株探米国株
英語
エドガーで原本を確認する
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2025
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number              001-40956
Udemy, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 27-1779864
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S. Employer Identification No.)
600 Harrison Street, 3rd Floor
San Francisco, California
 94107
(Address of Principal Executive Offices) (Zip Code)
(415) 813-1710
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.00001 par value UDMY The Nasdaq Stock Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒  No ☐ 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 
 Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer  ☐
Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐    No ☒
As of July 23, 2025, 150,343,676 shares of the registrant’s common stock were outstanding.



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Summary of risk factors
Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report titled “Risk Factors.” The following is a summary of the principal risks we face, any of which could adversely affect our business, operating results, financial condition, or prospects:
•We have a history of losses, and we may not be able to generate sufficient revenue to increase or sustain profitability in the future.
•We operate in an emerging and dynamic market, which makes it difficult to evaluate our future results of operations.
•     Our results of operations may fluctuate significantly from period to period due to a wide range of factors, which makes our future results difficult to predict.
•     Our growth may not be sustainable and depends on our ability to attract new learners, instructors, and organizations and retain existing ones.
•     Our platform relies on a limited number of instructors who create a significant portion of the most popular content on our platform, and the loss of these instructor relationships could adversely affect our business, financial condition, and results of operations.
•     If we fail to maintain and expand our relationships with Udemy Business (“UB” or “Enterprise”) customers, our ability to grow our business and revenue will suffer.
•     We operate in a highly competitive market, and we may not be able to compete successfully against current and future competitors.
•     Our revolving credit facility contains customary affirmative and negative covenants, including financial covenants, that may limit our operating flexibility.
•     The market for online learning solutions is relatively new and may not grow as we expect, which may harm our business, financial condition, and results of operations.
•     Adherence to our values and our focus on long-term sustainability may negatively impact our short- or medium-term financial performance.
•     Failure to effectively leverage our strategic partnerships to market and sell our products could impact our ability to increase brand awareness and grow our revenue.
•     We operate internationally and we plan to continue expanding our international operations, which exposes us to risks inherent in international operations.
•     Changes in laws or regulations relating to privacy, data protection, or cybersecurity, including those relating to the protection or transfer of data relating to individuals, or any actual or perceived failure by us to comply with such laws and regulations or any other obligations, could adversely affect our business.
•     We may be unable to adequately obtain, maintain, protect, and enforce our intellectual property and proprietary information, which could adversely affect our business, financial condition, and results of operations.
•     We could face liability, or our reputation might be harmed, as a result of courses posted to our platform.
•     Intellectual property litigation, including litigation related to content available on our platform, could result in significant costs and adversely affect our business, financial condition, results of operations, and reputation.
•     The trading price of our common stock may be volatile, and you could lose all or part of your investment.
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Special note regarding forward-looking statements
This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this Form 10-Q, including statements regarding our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these terms or other similar expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Form 10-Q include, but are not limited to, statements about:
•our expectations regarding our financial and operating performance, including our expectations regarding our revenue, costs, monthly average buyers, number of Udemy Business (“UB”) customers, UB Annual Recurring Revenue, UB Net Dollar Retention Rate, UB Large Customer Net Dollar Retention Rate, segment revenue, segment adjusted gross profit, adjusted EBITDA, adjusted EBITDA margin, and free cash flow;
•our ability to successfully execute our business, growth and operational strategies, including our operational efficiency initiatives;
•our ability to attract and retain learners, instructors, and enterprise customers;
•the timing, impact, and success of new features, integrations, capabilities, and other platform enhancements by us, or by our competitors to their offerings, or any other changes in the competitive landscape of our markets and industry;
•anticipated trends, developments, and challenges in our industry, business, the markets in which we operate, and broader macroeconomic environment;
•the size of our addressable markets, market share, and market trends, including our ability to grow our business internationally;
•the sufficiency of our cash, cash equivalents, and investments, together with the availability under our revolving credit facility, to meet our liquidity needs;
•our ability to develop and protect our brand and reputation;
•our expectations and management of future growth;
•our expectations concerning relationships with third parties;
•our ability to attract, retain, and motivate our skilled personnel, including members of our senior management team;
•our expectations regarding the effects of existing and developing laws and regulations, including with respect to taxation and privacy, data protection, and cybersecurity;
•our ability to maintain the security and availability of our platform;
•our ability to successfully defend litigation brought against us;
•our ability to successfully identify, execute, and integrate any potential acquisitions or strategic investments;
•our expectations regarding our income and other tax liabilities;
•our ability to effectively manage our exposure to fluctuations in foreign currency exchange rates; and
•our ability to obtain, maintain, protect, and enforce our intellectual property and proprietary information.
