Q4 2024 Coursera Inc Earnings Call
We 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.
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.
Speaker Change: 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 us for <unk> Q4, and full year 2024 earnings conference call.
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to Casera's fourth quarter and full year 2024 earnings call.
Speaker Change: Today I'm pleased to be joined by Andrew Ang Corsair, as chairman and co founder, Jeff J <unk>, Our current Chief Executive Officer, Greg Hart, our incoming Chief Executive Officer, and Ken Hahn, Our Chief Financial Officer.
Speaker Change: At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speaker's prepared remarks, there 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 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1. I'd like to turn the call over to Cam Carey, Head of Investor Relations. Mr. Carey, you may begin.
Following their prepared remarks, we will open the call for questions.
Speaker Change: Our earnings press release, including financial tables with issued prior to the market open and is available on our Investor Relations website located at Investor <unk> Coursera Dot Com, where this call is being simultaneously webcast versions of our prepared remarks and supplemental slides have been posted.
Speaker Change: During this call.
Speaker Change: 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 earnings press release and supplemental presentation on our Investor Relations website.
Cam Carey: Hi everyone, and thank you for joining us for Coursera's Q4 and full year 2024 earnings conference call. Today, I am pleased to be joined by Andrew Ang, Coursera's Chairman and Co-Founder, Jeff Maggioncalda, our current Chief Executive Officer, Greg Hart, our incoming Chief Executive Officer, and Ken Hahn, our Chief Financial Officer.
Speaker Change: 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.
Cam Carey: Following their prepared remarks, we will open the call for questions.
Cam Carey: Our earnings press release, including financial tables, was issued prior to the market open and is available on our investor relations website, located at investor.coursera.com, where this call is being simultaneously webcast, and where versions of our prepared remarks and supplemental slides have been posted.
Speaker Change: Actual results and events could differ materially from those expressed or implied any forward looking statements due to a number of risks and uncertainties, including those discussed in our earnings press release supplemental presentation.
Speaker Change: SEC filings.
Andrew: With that I'd like to turn it over to Andrew.
Cam Carey: During this call, we will present both GAAP and non-GAAP financial measures. The reconciliation of non-GAAP measures to the most directly comparable GAAP measure can be found in today's earnings press release and supplemental presentation on our investor relations website.
Andrew: Hi, everyone. We appreciate you joining us today.
Andrew: Before we discuss our results I would like to take a moment to touch on yesterday's leadership announcements.
Speaker Change: First on behalf of the board I want to thank Jeff for his significant contributions to host Sarah over the past seven years.
Cam Carey: 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.
Speaker Change: Under his leadership, we achieved important milestones, including completing the IPO, great revenue from less than $100 million in <unk>.
Speaker Change: 17th of nearly $700 million by the end of two weeks before achieving profitability.
Cam Carey: 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 earnings press release, supplemental presentation, and SEC filings.
Speaker Change: Rapidly expanding our platform products and offerings and collaboration.
Speaker Change: If we are partnering with more than 200, new universities and industry leaders.
Andrew Ang: And with that, I'd like to turn it over to Andrew.
Hi everyone, we appreciate you joining us today.
Speaker Change: Drilling a number of risks to alert us by over 100 million.
Andrew Ang: Before we discuss our results, I would like to take a moment to touch on yesterday's leadership announcement.
Speaker Change: And importantly, just helped us accomplish all this while remaining a faithful stewards of hotels number one go.
Andrew Ang: First, on behalf of the board, I want to thank Jeff for his significant contributions to Coursera over the past seven years.
Speaker Change: And to transform lives to them.
Speaker Change: This leadership and dedication helps us build a strong foundation adequately.
Andrew Ang: Under his leadership, we achieved important milestones including completing our IPO, growing our revenue from less than $100 million in 2017 to nearly $700 million by the end of 2034, while achieving profitability.
Speaker Change: The industry I was an important inflection point.
Speaker Change: Next chapter of growth.
Speaker Change: Advances in technology, such as AI are transforming industry after industry.
Andrew Ang: rapidly expanding our platform products and offerings in collaboration with the world's best educators including partnering with more than 200 new universities and industry leaders
Speaker Change: Education too will change.
Speaker Change: To discover develop and validate new skills.
Advance their career.
bringing our number of registered learners by over 100 million.
Speaker Change: Institutions, it's a modernized critical ashish learners.
Andrew Ang: And, importantly, he has helped us accomplish all this while remaining a faithful steward of Coteri's number one goal, to serve learners and to transform lives through learning.
Speaker Change: Not for the path for the future.
And enterprises.
Speaker Change: Hi, John and adaptive solutions to power ups coding initiatives are the most important asset their people.
Speaker Change: His leadership and dedication helped to build a strong foundation and I believe that Coursera and the industry are an important infection point as we look to our next chapter of growth.
Speaker Change: After all it's human capital is the most valuable formal capsule that we all have to address it.
Speaker Change: Ecosystem assets and global each are unmatched and I'm optimistic and excited about the growth platform will play in shaping the future.
Speaker Change: Advances in technology, such as AI, are transforming industry after industry, and education, too, will change.
Speaker Change: Together with Jeff The board has been thoughtful comprehensive deliberate selecting the right person to lead service mix space.
Speaker Change: Learners need to discover, develop, and validate new skills that can sponsor or advance their
Speaker Change: mean to modernize the curricula and teach learners the skills they need not for the
Speaker Change: Great Heart this is exceptional and proven either.
Speaker Change: With over 25 years of experience leading technology.
Speaker Change: and enterprises need a more agile and adaptive solution to power upskilling initiatives for the most important assets, their people. After all, human capital is the most valuable form of capital and we all have to invest in building that.
Speaker Change: She has a long track record highs.
Speaker Change: Highlights it.
Speaker Change: The combination of innovation and operational excellence.
<unk> helps.
Betsy: Betsy navigating two decades, a transformational technology shifts why Amazon.
Speaker Change: Coursera's ecosystem assets and global reach are unmatched, and I'm optimistic and excited about the role our platform will play in shaping the future of learning.
Betsy: And clearly multiple businesses domestically and internationally English frequency execution.
Betsy: And leading customer focused product development, including an early AI based consumer products Alexa.
Speaker Change: Together with Jeff, the board has been thoughtful, comprehensive, and deliberate in selecting the right person to lead Coursera's mixed phase.
Betsy: This wealth of operational excellence deep understanding of technology and products.
Greg Hart is an exceptional and proven leader.
Speaker Change: His passion for our mission based as excited for you all.
with over 25 years of experience leading technology-driven businesses.
Betsy: Yes.
Betsy: Deposit faithful to great for creators with at home.
Speaker Change: She has a long track record and is highlighted by that rare combination of innovation and operational excellence.
Betsy: And we're confident in his ability to the equal Sarah as we look to accelerate our journey of growth and innovation.
Speaker Change: including successfully navigating two decades of transformational technology shifts while at Amazon and scaling multiple businesses domestically and internationally with rigorous execution.
