Coursera — Q3 2026 Earnings Summary

Financial Performance:

• GAAP revenue for the three months ended September 30, 2026, was $376.7 million, a 94% year-over-year increase from $194.2 million.
• GAAP gross profit was $220.1 million, up 108% year-over-year, with a gross profit margin of 58.4% compared to 54.6% in the prior year period.
• GAAP net loss was $25.6 million, or $(0.10) per share, compared to a net loss of $8.6 million, or $(0.05) per share, in the same period last year.
• Non-GAAP gross profit was $240.0 million, up 122% year-over-year, with a non-GAAP gross profit margin of 63.7% versus 55.6% in the prior year.
• Non-GAAP net income was $57.1 million, or $0.21 per share, compared to $16.7 million, or $0.10 per share, in the prior year.
• Non-GAAP Adjusted EBITDA was $61.5 million, a 294% increase year-over-year, with an Adjusted EBITDA margin of 16.3% compared to 8.0% in the prior year.
• Free cash flow was $4.6 million for the quarter, down from $26.6 million in the prior year period.
• Net cash provided by operating activities was $15.5 million for the quarter, down from $33.9 million in the prior year.
• As of September 30, 2026, total assets were $1,805.4 million, with cash and cash equivalents of $670.6 million and deferred revenue of $461.7 million ($458.5 million current, $3.2 million non-current).

Guidance and Future Outlook:

• Full year 2026 revenue outlook was narrowed to a range of $1.229 billion to $1.237 billion.
• Full year 2026 Adjusted EBITDA margin target is approximately 14%.
• Fourth quarter 2026 revenue guidance is $358 million to $366 million.
• Fourth quarter 2026 Adjusted EBITDA guidance is $55 million to $59 million.
• Synergy integration is on track to be completed by year-end 2026, eight months ahead of the original 24-month timeline, delivering more than $150 million in annualized gross cost savings to support the $115 million annual run-rate net synergy target.

Business Segments and Product Lines:

• Enterprise revenue was $200.9 million for the quarter, up 214% year-over-year, with a gross profit margin of 81.3% compared to 69.6% in the prior year.
• Consumer revenue was $175.8 million for the quarter, up 35% year-over-year, with a gross profit margin of 65.7% compared to 61.2% in the prior year.
• Enterprise gross profit was $163.4 million, up 267% year-over-year.
• Consumer gross profit was $115.5 million, up 45% year-over-year.
• Enterprise customers decreased 4% year-over-year to 11,897 as of September 30, 2026, from 12,338 in the prior year.
• Paid subscribers increased 30% year-over-year to 1,687,000 as of September 30, 2026, from 1,299,000 in the prior year.
• Net Retention Rate for Enterprise Customers remained stable at 93% for the quarter.
• Project Helix, an AI-native skills platform connecting learning to verified proof of skills, is expected to be broadly available to Enterprise Customers in the first half of 2027.

Market and Competitive Landscape:

• Management highlighted that organizations are investing at extraordinary scale in AI infrastructure, creating a skills gap that Coursera and Udemy aim to address.
• The combined platform is positioned to deliver personalized learning, verified skills pathways, and stronger connections between human capabilities and business outcomes.
• The company notes that emerging technologies like AI may lower barriers to entry and alter industry dynamics.

Risks and Challenges:

• Forward-looking statements involve risks including the ability to attract, engage, and retain learners; market acceptance of offerings; and the pace of synergy realization.
• Risks include the ability to develop and market the AI-native skills platform in a timely manner, potential integration difficulties, and the risk of goodwill impairment.
• Other risks include dependence on content supply, regulatory matters, cybersecurity, and macroeconomic conditions.

Management Commentary and Tone:

• CEO Greg Hart stated the company is on track to deliver the original 24-month synergy plan in just eight months, creating greater capacity to invest in innovation.
• Management emphasized the opportunity to close the skills gap resulting from AI infrastructure investments.
• The tone regarding integration is confident, citing accelerated execution and significant cost savings.

Other Key Points:

• During the third quarter of 2026, Coursera repurchased approximately 18.1 million shares for $102 million.
• For the nine months ended September 30, 2026, the company repurchased approximately 34.6 million shares for $192 million.
• As of October 28, 2026, the company had repurchased more than $215 million of common stock since the program was announced in May 2026, with significant remaining capacity under its $500 million authorization.
• The financial results incorporate Udemy's operating results from the date of the transaction on May 11, 2026.
• Goodwill on the balance sheet increased to $182.7 million as of September 30, 2026, reflecting the acquisition.
• Strategic investments increased to $110.0 million as of September 30, 2026, from $1.7 million in the prior period.