Actual events or results may differ from those expressed in forward-looking statements. As such, you should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, prospects, strategy, and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions, and other factors described in the section titled “Risk Factors” and elsewhere in this Form 10-Q. Moreover, we operate in a highly competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Form 10-Q. While we believe that such information provides a reasonable basis for these statements, such information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
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The forward-looking statements made in this Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect new information, actual results, revised expectations, or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
Investors and others should note that we may announce material information to the public through filings with the Securities and Exchange Commission, our website (udemy.com), press releases, public conference calls, public webcasts, and social media, including our corporate and our Chief Executive Officer’s social media accounts on LinkedIn and X. We encourage our investors and others to review the information disclosed through such channels as such information could be deemed to be material information. Please note that this list may be updated from time to time.
Market and industry data
Certain market and industry data included in this Form 10-Q has been obtained from third party sources that we believe to be reliable. Market estimates are calculated by using independent industry publications, government publications, and third-party forecasts in conjunction with our assumptions about our markets. We have not independently verified such third-party information. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed in this Form 10-Q in the section titled “Special Note Regarding Forward-Looking Statements” and in Part II, Item 1A, “Risk Factors.”

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PART I.
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Udemy, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
(unaudited)
June 30, December 31,
2025 2024
Assets
Current assets:
Cash and cash equivalents $ 230,258  $ 190,592 
Restricted cash, current
 203  100 
Marketable securities
 161,718  163,844 
Accounts receivable, net 84,441  88,216 
Prepaid expenses and other current assets 22,919  22,735 
Deferred contract costs, current 47,957  40,841 
Total current assets 547,496  506,328 
Property and equipment, net 7,186  4,534 
Capitalized software, net 29,490  31,548 
Operating lease right-of-use assets 9,104  10,950 
Restricted cash, non-current 912  1,115 
Deferred contract costs, non-current 28,476  32,212 
Intangible assets, net 3,281  2,428 
Goodwill 12,646  12,646 
Other assets 5,365  3,867 
Total assets $ 643,956  $ 605,628 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 7,408  $ 6,311 
Accrued expenses and other current liabilities 27,585  31,156 
Content costs payable 33,167  37,607 
Accrued compensation and benefits 20,356  28,793 
Operating lease liabilities, current 2,933  2,502 
Deferred revenue, current 311,223  291,106 
Total current liabilities 402,672  397,475 
Operating lease liabilities, non-current 6,286  8,315 
Deferred revenue, non-current 1,635  2,438 
Other liabilities, non-current 5  6 
Total liabilities 410,598  408,234 
Note 8 – Commitments and contingencies
Stockholders' equity:
Common stock, $0.00001 par value - 950,000,000 shares authorized; 149,917,996 and 147,484,280 shares issued and outstanding as of June 30, 2025, and December 31, 2024, respectively.
 1  1 
Additional paid-in capital 1,033,803  1,002,390 
Accumulated other comprehensive income (loss)
 46  (11)
Accumulated deficit (800,492) (804,986)
Total stockholders’ equity 233,358  197,394 
Total liabilities and stockholders' equity $ 643,956  $ 605,628 
See accompanying notes to condensed consolidated financial statements.