I'll now hand, it over to Greg to share a few words.
Greg: Thank you Andrew and good afternoon, everyone I'm honored to take on the role of CEO and excited to build upon everything that Jeff and the collective team have accomplished.
Speaker Change: and leading customer-focused product development, including an early AI-based consumer product, Alexa.
Greg: Coursera is a transformative company with a powerful mission I've long admired the company's ability to bridge the gap between education access and economic opportunity.
Thank you. Bye.
It's wealth of operational excellence.
Speaker Change: deep understanding of technology and of product, and his passion for our mission makes us excited for the upcoming years. The board is grateful to Greg for agreeing to take the home as CEO and with confidence in his ability to lead Coursera as we look to accelerate our journey of growth and innovation. I'm thrilled to now hand it over to Greg to share a few words.
Greg: Millions of learners.
Greg: A institutions with a platform model powered by partnerships with over 350 World class universities and industry leaders.
Greg: The industry is at a critical moment accelerated by the rapid adoption of AI.
Greg: With other transformative technologies that I have navigated throughout my career.
Greg Hart: Thank you Andrew and good afternoon everyone. I'm honored to take on the role of CEO and excited to build upon everything that Jeff and the collective team have accomplished.
Greg: <unk> is poised to dramatically reshape industries and tasks across all sectors and regional economies and I believe this can create a future demand for learning that will be nearly limitless.
Coursera is a transformative company with a powerful mission.
Greg Hart: I've long admired the company's ability to bridge the gap between education access and economic opportunity, serving millions of learners and thousands of institutions with a platform model powered by partnerships with over 350 world-class universities and industry leaders.
Greg: Individuals and institutions will need to be more agile learning at an accelerated pace to ensure they have the relevant skills and talent to remain competitive in a global labor market.
Greg: Meeting this demand will require a market leader in education and technology with the capacity to transform access deliver new experiences and enable the future of learning and work.
Greg Hart: The industry is at a critical moment, accelerated by the rapid adoption of AI.
Greg: I believe that Coursera has that capacity and is uniquely positioned to capture this opportunity.
Greg Hart: As with other transformative technologies that I have navigated throughout my career, AI is poised to dramatically reshape industries and tasks across all sectors and regional economies. And I believe this can create a future demand for learning that will be nearly limitless.
Speaker Change: Thanks, So Jeff and the management teams work of course, there is on solid footing operating from a position of financial strength with a distinct set of assets.
In the coming days and weeks I am looking forward to spending my time immersing myself in the business getting to know the team engaging with our partners and customers and gaining a deeper understanding of the company and how to accelerate our progress against the opportunities ahead.
Greg Hart: Individuals and institutions will need to be more agile, learning at an accelerated pace to ensure they have the relevant skills and talent to remain competitive in a global labor market.
Greg Hart: Meeting this demand will require a market leader in education and technology with the capacity to transform access, deliver new experiences, and enable the future of learning and work.
Speaker Change: I am committed to driving a new phase of innovation and excited to work alongside such a talented team to shape. The next chapter of course, there is growth and leadership.
Greg Hart: I believe that Coursera has that capacity and is uniquely positioned to capture this opportunity.
Speaker Change: Thank you.
Jeff: I will now pass it to Jeff.
Speaker Change: Thanks, Greg.
Greg Hart: Thanks to Jeff and the management team's work, Coursera is on solid footing, operating from a position of financial strength with a distinct set of assets.
Jeff: I cannot be more thrilled as you take on this role.
Speaker Change: Serving as CEO for the past seven five years has been a privilege and a thrill.
Speaker Change: When Andrew and the Board gave me the opportunity to lead <unk> in 2017, my wife and I. Both felt that there was nothing more fundamental are more important than I could dedicate my time and talent to then providing education to the world.
Speaker Change: In the coming days and weeks, I'm looking forward to spending my time immersing myself in the business, getting to know the team, engaging with our partners and customers, and gaining a deeper understanding of the company and how to accelerate our progress against the opportunities ahead.
Speaker Change: During that time technology and globalization, we're changing industry after industry.
Speaker Change: I am committed to driving a new phase of innovation and excited to work alongside such a talented team to shape the next chapter of Coursera's growth and leadership.
Speaker Change: And the jobs most at risk of automation, where typically held by lower skilled workers.
Speaker Change: Fast forward to today and generative AI threatens the jobs have not only lower skilled workers would've knowledge workers as well.
Thank you.
I'll now pass it to Jeff.
Speaker Change: So talk about those with AI and appraise the day was football.
Jeff Maggioncalda: Thanks, Greg. I cannot be more thrilled to see you take on this role.
Speaker Change: Year of becoming obsolete.
Jeff Maggioncalda: Serving as CEO for the past seven and a half years has been a privilege and a thrill. When Andrew and the board gave me the opportunity to lead Coursera in 2017, my wife and I both felt that there was nothing more fundamental or more important that I could dedicate my time and talent to than providing education to the world.
Ted: Hi, Ted.
Speaker Change: Technology is dramatically shaping how we live learn and work and requires every one of US whether you are a CEO a data scientist or an uber driver to learn and adapt in order to keep up in this changing world.
Speaker Change: Earlier this month the World Economic Forum published its future of jobs report 2025.
Jeff Maggioncalda: During that time, technology and globalization were changing industry after industry.
Speaker Change: Encourage you all to read it.
Jeff Maggioncalda: and the jobs most at risk of automation were typically held by lower skilled workers.
Speaker Change: The findings based on responses for over 1000 companies.
Jeff Maggioncalda: Fast forward to today, and generative AI threatens the jobs of not only lower-skilled workers but of knowledge workers as well.
Speaker Change: Reinforce both the magnitude of change expected in our global labor markets and the opportunity ahead for <unk> in the industry.
Jeff Maggioncalda: The talk of Davos was AI, and the praise of the day was FOBO, fear of becoming obsolete due to AI.
Speaker Change: The report found that workers on average you can expect that nearly 40% of their existing skill sets will be transformed or become outdated over the next five years.
Jeff Maggioncalda: Technology is dramatically shaping how we live, learn, and work, and requires every one of us, whether you're a CEO, a data scientist, or an Uber driver, to learn and adapt in order to keep up in this changing world.
Speaker Change: And these skill gaps are considered to be the biggest barriers to business transformation.
Speaker Change: In response, 85% of employers plan to prioritize upskilling their workforce on.
Jeff Maggioncalda: Earlier this month, the World Economic Forum published its Future of Jobs Report 2025. I encourage you all to read it.
Speaker Change: Unsurprisingly AI and big data top the list of the fastest growing skills are complementing these are human skills like creative thinking resilience and agility all things required to adapt to change that are expected to rise in importance by 2030.
The findings, based on responses from over 1,000 companies,
Jeff Maggioncalda: reinforce both the magnitude of change expected in our global labor markets and the opportunity ahead for Coursera and the industry.
