Online learning platform Udemy (NASDAQ:UDMY) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 2.8% year on year to $199.9 million. The company expects next quarter’s revenue to be around $192.5 million, close to analysts’ estimates. Its non-GAAP profit of $0.16 per share was 33.8% above analysts’ consensus estimates.
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Udemy (UDMY) Q2 CY2025 Highlights:
- Revenue: $199.9 million vs analyst estimates of $197 million (2.8% year-on-year growth, 1.5% beat)
- Adjusted EPS: $0.16 vs analyst estimates of $0.12 (33.8% beat)
- Adjusted EBITDA: $28.4 million vs analyst estimates of $23.03 million (14.2% margin, 23.3% beat)
- The company slightly lifted its revenue guidance for the full year to $789 million at the midpoint from $783 million
- EBITDA guidance for the full year is $86.5 million at the midpoint, above analyst estimates of $84.09 million
- Free Cash Flow Margin: 19.5%, up from 3.5% in the previous quarter
- Monthly Active Buyers: 17,107, up 512 year on year
- Market Capitalization: $1.04 billion
"Our second quarter results mark an inflection point in Udemy's evolution, as we delivered both GAAP profitability and made meaningful progress on our strategy to drive accelerated growth,” said Hugo Sarrazin, President and CEO of Udemy.
Company Overview
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Udemy’s 11.7% annualized revenue growth over the last three years was decent. Its growth was slightly above the average consumer internet company and shows its offerings resonate with customers.
This quarter, Udemy reported modest year-on-year revenue growth of 2.8% but beat Wall Street’s estimates by 1.5%. Company management is currently guiding for a 1.5% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will face some demand challenges.
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Monthly Active Buyers
Buyer Growth
As a subscription-based app, Udemy generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.
Over the last two years, Udemy’s monthly active buyers, a key performance metric for the company, increased by 9.9% annually to 17,107 in the latest quarter. This growth rate is solid for a consumer internet business and indicates people are excited about its offerings. 
In Q2, Udemy added 512 monthly active buyers, leading to 3.1% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating buyer growth just yet.
Revenue Per Buyer
Average revenue per buyer (ARPB) is a critical metric to track because it measures how much the average buyer spends. ARPB is also a key indicator of how valuable its buyers are (and can be over time).
Udemy’s ARPB fell over the last two years, averaging 1.3% annual declines. This isn’t great, but the increase in monthly active buyers is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Udemy tries boosting ARPB by taking a more aggressive approach to monetization, it’s unclear whether buyers can continue growing at the current pace. 
This quarter, Udemy’s ARPB clocked in at $11,684. It was flat year on year, worse than the change in its monthly active buyers.
Key Takeaways from Udemy’s Q2 Results
This was a beat and raise quarter. Specifically, we were impressed by how significantly Udemy blew past analysts’ EBITDA expectations this quarter on the back of a revenue beat. We were also glad its full-year EBITDA guidance exceeded Wall Street’s estimates. On the other hand, its number of monthly active buyers slightly missed, but overall, this print was still quite solid. The stock traded up 10.1% to $7.69 immediately following the results.
Is Udemy an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.