Q3 2023 Coursera Inc Earnings Call
Speaker 1: transcript
Speaker 1: Ladies and gentlemen, thank you for standing by and welcome to Coursera's third quarter, 2023 earnings call. At this time, all participants are in a listen only mode, and please be advised that this call is being recorded. After this, speakers prepared remarks will be a question and answer session. If you would like to ask a question, during this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press star one.
Ladies and gentlemen, thank you for standing by and welcome to you of course, our third quarter 2023 earnings call.
At this time all participants are in a listen only mode and please be advised that this call is being recorded after the speakers' prepared remarks, there will be a question and answer session. If you would like to ask a question during.
During this time, please press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press Star one.
Speaker 1: transcript
Speaker 1: I'd like to turn the call over to Cam Carrey, head of Invest Relations. Mr. Carrey, you may begin. Hi, everybody.
I'd like to turn the call over to Cam carry head of Investor Relations. Mr. Carey you may begin.
Hi, everyone and thank you for joining our Q3 earnings conference call with.
Speaker 2: transcript
Speaker 2: With me today's Jeff Najim Kolda, Coursera's chief executive officer and Ken Han, our chief financial officer. Following their prepared remarks.
With me today is Jeff <unk>, Paula <unk>, Chief Executive Officer, and Ken Hahn, Our Chief Financial Officer.
Following their prepared remarks, we will open the call for questions.
Speaker 2: transcript
Speaker 2: Our press release including financial tables was issued after market closing is posted on our investor relations website located at investor.coursera.com Where this call is being simultaneously webcast and reversions of our prepared remarks and supplemental slides are available.
Our press release, including financial tables was issued after market close and is posted on our Investor Relations website located at Investor <unk> Coursera Dot Com, where this call is being simultaneously webcast and where versions of our prepared remarks and supplemental slides are available.
Speaker 2: transcript
Speaker 2: During this call, we will present both GAP and non- GAAP financial measures. A reconciliation and non- GAAP measures to the most directly comparable GAP measure can be found in today's press release and supplemental presentation, which are distributed and available to the public through our investor relations website. Please note, all growth percentages refer to your over-your-change unless otherwise specified. Additionally, all statements made during this call relating to future results and events are forward-looking statements based on current expectations and beliefs. These forward-looking statements include...
During this call we will present, both GAAP and non-GAAP financial measures a reconciliation of non-GAAP measures to the most directly comparable GAAP measure can be found in today's press release and supplemental presentation, which are distributed and available to the public through our Investor Relations website.
Please note all growth percentages refer to year over year change unless otherwise specified.
Additionally, all statements made during this call relating to future results and events are forward looking statements based on current expectations and beliefs.
These forward looking statements include but are not limited to statements regarding the potential impacts of trends affecting our industry and business and factors affecting the same.
Speaker 2: transcript
Speaker 2: statements regarding the potential impacts of trends affecting our industry and business and factors affecting the same.
Speaker 2: transcript
Speaker 2: The anticipated benefits and impact of our strategic assets and platform advantage.
The anticipated benefits and impact of our strategic assets and platform advantages.
Speaker 2: transcript
Speaker 2: our ecosystem, platform, content, and partner relationships, our anticipated plans and the anticipated advantages and benefits thereof, our strategy and priorities, our share reproaches program and cash and capital allocation, and our vision, business model, mission, opportunities outlook, financial business, and otherwise, and future intentions.
Our ecosystem platform content and partner relationships are anticipated plans and the anticipated advantages and benefits thereof, our strategy and priorities our share repurchase program and cash and capital allocation and our vision business model mission opportunities outlook financial business, and otherwise and future intentions.
Speaker 2: transcript
Speaker 2: Actual resultant events could differ materially from those expressed or implied in these four looking statements due to a number of risks and uncertainties, including those discussed in our press release, SEC filing, and supplemental material.
Actual results and events could differ materially from those expressed or implied in these forward looking statements due to a number of risks and uncertainties, including those discussed in our press release SEC filings and supplemental materials.
Speaker 2: transcript
Speaker 2: These forward-looking statements are not guarantees a future performance or plans, and investors should not place under reliance on them. We assume no obligation to update our forward-looking statements except as required by law. And with that, I'd like to turn it over to Jeff.
These forward looking statements are not guarantees of future performance or plans and investors should not place undue reliance on them, we assume no obligation to update our forward looking statements, except as required by law and.
And with that I'd like to turn it over to Jeff.
Speaker 3: transcript
Speaker 3: Thanks, Kim, and good afternoon, everyone. It's great to be with you all.
Thanks, Kim and good afternoon, everyone, it's great to be with you all.
Speaker 3: transcript
Speaker 3: I'm pleased to share that we've delivered another strong set of results.
I am pleased to share that we delivered another strong set of results.
Operator: Ladies and gentlemen, thank you for standing by and welcome to Coursera's third quarter 2023 earnings call. At this time, all participants are in a listen only mode, and please be advised that this call is being recorded. After this speaker's prepared remarks will be a question and answer session. If you would like to ask the question. During this time, please press star followed by the number one on your telephone keypad, if you would like to withdraw your question again, press star one.
Speaker 3: transcript
Speaker 3: We grew revenue 21% over the prior year, driven by 27% growth in our consumer segment. We welcomed six and a half million new learners to our platform, our highest third quarter since the pandemic tailwinds of 2020. And once again, we are raising our outlook on revenue and adjust EBITDA as our business model scale.
We grew revenue 21% over the prior year, driven by 27% growth in our consumer segment.
We welcome six and a half million new learners to our platform our highest third quarter since the pandemic tailwind of 2020.
And once again, we are raising our outlook on revenue and adjusted EBITDA as our business model scales.
Speaker 3: transcript
Speaker 3: We're delivering these results against the backdrop of a dynamic macro environment, which has reinforced my confidence in our vision for the future of higher education, the strategic asset that differentiates our ecosystem with quality, trust, and world-class branded credentials, and the global need for a platform like Percer.
We're delivering these results against the backdrop of a dynamic macro environment, which has reinforced my confidence in our vision for the future of higher education.
Cam Carey: I'd like to turn the call over to Cam Carey, head of investor relations. Mr. Carey, you may begin.
Cam Carey: Hi, everyone, and thank you for joining our Q through and its conference call. With me today is Jeff Maggion Calda, Coursera's chief executive officer and Ken Hahn, our chief financial officer. Following their prepared remarks, we will open the call for questions. Our press release, including financial tables with issued after market closing is posted on our investor relations website located at investor.coursera.com where this call is being simultaneously webcast and reversions of our prepared remarks in supplemental slides.
The strategic assets that differentiate our ecosystem with quality Trust and world class branded credentials and the global need for a platform like <unk>.
Speaker 3: transcript
Speaker 3: We have a lot to cover today, so let's jump in starting with the long term trends that are driving our business. The first trend.
We have a lot to cover today, so let's jump in starting with the long term trends that are driving our business.
The first trend is digital transformation.
Speaker 3: transcript
Speaker 3: For many years, the combined forces of technology, globalization and automation have been accelerating the transformation of every institution in our society.
For many years, the combined forces of technology globalization and automation have been accelerating the transformation of every institution in our society.
Cam Carey: During this call, we will present both gap and non-gap financial measures. A reconciliation of non-gap measures to the most directly comparable gap measure can be found in today's press release and supplemental presentation, which are distributed and available to the public through our investor relations website. Please note, all growth percentages refer to your over your change unless otherwise specified. Additionally, all statements made during this call relating to future results and events are forward-looking statements based on current expectations and beliefs.
Speaker 3: transcript
Speaker 3: More recently, the explosive adoption of a Gen. of AI is beginning to demonstrate how profoundly this new general purpose technology will reshape how we live, learn, and work.
More recently the explosive adoption of generative AI is beginning to demonstrate how profoundly this new general purpose technology will reshape how we live learn and work.
Speaker 3: transcript
Speaker 3: I'm a Kinsey Global Survey on AI published in August . Showed that nearly 80% of respondents, which included participants from all regions, industries, and seniority levels, reportedly some exposure to generative AI, either for work or outside of.
Ah Mackenzie Global survey published in August.
Nearly 80% of respondents which included participants from all regions and industries in seniority levels reported at least some exposure to generative AI either for work or outside of work.
Cam Carey: These four looking statements include, but are not limited to statements regarding the potential impacts of trends affecting our industry and business and factors affecting the same. The anticipated benefits and impact of our strategic assets and platform advantages, our ecosystem platform content and partner relationships, our anticipated plans and the anticipated advantages and benefits thereof, our strategy and priorities, our share repurchase program and cash and capital allocation, and our vision, business model mission, opportunities outlook, financial business and otherwise.
Speaker 3: transcript
Speaker 3: Ultimately, we believe increased demand for education will be driven by an unprecedented rate of change as every facet of our society, including businesses, governments, and academic institutions, grapples with the need to improve their productivity and human capital in this new world of generative A&M.
Ultimately, we believe increased demand for education will be driven by an unprecedented rate of change as every facet of our society, including businesses government and academic institutions Raffles with the need to improve their productivity and human capital in this new world degenerative AI.
Speaker 3: transcript
Speaker 3: This change in our society brings me to the second major trend, which is skills development.
This change in our Society brings me to the second major trend, which is skills development.
Speaker 3: transcript
Speaker 3: The rapid adoption of new technologies, tools, and processes creates an urgent need for organizations and individuals to remain competitive.
Rapid adoption of new technologies tools and processes creates an urgent need for organizations and individuals to remaining competitive.
Cam Carey: And future intentions. Actual resultant events could differ materially from those expressed or implied in these four looking statements due to a number of risks and uncertainties, including those discussed in our press release, SEC findings and supplemental materials. These four looking statements are not guarantees of future performance or plans and investors should not place under reliant on them. We assume no obligation to update our four looking statements except as required by law.
Speaker 3: transcript
Speaker 3: The same with Kinsey Survey found that high-performing organizations expect to rescale more than 30% of their workforces over the next three years as a result of AI adoption.
The same Mckinsey survey found that high performing organizations expect to re skill at more than 30% of their workforces over the next three years as a result of AI adoption.
Speaker 3: transcript
Speaker 3: For businesses, we believe that learning and development and HR leaders will play a crucial role in building organizational agility and implementing programs to take advantage of growth opportunities, product innovations and productivity.
For businesses, we believe that learning and development and HR leaders will play a crucial role in building organizational agility and implementing programs to take advantage of growth opportunities product innovations and productivity measures.
Jeff Maggioncalda: And with that, I'd like to turn it over to Jeff. Thanks, Cam, and good afternoon, everyone. It's great to be with you all. I'm pleased to share that we've delivered another strong set of results. We grew revenue 21% over the prior year, driven by 27% growth in our consumer segment. We welcome six and a half million new learners to our platform, our highest third quarter since the pandemic tailwinds of 2020. And once again, we are raising our outlook on revenue and adjust EBITDA as our business model scales.
Speaker 3: transcript
Speaker 3: This will include rapidly deploying new technologies, adapting to change, and unlocking new talent and skills. But...
This will include rapidly deploying new technologies adapting to change and unlocking new talent and skills.
But businesses are not alone.
Speaker 3: transcript
Speaker 3: Governments will need to deliver job training programs at the speed and scale required to keep pace with job dislocation and unemployment.
Governments will need to deliver job training programs at the speed and scale required to keep pace with job dislocation and unemployment changes.
Speaker 3: transcript
Speaker 3: As many of the world's largest employers, they will also need to transform their government workforces in order to unlock the value and efficiency gains enabled by generative A.
As many of the world's largest employers they will also need to transform their government workforces in order to unlock the value and efficiency gains enabled by generative AI.
Jeff Maggioncalda: We're delivering these results against the backdrop of a dynamic macro environment, which has reinforced my confidence in our vision for the future of higher education. The strategic asset that differentiates our ecosystem with quality trust and world class branded credentials and the global need for a platform like for Sarah.
Speaker 3: transcript
Speaker 3: and academic institutions from single campuses to entire systems of higher education will reckon with how they changed the way professors teach, the way that students learn, and of course, is that they must offer to meet the needs of graduates and the employers who hire us.
And academic institutions from single campuses to entire systems of higher education will reckon with how they change the way professors teach the way that students learn and of course is that they must offer to meet the needs of graduates and the employers who hire them.
Jeff Maggioncalda: We have a lot to cover today. So let's jump in starting with the long term trends that are driving our business. The First Trend is Digital Transformation. For many years, the combined forces of technology, globalization, and automation have been accelerating the transformation of every institution in our society. More recently, the explosive adoption of generative AI is beginning to demonstrate how profoundly this new general purpose technology will reshape how we live, learn and work.
Speaker 3: transcript
Speaker 3: Arguably, generative AI will have a larger and more enduring impact on higher education than COVID.
Arguably generative AI will have a larger and more enduring impact on higher education than COVID-19.
Speaker 3: transcript
Speaker 3: A recent study by researchers at Princeton, Penn, and NYU assessed the impact that Genevieve would have on more than 800 jobs.
A recent study by researchers at Princeton, Penn and NYU assess the impact of generative AI would have on more than 800 job roles. They concluded that 11 of the top 13 job roles that will be most impacted by generative AI, Our college and University professors in post secondary education.
Speaker 3: transcript
Speaker 3: They concluded that 11 of the top 13 job roles that will be most impacted by gendered AI are college and university professors in post-secondary.
Speaker 3: transcript
Speaker 3: And this leads me to the third trend drive in our business, the transformation of higher education.
And this leads me to the third trend driving our business the transformation of higher education.
Jeff Maggioncalda: I'm a Kinsey Global Survey on AI published in August. Showed that nearly 80% of respondents, which included participants from all regions, industries, and seniority levels, reportedly some exposure to generative AI, either for work or outside of work. Ultimately, we believe increased demand for education will be driven by an unprecedented rate of change as every facet of our society, including businesses, governments, and academic institutions, grapples with the need to improve their productivity and human capital.
Speaker 3: transcript
Speaker 3: Our vision for the future of higher education requires cross-sector collaboration between academic institutions, employers, and government to meet the needs and pace of a fast-changing economy.
Our vision for the future of higher education requires cross sector collaboration between academic institutions employers and government to meet the needs and pace of a fast changing economy.
Speaker 3: transcript
Speaker 3: In past quarters, I've discussed our growing number of partnerships with international institutions, including entire countries looking to uplevel their higher education.
In past quarters, I've discussed our growing number of partnerships with international institutions, including entire countries looking to up level their higher education systems. This quarter I'm excited to share an innovative blueprint for re imagined higher education, and one of the largest and fastest growing states in the U S.
Speaker 3: transcript
Speaker 3: This quarter, I'm excited to share an innovative blueprint for reimagining higher education in one of the largest and fastest growing states in the US.
Speaker 3: transcript
Speaker 3: Coursera has partnered with the University of Texas System to launch one of the most comprehensive, industry-recognized micro-prudential programs in the country.
Coursera has partnered with the University of Texas system to launch one of the most comprehensive industry recognized micro credential programs in the country.
Jeff Maggioncalda: This change in our society brings me to the second major trend, which is skills development. The rapid adoption of new technologies, tools, and processes creates an urgent need for organizations and individuals to remain competitive. The same with Kinsey Survey found that high performing organizations expect to reskill more than 30% of their workforces over the next three years as a result of AI adoption. For businesses, we believe that learning and development and HR leaders will play a crucial role in building organizational agility and implementing programs to take advantage of growth opportunities, product innovations, and productivity measures.
Speaker 3: transcript
Speaker 3: The forward-thinking leadership of the UT system believes that micro credentials are a powerful and effective tool in producing graduates who are both broadly educated and specifically skilled. Giving them a competitive edge in the labor market while also enhancing their overall student.
The forward thinking leadership of the U T system believes that micro credentials are a powerful and effective tool and producing graduates who are both broadly educated and specifically skilled.
Giving them a competitive edge in the labor market, while also enhancing the overall student experience.
Speaker 3: transcript
Speaker 3: Additionally, they are focused on investing in programs that can meet the states evolving workforce demands, viewing the system as an engine for the local economy.
Additionally, they are focused on investing in programs that can meet the state's evolving workforce demands viewing the system as an engine for the local economy.
Speaker 3: transcript
Speaker 3: What began as a pilot in 2022 had expanded into a system-wide project.
What began as a pilot in 2022 has expanded into a system wide project.
Jeff Maggioncalda: This will include rapidly deploying new technologies, adapting to change, and unlocking new talent and skills. But businesses are not alone. Governments will need to deliver job training programs at the speed and scale required to keep pace with job dislocation and unemployment changes. As many of the world's largest employers, they will also need to transform their government workforces in order to unlock the value and efficiency gains enabled by generative AI. And academic institutions from single campuses to entire systems of higher education will reckon with how they changed the way professors teach, the way that students learn, and of course, is that they must offer to meet the needs of graduates and the employers who hire them.
Speaker 3: transcript
Speaker 3: The program provides access to over 240,000 learners, including students, faculty, and staff, as well as alumni. It encompasses nine UT campuses, all of which have access to the Career Academy on Coursera, which now includes more than 40 entry-level professional certificates created by the world's most respected companies.
The program provides access to over 240000 learners, including students faculty and staff as well as alumni.
It encompasses nine Ut campuses, all of which have access to the career Academy on for Sarah which now includes more than 40 entry level professional certificates created by the worlds most respected companies.
Speaker 3: transcript
Speaker 3: And these certificates are being integrated into the curriculum and often offered as career electives for credit for students pursuing traditional degrees.
And these certificates are being integrated into the curriculum and often offered as career elective for credit for students pursuing traditional degrees.