Speaker Change: This moment calls for a new model of higher education and lifelong learning.
Jeff Maggioncalda: The report found that workers, on average, can expect that nearly 40% of their existing skill sets will be transformed or become outdated over the next five years.
Speaker Change: Of course, there was the ecosystem of partners educators and institutions is positioned at the intersection of these trends.
Speaker Change: And over the course of 2024, our team made substantial progress in scaling and deepening the three advantages that distinguish our platform I'd like to take a moment to highlight the progress that we've made to drive future growth.
Jeff Maggioncalda: and these skill gaps are considered to be the biggest barriers to business transformation.
Jeff Maggioncalda: In response, 85% of employers plan to prioritize upskilling their workforce.
Jeff Maggioncalda: Unsurprisingly, AI and big data top the list of the fastest-growing skills, but complementing these are human skills like creative thinking, resilience, and agility, all things required to adapt to change that are expected to rise in importance by 2030.
Speaker Change: First our leading educator partners, who created a broad catalog of trusted content and credentials.
Speaker Change: In 2024, we welcomed more than 25, new educator partners ending the year with over 350. This included many of the world's most respected industry leaders, including Adobe Johns Hopkins Medicine, Samsung Xbox and more.
Jeff Maggioncalda: This moment calls for a new model of higher education and lifelong learning.
Speaker Change: As well as prominent universities like Sage business school at the University of Oxford and Hyderabad.
Jeff Maggioncalda: Coursera's ecosystem of learners, educators, and institutions is positioned at the intersection of these trends.
Speaker Change: We also deepened our relationship with existing partners.
Jeff Maggioncalda: And over the course of 2024, our team made substantial progress in scaling and deepening the three advantages that distinguish our platform. I'd like to take a moment to highlight the progress that we've made to drive future growth.
Speaker Change: I'm pleased to share that we've extended the multiyear relationship with our largest industry partner setting the foundation to jointly serve our learners and customers in years to come.
Speaker Change: In addition to growing our educator partnerships, we've also been able to accelerate our content engine.
Jeff Maggioncalda: First, our leading educator partners, who created a broad catalog of trusted content and credentials.
Speaker Change: Applying new technology tools and production arrangements with our partners.
Jeff Maggioncalda: In 2024, we welcome more than 25 new educator partners ending the year with over 350. This included many of the world's most respected industry leaders, including Adobe, Johns Hopkins Medicine, Samsung, Xbox, and more.
Speaker Change: We launched nearly 40, new entry level professional certificates.
Speaker Change: Many of our certificates in the catalog and received credit recommendations from AC Etfs and SQL. So the industry micro credentials can create pathways to both well paying jobs as well as college degrees.
Jeff Maggioncalda: as well as prominent universities like Saïd Business School and the University of Oxford and IIT Hyderabad.
Speaker Change: We also rapidly expanded our catalog of generative AI courses and credentials.
We also deepened our relationship with existing partners.
Jeff Maggioncalda: I'm pleased to share that we've extended a multi-year relationship with our largest industry partner, setting the foundation to jointly serve our learners and customers in years to come.
Speaker Change: Our partners.
Speaker Change: Which are the world's leading AI companies added over 450 <unk> Gen. AI course of this year as they look to meet the growing demand for these skills.
Jeff Maggioncalda: In addition to growing our educator partnerships, we've also been able to accelerate our content engine, employing new technology tools and production arrangements with our partners.
Speaker Change: In 2024, we saw six enrollments per minute and Jen AI content up from one per minute in 2023.
We launched nearly 40 new entry-level professional certificates.
Speaker Change: For the first time, a generative AI course, Google's AI essentials was the most popular course of the year with over 900000 enrollments.
Jeff Maggioncalda: Many of our certificates in this catalog have received credit recommendations from ACE, ECTS, and NSQF so that industry micro-credentials can create pathways to both well-paying jobs as well as college degrees.
Speaker Change: Our second advantages Coursera has global reach to individuals and institutions.
Speaker Change: In 2024, we welcome 26 million new learners from across the world. The most since 2020 growing our learner base $268 million by the end of the year.
Jeff Maggioncalda: We also rapidly expanded our catalog of generative AI courses and credentials.
Jeff Maggioncalda: Our partners, many of which are the world's leading AI companies, added over 450 Gen-AI courses this year as they look to meet the growing demand for these skills.
Speaker Change: We added nearly 250, new paid enterprise customers ending the year with more than 1600 businesses campuses and governments using our platform.
Jeff Maggioncalda: In 2024, we saw six enrollments per minute in Gen-AI content, up from one per minute in 2023.
Speaker Change: To deliver more value for these learners and customers we continue to invest in our platforms third advantage product innovation.
Jeff Maggioncalda: For the first time, a generative AI course, Google's AI Essentials, was the most popular course of the year, with over 900,000 enrollments.
Speaker Change: Our innovation efforts have been focused in areas, where we can uniquely leverage AI to redefine the experience for our learners educators and customers first.
Speaker Change: Our second advantage is Coursera's global reach to individuals and institutions.
Speaker Change: A first example is of course, our coach which started as a learning the system, but it has rapidly grown to become a core presence across our platform with expanding capabilities and career guidance in discovery and structural design support and interactive learning.
Speaker Change: In 2024, we welcome 26 million new learners from across the world, the most since 2020, growing our learner base to 168 million by the end of the year.
Speaker Change: We added nearly 250 new paid enterprise customers, ending the year with more than 1,600 businesses, campuses, and governments using our platform.
Speaker Change: This year more than $1 7 million learners exchanged over 21 million messages with coach.
Speaker Change: In Q4, we launched coach dialogues, providing personalized interactive learning where coach acts as an extension of the instructor.
Speaker Change: To deliver more value for these learners and customers, we continue to invest in our platform's third advantage, product innovation.
Speaker Change: This is the future of work and.
Speaker Change: And partners, including Google Stanford Amazon, Johns Hopkins, Vanderbilt and Microsoft have already added coach dialogues to their courses.
Speaker Change: Our innovation efforts have been focused in areas where we can uniquely leverage AI to redefine the experience for our learners, educators, and customers.
Speaker Change: Second is our AI translation initiatives are allowing us to better serve the growing volume of learners coming from outside the U S.
Speaker Change: The first example is Coursera Coach, which started as a learning assistant but has rapidly grown to become a core presence across our platform, with expanding capabilities in career guidance and discovery, instructional design support, and interactive learning.
Speaker Change: To date, our learners have driven more than $2 4 million enrollments in AI translated content and we've recently added support for Gary Hungarian in Pashto, ending the year with up to 24 languages available in nearly 5000 courses.
Speaker Change: This year, more than 1.7 million learners exchanged over 21 million messages with Coach. In Q4, we launched Coach Dialogues, providing personalized, interactive learning where Coach acts as an extension of the instructor.
Speaker Change: In Q4, we started experimenting with AI audio and video dubbing that learners can both see and hear the top instructors and the world speaking in their own language.
