Udemy (UDMY) Q4 2024 earnings summary

Executive summary

• Achieved 8% year-over-year revenue growth in 2024, led by 18% growth in the Enterprise/Udemy Business segment, while Consumer revenue declined 5%.

• Adjusted EBITDA reached $43 million for 2024 (5% margin), a significant turnaround from prior losses, with Q4 adjusted EBITDA margin at 10%.

• Strategic shift focused on large enterprise customers, resulting in higher ARR growth, improved retention, and nearly 1,400 net new enterprise customers added in 2024.

• Accelerated AI-driven product innovation, including a 10x increase in generative AI course consumption and launch of new features like Skills Mapping and role-play simulations.

• Completed $150 million share repurchase program, buying back over 16 million shares.

Financial highlights

• Full-year 2024 revenue was $787 million, up 8% year-over-year, with Udemy Business/Enterprise revenue up 18% and Consumer revenue down 5%.

• Q4 2024 revenue reached $199.9 million, up 5% year-over-year, with a 2-point FX headwind.

• Adjusted EBITDA for 2024 was $43 million (5% margin); Q4 adjusted EBITDA was $19 million (10% margin).

• Gross margin for 2024 was 63% (up 500 bps); Q4 gross margin was 64%.

• Ended 2024 with $356 million in cash and equivalents; free cash flow for the year was $38 million.

Outlook and guidance

• 2025 revenue guidance: $787 million–$803 million, representing flat to 2% growth year-over-year, with a 2-point FX headwind.

• Full-year 2025 adjusted EBITDA guidance: $75 million–$85 million (approx. 10% margin); Q1 2025 adjusted EBITDA: $17 million–$19 million.

• Targeting $130 million–$150 million adjusted EBITDA in 2026 and 20% margin in 2027.

• Udemy Business/Enterprise revenue expected to grow ~5% in 2025; Consumer revenue expected to decline ~6%.

• Guidance assumes a 2-point negative FX impact for both Q1 and full year 2025.