Speaker 3: transcript
Speaker 3: We designed career academy to be a turnkey scalable solution for our customers and the value of this offer and is continuously enhanced every time that we launch a new certificate, secure additional credit recommendations, and forge new pathways between open course certificates and college degree.
We design career academy to be a turnkey scalable solution for our customers and the value of this offering is continuously enhanced every time that we launch a new certificate secure additional credit recommendations enforced new pathways between open course certificates and college degrees.
Jeff Maggioncalda: Arguably, generative AI will have a larger and more enduring impact on higher education than COVID did. A recent study by researchers at Princeton, Penn, and NYU assessed the impact that generative AI would have on more than 800 job roles. They concluded that 11 of the top 13 job roles that will be most impacted by generative AI are college and university professors in post-secondary education.
Speaker 3: transcript
Speaker 3: Our partnership with Texas brings together the vision of Coursera's three-sided equals.
Our partnership with taxes brings together the vision of course, there is three sided ecosystem, including broad affordable access to high quality education for learners.
Speaker 3: transcript
Speaker 3: including broad affordable access to high quality education for learners.
Speaker 3: transcript
Speaker 3: powerful combination of universities and industry experts as educators.
The powerful combination of universities and industry experts as educators.
Speaker 3: transcript
Speaker 3: and the collaboration of employers, government, and academic institutions to enable innovation at the scale of an entire state or an entire nation.
And the collaborations of employers government and academic institutions.
Enable innovation at the scale of an entire state for an entire nation.
Jeff Maggioncalda: And this leads me to the third trend drive in our business, the transformation of higher education. Our vision for the future of higher education requires cross sector collaboration between academic institutions, employers, and government to meet the needs and pace of a fast changing economy. In past quarters, I've discussed our growing number of partnerships with international institutions, including entire countries looking to uplevel their higher education. Coursera has partnered with the University of Texas System to launch one of the most comprehensive, industry-recognized micro-credential programs in the country.
Speaker 3: transcript
Speaker 3: We're able to pursue these partnerships because of our strategic assets and platform advantages. We will include our leading educator partners who created a broad catalog of trusted and branded content and credentials.
We're able to pursue these partnerships because of our strategic assets and platform advantages, which include our leading educate our partners who created a broad catalog of trusted and branded content and credentials.
Speaker 3: transcript
Speaker 3: Our global reached individuals and institutions, which encompassed businesses, governments, and campuses.
Our global reach to individuals and institutions, which encompasses businesses governments and campuses.
Speaker 3: transcript
Speaker 3: as well as our data technology and AI advancements that we leverage across our planet.
As well as our data technology, and AI advancements that we leverage across our platform.
Speaker 3: transcript
Speaker 3: Now let's cover some of our recent progress for each of these categories. First.
Now, let's cover some of our recent progress for each of these categories.
First educate our partners.
Speaker 3: transcript
Speaker 3: In a world where machines are increasingly capable of producing content at scale without guardrails for quality and accuracy, we believe trusted institutions will continue to play a critical role in education.
In a world where machines are increasingly capable of producing content at scale without guardrails for quality and accuracy. We believe trusted institutions will continue to play a critical role in education.
Speaker 3: transcript
Coursera is a trusted steward of more than 300 of the world's top University in industry brands, who continued to expand rapidly their catalog on our platform.
Jeff Maggioncalda: They are heavily educated and specifically skilled, giving them a competitive edge in the labor market while also enhancing their overall student experience. Additionally, they are focused on investing in programs that can meet the states evolving workforce demands, viewing the system as an engine for the local economy. What began as a pilot in 2022 had expanded into a system-wide project. The program provides access to over 240,000 learners, including students, faculty and staff, as well as alumni.
Speaker 3: transcript
Speaker 3: I like to begin with updates to our portfolio of entry-level professional certificates, which we leverage at the strategic asset across every segment of our platform, rather than consumer growth, enabling governments and campuses like Texas to embed micro credentials into their curriculum with career academy, and allowing students to begin and earn credit towards a college degree. With a regional credit recommendations and a growing number of degree pathways to bachelors and masters.
I'd like to begin with updates to our portfolio of entry level professional certificates, which we leverage as a strategic asset.
Cross every segment of our platform driving consumer growth, enabling governments and campuses like Texas to embed micro credentials into their curriculum with career Academy and allowing students to begin an earn credit towards a college degree with a regional credit recommendations and a growing number of debris pathways to bachelor's and master's programs.
Speaker 3: transcript
Speaker 3: Today we have 44 entry-level professional certificates live on the platform, including new titles from Microsoft and Tableau that launched during the quarter.
Today, we have 44 entry level professional certificates live on the platform, including new titles from Microsoft and Tableau that launched during the quarter.
Jeff Maggioncalda: It encompasses nine UT campuses, all of which have access to the career academy on Coursera, which now includes more than 40 entry-level professional certificates created by the world's most respected companies. And these certificates are being integrated into the curriculum and often offered as career electives for credit for students pursuing traditional degrees. We design career academy to be a turnkey scalable solution for our customers and the value of this offer is continuously enhanced every time that we launch a new certificate, secure additional credit recommendations, and forge new pathways between open course certificates and college degrees.
Speaker 3: transcript
Speaker 3: And earlier this month, we were proud to welcome our first entry-level professional certificate from Amazon Web Services in a fast growing field of cloud consult.
And earlier this month, we were proud to welcome our first entry level professional certificate from Amazon Web services in the fast growing field of cloud consulting.
Speaker 3: transcript
Speaker 3: Our expanding relationship with AWS seeks to serve our learners at every stage of their career. The new training program provides the foundational skills required to start or switch into a cloud.
Our expanding relationship with AWS seeks to serve our learners at every stage of their career.
The new training program provides the foundational skills required to start or switch into a cloud career and it is complemented by AWS as existing catalog of intermediate and advanced content already on Coursera.
Speaker 3: transcript
Speaker 3: And it is complemented by AWS's existing catalog of intermediate and advanced content already on Coursera. Now,
Now, let's discuss degrees.
Speaker 3: transcript
Speaker 3: We announced four new degree programs in Q3 from new and existing parts.
We announced four new degree programs in Q3 from new and existing partners that include a master of advanced study in engineering from the University of California, Berkeley with the <unk>.
Jeff Maggioncalda: Our partnership with Texas brings together the vision of Coursera's three-sided ecosystem, including broad affordable access to high quality education for learners, the powerful combination of universities and industry experts as educators, and the collaboration of employers, government and academic institutions to enable innovation at the scale of an entire state for an entire nation. We're able to pursue these partnerships because of our strategic assets and platform advantages, which include our leading educator partners who created a broad catalog of trusted and branded content and credentials. Our global reached individuals and institutions, which encompasses businesses, governments and campuses, as well as our data technology and AI advancements that we leverage across our platform.
Speaker 3: transcript
Speaker 3: They include a master of advanced study and engineering from the University of California, to Berkeley, the top ranked public university in the US.
Top ranked public University in the U S.
Speaker 3: transcript
Speaker 3: I'm Master of Engineering and Computer Engineering from Dartmouth, the University's first fully online degree, and the first online Ivy League Masters degree in the field, which aims to prepare engineering leaders in emerging technologies and combat talent shortages that it shortages associated with the chips.
Our master of engineering and computer engineering from Dartmouth The university's first fully online degree in the first online Ivy League Masters degree in the field, which aims to prepare engineering leaders in emerging technologies and combat talent shortage shortages associated with the chips Act.
Speaker 3: transcript
Speaker 3: as well as two additional message reprogrammed from Northeastern University in data analytics engineering and information.
As well as two additional message reprograms from northeastern University, and data analytics engineering and information systems.
Speaker 3: transcript
Speaker 3: Both Northeastern programs provide performance-based admissions pathways for learners or eligible completion of open content on Coursera, simply scoring a B or better on two initial courses, can reduce historical barriers to starting a degree.
Both northeastern programs provide performance based admissions pathways for learners were eligible completion of open content on coursera simply scoring a b or better on <unk> initial courses can reduce historical barriers to starting a degree.
Jeff Maggioncalda: Now let's cover some of our recent progress for each of these categories. First, educator partners. In a world where machines are increasingly capable of producing content at scale without guardrails for quality and accuracy, we believe trusted institutions will continue to play a critical role in education. Coursera is the trusted steward of more than 300 of the world's top university and industry brands who continue to expand rapidly their catalog on our platform.
Speaker 3: transcript
Speaker 3: We believe that the college degree needs to be more accessible, affordable and relevant.
We believe that the college degree needs to be a more accessible affordable and relevant.
Speaker 3: transcript
Speaker 3: And we've spent much of this year laying the groundwork for how our platform can uniquely address the needs of working adults, collaborating with partners committed to transforming the degree.
And we've spent much of this year laying the groundwork for how our platform can uniquely address the needs of working adults collaborating with partners committed to transforming the degree experience.
Speaker 3: transcript
Speaker 3: Chris, there is pioneering a new type of degree that we call pathway to
Of course, there is pioneering a new type of degree that we call pathway degrees that are designed to meet the needs of working adults. These degrees incorporate credit pathways.
Speaker 3: transcript
Speaker 3: that are designed to meet the needs of working adults. These degrees incorporate credit pathways where the learning and open content of Coursera can count as academic credit towards the college degree program.
Where the learning and open content and Coursera can count as academic credit towards a college degree program at.
Jeff Maggioncalda: I like to begin with updates to our portfolio of entry-level professional certificates, which we leverage as a strategic asset across every segment of our platform, driving consumer growth, enabling governments and campuses like Texas to embed micro credentials into their curriculum with career academy, and allowing students to begin and earn credit towards a college degree with a regional credit recommendations and a growing number of degree pathways to bachelors and masters, as well. Today we have 44 entry-level professional certificates live on the platform, including new titles from Microsoft and Tableau that launched during the quarter.
Speaker 3: transcript
Speaker 3: admissions pathways were performed in open content on Prasera can unlock admissions into a college degree program and progress pathways were completion of content on Prasera can count as completion of course work in a college degree.
Admissions pathways, where performance in open content <unk> can unlock admissions into a college degree program and.
Progress pathways, where completion of content on for Sarah can count as completion of coursework and a college degree program.
Speaker 3: transcript
Speaker 3: What example of this is a recently launched degree programs with Illinois Tech.
One example of this is our recently launched degree programs with Illinois Tech.
Speaker 3: transcript
Speaker 3: We're excited to share that as of September , Illinois Tech has agreed to create more than 10 pathways from our industry content, into two masses degree programs.
We're excited to share that as of September, Illinois Tech has agreed to create more than 10 pathways from our industry content into two masters degree programs the.
Speaker 3: transcript
Speaker 3: The industry content includes several of our best performing entry level and advanced professional certificates from Google, IBM and more. And these micro credentials have over 4 million cumulative historical enrollments.
The industry content includes several of our best performing entry level and advanced professional certificates from Google IBM and more.
Jeff Maggioncalda: And earlier this month, we were proud to welcome our first entry-level professional certificate from Amazon Web Services in a fast-growing field of cloud consulting. Our expanding relationship with AWS seeks to serve our learners at every stage of their career. The new training program provides the foundational skills required to start or switch into a cloud career. And it is complemented by AWS's existing catalog of intermediate and advanced content already on Coursera.
And these micro credentials have over 4 million cumulative historical enrollments.
Speaker 3: transcript
Speaker 3: That recaps our progress with our catalog and educator partner. So now let's move to our second manager advantage, the global reach of our plan.
That recaps, our progress with our catalog and educate our partners. So now let's move to our second major advantage the global reach of our platform brings.
Speaker 3: transcript
Speaker 3: For institutions, we increased the number of paid enterprise customers to over 1,300, with many of the recent additions driven by the momentum we're seeing in our campus
For institutions, we increased the number of paid enterprise customers to over 1300 with many of the recent additions driven by the momentum we're seeing in our campus vertical.
Speaker 3: transcript
Speaker 3: As I had left before, we added 6.5 million new registered learners growing our global learner base to 136 million by the end of September .
Jeff Maggioncalda: Now let's discuss degrees. We announced four new degree programs in Q3 from new and existing partners. They included a master of advanced study and engineering from the University of California, Berkeley, the top ranked public university in the U.S. A master of engineering and computer engineering from Dartmouth, the University's first fully online degree and the first online IB league master's degree in the field, which aims to prepare engineering leaders in emerging technologies and combat talent shortage as it shortages associated with the CHIPS Act.
As I highlighted before we added $6 5 million new registered learners growing our global learner base to $136 million by the end of September.
Speaker 3: transcript
Speaker 3: Road continued to be broad-based, would double-digit percentage increases across all regions.
Growth continued to be broad based with double digit percentage increases across all regions.
Speaker 3: transcript
Speaker 3: This year we've been investing in a number of strategic priorities focused on enhancing the localized learner and customer experience on Coursera, which is where I'd like to start the discussion of our third advantage, the ongoing product innovation across our platform. First is our
This year, we've been investing in a number of strategic priorities focused on enhancing the localized learner and customer experience on Coursera, which is where I'd like to start the discussion of our third advantage the ongoing product innovation across our platform.
First is our AI powered language translation initiative.
Speaker 3: transcript
Speaker 3: We believe that high quality education from the world's leading experts should be accessible to learners anywhere in the world, no matter what language they say.
Jeff Maggioncalda: As well as two additional master's reprogrammed from Northeastern University in data analytics engineering and information systems. Both Northeastern programs provide performance-based admissions pathways for learners where eligible completion of open content on Coursera simply scoring a B or better on two initial courses can reduce historical barriers to starting a degree. We believe that the college degree needs to be more accessible, affordable and relevant. And we have spent much of this year laying the groundwork for how our platform can uniquely address the needs of working adults, collaborating with partners committed to transforming the degree experience.
We believe that high quality education from the world's leading experts should be accessible to learners anywhere in the world No matter what language they speak.
Speaker 3: transcript
Speaker 3: For much of the world, access to educational opportunities is often limited to those who speak English.
For much of the world access to educational opportunities is often limited to those who speak English.
Speaker 3: transcript
Speaker 3: As emerging technologies create new skill requirements, and the world's talent becomes more globalized, language bears create impediments to collaboration, productivity, and economic opportunity.
As emerging technologies create new skill requirements and the world's talent becomes more globalized language barriers create impediments to collaboration productivity and economic opportunity.
Speaker 3: transcript
Speaker 3: Our strategy is to use technology to dramatically reduce the time and cost at producing high quality trusted content at scale. And remarkable advancements in the quality of machine learning translations can now translate courses at a fraction of both the cost and speed of using conventional human methods.
Our strategy is to use technology to dramatically reduce the time and cost of producing high quality trusted content at scale and.
And remarkable advancements in the quality of machine learning translations can now translate courses at a fraction of both the cost and speed of using conventional human methods.
Jeff Maggioncalda: Coursera is pioneering a new type of degree that we call pathway degrees that are designed to meet the needs of working adults. These degrees incorporate credit pathways where the learning and open content on Coursera can count as academic credit towards the college degree program. Admissions pathways where performance and open content on Coursera can unlock admissions into a college degree program and progress pathways where completion of content on Coursera can count as completion of course work in a college degree program.
Speaker 3: transcript
Speaker 3: We sit in an ambitious target at the beginning of this year to deliver more than 2000 full course translations into several of the world's most commonly spoken language.
We set an ambitious target at the beginning of this year to deliver more than 2000 and full course translations into several of the world's most commonly spoken languages.
Speaker 3: transcript
Speaker 3: I'm pleased to share that we accelerated our efforts, launching twice original goal with more than 4,000 full course translations in Spanish, Arabic, Brazilian Portuguese, French, German, Bahasa, Indonesia, and Thai.
I am pleased to share that we accelerated our efforts launching twice our original goal with more than 4000 full course translations in Spanish Arabic, Brazilian Portuguese French German Bahasa, Indonesia and tie.
Jeff Maggioncalda: What example of this is our recently launched degree programs with Illinois Tech. We're excited to share that as of September, Illinois Tech has agreed to create more than 10 pathways from our industry content into two master's degree programs. The industry content includes several of our best performing entry level and advanced professional certificates from Google, IBM and more. And these micro credentials have over 4 million cumulative historical enrollments.
Speaker 3: transcript
Speaker 3: The newly translated courses include the full learner experience like lecture video subtitles, course readings, assessments, discussion prompts, the user interface, and more.
The newly transplanted courses includes the full learner experience like luxury video subtitles course readings assessments discussion prompts the user interface and more.
Speaker 3: transcript
Speaker 3: And we've created a simple toggle experience, providing learners with the option to practice skills in their local language or use subtitles for English courses to advance the proficiency in specific workplace.
And we've created a simple tablet toggle experience, providing learners with the option to practice skills in their local language or use subtitles for English courses to advance their proficiency and specific workplace skills.
Speaker 3: transcript
Speaker 3: I've been inspired by the team's progress, but we're just getting started.
I've been inspired by the team's progress, but we're just getting started.
Speaker 3: transcript
Speaker 3: We expect to have more than 4,000 courses translated into more than 15 languages by the end of this year. And we see many other ways that genitive AI can reduce language barriers in addition to the translation of written.
Jeff Maggioncalda: That recaps our progress with our catalog and educator partners.
We expect to have more than 4000 courses translated into more than 15 languages by the end of this year and we see many other ways degenerative AI can reduce language barriers. In addition to the translation of written words.
Jeff Maggioncalda: So now let's move to our second manager advantage, the global reach of our platform. For institutions, we increased the number of paid enterprise customers to over 1,300 with many of the recent additions driven by the momentum we're seeing in our campus vertical. As I had left before, we added 6.5 million new registered learners growing our global learner base to 136 million by the end of September. Road continued to be broad-based, with double-digit percentage increases across all regions.