Speaker Change: This is the future of learning, and partners including Google, Stanford, Amazon, Johns Hopkins, Vanderbilt, and Microsoft have already added coach dialogues to their courses.
Speaker Change: Finally, we continue to make progress on course builder, our generative AI powered authoring tool in 2020 for our enterprise customers, particularly campuses and businesses started using correspondent to create custom private courses as they tailor our learning content and there are specific organizational needs.
Speaker Change: Second is our AI translation initiative allowing us to better serve the growing volume of learners coming from outside the U.S.
Speaker Change: To date, our learners have driven more than 2.4 million enrollments in AI-translated content and we recently added support for Dari, Hungarian, and Pashto, ending the year with up to 24 languages available in nearly 5,000 courses.
Speaker Change: In total our advancements in 2024 provide only a glimpse of how coursera will transform the teaching and learning experience.
Speaker Change: And I believe that Greg's deep innovation and technology expertise will serve to further accelerate our team's capabilities and these initiatives.
Speaker Change: In Q4, we started experimenting with AI audio and video dubbing so that learners can both see and hear the top instructors in the world speaking in their own language.
Speaker Change: In closing I want to thank Andrew the board and our exceptionally talented team.
Speaker Change: At Coursera, our mission is to provide universal access to world class learning so that anyone anywhere has the power to transform their lives through learning.
Speaker Change: Finally, we continue to make progress on Course Builder, our generative AI powered authoring tool.
Speaker Change: For me, it's been an inspiration at the end of every day to know that we're not only building a great company.
Speaker Change: But we're also serving the world through one of the most effective forces from powering individuals and institutions to rise to their full potential.
Speaker Change: In total, our advancements in 2024 provide only a glimpse of how Coursera will transform the teaching and learning experience.
Speaker Change: I am deeply proud of what we've accomplished in the past seven years.
Greg Hart: and I believe that Greg's deep innovation and technology expertise will serve to further accelerate our team's capabilities and these initiatives.
Speaker Change: Grateful to be part of this incredible journey.
Speaker Change: And looking forward to watch of course, there are change grow and redefine what is possible in the years to come with Greg at the helm.
Greg Hart: In closing, I want to thank Andrew, the board, and our exceptionally talented team.
Speaker Change: Now I'd like to hand, it over to Ken to walk us through the financial results. Ken. Please go ahead.
Greg Hart: At Coursera, our mission is to provide universal access to world-class learning so that anyone, anywhere, has the power to transform their life through learning.
Ken: Thank you, Jeff and good afternoon, everyone.
Ken: Over the course of 2024, while growth fell short of our goals. We nonetheless continue to demonstrate strong financial and operating leverage in our model.
Greg Hart: For me, it's been an inspiration at the end of every day to know that we're not only building a great company, but we're also serving the world through one of the most effective forces for empowering individuals and institutions to rise to their full potential.
Ken: In particular, we delivered more than 750 basis points of annual adjusted EBITDA margin expansion and generated over $59 million of free cash flow.
Greg Hart: I'm deeply proud of what we've accomplished in the past seven years.
Ken: Please note that for the remainder of the call as we review our business performance and outlook I will discuss our non-GAAP financial measures unless otherwise noted.
Speaker Change: Grateful to be a part of this incredible journey and looking forward to watching Coursera change, grow, and redefine what is possible in the years to come with Greg at the helm.
Ken: In the fourth quarter, we generated total revenue of $179 million, which was up 6% from a year ago and growth across all operating segments.
Ken Hahn: Now I'd like to hand it over to Ken to walk us through the financial results.
Ken, please go ahead.
Thank you, Jeff, and good afternoon, everyone.
Ken: Gross profit was $97 5 million or 54% gross margin in line with our gross margin in the prior year period.
Ken Hahn: Over the course of 2024, while growth fell short of our goals, we nonetheless continue to demonstrate strong financial and operating leverage in our model.
Ken: Total operating expense was $93 1 million or 52% of revenue an improvement of one percentage point from the <unk>.
Ken Hahn: In particular, we delivered more than 750 basis points of annual adjusted EBITDA margin expansion and generated over $59 million of free cash flow.
Ken: Higher year period.
Ken: Net income was $13 3 million or seven 4% of revenue and adjusted EBITDA was $9 5 million or.
Ken Hahn: Please note that for the remainder of the call, as we review our business performance and outlook, I'll discuss our non-GAAP financial measures unless otherwise noted.
Ken: A five 3% of revenue.
Ken: For the full year, we delivered total revenue of $695 million up 9% from a year ago.
Ken Hahn: In the fourth quarter, we generated total revenue of $179 million, which is up 6% from a year ago, on growth across all operating segments.
Ken: Gross profit was $379 6, million% to 55% gross margin up from 53% in the prior year.
Ken: Total operating expense was $357 7 million.
Ken: 52% of revenue an improvement of six percentage points from the prior year on continued operating discipline across all functions.
Ken: Net income was $55 6 million or 8% of revenue and adjusted EBITDA was $41 5 million or 6% of revenue, which was up from negative one 6% in 2023, as we extended our long track record of consistently delivering improving scale and.
Ken: Leverage each year.
Ken: Moving to cash performance and the balance sheet in Q4, we generated free cash flow of $7 $4 million and as I highlighted before delivered more than $59 million for the full year.
Ken: This included over $17 million in purchases content assets.
Ken: As of the beginning of 2024, we began treating like other categories capital expenditures effectively lowering our free cash flow computation.
Ken: In the coming year, we have earmarked approximately $20 million to continue driving this content engine initiatives, which importantly provides us with multiple long term benefits, including pipeline visibility platform exclusivity and more attractive revenue share economics over time.
Ken: Our free cash flow performance bolstered our already healthy balance sheet.
Ken: We ended the year with approximately $726 million of unrestricted cash cash equivalents marketable securities with no debt.
Ken: This was approximately the same balance is the beginning of 2024 as the completion of our share repurchase program designed to target dilution was offset by strong operating cash generation.
Ken: As we've discussed in the past our capital allocation framework emphasizes the strategic Optionality provided by our strong financial position, which we believe is particularly valuable given the industry's current pace of change as well as our desire to grow and enhance our leadership position.
Ken: Now I'd like to discuss our fourth quarter performance of our segments starting with consumer.
Ken: Consumer revenue was $101 $7 million up 5% from the prior year and solid demand for our Coursera plus subscription offering.
Ken: Following our October discussion of consumer retention trends, we made some progress stabilizing the month to month softness with our Coursera plus subscriptions with initiatives planned across content product and marketing in the coming year as we seek returns more significant growth.
Ken: Segment gross profit was $54 9 million or 54% of consumer revenue up from 53% in the prior year period.
Ken: And we added more than 6 million new registered learners, despite Q4 being our historically lightest quarter in terms of top of funnel seasonality.
Ken: Consistent with the regional trends, we discussed in the past several quarters softer growth in North America translates into a higher proportion of learner traffic coming from international regions, which on average have lower lifetime values given the price point.