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Udemy, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2025 2024 2025 2024
Revenue $ 199,879  $ 194,360  $ 400,179  $ 391,206 
Cost of revenue 67,830  73,244  138,687  149,526 
Gross profit 132,049  121,116  261,492  241,680 
Operating expenses
Sales and marketing 79,820  86,990  162,320  174,291 
Research and development 26,361  32,408  51,319  63,631 
General and administrative 21,831  27,264  46,839  52,033 
Restructuring charges 109  —  1,578  — 
Total operating expenses 128,121  146,662  262,056  289,955 
Income (loss) from operations
 3,928  (25,546) (564) (48,275)
Other income (expense), net
Interest income 3,663  5,195  7,238  10,923 
Interest expense (120) (77) (135) (80)
Other income (expense), net
 (73) (10,584) 25  (10,892)
Total other income (expense), net
 3,470  (5,466) 7,128  (49)
Net income (loss) before taxes
 7,398  (31,012) 6,564  (48,324)
Income tax provision 1,133  802  2,070  1,829 
Net income (loss)
 $ 6,265  $ (31,814) $ 4,494  $ (50,153)
Net income (loss) per share
Basic
 $ 0.04  $ (0.21) $ 0.03  $ (0.32)
Diluted
 $ 0.04  $ (0.21) $ 0.03  $ (0.32)
Weighted-average shares used in computing net income (loss) per share
Basic
 149,246,828  152,987,927  148,649,838  154,779,176 
Diluted
 150,492,003  152,987,927  150,716,185  154,779,176 
See accompanying notes to condensed consolidated financial statements.
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Udemy, Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
(unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Net income (loss)
 $ 6,265  $ (31,814) $ 4,494  $ (50,153)
Other comprehensive income (loss):
Foreign currency translation gain (loss), net of tax
 98  20  121  (32)
Change in unrealized gain (loss) on marketable securities, net of tax
 (37) 10  (64) (92)
Total other comprehensive income (loss)
 61  30  57  (124)
Comprehensive income (loss)
 $ 6,326  $ (31,784) $ 4,551  $ (50,277)
See accompanying notes to condensed consolidated financial statements.
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Udemy, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(in thousands, except share amounts)
(unaudited)
Common Stock Additional
Paid-In
Capital		 Accumulated
Other
Comprehensive Income (Loss)		 Accumulated
Deficit
Total
Stockholders’
Equity
Shares Amount
Balance— March 31, 2025
 148,485,106  $ 1  $ 1,016,130  $ (15) $ (806,757) $ 209,359 
Stock-based compensation —  —  19,065  —  —  19,065 
Exercise of stock options 32,392  —  8  —  —  8 
Vesting of restricted stock units 1,575,307  —  —  —  —  — 
Issuance of common stock under employee stock purchase plan 430,926  —  2,560  —  —  2,560 
Shares withheld related to net share settlement of equity awards (605,735) —  (3,960) —  —  (3,960)
Other comprehensive income
 —  —  —  61  —  61 
Net income —  —  —  —  6,265  6,265 
Balance—June 30, 2025
 149,917,996  $ 1  $ 1,033,803  $ 46  $ (800,492) $ 233,358 
Balance—March 31, 2024
 153,591,721  $ 2  $ 1,034,603  $ (74) $ (738,037) $ 296,494 
Stock-based compensation —  —  26,567  —  —  26,567 
Exercise of stock options 1,365,726  —  125  —  —  125 
Vesting of restricted stock units 1,633,696  —  113  —  —  113 
Issuance of common stock under employee stock purchase plan 554,039  —  4,533  —  —  4,533 
Shares withheld related to net share settlement of equity awards (1,672,652) —  (8,193) —  —  (8,193)
Repurchases of common stock (3,790,193) —  (35,601) —  —  (35,601)
Other comprehensive loss —  —  —  30  —  30 
Net loss —  —  —  —  (31,814) (31,814)
Balance—June 30, 2024
 151,682,337  $ 2  $ 1,022,147  $ (44) $ (769,851) $ 252,254 
Balance—December 31, 2024
 147,484,280  $ 1  $ 1,002,390  $ (11) $ (804,986) $ 197,394 
Stock-based compensation —  —  38,726  —  —  38,726 
Exercise of stock options 180,949  —  44  —  —  44 
Vesting of restricted stock units 3,129,636  —  —  —  —  — 
Issuance of common stock under employee stock purchase plan 430,926  —  2,560  —  —  2,560 
Shares withheld related to net share settlement of equity awards (1,307,795) —  (9,917) —  —  (9,917)
Other comprehensive income
 —  —  —  57  —  57 
Net income
 —  —  —  —  4,494  4,494 
Balance—June 30, 2025
 149,917,996  $ 1  $ 1,033,803  $ 46  $ (800,492) $ 233,358 
Balance—December 31, 2023
 157,166,360  $ 2  $ 1,076,508  $ 80  $ (719,698) $ 356,892 
Stock-based compensation —  —  51,633  —  —  51,633 
Exercise of stock options 2,146,724  —  377  —  —  377 
Vesting of restricted stock units 3,382,285  —  113  —  —  113 
Issuance of common stock under employee stock purchase plan 554,039  —  4,533  —  —  4,533 
Shares withheld related to net share settlement of equity awards (2,814,733) —  (19,905) —  —  (19,905)
Repurchases of common stock (8,752,338) —  (91,112) —  —  (91,112)
Other comprehensive loss —  —  —  (124) —  (124)
Net loss —  —  —  —  (50,153) (50,153)
Balance—June 30, 2024
 151,682,337  $ 2  $ 1,022,147  $ (44) $ (769,851) $ 252,254 
See accompanying notes to condensed consolidated financial statements.