Speaker 3: transcript
Speaker 3: Second, I'd like to provide an update on our Credit Recommendation Initiative. We've been actively pursuing American Council on Education or ACE, Credit Recommendations for many of our most popular forces and credentials, specifically our catalog of entry-level professional search.
Second I'd like to provide an update on our credit recommendation initiative.
<unk> been actively pursuing American council on education, or AC credit recommendations for many of our most popular courses and credentials specifically our catalog of entry level professional certificates.
Speaker 3: transcript
Speaker 3: achieving these credit recommendation distinctions, which is possible due to the quality of our catalog, has enabled us to pursue many of the strategic highlights I've shared today, including large system-wide deployments of Coursera for Campus, as well as a growing number of pathways from our consumer segment into our degrees.
Achieving these credit recommendation distinctions, which is possible due to the quality of our catalog.
Jeff Maggioncalda: This year we've been investing in a number of strategic priorities focused on enhancing the localized learner and customer experience on Coursera, which is where I'd like to start the discussion of our third advantage, the ongoing product innovation across our platform. First is our AI-powered language translation initiative. We believe that high-quality education from the world-leading experts should be accessible to learners anywhere in the world no matter what language they speak. For much of the world, access to educational opportunities is often limited to those who speak English.
Has enabled us to pursue many of the strategic highlights I've shared today, including large system wide deployments of Coursera for campus as well as the growing number of pathways from our consumer segment into our degree of segments.
Speaker 3: transcript
Speaker 3: I'm excited to share that the Foundation for International Business Administration accreditation has certified 12 professional certificates from Google and IBM with European credit transfer and accumulation system or ECTS credit records.
I'm excited to share that the foundation for International Business Administration Accreditation has certified 12 professional certificates from Google and IBM with European credit transfer, an accumulation system or E Cts credit recommendations.
Speaker 3: transcript
Speaker 3: This allows ministries, higher education institutions, and students to accept and transfer university credit for eligible industry micro credentials on Prasera at institutions across 49 member nations.
This allows ministries higher education institutions and students to accept and transfer University of credit for eligible industry micro credentials on for Sarah at institutions across 49 member Nations.
Jeff Maggioncalda: As emerging technologies create new skill requirements, and the world's talent becomes more globalized, language bears create impediments to collaboration, productivity, and economic opportunity. Our strategy is to use technology to dramatically reduce the time and cost at producing high-quality trusted content at scale, and remarkable advancements in the quality of machine learning translations can now translate courses at a fraction of both the cost and speed of using conventional human methods. We sit in ambitious target at the beginning of this year to deliver more than 2,000 full-course translations into several of the world's most commonly spoken languages.
Speaker 3: transcript
Speaker 3: It's an important milestone in our ongoing regional efforts to bridge the combined expertise of university and industry for the benefit of learners, employers, and academic institutions.
This is an important milestone in our ongoing regional efforts to bridge the combined expertise of University and industry for the benefit of learners employers and academic institutions.
Speaker 3: transcript
Speaker 3: Finally, we continue to make progress on our efforts to integrate generative AI into our product experience.
Finally, we continue to make progress on our efforts to integrate generative AI into our product experience.
Speaker 3: transcript
Speaker 3: Crisera Coach, our virtual learning assistant, launched as beta version of the Crisera Plus subscribers during Q2.
Coursera coach our virtual learning assistant launched as beta versus the Christopher our plus subscribers during Q2.
Speaker 3: transcript
Speaker 3: This quarter we expanded our BATED program to include enterprise customers, while embedding the coach interface into additional areas of the learner experience.
This quarter, we expanded our beta program to include enterprise customers, while embedded in the coach interface into additional areas of the learner experience.
Jeff Maggioncalda: I'm pleased to share that we accelerated our efforts, launching twice original goal with more than 4,000 full-course translations in Spanish, Arabic, resilient Portuguese, French, German, Bahasa, Indonesia, and Thai. The newly translated courses include the full learner experience like lecture video subtitles, course readings, assessments, discussion prompts, the user interface, and more. We've created a simple toggle experience providing learners with the option to practice skills in their local language or use subtitles for English courses to advance the proficiency in specific workplace skills. I've been inspired by the team's progress, but we're just getting started.
Speaker 3: transcript
Speaker 3: We remain excited about the potential for this technology to dramatically enhance the personalized learning and discovery experience on Coursera, and feedback from beta participants remains encouraging. Specifically our distinct ability to ground these technologies in the expert trusted content on Coursera.
We remain excited about the potential for this technology to dramatically enhance the personalized learning and discovery experience on Coursera and feedback from beta participants remains encouraging specifically our distinct ability to ground. These technologies and the expert trusted content on coursera.
Speaker 3: transcript
Speaker 3: To wrap up my opening remarks, let me recap several key priorities that we're focused on in the years.
To wrap up my opening remarks, let me recap several key priorities that we're focused on in the years ahead.
Speaker 3: transcript
Speaker 3: First, we are rapidly enhancing our catalog of entry-level professional certificates, including new partners, roles, languages, and credit records.
First we are rapidly enhancing our catalog of entry level professional certificates, including new partners rules languages and credit recommendations.
Speaker 3: transcript
Speaker 3: Second, we're sourcing and launching new degree programs, especially those tailored to meet the needs of working adults, including flexibility, affordability, and streamlined pathways between our consumer micro credentials and college degree.
Second we're sourcing it and launching new degree programs, especially those tailored to meet the needs of working adults.
Jeff Maggioncalda: We expect to have more than 4,000 courses translated into more than 15 languages by the end of this year, and we see many other ways that genitive AI can reduce language barriers in addition to the translation of written words.
Adding flexibility affordability and streamline pathways between our consumer micro credentials and college degrees.
Speaker 3: transcript
Speaker 3: Third, we're focused on growing our enterprise segment across our business, government, and keep.
Third we're focused on growing our enterprise segment across our business government and campus for Nichols.
Jeff Maggioncalda: Second, I'd like to provide an update on our credit recommendation initiative. We've been actively pursuing American Council on Education or ACE credit recommendations for many of our most popular courses and credentials, specifically our catalog of entry-level professional certificates. Achieving these credit recommendation distinctions, which is possible due to the quality of our catalog, has enabled us to pursue many of the strategic highlights I've shared today, including large system-wide deployments of Coursera for campus, as well as a growing number of pathways from our consumer segment into our degree segment.
Speaker 3: transcript
Speaker 3: And fourth, we're harnessing AI technologies to deepen our advantages while reimagining the platform experience for the benefit of our learners, customers, and educate the partners.
And fourth we're harnessing AI technologies to deepen our advantages while re imagining the platform experience for the benefit of our learners customers and educate our partners.
Speaker 3: transcript
And we're accomplishing these priorities, while delivering more scale and operating leverage over time.
Speaker 4: transcript
Speaker 4: I'd like to now turn it over to Ken. Ken, please go ahead. Thank you, Jess, and good afternoon, everyone. And please report another strong quarter of performance for Coursera.
I'd like to now turn it over to Ken Ken. Please go ahead.
Thank you, Jeff and good afternoon, everyone I'm pleased to report another strong quarter performance for Coursera.
Speaker 4: transcript
Speaker 4: Our diversified platform continues to serve us well, providing multiple growth opportunities in producing financial and operational leverage as we scale.
Our diversified platform continues to service well, providing multiple growth opportunities in producing financial and operational leverage as we scale.
Jeff Maggioncalda: I'm excited to share that the foundation for International Business Administration accreditation has certified 12 professional certificates from Google and IBM with European credit transfer and accumulation system or ECTS credit recommendations. This allows ministries, higher education institutions, and students to accept and transfer university credit for eligible industry micro credentials on Coursera at institutions across It's an important milestone in our ongoing regional efforts to bridge the combined expertise of university and industry for the benefit of learners, employers, and academic institutions.
Speaker 4: transcript
Speaker 4: As I'll discuss shortly, this is once again leading us to raise our revenue and the Justity Bitton margin targets for the full year.
As I will discuss shortly this is once again, leading us to raise our revenue and adjusted EBITDA margin targets for the full year.
Speaker 4: transcript
Speaker 4: Our third quarter performance is highlighted by the durable demand, solid execution, and increased confidence associated with our consumer sex.
Our third quarter performance is highlighted by the durable demand solid execution and increased confidence associated with our consumer segment.
Speaker 4: transcript
Speaker 4: We believe we're in the early stages of a long-term trend in education, where the units of learning are breaking down into more affordable, accessible, and relevant credentials that can unlock a job, or lead towards a college degree.
We believe we are in the early stages of a long term trend in education, where the units of learning or breaking down into more affordable accessible and relevant credentials that can unlock a job where lead towards a college degree.
Speaker 4: transcript
Speaker 4: This trend in combination with our assets is fueling our consumer's all.
This trend in combination with our assets is fueling our consumer results.
Jeff Maggioncalda: Finally, we continue to make progress on our efforts to integrate generative AI into our product experience. Coursera Coach, our virtual learning assistant, launched as betaverse to Coursera Plus subscribers during Q2. This quarter, we expanded our beta program to include enterprise customers while embedding the coach interface into additional areas of the learner experience. We remain excited about the potential for this technology to dramatically enhance the personalized learning and discovery experience on Coursera, and feedback from beta participants remains encouraging, specifically our distinct ability to ground these technologies in the expert trusted content on Coursera.
Speaker 4: transcript
Speaker 4: And we are actively driving the strategy with key investments, growing our catalog of trusted brands, building localized payment infrastructure, and international markets.
We are actively driving the strategy with key investments growing our catalog of trusted brands building localized payment infrastructure in international markets and deploying new technologies, including initiatives like our AI translation efforts to better serve the millions of learners coming to Coursera for high quality job relevant education.
Speaker 4: transcript
Speaker 4: and deploying new technologies, including initiatives like our AI translation efforts, to better serve the millions of learners coming to Coursera for high quality, job-relevant education.
<unk>.
Speaker 4: transcript
Speaker 4: In Q3, we generated total revenue of $165.5 million, which was up 21% from a year ago.
In Q3, we generated total revenue of $165 $5 million, which was up 21% from a year ago.
Speaker 4: transcript
Speaker 4: Growth was driven by double digit increases across all three of our segments with particular strength in consumer.
Growth was driven by double digit increases across all three of our segments with particular strength in consumer.
Jeff Maggioncalda: To wrap up my opening remarks, let me recap several key priorities that we're focused on in the years ahead. First, we are rapidly enhancing our catalog of entry-level professional certificates, including new partners, roles, languages, and credit recommendations. Second, we're sourcing and launching new degree programs, especially those tailored to meet the needs of working adults, including flexibility, affordability, and streamlined pathways between our consumer, micro credentials, and college degrees. Third, we're focused on growing our enterprise segment across our business, government, and campus radicals.
Speaker 4: transcript
Speaker 4: Please note that for the remainder of the call, as I review your business performance outlook, I'll discuss our non- GAAP financial measures. Unless...
Please note that for the remainder of the call as I review, our business performance and outlook I will discuss our non-GAAP financial measures unless otherwise noted.
Speaker 4: transcript
Speaker 4: Additionally, I'd like to remind you that our results in 2023, particularly the year-rear comparisons to gross profit and operating.
Additionally, I'd like to remind you that our results in 2023, particularly the year over year comparisons to gross profit and operating expenses continue to reflect the shift in income statement line items associated with the beginning of year contract extension with our largest industry partner we.
Speaker 4: transcript
Speaker 4: Continue to reflect the shift in income statement line items associated with the beginning of your contract extension with our largest industry part
Speaker 4: transcript
Speaker 4: We've discussed the shifts thoroughly in our pyrrning's calls and throughout the year. So again, just to remind.
We have discussed the ships thoroughly in our prior earnings calls and throughout the year. So again, just a reminder.
Speaker 4: transcript
Speaker 4: Removing the noise from the shift in panel geography, we are driving strong, bottom line EBITDAQ performance on a year-over-year base.
Removing the noise from the shift in P&L geography, we are driving strong bottom line EBITDA performance on a year over year basis.
Jeff Maggioncalda: And fourth, we're harnessing AI technologies to deepen our advantages while re-imagining the platform experience for the benefit of our learners, customers, and educator partners. And we're accomplishing these priorities while delivering more scale and operating leverage over time.
Speaker 4: transcript
Speaker 4: Cost of revenue increased by 14 points as a percentage revenue, while total op-EX decreased 15 points compared to year ago results. And we are increasing our guidance for annual EBITDA margin, as I will soon share.
Cost of revenue increased by 14 points as a percentage of revenue while total opex decreased 15 points compared to year ago results and we are increasing our guidance for annual EBITDA margin as I will soon share.
Ken Hahn: I'd like to now turn it over to Ken. Ken, please go ahead. Thank you, Jess, and good afternoon, everyone. And please report another strong quarter of performance for Coursera. Our diverse platform continues to serve us well, providing multiple growth opportunities and producing financial and operational leverage as we scale. As I'll discuss shortly, this is, once again, leading us to raise our revenue and adjusted EBITDA margin targets for the full year. Our third quarter of performance is highlighted by the durable demand, solid execution, and increased confidence associated with our consumer segment.
Speaker 4: transcript
Speaker 4: But the third quarter grossed profit was $84.9 million in the 51% gross margin, which was down 14 points from the prior year period. To a lot of our expense, $94.5 million, or 57% of revenue, down 15 points from 72% in the prior year period. Looking at the P&L line item components of OX, sales and marketing expense represented 32% of total revenue down six points.
For the third quarter gross profit was $84 9 million and a 51% gross margin, which is down 14 points from the prior year period total operating expense was $94 5 million or 57% of revenue down 15 points from 72% in the prior year period.
Looking at the P&L line items of the components of Opex sales and marketing expense represented 32% of total revenue down six points.
Speaker 4: transcript
Speaker 4: Research and development expense was 16% of revenue down five
Research and development expense was 16% of revenue down five points in general and administrative expense was 10% of revenue down four points.
Speaker 4: transcript
Speaker 4: And General Administrative Expense was 10% of revenue down for
Speaker 4: transcript
Speaker 4: Net loss was 2.1 million dollars or 1.3% of revenue. And the Jeff Zibit was lost of 5.3 million dollars or 3.2% of revenue.
Net loss was $2 1 million or.
Ken Hahn: We believe we're in the early stages of a long-term trend in education, where the units of learning are breaking down into more affordable, accessible, and relevant credentials that can unlock a job or lead towards a college degree. This trend in combination with our assets is fueling our consumer results. And we're actively driving the strategy with key investments, growing our catalog of trusted brands, building localized payment infrastructure, and international markets, and deploying new technologies, including initiatives like our AI translation efforts, that better serve the millions of learners coming to Coursera for high quality, job-relevant education.
Or one 3% of revenue and adjusted EBITDA was a loss of $5 3 million or three 2% of revenue.
Speaker 4: transcript
Speaker 4: The better than anticipated result was due to both overall revenue growth and strong operating expense.
The better than anticipated result was due to both overall revenue growth and strong operating expense discipline and a continued to be pleased with our ability to invest in multiple growth initiatives, while delivering leverage and scale.
Speaker 4: transcript
Speaker 4: And I continue to be pleased with our ability to invest in multiple growth initiatives while delivering leverage and scale.
Turning to cash performance and the balance sheet free.
Speaker 4: transcript
Speaker 4: Precast flow was $15.6 million during the quarter, compared to $1.3 million a year ago, driven by overall operating performance, as well as some working capital data.
Free cash flow was $15 6 million during the quarter compared to $1 3 million a year ago, driven by overall operating performance as well as some working capital benefits.
Ken Hahn: In Q3, we generated total revenue of $165.5 million, which was up 21% from a year ago, out. Growth was driven by double-digit increases across all three of our segments with particular strength and consumer. Please note that for the remainder of the call, as I review your business performance outlook, I'll discuss our non-gap financial measures unless otherwise noted. Additionally, I'd like to remind you that our results in 2023, particularly the year-of-year comparisons to gross profit and operating expenses, continued to reflect the shifting in containment line items associated with the beginning of your contract extension with our largest industry partner.
Speaker 4: transcript
We ended the quarter with approximately $721 million of unrestricted cash cash equivalents and marketable securities with no debt.
Speaker 4: transcript
Speaker 4: Additionally, we continue to make progress on the Share Repurchase Program announced on our April call. During the third quarter, we bought back approximately 300,000 shares and average price of $12.67 per share.
Additionally, we continue to make progress on the share repurchase program announced on our April call.
During the third quarter, we bought back approximately 300000 shares an average price of $12 67 per share.
Speaker 4: transcript
Speaker 4: This amount in combination with the strong initial traction we made in the second quarter has allowed us through purchase of total $58.5 million today.
This amount in combination with the strong initial traction we made in the second quarter has allowed us to repurchase a total of $58 5 million today.
Speaker 4: transcript
Speaker 4: Finally, I want to remind you that our capital allocation priorities remain unchanged. We're focused on both investments in organic growth, along with the resilience and the strategic optionality provided by a strong balance sheet to win our large and early markets.
Finally, I want to remind you that our capital allocation priorities remain unchanged. We are focused on both investments and organic growth along with the resilience and the strategic Optionality provided by a strong balance sheet to win are large and early market.
Ken Hahn: We have discussed the shifts thoroughly in our prior earnings calls and throughout the year, so again, just a reminder. Removing the noise from the shift in pain-algeography, we are driving strong, bottom-line EBITDAW performance on a year-over-year basis. Cost of revenue increased by 14 points as a percentage revenue, while total off-ex decreased 15 points compared to year-of-year results. And we are increasing our guidance for annual EBITDAW margin, as I will soon share.
Speaker 4: transcript
Speaker 4: Next, let's discuss the performance of our segments in more detail.
Next let's discuss the performance of our segments in more detail <unk>.