Ken: Moving to our enterprise segment enterprise revenue was $62 $3 million up 7% from a year ago and driven by the momentum in our business and campus verticals.
Ken: Segment gross margin was $42 6 million and remained at 68% of enterprise revenue.
Ken: The total number of paid enterprise customers increased to 1612 up 18% from a year ago.
Ken: Our net retention rate for paid enterprise customers was 87%, reflecting the transitory budget dynamics, we've discussed in prior quarters.
Ken: And finally, our degree segment.
Ken: The greatest revenue was $15 $2 million up 14% from a year ago on growth in new students and scaling of recent programs.
Ken: The total number of degree students grew 22% from a year ago 26700, primarily due to some sizable new student cohorts for more recently added programs in India.
Ken: As a reminder, there is no content costs attributable to degree segment margin was 100% of revenue.
Ken: As we discussed in October we expect the degrees market and broader opportunities to serve universities will continue to evolve and we want to be clear about our focus in the near term.
Ken: In 2024, we're selective in our pursuit of partnerships and programs that align with our platform strengths.
Ken: This approach coupled with our recent expense initiatives prioritize resources and investments leads us to anticipate a revenue decline in our degree segment for Q1 and full year 2025.
Ken: We continue to believe this is an attractive long term market that we can uniquely serve but our pace of investment will shift to more productive near term opportunities such as Coursera for campus that can position us for a more immediate return to a growth company revenue trajectory.
Ken: Finally, turning to our financial outlook.
Ken: As you know our historical practice entering a new year has been to provide some incremental color on the composition and pace of our business, particularly given the diverse global markets and broad ecosystem or platform serves.
Ken: Over the next several months, Greg will work closely with the rest of the management team to assess areas and opportunities for growth in support of course, there is long term strategy and the creation of shareholder value.
Ken: Once you've had the opportunity to do so our intention is to provide more detailed full year 2025 expectation in the coming months.
Ken: For the full year 2025, we expect to continue to generate positive overall topline growth.
Ken: We anticipate top line growth in both our consumer and enterprise segments and as previously mentioned expect our degree segment revenue to decline in the year.
Ken: And we will provide refined guidance on the magnitude of the overall growth and that of the segments in the coming months.
Ken: For full year adjusted EBITDA, we remain committed to extending our strong track record of delivering annual EBITDA margin improvement.
Ken: We have done so each year as a public company and even in the immediate years preceding our IPO.
Ken: Our initial expectations are to once again expand annual EBITDA margin.
Ken: Less aggressive pace in order to provide the company with the flexibility and capacity to invest in growth initiatives.
Ken: At the end of the day, our long term prospects and value will depend most heavily on us growing and succeeding in our large and attractive market.
Ken: As we work to reignite the higher growth rates enjoyed until just recently, we will continue to operate in a disciplined financial fashion over.
Ken: Over the past two years, we delivered over 1300 basis points of EBITDA margin expansion, including more than 750 basis points in 2024.
Ken: We've made strong progress on our business model and ability to generate cash, particularly as the team demonstrated its ability to operate financial discipline and delivered consistent productivity improvement and scaling our core capabilities.
Ken: This scaling and a moderation of the aggressive pace of improvement is designed to provide us the rooms. This year to further differentiate enhance <unk> leadership position.
With regards to the quarterly guidance for Q1, we expect revenue to be in the range of $173 million to $177 million representing growth of 2% to 5% year over year, driven by our enterprise and consumer segments.
Ken: For adjusted EBITDA, we're expecting a range of $8 million to $12 million.
Ken: We enter 2025, and a position of operational and financial strength with the flexibility and stability needed to effectively execute on our long term strategy and bolster our return to higher growth.
Ken: We're confident now is the right time to be joined by Greg.
Greg: Decades of experience successfully navigating technology trends steering product development, and scaling new and international markets.
Greg: Excited to work alongside him deliver core Cerus next phase of innovation growth and industry leadership and in the process create value for shareholders, while transforming the global higher education market with millions of learners customers and educators we serve.
Greg: With that I'll open the call for questions.
Speaker Change: Thank you for today's Q&A session, and you, Jeff and Ken will be available to answer your questions. As a reminder, if you would like to ask a question. During this time. Please press star followed by the number one on your telephone keypad.
Speaker Change: We will now take our first question from the line of Stephen Sheldon with William Blair. Your line is open.
Speaker Change: Yeah.
Pat Mcinally: Hi team yet Pat Mcinally on for Stephen today. Thank you all for being here and taking my questions. My My first.
Pat Mcinally: Can you just talk more about the trends youre seeing in enterprise.
Pat Mcinally: More specifically, where you're seeing notable weakness or strength across campus b to b and government.
Jeff: Yeah, Hey, Pat this is Jeff.
Speaker Change: So enterprise, we obviously will look across the three verticals.
Speaker Change: The business government and campus I'd say, where we're seeing weakness has been in not only <unk>.
Speaker Change: Expansion bookings, but also new bookings in <unk>.
Speaker Change: Corsair for government workforce development types of programs I mean to a large degree in the years. Following COVID-19 a lot of money went into programs to kind of Upskill and.
Speaker Change: And generally support.
Speaker Change: The visual citizens many of those budgets have turned out to be transmitted a transitory that's where we're seeing some weakness and thats been weighing on the <unk>. When you look at the <unk> in Q4, and the trend of <unk> that we've been seeing and we've talked about that in previous quarters. The other part of the weakness that we're seeing notably is coursera for campus when it's not you.
Speaker Change: Used for credit.
Speaker Change: So clearly universities colleges vocational programs. They they are really struggling to come up with curriculum that make the training that they do for students relevant to the workforce and the faster things change the harder it is to keep pace when universities and colleges and other educational institutions.
Speaker Change: Use coursera, but kind of avoid the process of integrating into the curriculum and avoid all the faculty.
Speaker Change: Approval process.
Speaker Change: What we find is that the students are less likely to take the courses because they're not getting credit for it.
Speaker Change: And they're also more of a cost center then a profit center for the educational institution, because they are not receiving tuition for the courses being offered.
Speaker Change: When you offer Coursera for campus for credit the opposite is true suddenly students take it up higher rates the completion rates among students who are taking coursera.
Speaker Change: Part of courses for credit are the highest across our entire platform.
Speaker Change: Because it's for credit the institution is receiving tuition, but the relative cost of delivering those credit hours is lower so it's early days, we're seeing great progress in India and in certain regions, where this embrace them online learning and integrating it into college degree programs has been faster in Europe, we've seen it a little bit slower but.
Speaker Change: It clearly seems that this is the beginning we are seeing the beginning of.
Speaker Change: Education institutions around the world realizing they cannot keep up without partnering with someone like a coursera to provide this kind of content.
Jonathan: Okay. Thank you Jonathan.
Jonathan: Briefly as we look forward to 'twenty five in discussing the overall enterprise growth, which we expect for 2025.
