Udemy Inc: Neutral Stance Amidst Modest Growth and Decelerating Expansion

Udemy Inc. reported modest revenue growth and a slight increase in full-year guidance, but growth has decelerated for 13 consecutive quarters. The company's gross margins exceeded estimates, and gross profit grew significantly year-over-year. However, the overall revenue growth remains modest, and the expected decline in consumer revenue and unchanged growth rate for Udemy Business contribute to a Hold rating.

Udemy Inc. (NASDAQ: UDMY), an online learning platform, reported its financial results for the second quarter of 2025, showcasing modest revenue growth and a slight increase in full-year guidance. However, the company continues to face challenges with decelerating business expansion. William Blair analyst Stephen Sheldon recently maintained a Hold rating on Udemy stock, reflecting both positive and negative aspects of the company's performance and future outlook [1].

The company reported a 2.8% year-on-year revenue growth in Q2 CY2025, exceeding Wall Street's expectations by 1.5%. Udemy's non-GAAP profit of $0.16 per share was 33.8% above analysts' consensus estimates, while adjusted EBITDA was 23.3% above estimates [2][3]. Despite these positive results, Udemy's overall revenue growth remains modest, and the company faces ongoing challenges in sustaining robust growth.

Udemy's gross margins exceeded estimates, and gross profit grew significantly year-over-year. However, the expected decline in consumer revenue and the unchanged growth rate for Udemy Business contribute to the Hold rating. The company's revenue growth has decelerated for 13 consecutive quarters, indicating persistent challenges in the macroeconomic environment that affect learning and development budgets [1].

The updated guidance for 2025 shows a narrowed revenue range with flat growth at the midpoint, and a slight improvement in adjusted EBITDA. Udemy's monthly active buyers increased by 512 year on year, but the overall growth rate is lower than the two-year average. The company's average revenue per buyer (ARPB) remained flat year on year, suggesting that while the subscriber base is growing, the revenue generated per buyer is not increasing [2][3].

Stephen Sheldon's rating is based on a combination of factors, including Udemy's recent performance, growth prospects, and the current macroeconomic environment. He covers the Technology sector and has an average return of 8.9% and a 59.14% success rate on recommended stocks [1].

In conclusion, while Udemy Inc. reported positive results in Q2 CY2025, the company continues to face challenges with decelerating business expansion. The Hold rating reflects the ongoing challenges and the uncertainty surrounding Udemy's growth prospects. Investors should closely monitor the company's performance and the broader macroeconomic environment to make informed investment decisions.

References:
[1] https://www.tipranks.com/news/ratings/udemy-inc-hold-rating-amidst-modest-revenue-growth-and-decelerating-business-expansion-ratings
[2] https://markets.financialcontent.com/wral/article/stockstory-2025-7-30-udemy-nasdaqudmy-exceeds-q2-expectations-stock-jumps-101
[3] https://finance.yahoo.com/news/udemy-nasdaq-udmy-exceeds-q2-223031763.html