Speaker 4: transcript
Speaker 4: Consumer revenue was $99 million, up 27% from the prior year on solid execution. Demand remained strong for our growing portfolio of entry-level professional certificates, including a number of successful recent launches from Google, IBM, and Microsoft.
Consumer revenue was $99 million up 27% from the prior year on solid execution.
Demand remains strong for our growing portfolio of entry level professional certificates, including a number of successful recent launches from Google IBM and Microsoft.
Ken Hahn: For the third quarter, gross profit was $84.9 million in the 51% gross margin, which was down 14 points in the prior year period. To operate expenses, $94.5 million, or 57% of revenue down 15 points from 72% in the prior year period, looking at the P&L line item components of off-ex, sales and marketing expense represented 32% of total revenue down 6 points. Research and development expense was 16% of revenue down 5 points.
Speaker 4: transcript
Speaker 4: With Jeff mentioned, a top of fun activity remains robust with 6.5 million new registered learners coming to Coursera.
As Jeff mentioned, our top of funnel activity remains robust with $6 5 million new registered learners coming to Coursera.
Speaker 4: transcript
Speaker 4: Seventh gross profit was $51.8 million or 52% of consumer revenue compared to 73% a year ago. Reflecting the impact associated with the industry partner contract extension, which is most pronounced in consumer.
Segment gross profit was $51 8 million or 52% of consumer revenue compared to 73% a year ago, reflecting the impact associated with the industry partner contract extension, which is most pronounced in consumer.
Speaker 4: transcript
Speaker 4: We believe our strategic that on high quality credentials created by the world's leading brands, distinguishes our consumer segment and has created a differentially offering for learners around the globe.
We believe our strategic that on high quality credentials created by the world's leading brands distinguishes our consumer segment and has created a differentiated offering for learners around the globe.
Ken Hahn: And general administrative expense was 10% of revenue down 4 points. Net loss was $2.1 million, or $1.3% of revenue, and the just EBITDAW was lost of $5.3 million for 3.2% of revenue. The better than anticipated result was due to both overall revenue growth and strong operating expense discipline. And I continue to be pleased with our ability to invest in multiple growth initiatives while delivering leverage and scale. Turning the cash performance and the balance sheet, pre-cash flow was $15.6 million during the quarter, compared to $1.3 million a year ago driven by overall operating performance as well as some working capital benefits.
Speaker 4: transcript
Speaker 4: and we intend to invest into this tailwind to create more value for our learners, expand our new and existing partners, and reinforce the competitive assets and operational leverage that also benefit our other segments. Come back in.
And we intend to invest into this tailwind to create more value for our learners expand our new and existing partners and reinforce the competitive assets and operational leverage that also benefit our other segments.
Now, let's move to enterprise.
Speaker 4: transcript
Speaker 4: Enterprise revenue was $54.9 million, up 14% from a year ago, on growth in each of our three segment verticals.
Enterprise revenue was $54 $9 million up 14% from year ago and growth in each of our three segment verticals.
Speaker 4: transcript
Speaker 4: Segment gross profit was $37.1 million or 68% of enterprise revenue compared to 71% a year ago.
Segment gross profit was $37 1 million or 68% of enterprise revenue compared to 71% a year ago.
Speaker 4: transcript
Speaker 4: a total number of paid enterprise customers increased to 1,315 up 21% from New York.
Total number of paid enterprise customers increased to 1315 up 21% from a year ago.
Ken Hahn: We ended the quarter with approximately $721 million of unrestricted cash, cash equivalents, and marketable securities with no debt. Additionally, we continue to make progress on the share repurchase program announced on our April call. During the third quarter, we bought back to approximately 300,000 shares and average price of $12.67 per share. This amount, in combination with the strong initial traction we made in the second quarter, has allowed us to repurchase a total of $58.5 million to date.
Speaker 4: transcript
Speaker 4: Internet retention rate for paid enterprise customers was 99%.
And our net retention rate for paid enterprise customers was 99%.
Speaker 4: transcript
Speaker 4: Our commentary and enterprise has remained consistent this year. With ongoing pressure in our Coursera for Business vertical, offset by momentum in our newer vertical...
Our commentary and enterprise has remained consistent this year with ongoing pressure in our coursera for business vertical offset by momentum in our newer verticals.
Speaker 4: transcript
Speaker 4: While we wait more clarity on corporate learning budgets, we are leaning into the benefits of our diversification of government and campus, where the customer use cases, like the Texas example, just just discussed.
While we await more clarity on corporate learning budgets, we're leaning into the benefits of our diversification of government and campus, where the customer use cases like the Texas example, Jeff just discussed are particularly well suited for our branded job relevant credentials and finally, our degree segment degree.
Speaker 4: transcript
Speaker 4: We're tickling, well-suited for our branded, job-relevant prudence.
Speaker 4: transcript
Speaker 4: And finally, our degree segment. Degrees revenue was $11.7 million of 13% from year ago on growing student role myths. The total number of degree students grew 15% from year ago to 20,432.
Ken Hahn: Finally, I want to remind you that our capital allocation priorities remain unchanged. We are focused on both investments in organic growth, along with the resilience and the strategic optionality provided by a strong balance sheet to win our large and early markets. Next, let's discuss the performance of our segments in more detail, consumer revenue with $99 million, up 27% from the prior year on solid execution. Demand remains strong for our growing portfolio of entry-level professional certificates, including a number of successful recent launches from Google, IBM, and Microsoft.
<unk> revenue was $11 $7 million up 13% from year ago on growing student enrollments. The total number of degree students grew 15% from year ago to 20432.
Speaker 4: transcript
Speaker 4: As a reminder, there's no content cost attributable to the degree segment. So degree segment Gross Martin was 100% of her.
As a reminder, there is no content costs attributable to the degree segment. So degree segment gross margin was 100% of revenue.
Speaker 4: transcript
Speaker 4: As Jeff discussed, our progress in degrees remains promising as we prioritize the foundational work required to fundamentally transform access and affordability in online degrees using the capabilities of our platform and our ecosystem partners.
As Jeff discussed our progress in degrees remains promising as we prioritize the foundational work required to fundamentally transform access and affordability and online degrees using the capabilities of our platform and our ecosystem partners.
Speaker 4: transcript
Speaker 4: This requires sourcing and launching new programs that leverage our platform's unique assets while increasingly creating pathways between our consumer segment and our degree programs. Today, more than a dozen of our most popular certificates offer credit pathways into multiple degree programs. And we are focused on building more linkages from micro credentials where we benefit from scale.
This requires sourcing and launching new programs that leverage our platforms unique assets, while increasingly creating pathways between our consumer segment and our degree programs today more than a dozen of our most popular certificates offer credit pathways into multiple degree programs and we are focused on building more.
Ken Hahn: As Jeff mentioned, our top-of-fun activity remains robust with 6.5 million new registered learners coming to Coursera. Segment gross profit was $51.8 million or 52% of consumer revenue compared to 73% a year ago, reflecting the impact associated with the industry partner contract extension, which is most pronounced in consumer. We believe our strategic that on high-quality credentials created by the world's leading brands, distinguishes our consumer segment and has created differentiated offerings for learners around the globe. And we intend to invest into this tailwind to create more value for our learners, expand our new and existing partners, and reinforce the competitive assets and operational leverage that also benefit our other segments.
<unk> from micro credentials, where we benefit from scale.
Speaker 4: transcript
Speaker 4: Now, on to our financial outlook. For Q4, we're expecting revenue to be in the range of $161 to $165 million. Driven by our increased confidence in the durable demand, we continue to see and are consumer segments.
Now onto our financial outlook for Q4, we're expecting revenue to be in the range of 161% to $165 million driven by our increased confidence in the durable demand we continue to see in our consumer segment.
Speaker 4: transcript
Speaker 4: While a relatively small contribution on dollar basis, we don't expect degrees growth trajectory to be linear quarter to quarter and now anticipate mid single digit growth in Q4.
While a relatively small contribution on a dollar basis, we don't expect degrees growth trajectory to be linear quarter to quarter and now anticipate mid single digit growth in Q4.
Speaker 4: transcript
Speaker 4: We remain focused on enabling our pathway degree strategy while closely monitoring cohort recruitment and student persistence.
We remain focused on enabling our pathway degree strategy, while closely monitoring cohort recruitment in student persistence, particularly for newly launched programs with more flexible structures.
Ken Hahn: Now let's move to enterprise. Enterprise revenue was $54.9 million, up 14% from a year ago, on growth in each of our three segment verticals. Segment gross profit was $37.1 million or 68% of enterprise revenue compared to 71% a year ago.
Speaker 4: transcript
Speaker 4: Particularly for newly launched programs with more flexible strokes.
Speaker 4: transcript
Speaker 4: As a reminder, we'll share updated views on segment-specific growth expectations for full year 2024 on the February call calling the completion of our annual planning process. As we've discussed,
As a reminder, we will share updated views on segment specific growth expectations for full year 2024 on the February call. Following the completion of our annual planning process.
As we've discussed since the beginning of the year fourth quarter adjusted EBITDA is expected to be breakeven.
Ken Hahn: The total number of paid enterprise customers increased to 1,315 up 21% from a year ago. Internet retention rate for paid enterprise customers was 99%. Our commentary on enterprise has remained consistent this year, with ongoing pressure in our Coursera for Business Vertical, offset by momentum in our newer verticals.
Speaker 4: transcript
Speaker 4: Fourth quarter, adjustity bit is expected to be breakied.
Speaker 4: transcript
Speaker 4: As a relatively new public company, we look forward to achieving this milestone in delivering on our accelerated commitment to profitability.
As a relatively new public company, we look forward to achieving this milestone and delivering on our accelerated commitment to profitability.
Speaker 4: transcript
Speaker 4: Turn into the full year. We're increasing our outlook for both revenue and adjusted even.
Turning to the full year, we're increasing our outlook for both revenue and adjusted EBITDA we.
Speaker 4: transcript
Speaker 4: We now anticipate revenue to be in the range of $628 to $632 million, representing approximately 20% growth at the midpoint of the range.
We now anticipate revenue to be in the range of $628 million to $632 million representing.
Ken Hahn: While we weight more clarity on corporate learning budgets, we are leaning into the benefits of our diversification of government and campus, where the customer use cases, like the Texas example Jeff just discussed, are particularly well suited for our branded job-relevant credentials.
Representing approximately 20% growth at the midpoint of the range.
Speaker 4: transcript
Speaker 4: Our full year revenue outlook has increased by $30 million since the start of the year and $10 million since the prior quarter.
Our full year revenue outlook has increased by $30 million since the start of the year and $10 million since the prior quarter.
Ken Hahn: And finally, our degree segment. Degrees revenue was $11.7 million of 13% from a year ago on growing student enrollments. The total number of degree students grew 15% from a year ago to 20,432.
Speaker 4: transcript
Speaker 4: For just the EBITDA, we are now expecting a reduced loss of approximately $15.7 million, or negative 2.5% of just the EBITDA margin at the midpoint of the revenue guidance.
For adjusted EBITDA, we are now expecting a reduced loss of approximately $15 7 million or negative two 5% adjusted EBITDA margin at the midpoint of the revenue guidance range.
Ken Hahn: As a reminder, there's no content cost attributable to the degree segment, so degree segment gross margin was 100% of revenue. As Jeff discussed, our progress in degrees remains promising as we prioritize the foundational work required to fundamentally transform access and affordability in online degrees, using the capabilities of our platform and our ecosystem partners. This requires sourcing and launching new programs that leverage our platform's unique assets, while increasingly creating pathways between our consumer segment and our degree programs. Today, more than a dozen of our most popular certificates offer credit pathways into multiple degree programs, and we're focused on building more linkages from micro credentials where we benefit from scale.
Speaker 4: transcript
Speaker 4: As you know, our consistent practice, both pre-public and as a public company, is to set an annual EBITDA margin target at the beginning of the year, and work within that plan based on the structure of the business.
As you know our consistent practice, but pre public and as a public company is to set an annual EBITDA margin target at the beginning of the year and work within that plan based on the trajectory of the business.
Speaker 4: transcript
Speaker 4: This year we've been able to drive both top line performance and operating.
This year, we've been able to drive both topline performance and operating efficiency for our revised guidance improvement of 250 basis points and our full year adjusted EBITDA margin from our initial 2023 target of negative 5%.
Speaker 4: transcript
Speaker 4: For Revives, Guidance Improvement of 250 basis points in a full year adjusted eva to Dymargem from our initial 2023 target of negative 5.
Speaker 4: transcript
Speaker 4: Finally, I want to reiterate our expectation of being EBITDA positive for full year 2024 and intend to share more detail regarding next year's annual March and target on the February call.
Finally, I want to reiterate our expectation of being EBITDA positive for full year 2024, and intend to share more detail regarding next year's annual margin target on the February call.
Speaker 4: transcript
Speaker 4: We are offering a diversified growth company, delivering high quality learning through multiple channels.
We are operating a diversified growth company delivering high quality learning through multiple channels.
Ken Hahn: Now, onto our financial outlook. For Q4, we're expecting revenue to be in the range of $161 to $165 million, driven by our increased confidence in the durable demand we continue to see in our consumer segment. Devin.
Speaker 4: transcript
Speaker 4: We're producing this growth with consistently increasing scale and leverage resulting from the complementary benefits of our three segments.
We're producing this growth with consistently increasing scale and leverage resulting from the complementary benefits of our three segments.
Speaker 4: transcript
Speaker 4: And we are investing in our long-term strategy from a position of financial strength, allowing us the resilience and the strategic flexibility to fundamentally transform the education market. I'll now turn.
And we are investing in our long term strategy from a position of financial strength, allowing us the resilience and the strategic flexibility to fundamentally transform the education market.
Ken Hahn: While a relatively small contribution on dollar basis, we don't expect degrees growth trajectory to be linear quarter to quarter and now anticipate mid single digit growth in Q4. As we've discussed since the beginning of the year, fourth quarter, adjusted EBITDA is expected to be break even. As a relatively new public company, we look forward to achieving this milestone in delivering on our accelerated commitment to profitability.
I'll now turn the call back to Jeff for closing comments.
Speaker 3: transcript
Speaker 3: Thanks Ken. Our mission has always been deeply rooted in our business. So to wrap up today's remarks, I'd like to highlight one additional enterprise customer that demonstrates how our platform is impacting the next generation of...
Thanks, Ken our mission has always been deeply rooted in our business. So to wrap up today's remarks, I would like to highlight one additional enterprise customer that demonstrates how our platform is impacting the next generation of talent.
Speaker 3: transcript
Like many states across the country emerging technologies are reshaping the labor market in Nevada, fostering new industries, creating job opportunities and changing in demand skill sets.
Speaker 3: transcript
Speaker 3: I'm proud to share that Chris are for government has parted with the Nevada Department of Employment Training and Rehabilitation to launch learn and be a new statewide program that will provide free job training to tens of thousands of unemployed and under employed Nevadans. The program initial focus is.
I am proud to share that Coursera for government has partnered with the Nevada Department of employment training and rehabilitation to launch learn envy.
New statewide program that will provide free job training to tens of thousands of unemployed and underemployed and Nevada.
Ken Hahn: Turning to the full year, we're increasing our outlook for both revenue and adjusted EBITDA. We now anticipate revenue to be in the range of $628 to $632 million, representing approximately 20% growth at the midpoint of the range. Our full year revenue outlook has increased by $30 million since the start of the year and $10 million since the prior quarter. For just EBITDA, we are now expecting a reduced loss of approximately $15.7 million, or negative 2.5% adjusted EBITDA margin at the midpoint of the revenue guidance range.
The programs initial focus is aimed at Nevada as youth population.
Speaker 3: transcript
Speaker 3: Equipeting young adults ages 18 to 24 with the skills and credentials that can help them unlock well-paying careers.
Equipping young adults ages 18 to 24 with the skills and credentials that can help them unlock well paying careers.
Speaker 3: transcript
Speaker 3: We're excited about the inclusion of our entry-level professional certificates, which were specifically designed for learners with no college degree or background in the field to learn the skills needed for a job in less than a year.
We're excited about the inclusion of our entry level professional certificates, which was specifically designed for learners with no college degree our background in the field to learn the skills needed for a job in less than a year.
Speaker 3: transcript
Speaker 3: But these young learners don't need to choose between an entry-level job or college.
But these young learners don't need to choose between an entry level job or college degree.
Speaker 3: transcript
Speaker 3: with a growing number of ACE credit recommendations, completions of these micro credentials provides them with the opportunity to earn academic credit and the optionality to pursue a bachelor's or master's program through one of our pathway degrees, should they choose to continue their education.
With a growing number of AC credit recommendations completions of these micro credentials provided them with the opportunity to earn academic credit.
Ken Hahn: As you know, our consistent practice, both pre-public and as a public company, is to set an annual EBITDA margin target at the beginning of the year and work within that plan based on the structure of the business. This year, we've been able to drive both top line performance and operating efficiency for revised guidance improvement of 250 basis points in a full year adjusted EBITDA margin from our initial 2023 target of negative 5%.
And the Optionality to pursue a bachelors or masters program through one of our pathway degrees should they choose to continue their education in the future.
Speaker 3: transcript
Speaker 3: the first phase launched in Clark County in September , and will expand the entire state in the coming months.
The first phase launched in Clark County in September and will expand to the entire state in the coming months.
Speaker 3: transcript
Speaker 3: It's one more example of a Coursera partner with the ambition to deliver statewide impact through our plato.
It's one more example of of course, they're a partner with the ambition to deliver a statewide impact through our platform our.
Speaker 3: transcript
Speaker 3: Our government customers, like businesses and economic institutions, increasingly understand the important role that they play in enabling the future work.