Jonathan: In rank ordering since you asked the question before see foresee we expect to deliver the most growth next year, followed by <unk> and then <unk> of course with the.
Jonathan: Yeah, and one more thing you asked about the weak spots one other bright spot that we saw it has been building, but we certainly saw it in Q4 is coursera for business in North America is looking pretty strong driven mostly by AI upscaling efforts I mean, it seems like businesses in North America are embracing sort of seeing and.
Jonathan: Missing the need to upskill their employees the fastest they're also the ones who seem to be differentiating and carrying discriminating between the generated content on course, there versus other places and frankly, the generative AI teaching and learning experiences. They are built into the platform. So we're seeing signals that the demand is growing from businesses in general and that the courtyard.
Jonathan: Content and platform are pretty well differentiated against the competition for those kinds of buyers looking for this kind of a generic scaling solution and we think that North America is leading the world in the adoption of this in the business sector.
Jonathan: Okay. Thank you both for clarifying that and the.
Speaker Change: The additional color.
Speaker Change: One more question if I may.
Speaker Change: At your 2023 Investor Day, you had.
Speaker Change: I expect two degrees to be a core growth engine for the for this business and you know.
Speaker Change: We're now looking at declining revenue in 2025, so understand theres some shift in strategic priorities. There, but can you just talk us through a bit what has changed in that business versus your prior expectations.
Speaker Change: Sure sure.
Speaker Change: I'd say a lot of it is five years ago seven years ago online degrees were pretty normal.
Speaker Change: And during Covid when campus was closed online degrees became largely a necessity in some sort of form.
Speaker Change: Clearly the OPM market the online program managers, the more traditional bundled outsourced sort of online degree programs have had.
Speaker Change: Struggled quite a bit and what we saw and what we've kind of outlined on Investor day was a new type of an online degree that really coupled together. The open learning that you can do on the courses from our partners that can count as credit towards a college degree so.
Speaker Change: The model that we see as being attractive and Ken emphasized this a bit is are those that are sort of based on open content being used for credit with what we call. A degree pathway, where you can start learning and open content that where Sarah and you can have that credit count is guaranteed credit on a mission to a degree program.
Speaker Change: Now the degree programs.
Speaker Change: What we had been had been thinking before that there would be only the elite universities and there would be the degrees will be fully on coursera. What we're seeing is a lot of coursera for campus customers once they put coursera and make it available to integrate it into their curriculum.
Speaker Change: Suddenly that like look students were already taking open content in my in my college courses and Theyre getting credit towards degrees, we would love to bridge that gap between what's happening on coursera broadly and attracting students into our degree programs. So we see a tighter synergy between coursera for campus and degree recruitment and Thats, where were putting more of our focus.
Speaker Change: Okay. Thank you I appreciate that Jeff.
Speaker Change: Sure.
Speaker Change: The next question comes from <unk> <unk> of RBC capital markets. Your line is open.
Speaker Change: Wonderful. Thanks, so much for taking my question, Jeff It's been a pleasure working with you since IPO wishing you all the best in the next chapter and Greg looking forward to working with you maybe.
Speaker Change: Wanted to start with.
Speaker Change: Jeff as you kind of reflect over your seven year tenure as CEO, you've been through some major major SaaS right.
Speaker Change: Yes, the initial onset of the company as you took over as CEO Covid and the rise of virtual learning and now AI and from the outside perspective, it seems like virtual learning, while still transformational has not been quite as widely adopted our transformational or at the very least we snap back.
Speaker Change: To more traditional ways of learning than we would've expected if we rewind the tape back too late.
Speaker Change: Our early 2021 late 2020 and on the AI front, you've given some really encouraging stats in terms of course adoption and users and courses, but maybe the monetization or at least the disruption from AI that necessitates that hasnt been quite as profound as maybe we would've expected.
Speaker Change: When <unk> first came out maybe can you walk us through your reflections over the past seven years.
Speaker Change: And just kind of how to think about the timeline of things going forward.
Ritchie: Yeah, Hey, Ritchie thank you.
Speaker Change: I'll make I'll make the.
Speaker Change: <unk> arc.
Speaker Change: Short, but I'll jump a little bit into this question of generative AI and.
Speaker Change: How that might play out at least from my perspective.
Speaker Change: First got here back in 2017, a lot of what was driving <unk> growth and it really started literally with Andrew and Daphne and literally with the Stanford machine learning course that Andrew had done it was heavily driven in the early days by data scientists wanting to know machine learning is not being taught in any educational institutions. There were no incumbent.
Speaker Change: And if you want to learn the skills of machine learning and prove that you knew him you kind of come to Coursera like that was that was kind of what you did.
Speaker Change: That expanded rapidly when Google launched the first <unk> support certificate suddenly, whereas when Andrew launched deep learning in November of 'twenty.
Speaker Change: 17.
Speaker Change: 90% of the learners that can take deep learning had already taken the machine learning cloud. It was like a sequel to Andrew and attracted a lot of the same kinds of people sort of I call them like the data science that heats heat seekers, the ones, who wanted to build the AI models, but when Google launched it support 90% of the people that came for those certificates had never been of course, there are learning before attracted it attracted a.
Speaker Change: Totally different audience, so part of it in the early stages of what was driving our growth was a broadening of appeal largely because of the content from experts in AI to broader people looking for career advancement and those professional certificates during that time period, where someone without a college degree you can get trained and the skills and get a certificate credentials.
Speaker Change: From a recognized brand to do either a new career by switching or a new career as a student graduating handle the entry level professional certificates really fueled that next level of growth and a broadening of the of the platform now as it relates to Covid in general Covid clearly I mean, it closed almost every.
Speaker Change: Campus in every office in the World within a course of 30 to 60 days.
Speaker Change: Things just went through the roof.
Speaker Change: The urgency of action and the clarity of action was Super clear like people had no other choice and it happened immediately.
Speaker Change: With generative.
Speaker Change: We saw the subsequent growth because of that.
Speaker Change: Generally it's been a little bit different I mean, the recognition that something big is happening was fairly immediate.
Understanding for companies or campuses, what to do about it less immediate regulatory uncertainty certainly slowed some things down and there is also a question like is this really valuable or is this sort of a gimmick or like what do I, what do I do with this stuff, but I wouldn't say that the urgency to act with slower the clarity of strategy and action was fuzzier now.
Speaker Change: What we're starting to see now and we're seeing it largely because the models keep getting better and there is more evidence that the value is there we're seeing a lot more interest not in understanding the general nature of generally I, but productivity gains.
Speaker Change: Productivity gains.
Speaker Change: To me, what we'll deliver the urgency of action and the clarity of action will be when companies realize that for certain types of tasks and certain types of jobs and certain types of functions that they can be done much faster and much with much higher quality and much lower cost.
Speaker Change: And to do that you're going to need to train certain people I think productivity unlock will be something that improve the urgency and clarity and will provide a similar kinds of tailwind as to what we saw before but it has been a little bit slower to get that kind of clarity and urgency and ability to see how much value. There is that you can unlock through re skilling and Andrew I'd love to get some of your thoughts on this too.
