Coursera’s third quarter drew a negative market reaction, reflecting investor concerns despite exceeding Wall Street’s revenue and non-GAAP profit expectations. Management attributed the results to robust growth in the Consumer segment, driven by higher demand for AI-related courses and improvements in the Coursera Plus subscription. CEO Gregory Hart cited the company’s expanded course catalog and international pricing adjustments as factors fueling new learner registrations. However, management expressed dissatisfaction with muted growth in the Enterprise segment, noting mixed trends across business, government, and campus customers.
Is now the time to buy COUR? Find out in our full research report (it’s free for active Edge members).
Coursera (COUR) Q3 CY2025 Highlights:
- Revenue: $194.2 million vs analyst estimates of $190.3 million (10.3% year-on-year growth, 2.1% beat)
- Adjusted EPS: $0.10 vs analyst estimates of $0.08 (19.6% beat)
- Adjusted EBITDA: $15.6 million vs analyst estimates of $12.98 million (8% margin, 20.2% beat)
- Revenue Guidance for Q4 CY2025 is $191 million at the midpoint, above analyst estimates of $187.6 million
- EBITDA guidance for Q4 CY2025 is $8.5 million at the midpoint, below analyst estimates of $10.09 million
- Operating Margin: -8%, up from -12.4% in the same quarter last year
- Annual Recurring Revenue: $221.7 million vs analyst estimates of $235.4 million (2.5% year-on-year decline, 5.8% miss)
- Paying Users : 191 million, up 28.9 million year on year
- Billings: $186.7 million at quarter end, up 8.5% year on year
- Market Capitalization: $1.38 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Coursera’s Q3 Earnings Call
- Josh Baer (Morgan Stanley) asked about early engagement and expectations for the OpenAI ChatGPT integration; CEO Gregory Hart replied that it is too early for specific impact data, but views it as a major top-of-funnel opportunity with no direct economic arrangement.
- Bryan Smilek (JPMorgan) inquired about the durability of Consumer segment growth and the drivers behind Q4 deceleration; Hart cited seasonality and ongoing marketing efficiency as key influences.
- Stephen Sheldon (William Blair) questioned the effects of international pricing changes on growth; Hart confirmed that targeted price reductions improved accessibility and demand, especially in emerging markets.
- Rishi Jaluria (RBC) sought clarity on the potential for AI certifications through partnerships like Anthropic; Hart indicated that certifications are a future focus, especially for Enterprise customers seeking verified skills.
- Ryan Griffin (BMO Capital Markets) asked about potential changes to Enterprise sales strategy; Hart noted that the new general manager is expected to recommend innovations in go-to-market and packaging, with Skills Tracks representing one such initiative.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will monitor (1) the effectiveness of AI-powered product launches and their impact on user retention, (2) progress in Enterprise segment turnaround under new leadership, and (3) continued growth in international markets following pricing adjustments. Execution on partnerships with leading AI companies and improving conversion from free to paid users will also be pivotal.
Coursera currently trades at $8.49, down from $10.53 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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