and how maybe investors should think about sort of the framework between balance of growth and margin expansion, what that looks like heading towards '26 without giving guidance. Is there still an intent to sort of expand EBITDA margins while trying to grow? Or is fourth quarter more of '25 more indicative of how we should think about sort of the margin profile heading into '26?

Question: Ryan MacDonald - Needham & Company LLC - Analyst : Super helpful. I appreciate the clarification there, Greg. Maybe on just sort of the broader sort of AI upskilling, reskilling initiatives. Just curious to get your comment on the news from a couple of months ago about Google and Microsoft committing, I think it combines $5 billion plus on sort of AI skills gap closures and sort of skilling initiatives with AI. Given both companies are Coursera partners, is there a role for Coursera to play in these initiatives? Can either company sort of route learners to the platform or sponsor learners to be trained sort of on their content through the Coursera platform? Or are these sort of completely separate from the existing relationships you have there?

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Nice to see continued momentum in the business. And Ken, let me echo my colleagues. It's been an absolute pleasure working with you since IPO over the years through all these earnings calls, the analyst Days, you name it. So wishing you the best for the next shop and again, really appreciate the partnership. Maybe I wanted to ask two AI questions. First, I want to go back to the OpenAI and Anthropic partnerships. I understand these are really new. You talked about kind of some of them as being pipeline generation and you have these 1,000 AI courses on Coursera today, which is great to see that sort of growth. Over time, can these partnerships and other future contemplated ones, right, whether it's Google AI or other AI native companies, where -- there's not only those courses and for of those tools in there, but also the opportunity for there to be actual certifications, right, whether it's an anthropic certification or an open AI certification and maybe the newly announced Anthropic course is exactly that. It was on to me just going to the website. But maybe just walk us through what does that opportunity look like to create these AI certifications attached to courses similar to what you had with Google and Facebook and IBM and Salesforce over the years? And then I've got a follow-up. 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 23, 2025 / 9:00PM, COUR.N - Q3 2025 Coursera Inc Earnings Call

Question: Rishi Jaluria - RBC Capital Markets Inc - Analyst : Awesome. That's really helpful. And then you alluded to this in the prepared remarks, talking about leaning more into AI search. And obviously, it's a huge debate that we're having in software and Internet of just the shift from traditional SEO to AI search and it's obviously caused a lot of controversy out there. Can you talk a little bit more specifically about some of the early signs of success that you're seeing in that shift? And how you intend to invest and measure success there? Because look, I understand even if overall raw traffic to the Coursera website is down, having -- you go to ChatGPT and you say, I need courses for advancing my career. Coursera is going to be the number one with an explanation versus going to Google and you have to sort through a bunch of different similar sounding things before realizing Coursera is the best option. So the industrial logic makes sense to me. But maybe can you just walk us through what you've seen so far and how you expect to invest against that opportunity and measure success there?

Question: Claire Gerdes - UBS AG - Analyst : This is Claire Gerdes on for Taylor. I just wanted to ask on the 4Q revenue guide. You mentioned a couple of things before that might affect that with seasonality, but it does imply like a sequential decline in a further decel year-over-year. So can you just unpack the moving pieces there? And as we think about heading into fiscal '26, just any thoughts you can provide on trends that you're seeing that we should keep in mind as we look into next year?

Question: Nafeesa Gupta - Bofa Merrill Lynch Asset Holdings Inc - Analyst : My question is on the Coursera Plus doing really well. It's been growing consistently and you've been talking about it for the past couple of quarters. What do you think has led to this uptick in consumer subscription increase in paid subscription conversion. I know you're doing a couple of things on pricing, product updates, but what do you think is driving this mostly?

Question: Ryan Griffin - BMO Capital Markets Corp - Analyst : This is Ryan on for Jeff Silber. I appreciate the question. Just wondering if any changes to the sales motion that you can speak to on the enterprise segment that the last few years have been plagued by a challenging macro, but wondering if you're thinking about anything differently, whether

Question: Ryan Griffin - BMO Capital Markets Corp - Analyst : Yes. Sorry about that. Can you hear me now?

Question: Ryan Griffin - BMO Capital Markets Corp - Analyst : Okay. Great. I was just wondering if there's any changes to the sales motion that you can speak to on enterprise. I know the last few years, have been plagued by a tough macro, but wondering if you're thinking about anything differently, whether that's the pricing in enterprise or just your