Speaker Change: From your vantage point, what you're seeing.
Speaker Change: One of our leading learner providers on our planet right.
Speaker Change: Yeah. Thanks, Thanks, Ken and thank you received for the question.
Speaker Change: So actually I wanted to ask is your comment that disruption from AI is not yet as profound as I think of the Hyatt had made it ought to be I know a few years ago. There was a lot of how youre, saying it will be smarter than people and you'll change everything and maybe predictably.
Speaker Change: It takes some time for the amazing technology, which I think it is to be mapped to concrete applications did <unk> not just in education, but it's actually just the Davos World Economic Forum last week and there is also the sentiment that probably the shortest of lot of hype and finally across multiple businesses.
Speaker Change: He actually valuable applications are being built.
Speaker Change: So in terms of clothes, Sarah I think we have a very strong base on top of which to innovate to capture to invent.
Speaker Change: It's a partner or whatever.
Speaker Change: Whatever comes next.
Speaker Change: I do think that there is going to be a transformation of learning a lot of learning isn't already asking closer and cultural sometimes I'll try and keep the or other large language models for inflammation. I think there is a transformation that maybe it's coming and as Jeff mentioned earlier.
Speaker Change: And close builder, which we announced I think over a year ago are getting real traction close dialogue, which was announced more recently, we're seeing frankly much earlier signs of hopeful traction there, but it does take some time for these things to gain adoption.
Speaker Change: I would tell you I was just meeting our CTO, who suffer fairly regularly and our product team is working very hard to innovate you've heard about some of the things that are announced that he was working very hard on a long list of additional things that I find exciting and in terms of <unk>.
Speaker Change: Based on what you're building on I think it was starting from a very strong position because I think many learning is no assessing quality shocks of high quality content.
Speaker Change: Have a very large user base and a coffee culture from day, one has always put them. During this first 19 connectivity up and down the organization did a very deep learning and empathy and people really wake up in the morning and figure out how they serve during this today.
Speaker Change: That combination.
Speaker Change: <unk> assays and culture together with a healthy balance sheet, which also gives us more options I think puts us in excellent position to events will sponsor what comes next and then quickly use our platform to scale. Some of those earnings. So our team knows that this work can be done.
Speaker Change: And are busy.
Speaker Change: Not just drilling on some of the inventions, you've already heard us talk about it but hopefully new things to come as well.
Speaker Change: Alright, Thanks really detailed answer in the interest of time I'll jump back in the queue. Thank you so much.
Rajiv: Thanks Rajiv.
Rajiv: The next question comes from Josh Baer with Morgan Stanley. Your line is open.
Josh Baer: Great. Thanks for the question.
Speaker Change: And congrats and thanks, Jeff Congrats Greg.
Speaker Change: Wanted to dig in on degrees and on the strategy there and like part of the strategy is to focus investments on some other initiatives that are going to drive kind of a faster return to more attractive growth trajectory ahead.
Speaker Change: The last three quarters degrees has been the fastest growing business. So could you talk through that a little bit.
Speaker Change: It seems like kind.
Speaker Change: Taking away focus from what's actually been.
Speaker Change: Growing fast if you could talk about the growth rate of Coursera for campus in 2024, and then I wanted to just understand like what that actually means for degrees are you pulling away marketing dollars are you not launching any more degrees like how.
Speaker Change: How does that growth rate turned negative looking ahead.
Speaker Change: Sure Josh This is Ken so on degrees one of the important items to consider is the revenue model. So it's the degrees we sign up for years past really don't get up to full productivity for the course of a couple of years as we fulfill different cohorts and it builds over time.
Speaker Change: Naturally when you have larger growth it tails off when things are slowing and takes a little while so that Rev. Rec is part of the answer.
Speaker Change: With regard to the investments our current investments we continue invest in degrees and as Jeff mentioned, we do believe there is an excellent opportunity that were uniquely enabled to provide but in the near term, especially given the revenue model in the near term. We are not as focused on that will focus more on enterprise and consumer where theres more near term.
Speaker Change: Opportunity to return to growth.
Speaker Change: But there will be other ways, we believe two to serve those degrees.
Speaker Change: Customers essentially the universities and CPC is one of them. So I mentioned before as we look to next year to 2025 and enterprise, we expect the largest growth in CPC and Thats a reasonable part of it we're pretty excited that we may or may not have enrollment services, we add on top of that there's different ways to serve that the same.
Speaker Change: Need and it's taken as you know some experimentation and the growth hasnt come as much as we'd like if you go back to the IPO and our thoughts on on the degrees business, we expected that to be Lara.
Speaker Change: Larger now than it is that said overall, we've had outsized growth in enterprise and consumer. So you can never predict too far ahead of time, but.
Josh Baer: But we still do believe in that model once again, it's a matter of how that morphs in how we serve the customer and the near term practicalities of driving growth again, we need to restore growth. So that people understand us as they always have as a growth company stock and one of the things also that is true Josh is that you.
Josh Baer: Cannot look at higher education is a two trillion dollars market and say, it's not going to have to change and so I'm pretty fundamental way certainly one of the ways to do that is by putting coursera for campus our partners content in as for credit electives.
Josh Baer: Great way to quickly modernize the curriculum and it's obviously a stones throw when you're already offering credit for those courses in a real degree program to say do you want us to help you recruit some other students who aren't currently at your University to do this so.
Josh Baer: It's conceptually the same in terms of going after the big higher Ed market, but we're trying to find a more differentiated and I'd say standardized and scalable model I think in the past it was sort of it.
Speaker Change: Elite University and you want to put them online just put them on coursera.
Speaker Change: It's much more an hour complimentary with Coursera for campus in recruiting people into these four credit electives that where going forward. We think it's going to have better scale over time.
Speaker Change: Thank you Ed.
Speaker Change: One follow up like a lot of this conversation around degrees.
Speaker Change: Different priorities and focus is around growth.
Speaker Change: Hoping you could comment on the bottom line like I know the way you frame it as is.
Speaker Change: Segment margins and a 100% but.
Speaker Change: As part of this like now with a commitment to continue expanding EBITDA margins and the cost savings that you've recently talked about.
Speaker Change: It basically is the degrees business profitable like is that part of the decision to pull back.
Speaker Change: Yes, Josh and we don't it's not so much that we measure profitability by the different segments, it's more investment versus growth outlook for the more distant future. The way, we think about it but it's always a matter of allocating resources in the near term. So that's exactly right. We've pulled back some of the investment there we're continuing.
Speaker Change: Spend there, but when growth is slower invest alas as traditional business and so that's what we're doing in deploying those resources to where we see more opportunity in the near term and with it within the degree portfolio. There are some degrees that have the kind of model like a standardized model that is integrated.