Our government customers like businesses and academic institutions increasingly understand the important role that they play in enabling the future workforce addressing skills shortages transforming their local economies and equipping the next generation with the education and opportunities that they need to succeed in an increase.
Ken Hahn: Finally, I want to reiterate our expectation of being EBITDA positive for full year 2024 and intend to share more detail regarding next year's annual margin target on the February call. We are operating a diversified growth company delivering high quality learning through multiple channels. We're producing this growth with consistently increasing scale and leverage resulting from the complementary benefits of our three segments. And we are investing in our long term strategy from a position of financial strength, allowing us the resilience and the strategic flexibility to fundamentally transform the education market.
Speaker 3: transcript
Speaker 3: addressing skill shortages, transforming their local economies, and equipping the next generation with the education and opportunities that they need to succeed in an increasingly digital world. Now let's open the call for questions.
<unk> digital world.
Now, let's open the call for questions. Thank you.
Speaker 1: transcript
Speaker 1: Thank you. As a reminder, everyone, if you would like to ask a question during this time, please press star, followed by the number one on your telephone keypad. We will take our first question from the line of Steven Chelden with William Blair.
Okay.
Thank you as a reminder, everyone. If you would like to ask a question. During this time. Please press star followed by the number one on your telephone keypad.
We'll take our first question from the line of Stephen Sheldon with William Blair.
Okay.
Hey, Thanks, Great results here.
Speaker 5: transcript
Speaker 5: First, I just wanted to ask about kind of generally how you're thinking about the resiliency of consumer revenue growth, which I think...
First I just wanted to ask about kind of generally how youre thinking about the resiliency of consumer revenue growth, which I think is.
Jeff Maggioncalda: I'll now turn the call back to Jeff for closing comments. Thanks, Ken. Our mission has always been deeply rooted in our business.
Speaker 5: transcript
Speaker 5: far surpassed everyone's expectations in recent quarters. Do you think there could be some slowdown, especially if industry job openings pull back at all? As I think a lot of learners on your platform are trying to drive their employment outcome, at least more so than maybe some other B2C platforms out there. So generally, how you think about the consumer segment is we head into 2024.
Far surpassed everyone's expectations in recent quarters do you think there could be some slowdown, especially if.
Jeff Maggioncalda: So to wrap up today's remarks, I'd like to highlight one additional enterprise customer that demonstrates how our platform is impacting the next generation of talent. Like many states across the country, emerging technologies are reshaped in the labor market in Nevada, fostering new industries, creating job opportunities and changing in demand skill sets. I'm proud to share that Cresera for government has partnered with the Nevada Department of Employment Training and Rehabilitation to launch LearnNV, a new statewide program that will provide free job training to tens of thousands of unemployed and under employed Nevada.
Industry job openings pulled back at all with I think a lot of learners on your platform or trying to drive employment outcomes.
More so than than maybe some other BDC platforms out there so.
How you're thinking about the consumer segment.
Heading into 2024.
Speaker 3: transcript
Speaker 3: Yeah, hey Steve, Mrs. Jeff. We agree. I mean, if you look at the numbers, consumers have been very strong. And pretty much across the board, when you look down the funnel and you look across regions, it just seems like these types of...
Yeah, Hey, Steven this is Jeff.
We agree I mean, if you look at the numbers.
Consumer has been very strong and pretty much across the board. When you look down the funnel and you look across regions. It just seems like these types of professor.
Speaker 3: transcript
Speaker 3: professional certificates that are designed around a job and don't have a lot of requirements for a college degree or prior work.
Professional certificates that are designed around a job and don't have a lot of requirements for a college degree or prior work.
Jeff Maggioncalda: The program's initial focus is aimed at Nevada's youth population, equipping young adults ages 18 to 24 with the skills and credentials that can help them unlock well-paying careers. We're excited about the inclusion of our entry-level professional certificates, which were specifically designed for learners with no college degree or background in the field to learn the skills needed for a job in less than a year, but these young learners don't need to choose between an entry-level job or college degree.
Speaker 3: transcript
Speaker 3: They just seem to be resonating with people who, we may be a job opportunities, but a lot of it seems to be frustration with the jobs that people are in right now. I mean, when we interview people in these certificate programs, what they say is, I'm not sure what job I wanna get, but I'm sure I wanna get a different job. That's more flexible, pays better, and has better long term career opportunities.
Just seem to be resonating with people, who I mean.
Maybe it's a job opportunity there's been a lot of it seems to be frustration with the jobs that people are are in right now I mean, when we interview people in these certificate programs, what they say is I'm not sure what job I want to get but I'm sure I wanted to get a different job that's more flexible pay as better and has better long term career opportunities.
Speaker 3: transcript
Speaker 3: If that's the reason they're coming, maybe it would have made if there were fewer job opportunities out there, to some degree it's more about people looking for something better than looking for something specific. And so, you know, we don't see a reason why they should slow down. And like I said, across the board, whether it's in North America or in Europe , these professional certificates in the consumer segment seem to be growing in a good clip.
If thats the reason theyre coming.
Jeff Maggioncalda: With a growing number of ACE credit recommendations, completions of these micro credentials provide them with the opportunity to earn academic credit and the optionality to pursue a bachelor's or master's program through one of our pathway degrees should they choose to continue their education in the future. The first phase launched in Clark County in September and will expand the entire state in the coming months. It's one more example of a Coursera partner with the ambition to deliver a statewide impact through our platform.
Would it be.
If there were fewer job opportunities out there to some degree it's more about people looking for something better than looking for something specific and so we.
We don't see a reason why this should slowdown and <unk>.
Like I said across the board whether it's in.
In North America or in Europe.
Special certificates in the consumer segment seem to be growing at a good clip.
Great Yeah, that's really helpful and then.
Speaker 5: transcript
Speaker 5: We can great see the progress on translating courses in the other languages.
Great to see the progress on translating courses into other languages.
Jeff Maggioncalda: Our government customers, like businesses and academic institutions, increasingly understand the important role that they play in enabling the future workforce, addressing skill shortages, transforming their local economies and equipping the next generation with the education and opportunities that they need to succeed in an increasingly digital world.
I'm curious what feedback you're getting about the quality of translation from learners that have engaged with it so far and I know, it's early but is the language expansion driving any.
Speaker 5: transcript
Speaker 5: I'm curious what feedback you're getting about the quality of translations from learners that have engaged with it so far And I know it's early, but is the language expansion driving any
Speaker 5: transcript
Speaker 5: Positive outcomes are, I guess, at least more positive conversations, especially with an enterprise.
Positive outcomes or I guess at least more positive conversations, especially with it within enterprises.
Speaker 3: transcript
Speaker 3: Yeah. So we are, when we've been doing the translations, I mean part of what we're able to do is to look at the quality ratings from the translation providers. As you can imagine, they do a lot of testing on language pairs to say, our models when we translate from English to Spanish, this is the quality rating. The usually benchmark it against, they call it a blue score, but basically it's against a reference point of professional human translators.
Yes so.
We are when we have been doing the translations I mean part of what we're able to do is to look at the quality ratings from the translation providers as you can imagine.
Operator: Now let's open the call for questions. Thank you. As a reminder, everyone, if you would like to ask a question during this time, please press star, followed by the number one on your telephone keypad.
I do a lot of testing on language Paris to say Hey, our models when we translate from English to Spanish business, the quality rating, the usually benchmark it against what they call. It a blue score, but basically it's against a reference point of professional.
Stephen Sheldon: We will take our first question from the line of Steven Cheldon with William Blair. Hey, thanks. Great results here. First, I just wanted to ask about kind of generally how you're thinking about the resiliency of consumer revenue growth, which I think is far surpassed past everyone's expectations in the recent quarters. Do you think there could be some slowdown, especially if industry job openings pull back at all. Well, I think a lot of learners on your platform are trying to drive an outcome, at least more so than maybe some other B to C platforms out there.
Human translators.
Speaker 3: transcript
Speaker 3: These blue scores are coming up across almost every language pair and certain providers are better at certain language pairs. But what we're finding is, you know, feedback from learners, the certain language pairs are very good. And usually that's based on the amount of language sets available on the internet. So English to Spanish, really good. English to French, really good. English to Brazilian Portuguese, really good. English to Thai, not as good as Spanish. But what we hear from.
<unk> scores are coming up across almost every language pair and certain providers are better at certain language pairs.
But what we're finding is feedback from learners to certain language fares are very good and usually thats based on the amount of language that's available on the Internet, So English or Spanish really good English to French really good English to Brazilian Portuguese really good English to tie not as good a Spanish but what we hear.
Stephen Sheldon: Generally, how do you think about the consumer segment as we head into 2024? Yeah, hey, Steven. This is Jeff. We agree. I mean, if you look at the numbers, consumers have been very strong and pretty much across the board. When you look down the funnel and you look across regions, it just seems like these types of professional certificates that are designed around a job and don't have a lot of requirements for a college degree or prior work.
Hi learners is.
Speaker 3: transcript
Speaker 3: I'm so much happy to have some translations, then nothing.
I'm so much happier have some translation net nothing.
Speaker 3: transcript
Speaker 3: And what we're doing is we're actually building a human and a loop process where the learners get notified that it's machine translated and they have the ability to put a little down thumb arrow to say that wasn't so good. They can even specify what about it wasn't good. And then we do have human translators that will go in and improve those elements of courses in certain languages that were the quality level needs to be improved.
And what we're doing is we're actually building a human in the loop process, where the learners get notified those machine translated and they have the ability to put a little downtime narrow to say that wasn't so good it can even specify what about it wasn't good and then we do have human translators that will go in and improve those elements.
Stephen Sheldon: They just seem to be resonating with people who may be at the job opportunities, but a lot of it seems to be frustration with the jobs that people are in right now. I mean, when we interview people in these certificate programs, what they say is, I'm not sure what job I want to get, but I'm sure I want to get a different job that's more flexible, it pays better and has better long term career opportunities.
Of course as in certain languages that where the quality level needs to be improved but the other thing that we're talking to our institutions about and.
Speaker 3: transcript
Speaker 3: But the other thing that we're talking to our institutions about, and we've also done institutional testing. So we're not only getting feedback from consumers, but also from institutions who are looking at this and measuring quality.
And we've also then institutional testing so we're not only getting feedback from consumers, but also from institutions, who are looking at this and measuring quality.
Speaker 3: transcript
Speaker 3: is we're saying that the rate of progress is so high.
We're saying that the rate of progress is so high and the rate of cost.
Stephen Sheldon: If that's the reason they're coming, maybe it would have made if there were fewer job opportunities out there. To some degree, it's more about people looking for something better than looking for something specific. And so, you know, we don't see a reason why this should slow down. And like I said, across the board, whether it's in North America or in Europe, these professional certificates in the consumer segment seem to be growing in a good clip.
Speaker 3: transcript
Speaker 3: And the rate of cost decreases is so high.
Decreases is so high that we will effectively just keep on translating these things as every new model comes out with better quality. So right now it's machine translation with humans in the loop as the model to get better let me fewer and fewer humans needed in order to keep the quality at the <unk>.
Speaker 3: transcript
Speaker 3: that we will effectively just keep on translating these things as every new model comes out with better quality. So, you know, right now, it's machine translation with humans in the loop as the model will get better. So if you were in fewer humans needed in order to keep the quality at the bar that we're looking for, but overall, we've been pretty positively impressed by the feedback that we're getting from both consumers and from enterprise.
Stephen Sheldon: [inaudible] Great. Yeah, that's really helpful. And then great to see the progress on translating courses into other languages. Curious what feedback you're getting about the quality of translations from learners that have engaged with it so far. And I know it's early, but is the language expansion driving any positive outcomes, or I guess at least more positive conversations, especially with within enterprise. Yeah. So we are, you know, when we've been doing the translations, I mean, part of what we're able to do is to look at the quality ratings from the translation providers.
<unk> that we're looking for but overall, we've been pretty positively impressed by the feedback that we're getting for both consumers and from enterprises.
Speaker 3: transcript
Speaker 3: Oh, Edmund Steve, when you asked him about unlocks, you know, I think that we are just now kind of promoting that these certificate, most of the certificates, but other courses are available in other languages on the consumer segment. We need to unlock the payment capabilities to really take advantage of the language translations on consumer, but especially on Coursera for Government.
And then Stephen you asked about unlocks.
I think we.
We are just now kind of promoting that these certificate promotional certificates, but other courses are available in other languages on the consumer segment, we need to unlock the payment capabilities to really take advantage of the language translations on consumer.
Especially on Coursera for government.
Speaker 3: transcript
Speaker 3: And Coursera for Business, where an institution has a global population or a large population of non-English speaking learners.
And of course, there for business, where an institution has a global population or a large population of non English speaking learners.
Stephen Sheldon: As you can imagine, they do a lot of testing on language pairs to say, our models, when we translate from English to Spanish, you know, this is the quality rating, usually benchmark it against, they call it a blue score, but basically it's against a reference point of professional human translators. These blue scores are coming up across almost every language pair. And certain providers are better at certain language pairs. But what we're finding is, you know, feedback from learners, the certain language pairs are very good.
Speaker 3: transcript
Speaker 3: They're kind of saying, this is pretty good. It's really high quality from well-known brands, but still available in lots of different languages. And for a business that might have a workforce across 10 different countries that speaks five different languages.
They're kind of saying this this is pretty good it's really high quality from well known brand, but still available and lots of different languages and for a business that might have a workforce across 10 different countries that speaks five different languages.
Speaker 3: transcript
Speaker 3: Being able to use the same high quality content so everyone learning the same stuff
Being able to use the same high quality content. So everyone's learning the same stuff, but theyre able to learn it in multiple languages, that's something that net currently almost no. Other solution on the market can provide so we're getting very positive feedback from enterprises on the applicability of this for global workforce.
Speaker 3: transcript
Speaker 3: that they're able to learn it in multiple languages, that's something that currently almost no other solution on the market can provide. So we're getting very positive feedback from enterprises on the applicability of this for global work.
Stephen Sheldon: And usually that's based on the amount of language that's available on the internet. So English to Spanish, really good. English to French, really good. English to Brazilian Portuguese, really good. English to Thai, not as good as Spanish, but what we hear from Thai learners is, I'm so much happy to have some translation. Then nothing. And what we're doing is we're actually building a human and a loop process where the learners get notified that this machine translated and they have the ability to put a little down thumb arrow to say that wasn't so good.
Speaker 4: transcript
Speaker 4: Early yet, for anecdotal, extra contracts closed, but Jeff, you're in the field all the time, and you're hearing very positive feedback on trying to ask things. Great to hear. Appreciate the color.
Too early yet for anecdotal extra contracts closed, but Jeff you are in the field all the time and Youre hearing very positive feedback.
Yes.
Okay.
Great to hear I appreciate the color alright.
Alright, Thanks, David.
We will take our next question from Josh Baer with Morgan Stanley.
Stephen Sheldon: And they can even specify, you know, what about it wasn't good. And then we do have human translators that will go in and improve those elements of courses in certain languages that where the quality level needs to be improved. But the other thing that we're talking to our institutions about. And we've also done institutional testing. So we're not only getting feedback from consumers, but also from institutions who are looking at this and measuring quality.
Speaker 6: transcript
Speaker 6: Great, thank you for the question and congrats on the outperformance in the quarter and consumer acceleration. I did want to ask on degrees and I think I heard the commentary for mid single digit growth. That was degrees in Q4. I just wanted to confirm that. And I believe that's
Great. Thank you for the question and congrats on.
The outperformance in the quarter and consumer acceleration.
I did want to ask on degrees and.
I think I heard that.
The commentary for mid single digit growth those degrees in Q4, just wanted to confirm that.
<unk>.
I believe that's.
Speaker 6: transcript
Speaker 6: When you combine sort of Q3, Q4, it's a bit different than some prior expectations on the growth profile. If you could sort of talk through any changes that you're seeing as far as degree performance.
When you combine sort of Q3 Q4, it's a bit different than some prior expectations on the growth profile. If you could sort of talk through any changes that you're seeing as far as degree performance.
Stephen Sheldon: We're saying that the rate of progress is so high. And the rate of cost decreases is so high that we will effectively just keep on translating these things as every new model comes out with better quality. So, you know, right now it's machine translation with humans and the loop as the model get better. So if you were and fewer humans needed in order to keep the quality at the bar that we're looking for.
Speaker 4: transcript
Speaker 4: Sure, Josh, this can of course. Yeah, that is the implication, and which is why we wanted to make the comment ahead of time.
Sure Josh This is Ken of course, yes.
Yes.
Is the implication and which is why we wanted to make the comment ahead of time.
Speaker 4: transcript
Speaker 4: We're still working through on the degree strategy our pathways.
We're still working through on the degree strategy.
Our pathways and we're seeing good progress and we're excited about the growth going forward do not get us wrong on the strategy.
Speaker 4: transcript
Speaker 4: And we're seeing good progress and we're excited about the growth going forward. Do not get us wrong on the strategy. As and we've been very open about this. As we're sorting that strategy, the growth has been a little bit more variable in the meantime. So finishing off this year is not quite where we thought it was going to be at the beginning of the year. We're excited about it as we get into 2024. We'll produce or will provide additional guidance.
And we've been very open about this as we're sorting that strategy.
Stephen Sheldon: But overall, we've been pretty positively impressed by the feedback that we're getting from both consumers and from enterprises. And then Steve, when you asked him about unlocks, you know, I think that we are just now kind of promoting that these certificate, most of certificates, but other courses are available in other languages on the consumer segment. We need to unlock the payment capabilities to really take advantage of the language translations on consumer.
Growth has been a little bit more variable in the meantime, so finishing off this year is not quite where we thought it was going to be at the beginning of the year. We're.
We're excited about as we get into 2024 will produce.
