Yahoo Finance Udemy's (NASDAQ:UDMY) Q2 Earnings Results: Revenue In Line With Expectations But Stock Drops 13.5%
Online learning platform Udemy (NASDAQ:UDMY) reported results in line with analysts' expectations in Q2 CY2024, with revenue up 9% year on year to $194.4 million. On the other hand, next quarter's revenue guidance of $192.5 million was less impressive, coming in 3.8% below analysts' estimates. It made a non-GAAP loss of $0.04 per share, down from its loss of $0.01 per share in the same quarter last year.
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Udemy (UDMY) Q2 CY2024 Highlights:
Revenue: $194.4 million vs analyst estimates of $194.2 million (small beat)
EPS (non-GAAP): -$0.04 vs analyst estimates of -$0.01 (-$0.03 miss)
Revenue Guidance for Q3 CY2024 is $192.5 million at the midpoint, below analyst estimates of $200.1 million
The company dropped its revenue guidance for the full year from $800 million to $779 million at the midpoint, a 2.6% decrease
Gross Margin (GAAP): 62.3%, up from 57.4% in the same quarter last year
Free Cash Flow of $42.3 million, up 142% from the previous quarter
Monthly Active Buyers: 1.29 million, up 1.28 million year on year
Market Capitalization: $1.40 billion
“Revenue for the second quarter of 2024 came in at the high end of our guidance range and we outperformed our outlook for Adjusted EBITDA,” said Greg Brown, Udemy’s President and CEO.
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Consumer Subscription
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
Sales Growth
Udemy's revenue growth over the last three years has been mediocre, averaging 17.1% annually. This quarter, Udemy reported mediocre 9% year-on-year revenue growth, in line with analysts' expectations.
Guidance for the next quarter indicates Udemy is expecting revenue to grow 4.2% year on year to $192.5 million, slowing from the 16.6% year-on-year increase it recorded in the comparable quarter last year. Ahead of the earnings results, analysts were projecting sales to grow 10.5% over the next 12 months.
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Key Takeaways from Udemy's Q2 Results
We struggled to find many positives in these results. Udemy not only lowered its full-year revenue guidance but also missed Wall Street's EPS estimates. Overall, this was a bad quarter for Udemy. The stock traded down 13.5% to $8 immediately after reporting.
So should you invest in Udemy right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