Speaker Change: The open content in the credit for open country, where like those are the kinds of programs that are more standardized scalable Ana offer unique value proposition to the end learner is not just an elite degree online. It's now you can start in open content and get credit for an online degree.
Speaker Change: We're really focusing within degrees even on certain programs that exhibit the right kinds of characteristics that we think could be more formally scaled over over a larger base.
Speaker Change: So thank.
Speaker Change: Finding that model in that rhythm that can scale, which we havent quite achieved hence the underperformance on the growth versus where we wanted it to be.
Speaker Change: Got it thanks.
Speaker Change: We will take our final question from the line of Ryan Macdonald with Needham Your line is open.
Speaker Change: Alright, Thanks for taking my questions and Jeff Best of luck in the future endeavors and it was a pleasure working with you.
Speaker Change: Maybe just to talk about the consumer segment and one of the things obviously that we learned in 2024 is that sort of the cadence and timing of of content launches and certification rollouts.
Speaker Change: A driver of segment performance for the year and so as we go into 2025 can you just talk about the level of visibility you have in terms of one the number of new certification launches.
Speaker Change: Expected for 25 years and see what the timing of those expected rollouts are and as we think about with generative AI being sort of a high priority and demand.
Speaker Change: The new certifications, you're expecting to launch.
Speaker Change: What's the general mix of Gen AI related certifications there. Thanks.
Speaker Change: Maybe Ryan I'll start off and I'll hand, it over to Ken.
Speaker Change: When we think about 2024 and consumer growth and finishing relatively strong.
Speaker Change: On what we were expecting them to be end of the quarter in Q4.
Speaker Change: Clearly it was a year, where a few of the larger titles that did not perform as well in a region that really matters, which is north America and as we talked about I think in Q2.
Speaker Change: I think there are some macro factors going on and there's a question about the relative demand for entry level professional certificates in 2024 compared to 2021 or 2022.
Speaker Change: We did see in 2024, and really especially in Q4 is that a much broader and more diverse set of titles.
Speaker Change: Zibet had much stronger growth, even though in 2023, there was more growth coming from a concentrated region and from a much more narrow set of our overall content based so we did accelerate the content engine much of it was of course, there are produced and partner branded that content Purdue.
Speaker Change: Performed quite well and as we go into 2025, we think that that broader more diversified.
Speaker Change: Portfolio of content created by this more gen. AI powered content engine, we will provide a more predictable steady reliable source of consumer segment growth that will also be more heavily indexed towards international markets. The translations text translations and we think the video and audio dubbing is going to only accelerate.
Jim: This along with Jim.
Jim: Geography specific promotion geography specific pricing geography specific currency and payments.
Jim: Will really help us open up consumer growth in markets beyond North America, where we're seeing some of the headwinds Ken anything you'd want to add to that I guess.
Jim: <unk>.
Jim: A little bit of mix of some of the things we were talking about in the more near term, which was the C plus month to month.
Jim: We've started to see some stability there as.
Jim: As well as a lot more progress on Coursera, plus subscriptions and generally I guess I tip that and in the near term, we're seeing opportunity there and I guess I wouldn't hesitate ever to highlight.
Jim: Because it is so important to the business highlighting the renewal of the agreement we had with our largest largest industry partner, which has been a big driver of growth and innovation for us over time. So maybe just to wrap this I mean, the greatest growth that we've ever seen in consumer.
It was due to COVID-19 when there are when there are job dislocations, whether theres a lot of jobs being created or a lot of jobs going away, helping people transition into new jobs as a huge driver of consumer segment growth. We do anticipate a wave of dislocation of various jobs for various reasons and different different time horizons.
Jim: Firing people to go retool, if they want to stay relevant in the labor market and so we are.
Jim: Clearly trying to position ourselves for Jennie O titles and to your question Ryan a lot of the titles that we're going to be producing in 2025 on the heels of a pretty solid 'twenty 'twenty four our job specific titles that teach you how to do a job using new generator I tools to be more productive and earn a credential that is relevant to employers. It sounds like you are a <unk>.
Jim: AI capable person who's going to be a good return on investment for some employer who's going to hiring we see that world coming and we're going to play through in 2025.
Jim: Super helpful and maybe just a quick follow up to that.
Speaker Change: The obviously the impact in the markets that <unk> had this week have you seen any impact in terms of demand or interest sort of coming to the website and the platform specifically for sort of deep seek related content and could that be an unexpected tailwind for 25.
Speaker Change: Yes, so far I wouldn't say that we have any any signals per se on deep sea, but like a lot of people have said.
Speaker Change: As models become more capable and cheaper they become more ubiquitous as they become more ubiquitous like people have to learn how to use them and there'll be expected to use them, although there'll be more productive when they do use them and so all of the innovation and enhancements to the underlying models to me says productivity gains will be higher.
Speaker Change: It'd be more broad spread and more widely used and it will be more and more impactful when it is and so people will need to skilled themselves up on it. So I'd say that for me like anything that advances the return on investment of using and generally I kind of model is probably going to necessitate a greater clarity and urgency to get people skilled on it Andrew anything you'd want to add to that.
Speaker Change: Do you see a lot of the business, we also and I feel like in the AI World. There's been a lot of excitement and hype about the AI model or the foundation model there, which includes the models by the peak, while the trainers, sometimes spending hundreds of millions or maybe billions of dollars trading them I think that looking at the future a lot of the valley.
Speaker Change: <unk> will be created and captured by companies at the application layer that take advantage of these wonderful models and someone else has spent so much money as they train and then we can now access really expensive to build valuable products like closer coach will close builder or who wish to either license and so on.
Speaker Change: So our engineering team is.
Speaker Change: Frankly, I think very temporary savvy and frequently looks at all of the leading models out there and the fact that the models like deep CCAR release relatively open we opened weight.
Speaker Change: License this actually increases the ability of.
Speaker Change: <unk> sales team and other teams working on applications to build valuable products. So I think long term. The fact that the foundation model. There is becoming hyper competitive I think is actually good for companies like us and Andrew we hear we hear from our customers often our corsair for business customers.
Speaker Change: The fact that we have the ability of coursera to use one model for coaches tutor a different model for coach dialogues a different model for course builder and even within course builder for different features of course builder, we use different fit for purpose models. We are using a wide array of models cost effectively each for the best per.
Speaker Change: And every time, they get better and cheaper our business improved so I I really think that we're pretty well set up and Andrew has clearly been a very helpful Guide and an architect of the strategy, but I think we're pretty well set up to exploit that kind of competition and innovation that's happening at the foundation there.
Speaker Change: <unk>.
Speaker Change: So really excited about the coming AI technologies that companies like <unk> and others may bring and I think we will continue to benefit from those innovations to build on top of this on our own unique education focused innovations.
Speaker Change: Excellent I appreciate all the color.
Speaker Change: Great. Thanks, Brian that wraps today's Q&A session. A replay of this webcast will be available shortly on our Investor Relations website. We appreciate you joining us today take care.
Speaker Change: This concludes today's conference call you may now disconnect.