To provide additional guidance in the February call and we're going to be for the year on degrees in each of the segments.
Speaker 4: transcript
Speaker 4: In the February call, and we're going to be for the year, on degrees, in each of the segments.
Speaker 3: transcript
Speaker 3: But overall, yes, that's exactly why we made this comment. And then, Josh, as we look at this in fair, what leads to some of the negative variances there, a bit of it is recruitment into degree programs, but when we look at the specific degree programs, and we say, well, how are we doing recruiting into different populations of degree programs?
But overall, yes, that's exactly why we made those comments and then Josh as we look at business area, what leads to some of the negative variances there a bit of it is recruitment into degree programs, but when we look at the specific degree programs and we say well how are we doing recruiting into.
Stephen Sheldon: But especially on Coursera for government and Coursera for business, where an institution has a global population or a large population of non English speaking learners, they're kind of saying, this is pretty good. It's really high quality from well known brand, but still available in lots of different languages. And for a business that might have a workforce across 10 different countries that speak five different languages. Being able to use the same high quality content so everyone's learning the same stuff that they're able to learn it in multiple languages.
Populations a degree programs.
Speaker 3: transcript
Speaker 3: We are seeing encouraging signs that when there are degrees that have these pathways.
We are seeing encouraging signs that when there are degrees that have these pathways there.
Speaker 3: transcript
Speaker 3: They're looking pretty good. It's more of the more expensive traditional degrees without the pathways where we're seeing some of that, kind of continuing headwinds, I think from a tight labor market and many of the things that we've seen in the past, which I think are affecting not only traditional online degrees, but frankly traditional Greece in the United States. So I think a lot of it is we're still seeing a tight labor market put pressure on people saying, I want to go for one of those more expensive traditional degrees.
Theyre looking pretty good and it's more of the more expensive traditional degrees without the pathways, where we're seeing some of that kind of continuing headwinds I think from a tight labor market in many of the things that we've seen in the past, which I think are affecting not only traditional online degrees, but frankly traditional grease in the United States. So I think a lot of it.
Stephen Sheldon: That's something that that currently almost no other solution on the market can provide. So we're getting very positive feedback from enterprises on the applicability of this for global work, of course. Early yet for anecdotal, extra contracts closed, but Jeff, you're in the field all the time, and you're hearing very positive feedback on flying athletes. Great day, I appreciate the color. All right, thanks, Steve.
We are still seeing a tight labor market put pressure on people, saying I want to I want to go from one of those more expensive traditional degrees.
Speaker 6: transcript
Speaker 6: got it very helpful. And then on consumer with just the impressive growth, number that you put up and acceleration. And I think in the first question was on consumer and Jeff, you could sort of...
Got it very helpful.
And then on consumer with with just the impressive growth.
No number that you put up an acceleration.
Josh Baer: We'll take our next question from Josh Baer with Morgan Stanley. Great, thank you for the question and congrats on the outperformance in the quarter and consumer acceleration. I did want to ask on degrees, and I think I heard the commentary for mid-single digit growth, that was degrees in Q4, just wanted to confirm that. And I believe that when you combine sort of Q3, Q4, it's a bit different than some prior expectations on the growth profile, if you could sort of talk through any changes that you're seeing as far as degree performance.
And I think in the first question was on consumer and Jeff you could sort of talk.
Speaker 6: transcript
Speaker 6: talked about just strengths there and expecting that growth to kind of continue. I just wanted to see, I know we're going to get some thoughts on 24 next quarter for consumer, but with the growth accelerating so much, like, is there any need to moderate sort of expectations on that trajectory of growth in that segment, just given where it is and where people might,
<unk> talked about just strength, there and expecting that growth to kind of continue I just wanted to see I know, we're going to get some thoughts on 'twenty four.
Next quarter for consumer, but with the growth accelerating so much like is there any need to moderate sort of expectations on on that trajectory of growth in that segment, just given where it is and where people might have.
Expect it to go.
Speaker 4: transcript
Speaker 4: Sure, Josh. So, you know, we've provided, of course, overall guidance for the coming quarter, as we always do. We don't provide different segments. We were just not in that business to do that across each of the three segments every.
Sure Josh So we've provided of course overall guidance for the coming quarter as we always do we don't provide different segment.
Josh Baer: Sure, Josh, this can of course. Yeah, that is the implication, and which is why we wanted to make the comment ahead of time. We're still working through on the degree strategy, our pathways. And we're seeing good progress, and we're excited about the growth going forward. Do not get us wrong on the strategy, and we've been very open about this. As we're sorting that strategy, the growth has been a little bit more variable in the meantime. So finishing off this year is not quite where we thought it was going to be at the beginning of the year. We're excited about it as we get into 2024.
Not in that business to do that across each of the three segments every quarter, we do feel very good about consumer.
Speaker 4: transcript
Speaker 4: We do feel very good about consumer. We've met momentum continues. We're hopeful it continues at the same pace it does.
That momentum continues we're hopeful it continues at the same pace it does.
Speaker 4: transcript
Speaker 4: But we don't update guidance between the segments. And again, it's captured in the overall guidance, of course, for the quarter. But we're really pleased with the results. And we there's
But we don't update guidance between the segments and again is captured in the overall guidance of course for the quarter.
But we're really pleased with the results in.
There is.
Speaker 3: transcript
Speaker 3: All we see is positive on the consumer side. Yeah, another thing, Josh, you know, a way to also kind of think through your question is, what are the factors that are causing this growth and are there reasons to believe that some of those factors might be temporary?
All we see is positive on the consumer side, yes, the other thing Josh.
Way to also kind of think through your question is what are the factors that are causing this growth and are there reasons to believe that some of those factors might be.
Josh Baer: We'll produce, or we'll provide additional guidance in the February column. We're going to be for the year on degrees in each of the segments. But overall, yes, that's exactly why we made this comment. And then, Josh, as we look at this and say, what leads to some of the negative variances there, a bit of it is recruitment into degree programs. But when we look at the specific degree programs, and we say, well, how are we doing recruiting into different populations of degree programs, we are seeing encouraging signs that when there are degrees that have these pathways, they're looking pretty good.
Temporary.
And we think a lot of it is kind of what's happening in the global labor markets and as Ken said in the script like people are looking for cheaper more flexible job oriented ways to switch a career or to start a new career. So we don't see why that would change necessarily another thing is that some of this growth and you see it in the <unk>.
Speaker 3: transcript
Speaker 3: We think a lot of it is kind of what's happening in the global labor markets, and as Ken said in the script, like people are looking for cheaper, more flexible job-oriented ways to switch.
Speaker 3: transcript
Speaker 3: career or to start a new career. So we don't see why that would change necessarily. Another thing is that some of this growth, and you see it in the sales and marketing line, can mention this in the script as well.
Sales and marketing line, Ken mentioned this in the script as well we are seeing pretty good returns from paid media spend on these professional certificates and I think part of what that is is as the portfolio has gotten big enough now over 40 of these it appeals to a lot more people and to make sure it's making our ad spend.
Speaker 3: transcript
Speaker 3: We are seeing pretty good returns from paid media spend on these professional certificates. And I think part of what that is is...
Speaker 3: transcript
Speaker 3: has the portfolio's gotten big enough, not over 40 of these, it appeals to a lot more people and it makes your, it's making our ad spend a bit more productive. And so.
Josh Baer: It's more of the more expensive, traditional degrees without the pathways, where we're seeing some of the kind of continuing headwinds, I think, from a tight labor market and many of the things that we've seen in the past, which I think are affecting not only traditional online degrees, but frankly, traditional degrees in the United States. So I think a lot of it is we're still seeing a tight labor market put pressure on people saying, I want to go for one of those more expensive traditional degrees.
A bit more productive and so.
Speaker 3: transcript
Speaker 3: At some point, the marginal benefits of that start tapering off, but we're seeing pretty good leverage from advertising expense. So that's feeling pretty good there. And then we've got the language translations, which are just starting and we think, that's a liquid. Now, something that often is a little bit temporary is when a blockbuster new title comes out. And it produces kind of a big bang spur of growth when the new title comes out.
At some point in the marginal benefits of that start tapering off but we're seeing pretty good leverage from advertising spend so so that us feeling pretty good there and then we've got the language translations, which are just starting and we think that could look right now something that often is a little bit temporary is when a blockbuster new title comes out.
Josh Baer: Got it, very helpful. And then, on consumer with just the impressive growth number that you put up and acceleration. And I think in the first question was on consumer, and Jeff, you could sort of talk about just strengths there and expecting that growth to kind of continue. I just wanted to see, I know we're going to get some thoughts on 24 next quarter for consumer, but with the growth accelerating so much, like, is there any need to moderate sort of expectations on that trajectory of growth in that segment, just given where it is and where people might... You know, expected to go.
And if it produces kind of a big Bang spurt of growth when the new title comes out but when you look at the full year, it's not really a story of one big title producing all of the growth I mean, it is more diversified than that and so unlike maybe three or four years ago, where one titled would've been response.
Speaker 3: transcript
Speaker 3: But when you look at the full year, it's not really a story of one big title producing all the growth. I mean, it is more diversified than that. And so, unlike maybe three, four years ago, where one title would have been responsible for a majority of the growth, that's not really the case in 2023. And that way, we think we could probably bring a lot of this moment that's been to 2024, because it's not sort of a one time month that we received in the 2023 numbers. Happy century.
Before a majority of the growth that's not really the case in 2023 and that way. We think we can probably bring a lot of this momentum into 2020 for it because it's if not sort of a onetime bump that we received in the 2023 numbers.
Really helpful. Thank you.
Okay.
Speaker 1: transcript
Speaker 1: We'll take our next question from Jeff Silver with BMO Capital Markets.
We will take our next question from Jeff Silber with BMO capital markets.
Josh Baer: Sure, Josh. So, you know, we provided, of course, overall guidance for the coming quarter, as we always do. We don't provide different segments. We were just not in that business to do that across each of the three segments every quarter. We do feel very good about consumer. We've met momentum continues. We're hopeful it continues at the same pace it does. But we don't update guidance between the segments. And again, it's captured in the overall guidance, of course, for the quarter.
Speaker 4: transcript
Speaker 4: Thanks so much. Your growth has been strong. You expected to continue. I'm just curious, do you have the infrastructure specifically that people would continue this strong growth? You've talked about the tight labor market. I'm just curious if we could get some color on that.
Thanks, so much.
Your growth has been strong you expect it to continue I'm. Just curious do you have the infrastructure specifically the people to continue the strong growth you've talked about the tight labor market I'm. Just curious if we can get some color on that.
Speaker 3: transcript
Speaker 3: Yeah, thanks, Jeff. It's a great question, and it really does play to our HR strategy.
Yeah. Thanks, Jeff It's a great question and it really does play to our HR strategy during the pandemic when we all started working for hard from home.
Speaker 3: transcript
Speaker 3: During the pandemic, when we all started working from home, we recognized a number of things. One is we can be pretty productive even in our business model, even when we're working from home. Another thing that we realize is our ability to drive increased diversity and a more global talent pool.
Josh Baer: But we're really pleased with the results. And we there's always see as positive on the consumer side. Yeah, another thing, Josh, you know, a way to also kind of think through your question is what are the factors that are causing this growth? And are there reasons to believe that some of those factors might be temporary? And we think a lot of it is kind of what's happening in the global labor markets.
We recognized a number of things one is we can be pretty productive everyone in our business model, even when we're working from home. Another thing that we realized is our ability to drive ins.
Increased diversity and a more global talent pool.
Speaker 3: transcript
Speaker 3: when you're able to work more remotely. And so we have a pretty remote first working culture. Part of what that means is we're finding talent all over the world.
When you were able to work more remotely and so we have a pretty remote first working culture part of what that means is we're finding talent all over the world.
Josh Baer: And as Ken said in the script, like, people are looking for cheaper, more flexible job-oriented ways to switch a career or to start a new career. So, we don't see why that would change necessarily. Another thing is that some of this growth, and you see it in the sales and marketing line, Ken mentioned this in the script as well, we are seeing pretty good returns from paid media spend on these professional certificates.
Speaker 3: transcript
Speaker 3: And we are not really constrained to a certain talent pool. And so our recruitment has been really great. Plus, you have people really love work and permission driven companies these days. So I think when it comes to talent recruitment, we are not seeing any major constraint.
And we are not really constrained to a certain talent pool and so our recruitment has been really great plus if people really love working for mission driven companies. These days. So I think when it comes to talent recruitment, we are not seeing any major constraints on our ability to find really good talent that wants to work for coursera and to find that talent at <unk>.
Speaker 3: transcript
Speaker 3: on our ability to find really good talent that wants to work for Coursera and define that talent at affordable cost.
Josh Baer: And I think part of what that is is, as the portfolio has gotten big enough, now over 40 of these, it appeals to a lot more people. And it makes your, it's making our ad spend a bit more productive. And so, at some point, marginal benefits of that start tapering off, but we're seeing pretty good leverage from advertising spend. So, so that's feeling pretty good there. And then we've got the language translations, which are just starting.
Portable costs.
Speaker 3: transcript
Speaker 3: And so I would say that no, we really aren't seeing talent constraints. And we don't foresee, at least I don't foresee next year.
And so I would say that no we really arent seeing talent constraints and we don't foresee at least I don't foresee next year talent constraints as one of the major features another thing I'll just say as you look at the executive team for example, our exec team lives in the Bay area.
Speaker 3: transcript
Speaker 3: talent constraints as one of the major features. Another thing I'll just say, as you look at the executive team, for example, our executive team lives in the Bay Area, New York, Denver, Utah, I mean,
New York.
Josh Baer: And we think, that could look good. Now, something that often is a little bit temporary, is when a blockbuster new title comes out, and it's, it produces kind of a big bang spurred of growth when the new title comes out. But when you look at the full year, it's not really a story of one big title producing all the growth. I mean, it is more diversified than that. And so, unlike, you know, maybe three, four years ago where, where one title would have been responsible for a majority of the growth, that's not really the case in 2023. And that way, we think we could probably bring a lot of this momentum into 2024, because it's, it's not sort of a one time month that we received in the 2023 numbers.
Denver.
Josh Baer: Really helpful.
Utah.
Speaker 3: transcript
Speaker 3: We can really get the talent at all levels from a number of different places. And I think that gives us a pretty good flexibility in securing.
We can really get the talent at all levels from a number of different places and I think that gives us.
Creating good flexibility on securing the talent that we need.
Speaker 4: transcript
Speaker 4: All right, that's really helpful. If I could shift over to the enterprise segment, the net retention rate increased a bit sequentially. It's been dropping for a number of quarters. Is there some seasonality? Are you seeing some improvement there? Again, if we can get some color, that would be great.
Operator: Thank you.
Alright, Thats really helpful. If I could shift over to the enterprise segment, the net retention rate.
Increased a bit sequentially, it's been dropping for a number of quarters is there some seasonality or are you seeing some improvement there again, if we can get some color that would be great.
Speaker 4: transcript
Speaker 4: Yeah, Jeff, this is Ken. It's a little early to tell. We don't want to declare victory yet. We're pleased it's surrounded a little bit. We don't like the fact it's not triple digits to be perfectly honest. And we see room for improvement. I'd say our commentary overall on the enterprise space hasn't changed.
Yes, Jeff.
This is Kent.
Little early to tell we don't want to declare victory yet.
Pleased it's rebounded a little bit we don't like the fact, its not triple digits to be perfectly honest and we see room for improvement.
Jeff Silver: We'll take our next question from Jeff Silver with BMO capital markets. Thanks so much. You know, your growth has been strong. You expected to continue.
I'd say our commentary overall in the enterprise space Hasnt changed.
Speaker 4: transcript
Speaker 4: And then when I'm talking about the specifically a C for B, we're definitely more excited in the C for G, and particularly the C for C verticals, where we're seeing some really nice progress.
And what I'm talking about specifically is Ctrip date, we're definitely more excited in the about the secret GM, particularly the secrecy verticals, where we're seeing some really nice progress.
Jeff Silver: I'm just curious, do you have the infrastructure specifically that people to continue this strong growth? You talked about the tight labor market. I'm just curious if we could get some color on that. Yeah, thanks, Jeff. It's a great question. And it really does play to our HR strategy during the pandemic. When we all started working from home, we recognized a number of things. One is we can be pretty productive even when, in our business model, even when we're working from home.
Speaker 3: transcript
Speaker 3: But overall, the macro has remained tough and super big. The numbers are stabilizing. We like that. Again, we're not declaring victory yet. Another thing I'll mention, Jeff, is when Kent has super big, that's Coursera for business, Coursera for campus, and then Coursera for government.
But overall at the macro has remained competency for bake the numbers are stabilizing we like that and again, we're not declaring victory yet another thing I'll mention Jeff is when Kansas see for me that's Coursera for business Coursera for campus and then <unk> Corsair for government, we do see different <unk> bye.
Jeff Silver: Another thing that we realized is our ability to drive increased diversity and a more global talent pool when you're able to work more remotely. And so we have a pretty remote first working culture. Part of what that means is we're finding talent all over the world. And we are not really constrained to a certain talent pool. And so our recruitment has been really great. Plus, you have people really love work information driven companies these days.
Speaker 3: transcript
Speaker 3: We do see different NRRs by vertical, right, among those. The other thing I'll point out that is
Vertical right among those the other thing I'll point out that is.
Speaker 3: transcript
Speaker 3: that is promising from my perspective. It also depends on the use case.
Promising from my perspective is it also.
Turns on the use case.
Speaker 3: transcript
Speaker 3: when academic institutions deploy Coursera for campus for credit towards degree.
When academic institutions deploy coursera for campus for credit towards degree, we see we see pretty strong <unk> and so we are trying to identify and then really drive use cases of coursera and those institutional settings, where we have high <unk>, where we're <unk>.
