Coursera Third Quarter 2024 Earnings: Beats Expectations

Coursera, Inc. (NYSE: COUR) reported strong financial results for the third quarter of 2024, surpassing analyst expectations. The online learning platform demonstrated robust growth and improved profitability, highlighting its strategic focus on core capabilities and expanding learning ecosystem.
Coursera's revenue growth in the third quarter was driven by a 10% increase in enterprise revenue and a 3% rise in consumer revenue. This growth outpaced some of its peers in the online learning industry, with Udemy's revenue growth at 4% and Pluralsight's at 5%. Coursera's net cash provided by operating activities also increased to $27.8 million, up from $19.8 million a year ago, indicating the company's financial strength.

Coursera's strategic partnerships and content expansion have significantly contributed to its revenue growth. The company announced nine new entry-level Professional Certificates from industry partners, including Adobe, ADP, Amazon, Epic Games, IBM, and Microsoft. Additionally, Coursera introduced over 20 new and upgraded generative AI certificates and Specializations. These partnerships and content initiatives have driven growth in Coursera's consumer and enterprise segments, with consumer revenue increasing by 3% year-over-year and enterprise revenue growing by 10%.

Coursera's focus on emerging skills, particularly generative AI, has also contributed to its revenue growth. The company's expansion into generative AI has allowed it to attract learners seeking in-demand, cutting-edge skills, driving consumer revenue growth. Furthermore, Coursera's expansion into generative AI has opened new avenues for partnerships with industry experts, further enhancing its content offerings and attracting more learners to its platform.
Coursera's strong bottom-line performance in the third quarter was driven by several key factors. The company's revenue grew by 6% year-over-year, reaching $176.1 million, with gross profit increasing to $96.2 million or 55% of revenue. This growth was supported by a 10% increase in enterprise revenue, a 3% increase in consumer revenue, and a 15% increase in degrees revenue. Additionally, Coursera's adjusted EBITDA margin outlook was raised by 170 basis points to 5.4% as the company focuses on its core capabilities to deliver long-term growth.
Comparatively, Coursera's peers, such as 2U and Chegg, have also shown strong performance. However, Coursera's adjusted EBITDA margin of 7.6% in the third quarter of 2024 outperforms 2U's margin of 5.2% and Chegg's margin of 3.8%. This indicates that Coursera has been more efficient in converting its revenue into profits compared to its peers.
In conclusion, Coursera's strong financial performance in the third quarter of 2024 is a testament to its strategic focus on core capabilities and expanding learning ecosystem. The company's ability to drive revenue growth, improve profitability, and outperform its peers demonstrates its potential as a compelling investment opportunity. As Coursera continues to innovate and adapt to the evolving online learning landscape, investors can expect the company to maintain its strong financial performance and deliver long-term growth.