Speaker 3: transcript
Speaker 3: We see pretty strong NIRRs. And so we're trying to identify and then really drive.
Speaker 7: transcript
Speaker 7: use cases of Coursera in those institutional settings where we have high NIRRs, where we're delivering great value with the distinctive offering and when customers try it they're like I want more of it. So we're seeing some positive signals underneath that average that you say there and I'll reinforce what Ken said. Double digit NIRRs are not where we want to be at all. Our aspirations are much higher and we see pathways to drive that back up. Okay, appreciate the color. Thanks.
<unk>, great value with a distinctive offering and when customers try it but like I want more of it. So we're seeing some positive signals underneath that average that you save there and I'll reinforce what Kevin said double digit NR ours are not where we want to be at all our aspirations are much higher and we see pathways to drive that backup.
Jeff Silver: So I think when it comes to talent recruitment, we are not seeing any major constraints on our ability to find really good talent that wants to work for Coursera and define that talent at affordable cost. And so I would say that no, we really aren't seeing talent constraints. And we don't foresee, at least I don't foresee next year, talent constraints as one of the major features. Another thing I'll just say, as you look at the executive team, for example, our executive team lives in the Bay Area, New York, Denver, Utah. I mean, we can really get the talent at all levels from a number of different places. And I think that gives us a pretty good flexibility in securing the talent that we need.
Jeff Silver: All right, that's really helpful.
Okay. Appreciate the color. Thanks.
Sure.
Yeah.
We'll take our next question from Brian Peterson with Raymond James.
Speaker 3: transcript
Speaker 3: I'll hide gentlemen, congrats on the quarter. Just one for me. So if we think about the professional certificates, I'd love to understand thinking about maybe sales cycles, maybe that's not the right term, but the late stage pipeline, as people see what you're able to do in the scale you're able to reach, has it become easier and quicker to get more professional certificates partners out of the platform? Thanks, guys.
Hi, gentlemen, congrats on the quarter just one for me. So if we think about the professional certificates and love understand thinking about maybe sales cycles, maybe that's not the right term, but the late stage pipeline.
People see what Youre able to do in the scale Youre able to reach has it become easier and quicker to get more professional certificate partners out of the platform. Thanks guys.
Ken Hahn: It's like a shift over to the enterprise segment. The net retention rate increased a bit sequentially.
Thanks, Brian.
Speaker 3: transcript
Speaker 3: It is, if you look at the rate of increase in professional certificates out there, we're at 44 now, and it's kind of a number of things. Step one is identifying which jobs do we want to offer a professional certificate for, and then making sure you design it, have the skills that managing that the hiring managers will need, and then you look to a partner, and then you produce it, you launch it, you promote it, et cetera.
Is if you look at the rate of increase in professional certificates out there. We're at 44 now and it's kind of a number of things you'll step one is identifying which jobs do we want to offer a professional certificate for and then making sure you designed it to have the skills that managing.
Jeff Maggioncalda: It's been dropping for a number of quarters. Is there some seasonality? Are you seeing some improvement there? Again, if we can get some color, that would be great. Yeah, Jeff, it's this is Ken. It's a little early to tell. We don't want to declare victory yet. We're pleased it's rebounded a little bit. We don't like the fact it's not triple digits to be perfectly honest. And we see room for improvement. I'd say our commentary overall on the enterprise space hasn't changed.
That hiring managers will need and then you look to a partner and then you produce if you launch it you promoted et cetera, I would say that the interest among industry partners wanting to create branded professional certificates is high and increasing the more that we have from from world leading brands.
Speaker 3: transcript
Speaker 3: I would say that the interest among industry partners wanting to create branded professional certificates.
Speaker 3: transcript
Speaker 3: is high and increasing. I mean, the more that we have from, you know, world leading brands, the more other brands are like, hey, I'd like to do this too. I want to put my brand into the world where it's not just, you know, on a TV ad or a billboard, where my brand is something that my customers interact.
Jeff Maggioncalda: Then, and what I'm talking about specifically a C for big. We're definitely more excited in the seat about the C for G and particularly the C for C verticals where we're seeing some really nice progress. But overall, the macro has rooming tough and C for big. The numbers are stabilizing. We like that. And again, we're not declaring victory yet. Yeah, another thing I'll mention, Jeff is and we can't just see for me as Coursera for business, Coursera for campus.
The more other browser like Hey, I'd like to do this too I want to put my brand into the world, where it's not just on a TV AD or Billboard where my brand is something that my customers interact with my brand helps create opportunity I mean is the level of engagement and impact that's a pretty power.
Speaker 3: transcript
Speaker 3: and my brand helps create opportunity. I mean, it's a level of engagement and impact that's a pretty powerful way for employers and businesses to engage their audience. So we are seeing, I think, increased interest in this.
Full way for <unk>.
Jeff Maggioncalda: And then C for G is Coursera for government. We do see different NRRs by vertical right among those. The other thing I'll point out that is this promising from my perspective is it also depends on the use case. When academic institutions deploy Coursera for campus for credit towards degree, we see we see pretty strong NRRs. And so we're trying to identify and then really drive use cases of Coursera in those institutional settings where we have high NRRs.
Employers and businesses to engage their audience. So we are seeing I think increased interest and this I think with language translation that will also open up new markets that many of these brands are looking to engage and so we do see that this cycle of identifying sourcing building and launch.
Speaker 3: transcript
Speaker 3: If it would language translation, that will also open up new markets that many of these brands are looking to engage. And so...
Speaker 3: transcript
Speaker 3: We do see that this cycle of identifying, sourcing, building, and launching is on a positive trend. I don't want to overestimate how quickly we can get these built, but I will say that generative AI will make it easier and less expensive and faster to build content generally than before generative AI. And so we...
<unk> is on a on a positive trend I don't want to overestimate how quickly we can get these built but I will say that generative AI will make it easier and less expensive and faster to build content generally than before generative AI and so we.
Jeff Maggioncalda: We're delivering great value with the distinctive offering and when customers try it, they're like, I want more of it. So we're seeing some positive signals underneath that average that you say there and I'll reinforce what Ken said, you know, double digits NRRs are not where we want to be at all. Our aspirations are much higher and we see pathways to drive that back up.
Speaker 3: transcript
Speaker 3: We see increasing demand and likely increasing speed and reducing costs as we march forward with professional certificates. »,
We see increasing demand and likely increasing speed and reducing cost as we march forward with professional certificates.
Great. Thanks, Jeff.
Speaker 1: transcript
Speaker 1: We'll take our next question from Ryan McDonald with Needham and Company.
We will take our next question from Ryan Macdonald with Needham <unk> Company.
Speaker 8: transcript
Speaker 8: Hi, thanks for taking my question, Congrats on a nice quarter. Jeff, maybe you could start with you. On the, as you would think about the pathways degrees and sort of the the role continued role out here, if you look at the existing sort of portfolio of degrees that you have, how many of those university partners are exploring or showing interest in the pathways?
Jeff Silver: Okay, please call it thanks.
Hi, Thanks for taking my question congrats on a nice quarter.
Jeff maybe to start with you.
Brian Peterson: We'll pick our next question from Brian Peterson with Raymond James. Hi gentlemen, congrats in the quarter just one from me. So if we think about the professional certificates, you know, I'd love to understand thinking about maybe sales cycles, maybe that's not the right term, but the late stage pipeline. As people see what you're able to do in the scale you're able to reach, as it become easier and quicker to get more professional certificate partners out of the platform. Thanks guys. Yeah, thanks Brian.
As we think about the pathways degrees in sort of the the rollout continued rollout here. If you look at the existing sort of portfolio of degrees that you have how many of those University partners are exploring are showing interest in the pathways.
Speaker 8: transcript
Speaker 8: from that perspective. And then are you seeing any signs on the early stages of the ones that you've already launched where you're seeing sort of a better ability to convert maybe a...
From that perspective, and then are you seeing any any signs on the early stages of the ones that you've already launched where youre seeing sort of a better ability to convert maybe ed.
Speaker 8: transcript
Speaker 8: Cut the tumor learner to a degree learner from some of these degree pathways.
Consumer learner to a degree lerner from some of these degree pathways.
Jeff Maggioncalda: It is, if you look at the rate of increase in professional certificates out there, we're at 44 now and it's kind of a number of things. Step one is identifying which jobs do we want to offer a professional certificate for and then making sure you design it to have the skills that managing that that hiring managers will need. And then you look to a partner and then you produce it, you launch it, you promoted, et cetera.
Speaker 3: transcript
Speaker 3: Yeah, on the first question, we do see growing interests.
Yeah on the first question, we do see growing interest in.
Speaker 3: transcript
Speaker 3: in the University of San, this is an interesting concept. The more that we...
And the unit from University of saying. This is this is an interesting concept.
More that we have.
Speaker 3: transcript
Speaker 3: ACE credit recommendations, ECPS credit recommendations, and other quality standards that universities and both secondary.
ACD credit recommendations ECS credit recommendations and other quality standards that universities.
Postsecondary education institutions have looked to in the past the easier. This gets the more that we have states University of Texas, and the whole <unk> system and other major University systems doing this others looked at that and say well hey, if theyre doing it this seems like a pretty good thing.
Speaker 3: transcript
Speaker 3: Education institutions have looked to in the past to easier the sketch.
Jeff Maggioncalda: I would say that the interest among industry partners wanting to create branded professional certificates is high and increasing. I mean, the more that we have from from, you know, world leading brands, the more other brands are like, hey, I'd like to do this, too. I want to put my brand into the world where it's not just, you know, on a TV ad or billboard where my brand is something that my customers interact with and my brand helps create opportunity.
Speaker 3: transcript
Speaker 3: The more that we have states, you know, University of Paxis and the whole UT system and other major university systems doing this, others looked at and say, well, hey, you know, if they're doing it, this seems like a pretty good thing.
Speaker 3: transcript
Speaker 3: I will also say that in the US, especially when it comes to public institutions, including flagship public universities, there is a state mandate to educate people on a much broader scale than many of these universities are doing. And when you look at the demographics, with a generally declining population of young people, compared to, say, the millennial cohort that came through,
I will also say that in the U S, especially when it comes to public institutions, including flagship public universities. There is a state mandate to educate people on a much broader scale than many of these universities are doing and when you look at the demographics with a generally declining population of young people compared to say the.
Jeff Maggioncalda: I mean, it's a level of engagement and impact that's a pretty powerful way for, you know, employers and businesses to engage their audience. So we are seeing, I think, increased interest in this. I think with language translation, that will also open up new markets that many of these brands are looking to engage. And so we do see that this cycle of identifying, sourcing, building and launching is on a positive trend. I don't want to overestimate how quickly we can get these built, but I will say that generative AI will make it easier and less expensive and faster to build content generally than before generative AI. And so we see increasing demand and likely increasing speed and reducing costs as we march forward with professional service. Thank you. Great to hear. Thanks, Jeff.
Real cohort that came through.
Speaker 3: transcript
Speaker 3: Helping to educate working adults is becoming a bigger imperative. And these pathway degrees which don't require you to stop what you're doing and move to a campus.
Helping to educate working adults is becoming a bigger imperative and these pathway degrees, which don't require you to stop what youre doing and move to a campus.
Speaker 3: transcript
Speaker 3: Clearly fit the needs of this older working adult population that needs to get reskilled because technology is changing jobs so quickly. So we do see a lot more interest and a lot more openness to these more flexible pathway degrees even from fairly elite universities. And I'll say not just in the US, of course, globally as well.
Clearly fit the needs of this older working adult population that needs to get re skilled because technology is changing jobs. So quickly. So we do see a lot more interest and a lot more openness to these more flexible pathway degrees, even from fairly elite universities and I'll say not just in the U S of course globally as well.
Speaker 3: transcript
Speaker 3: In terms of conversion, and I kind of mentioned this a little bit, we're not happy with a degree segment. I mean, it's not as, I think Josh may be asked.
In terms of conversion and I kind of mentioned this a little bit.
Not happy with the degree segment.
Not as I think Josh maybe you asked it's not what we had set at the beginning of the year, we're not going to finish up on target there, but when you look at the performance of the great programs that have these pathways you do see an ability to make a proposition that resonates with the learner that helps convert them from the consumer.
Speaker 3: transcript
Speaker 3: It's not what we had said at the beginning of the year. We're not going to finish up on target there. But when you look at the performance of the Green Programs that have these pathways, you do see an ability to make a proposition that resonates with the learner, that helps convert them from the consumer open content into the degree, at better rates than just a plain vanilla traditional degree.
Ryan Macdonald: We'll take our next question from Ryan MacDonald with Needham and Company. Hi, thanks for taking my question.
Ryan Macdonald: Congrats on a nice quarter. Jeff, maybe you could start with you. As we think about the pathways degrees and sort of the continued rollout here, if you look at the existing sort of portfolio of degrees that you have, how many of those university partners are exploring or showing interest in the pathways from that perspective. And then, are you seeing any signs on the early stages of the one that you've already launched, where you're seeing sort of a better ability to convert maybe a consumer learner to a degree learner from some of these degree pathways?
Open content under degree.
At better rates than just a plain vanilla traditional degree.
Speaker 3: transcript
Speaker 3: We have a lot to prove out. We've got to do it more at scale. Part of what we're also doing is looking to exist in degree programs that don't have pathways and architecting pathways for those degrees. We're trying to create pathways from those types of certificate programs where we have a lot of learners who are seeking jobs because of those professional certificates that would benefit from a degree and you get a wage and wealth premium if you have a degree. So there's a lot of work to do.
We have a lot to prove out we've got to do it more at scale part of what we're also doing is looking to existing degree programs that don't have pathways and architected pathways for those degrees. We're trying to create pathways from those types of certificate programs, where we have a lot of learners, who are seeking jobs because of those professional certificates that would benefit from it.
<unk> and you'll get a wage and wealth premium if you have a degree of <unk>.
Lot of work to do.
Ryan Macdonald: Yeah, on the first question, we do see growing interest in the university saying, this is an interesting concept. The more that we have ACE credit recommendations, ECPS credit recommendations and other quality standards that universities and post-secondary education institutions have looked to in the past the easier this gets. The more that we have states, the university of Paxis and the whole UT system and other major university systems doing this. Others looked at that and say, hey, if they're doing it, this seems like a pretty good thing.
Speaker 3: transcript
Speaker 3: You know, the logic is very clear. And the intuition certainly resonates. And when you put the proposition in front of learners, it makes good sense. So for early stage logic, the intuition and the early result. Yeah, yeah. We are seeing positive signs on the strategy. But obviously it's still early and we've got a lot to prove.
The logic is very clear and the intuition.
Certainly resonate and when you put the proposition in front of learners. It makes good sense. So early stage project the intuition and the early result, yes, yes, we are seeing positive signs on the strategy.
But obviously, it's still early and we've got a lot to prove.
Speaker 8: transcript
Speaker 8: a super-helpful color there, maybe just as a follow-up, I wanted to touch on the translation as we think about how this sort of translates, if you will, to business performance moving forward. I mean, from the...
Super helpful color, there and maybe just as a follow up I wanted to touch on the translation as we think about how this sort of translates if you will to business performance moving forward I mean from from the regions and languages that you've already translated or how should we start to track success. In this area is this more.
Speaker 8: transcript
Speaker 8: regions and languages that you've already translated for how should we start to track success in this area? Is this more registered learners on the platform coming from countries that are speaking in those languages? Should we start to see that more in terms of paid conversion or expansion opportunities within the perhaps the Corsair for Business segment? How should we track this moving forward?
Ryan Macdonald: I will also say that in the US, especially when it comes to public institutions, including flagship public universities, there is a state mandate to educate people on a much broader scale than many of these universities are doing. And when you look at the demographics with a generally declining population of young people compared to, say, the millennial cohort that came through, helping to educate working adults is becoming a bigger imperative. And these pathway degrees, which don't require you to stop what you're doing and move to a campus, clearly fit the needs of this older working adult population that needs to get reskilled because technology is changing jobs so quickly.
<unk>.
Registered <unk> on the platform coming from countries that are speaking in those languages should we start to see that more in terms of paid conversion or expansion opportunities within the.
Perhaps a coarser for business segment, how should we track this moving forward.
Speaker 3: transcript
Speaker 3: Yeah, so separate from what we actually reported and I'll talk about what metrics that we report might move first, but just so do you understand the intuition of kind of how we're seeing the translation show up as as demand. Currently the part of our business where we're seeing the most immediate response is Coursera for government.
Yeah, so separate from what we actually reported and I'll talk about what metrics that we report might move first but just so that you understand the intuition of kind of how we're seeing the translation show up as as demand.
Currently the the.
Part of our business, where we're seeing the most immediate response is coursera for government.
Ryan Macdonald: So we do see a lot more interest and a lot more openness to these more flexible pathway degrees, even from fairly elite universities. And I'll say not just in the US, of course, globally as well. In terms of conversion, and I kind of mentioned this a little bit, we're not happy with a degree segment. I mean, it's not, as Josh may be asked, it's not what we had said at the beginning of the year.
Speaker 3: transcript
Speaker 3: And a lot of it is government serve their citizen populations. And in many cases, those populations don't speak English, or a few of them speak English as a second language.
And a lot of it is government serve their citizen populations and in many cases those populations don't speak English or few of them speak English as a second language.
Speaker 3: transcript
Speaker 3: When we're able to go to a government and say we can help you skill up 100,000 people who speak Arabic and maybe only 10% speak English.
When we're able to go to a government and say we can help you a skill up 100000 people, who speak Arabic, maybe only 10% speak English, but we have a full catalog of high quality brands and credentials in Arabic or in Pi.
Speaker 3: transcript
Speaker 3: But we have a full catalog of high quality brands and credentials in Arabic or in Thai. That's a very different proposition than what we were able to say six months ago. So I would now, how might that show up? Well, we measured as bookings, but you wouldn't see it except in so far as you'd see a number of enterprise customers.
Ryan Macdonald: We're not going to finish up on target there. But when you look at the performance of the Green Programs that have these pathways, you do see an ability to make a proposition that resonates with the learner that helps convert them from the consumer open content into degree at better rates than just a plain vanilla traditional degree. We have a lot to prove out. We've got to do it more at scale. Part of what we're also doing is looking to exist in degree programs that don't have pathways and architecting pathways for those degrees.
At a very different proposition than what we were able to say six months ago. So.
How might that show up.
Well, we measured as bookings, but you wouldn't see it except in so far as you can see number of enterprise customers.
Speaker 3: transcript
Speaker 3: You might see bigger buys, so it could be an NRR, where existing customers can roll, government customers can roll this out to bigger populations because the language accessibility is higher. And then at some point that will show up in ARR, just the revenue that shows up on the enterprise segment. So on the Coursera for government side, it's kind of that sequence of leading indicators. The second would be Coursera.
You might see bigger buys so it could be an NRI, where existing customers can enroll government customers can roll this out the bigger populations because the language accessibility is higher and then at some point that will show up in <unk> just.
Ryan Macdonald: We're trying to create pathways from those types of certificate programs where we have a lot of learners who are seeking jobs because of those professional certificates that would benefit from a degree. And you get a wage and wealth premium if you have a degree. So that it's a lot of work to do. The logic is very clear. And the intuition certainly resonates. And when you put the proposition in front of learners, it makes good sense. So for early day logic, the intuition, and the early result. Yeah. We are seeing positive signs on the strategy. But obviously it's still early and we've got a lot to prove.
The revenue that shows up on the enterprise segments. So on the Coursera for government side, it's kind of that sequence of leading indicators the second would be corsair for business.
Speaker 3: transcript
Speaker 3: not so much focused as per Sarah for government on the non-English speaking, but there's a lot of businesses where the primary language is spoken is not English, or at least many other employees in different countries with global operations don't speak English at all or don't speak English as a primary language. And the businesses would much rather have one set of courses that teaches something in the same way with the same basic concept.
Not so much focused as coursera for government on the non English speaking, but theres a lot of businesses, where the primary languages spoken as non English or at least many other employees in different countries with global operations don't speak English at all or don't speak English as a primary language.
And the businesses would much rather have one set of courses that teach us something in the same way with the same basic concepts.
Jeff Maggioncalda: Now, it's a super-helpful color there. Maybe just as a follow-up, I wanted to touch on the translation. As we think about how this sort of translates, if you will, to business performance moving forward, I mean, from the regions and languages that you've already translated, or how should we start to track success in this area? Is this more registered learners on the platform coming from countries that are speaking in those languages? Should we start to see that more in terms of paid conversion or expansion opportunities within the perhaps the Coursera for Business segment?
Jeff Maggioncalda: How should we track this moving forward? Yeah, so separate from what we actually reported, and I'll talk about what metrics that we report might move first, but just so do you understand the intuition of kind of how we're seeing the translation show up as demand. Currently, the part of our business where we're seeing the most immediate response is Coursera for government, and a lot of it is government serve their citizen populations, and in many cases those populations don't speak English, or a few of them speak English as a second language.
Speaker 3: transcript
Speaker 3: but just in different languages. And so, you know, we are seeing attractiveness in Europe and other parts of the world where businesses are saying, hey, this is pretty nice. One set of courses for a global workforce. That would show up in the same kinds of metrics as what I was saying for Coursera for government.
Just in different languages, and so we are seeing attractiveness in Europe and other parts of the world where businesses are saying Hey, This is pretty nice one set of courses for our global workforce.
That would show up in the same kinds of metrics is what I was saying for coarser for government.
Speaker 3: transcript
Speaker 3: And then you mentioned consumer. And I think there might be a bit more of a lag. And I think we have to unlock it with payment systems.
And then you mentioned consumer and I think there might be a bit more of a lag and I think we have to unlock it with payment systems and international sort of localized discovery and to some degree paid media.
Speaker 3: transcript
Speaker 3: and international sort of localized discovery. And to some of the repaid media, we're mostly doing the paid media in North America right now and seeing the good return.
Whereas mostly billing the paid media in North America, right now and seeing a good return we would have to kind of ramp that up and figure out how to get good returns on that paid media, but.
Speaker 3: transcript
Speaker 3: We would have to kind of ramp that up and figure out how to get good returns on that pay media, but that was show up after.
That would show up faster once we get the payment capabilities in place and we kind of figure out the recipe of liquidity market to what's your message and what payment systems back it up but when we do if we do figure that out that will show up as consumer revenue.
Speaker 3: transcript
Speaker 3: once we get the payment to take the bill is in place and we kind of figure out the recipe of who do you market to, what's your message and what payment systems back it up?
Speaker 7: transcript
Speaker 7: When we do figure that out, that'll show up as consumer revenue on a much quicker time table.
<unk> quicker timetable.
Thanks again.
We will take our final question from Taylor Martinez with UBS.
Speaker 9: transcript
Speaker 9: Yeah, hi. Thank you for taking my question. Just one for me on the
Jeff Maggioncalda: When we're able to go to a government and say we can help you skill up 100,000 people who speak Arabic and maybe only 10% speak English, but we have a full catalog of high-quality brands and credentials in Arabic or in Thai, that's a very different proposition than what we were able to say six months ago. Now, how might that show up? Well, we measured as bookings, but you wouldn't see it except in so far as you'd see a number of enterprise customers.
Yeah, Hi, Thanks for taking my question just one for me on that.
Speaker 9: transcript
Speaker 9: Can you maybe talk a little bit more about how budget discussions are going in some of the competitive dynamics?
Can you maybe talk a little bit more about how budget discussions are going in some of the competitive dynamic there.
Speaker 9: transcript
Speaker 9: There was their line of sight to stabilization or trends still worsening. I'm just trying to get a sense of whether revenue growth could begin to stabilize in the teens or trends are pointing to the potential to dip closer to the single digits. And then the second part of it is that maybe from like a mixed standpoint is see, see for be reaching a point where you could see a more favorable mix shift in the future, maybe towards some of the other areas that have been more durable.
Your line of sight.
Stabilization or trends worsening I'm, just trying to get a sense of whether revenue growth could begin to stabilize in the teens or trends are pointing to the potential to get closer to the single digits and then the second part of it is that may be from like a mixed standpoint.
Deeper be reaching a point, where you could see a more favorable mix shift in the future maybe towards some of the other areas that have been more durable.
Jeff Maggioncalda: You might see bigger buys, so it could be an NRR, where existing customers can roll government customers can roll this out to bigger populations because the language accessibility is higher. And then at some point, that will show up in an ARR, just the revenue that shows up on the enterprise segment. So on the Coursera for government side, it's kind of that sequence of leading indicators. The second would be Coursera for business, not so much focused as Coursera for government on non-English speaking, but there's a lot of businesses where the primary language is spoken is not English, or at least many other employees in different countries.
Speaker 3: transcript
Speaker 3: Yeah, great question, Taylor. So I'll start with your mixed question because obviously we got started with Corsair for Business, which is facing the biggest headwinds before campus and government. It is now getting to the point where Corsair for Business is still the biggest, but the other two, which are growing faster, are becoming big enough that if it's affecting the growth.
Yeah, Great question Taylor, So I'll start with your mix question, because obviously, we got started with Coursera for business, which is facing the biggest headwinds before campus and government.
It is now getting to the point where of course, our business is still.
The biggest but the other two which are growing faster are becoming big enough.
It's affecting the growth rates and as we go into 2024, if we sustain those and we expect that we will and when I say that when we if we can sustain the non business.
Speaker 3: transcript
Speaker 3: And as we go into 2024, if we sustain those and we expect that we will, when I say those, when we say, if we can sustain the non business.
Speaker 3: transcript
Speaker 3: campus and government verticals with higher growth rate. We do expect the overall enterprise growth rate to start tilting up because of those other verticals. And then more specifically, yeah, we'll want to now, Chris, era for business.
Campus and government verticals with higher growth rate, we do expect the overall enterprise growth rate to start tilting up because of those other verticals and then more specifically to well what about coursera for business.
Jeff Maggioncalda: With global operations, don't speak English at all, or don't speak English as a primary language. And the businesses would much rather have one set of courses that teaches something in the same way with the same basic concepts, but just in different languages. And so, you know, we are seeing attractiveness in Europe and other parts of the world where businesses are saying, hey, this is pretty nice. One set of courses for a global workforce.
Speaker 3: transcript
Speaker 3: It's still pretty tough out there and it is pretty competitive and budgets and teams are are seeing compression and general competitive competition is pretty intense. There's a lot more comp we see a lot more competition in Coursera for business Then we do in Coursera for Canvas or Coursera for government in fact a lot more competition
It's still pretty tough out there and it is pretty competitive and budgets and teams or are seeing compression.
In general competitive competition is pretty intense theres a lot more we see a lot more competition and of course, our for business than we do in Coursera for campus or Coursera for government in fact, a lot more competition.
Jeff Maggioncalda: That would show up in the same kinds of metrics as what I was saying for Coursera for government. And then you mentioned consumer. And I think there might be a bit more of a lag. And I think we have to unlock it with payment systems and international sort of localized discovery. And to some of the repaid media, we're mostly doing the paid media in North America right now and seeing the good return.
Speaker 3: transcript
Speaker 3: But at the same time, it doesn't look as bad in certain dimensions as it did last quarter. We don't know if this is the bottom or exactly where we're heading with it. But it doesn't look great and it could look worse as we sort of look at how it's turning out in Q3. And Ken, I don't know if you'd like to add anything to that.
But at the same time.
It doesn't look as bad in certain dimensions as it did last quarter. We don't know if this is the bottom or exactly where we're heading with it.
Jeff Maggioncalda: We would have to kind of ramp that up and figure out how to get good returns on that paid media, but that was show up after once we get the payment, pay for bills in place. And we kind of figure out the recipe of, who do you market to? What's your message and what payment systems back it up? But if we do figure that out, that will show up as consumer revenue on a much quicker time table.
But.
It could look it doesn't look great and it could look worse.
Ryan Macdonald: Thanks again.
As we sort of look at how it's turning out in Q3 and 10 I don't know if you'd like to add anything to that.
Speaker 4: transcript
Speaker 4: Hi, now I agree entirely. I think the comment is exactly right. And we do continuously growth in both the other newer verticals. And I think that stabilizes us next year. And calling the modem is always dangerous on the C for B. He has an it's called modem bit.
No.
Agree entirely I think we're.
The mix comment is exactly right and we do continue to see growth in both of the other newer verticals and I think that stabilizes as nextera and calling the bottom is always dangerous on the safer based hesitant to call bottom.
Taylor McGinnis: We'll take our final question from Taylor McGinnis with UBS. Yeah, hi, thanks for taking my question. Just one for me on to enter. Can you maybe talk a little bit more about how budget discussions are going in some of the competitive dynamics? Those are line of sight to stabilization or trends so worsening. I'm just trying to get a sense of whether revenue growth could begin to stabilize in the teens or, you know, trends are pointing to the potential to dip closer to the single digits.
Speaker 3: transcript
Speaker 3: We are seeing good signs and we have a number of initiatives that just laid out earlier around translation. Trans, there are good things happening. We'll see how the macro goes, but it's competitive and it doesn't feel terrible as what I would say. I wouldn't re-bore saying it's being overly negative. Taylor, there's one other thing I will, I certainly referenced it in the script. I'll put a little bit more color on it here.
We are seeing good signs and we have a number of initiatives as Jeff laid out earlier around translation trends. There are good things happening, we will see how the macro goes but it's competitive and it doesn't feel terrible, it's what I would say yes.
Rebar, saying as being overly negative there's one other thing I will.
Certainly referenced in the script, a little bit more color on it here.
Taylor McGinnis: And then the second part of it is that maybe from like a mixed standpoint, is C for B reaching a point where you could see a more favorable mix shift in the future, maybe towards some of the other areas that have been more durable.
Speaker 3: transcript
Speaker 3: COVID was a shock that immediately caused businesses all around the world to increase their learning of development budgets as people went home and companies wanted to show support and give them something to protect it to do in the early stages.
Covid was a shock that immediately caused businesses all around the world to increase their learning and development budgets as people went home and companies wanted to show support and give them something productive to do in the early stages of Covid.
Ken Hahn: Yeah, great question, Taylor. So I'll start with your mixed question because obviously we got started with Coursera for business, which is facing the biggest headwinds before campus and government. It is now getting to the point where Coursera for business is still the biggest, but the other two which are growing faster are becoming big enough that's if it's affecting the growth rates. And as we go into 2024, if we sustain those and we expect that we will, when I say those, when we say if we can sustain the non business, campus and government verticals with higher growth rate, we do expect the overall enterprise growth rate to start tilting up because of those other verticals.
Speaker 3: transcript
Speaker 3: We are seeing something different, but I think
We are seeing something different but I think.
Speaker 3: transcript
Speaker 3: potentially very big that's brewing which is generative AI.
A potentially very big that's brewing, which is generative AI.
Speaker 3: transcript
Speaker 3: The number of companies who are starting to say
The number of companies who are starting to say.
What.
Speaker 3: transcript
Speaker 3: Generally I, it's gonna change a lot of jobs at my company.
These generative AI is going to change a lot of jobs that my company.
Speaker 3: transcript
Speaker 3: And my CFO and CEO are asking me head of HR or head of learning and development.
<unk> and CEO are asking me head of HR head of learning and development.
Speaker 3: transcript
Speaker 3: What am I going to do to teach people these new skills and tools to unlock productivity gains that could potentially create more value to my customers and create more productivity for the company?
What am I going to do to teach people these new skills and tools to unlock productivity gains.
Potentially create more value from our customers and create more productivity for the company.
Speaker 3: transcript
Speaker 3: We're definitely hearing a lot more interest in organizational transformation and upskilling and re-skilling associated with the potential benefits of unlocking genitive AI. And that might be a trend back to provide a little bit of an offset to the headwinds that we've been seeing in Coursera for Business in 2020.
We're definitely hearing.
A lot more interest in organizational transformation, and Upskilling and reskilling associated with the potential benefits of unlocking generative AI and that might that might be.
Ken Hahn: And then more specifically to, yeah, well, what about Coursera for business? It's still pretty tough out there and it is pretty competitive. And budgets in teams are seeing compression and general competition is pretty intense. There's a lot more competition. We see a lot more competition in Coursera for business than we do in Coursera for campus or Coursera for government. In fact, a lot more competition. But at the same time, it doesn't look as bad in certain dimensions as it did last quarter.
Trend that could provide a little bit of an offset to the headwinds that we've been seeing in corsair for business in 2023.
Speaker 9: transcript
Speaker 9: Awesome, really appreciate the additional color and congrats on the upside in the quarter.
Awesome really appreciate the additional color and congrats on the upside in the quarter.
Speaker 2: transcript
Speaker 2: Yeah, thank you. Thanks Taylor. Thank you Taylor. That wraps the Q&A. Replay of this webcast will be available on our Investor Relations website with a transcript in the next 24 hours. We appreciate you doing that.
Yes. Thank you. Thanks Taylor. Thank you Taylor that wraps the Q&A a replay of this webcast will be available on our Investor Relations website with the transcript in the next 24 hours. We appreciate you joining us.
Speaker 1: transcript
Speaker 1: And that concludes today's presentation. Thank you for your participation, and you may now disconnect.
Ken Hahn: We don't know if this is the bottom or exactly where we're heading with it. But it doesn't look great and it could look worse as we sort of look at how it's turning out in Q3. And Ken, I don't know if you'd like to add anything to that. I agree entirely. I think the comment is exactly right and we do continue to see growth and both the other newer verticals. And I think that stabilizes us next year.
And that concludes today's presentation. Thank you for your participation and you may now disconnect.
Okay.
Yeah.
Yeah.
Ken Hahn: And calling the bottom is always dangerous on the C4 piece. He has it and it's called bottom. We are seeing good signs and we have a number of initiatives as Jeff laid out earlier around translation. So there are good things happening. We'll see how the macro goes. But it's competitive and it doesn't feel terrible as what I would say. I wouldn't re-bore saying it's being overly negative. Taylor, there's one other thing I will, yeah, I certainly reference it in the script.
Ken Hahn: I'll put a little bit more color on it here. COVID was a shock that immediately caused businesses all around the world to increase their learning of development budgets as people went home and companies wanted to show support and give them something to protect it to do in the early stages of this. Covid. We are seeing something different, but I think potentially very big that's brewing, which is generative AI. The number of companies who are starting to say, you know what, this generative AI is going to change a lot of jobs at my company, and my CFO and CEO are asking me, head of HR or head of learning and development, what am I going to do to teach people these new skills and tools to unlock productivity gains that could potentially create more value to my customers and create more productivity for the company.
Ken Hahn: We're definitely hearing a lot more interest in organizational transformation and upskilling and re-skilling associated with the potential benefits of unlocking generative AI, and that might be a trend back to provide a little bit of an offset of the headwinds that we've been seeing in Coursera for business in 2023.
Jeff Maggioncalda: Awesome, really appreciate the additional color and congrats on the upside in the quarter. Yeah, thank you, thanks, Taylor. Thank you, Taylor.
Operator: That wraps the Q&A. Replay of this webcast will be available on our investor relations website with a transcript in the next 24 hours. We appreciate you joining us.
Operator: And that concludes today's presentation. Thank you for your participation, and you may now disconnect.