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Udemy, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
2025 2024
Cash flows from operating activities:
Net income (loss)
 $ 4,494  $ (50,153)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 13,146  13,175 
Amortization of deferred contract costs
 31,612  28,642 
Stock-based compensation 35,387  47,022 
Allowance for credit losses 2,391  743 
Net (accretion) amortization of marketable securities
 (2,134) (4,450)
Non-cash operating lease expense 1,846  2,732 
Unrealized loss on strategic investments —  10,311 
Other 623  502 
Changes in operating assets and liabilities:
Accounts receivable 1,384  9,732 
Prepaid expenses and other assets (413) (545)
Deferred contract costs (34,992) (32,734)
Accounts payable, accrued expenses and other liabilities (10,196) 2,937 
Content costs payable (4,439) (4,627)
Operating lease liabilities (1,611) (3,539)
Deferred revenue 19,315  29,813 
Net cash provided by operating activities
 56,413  49,561 
Cash flows from investing activities:
Purchases of marketable securities (112,505) (146,378)
Proceeds from maturities of marketable securities 116,700  173,550 
Purchases of property and equipment (4,661) (554)
Capitalized software costs (5,651) (6,711)
Payments related to asset acquisitions
 (1,500) — 
Net cash provided by (used in) investing activities
 (7,617) 19,907 
Cash flows from financing activities:
Net proceeds from exercise of stock options 49  439 
Proceeds from share purchases under employee stock purchase plan
 2,560  4,533 
Taxes paid related to net share settlement of equity awards
 (9,917) (19,815)
Repurchases of common stock and excise taxes paid
 (875) (90,577)
Payments of debt issuance costs
 (1,219) — 
Net cash used in financing activities
 (9,402) (105,420)
Effect of foreign exchange rates on cash flows 172  (21)
Net increase (decrease) in cash, cash equivalents and restricted cash
 39,566  (35,973)
Cash, cash equivalents and restricted cash—Beginning of period
 191,807  309,552 
Cash, cash equivalents and restricted cash—End of period
 $ 231,373  $ 273,579 
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Six Months Ended June 30,
2025 2024
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents $ 230,258  $ 272,364 
Restricted cash, current 203  100 
Restricted cash, non-current 912  1,115 
Total cash, cash equivalents and restricted cash $ 231,373  $ 273,579 
Supplemental disclosures of cash flow information:
Interest paid $ —  $ — 
Income taxes paid $ 1,112  $ 602 
Supplemental disclosure of non-cash investing and financing activities:
Stock-based compensation in capitalized costs $ 3,304  $ 4,627 
Net change in unrealized gain (loss) on marketable securities
 $ (64) $ (92)
Increase (decrease) in purchases of property and equipment included in liabilities
 $ (354) $ 347 
Unpaid debt issuance costs
 $ 220  $ — 
Operating lease right-of-use assets exchanged for operating lease liabilities
 $ —  $ 9,779 
See accompanying notes to condensed consolidated financial statements.
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Udemy, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Organization and description of business
Description of business
Udemy, Inc. (“Udemy” or the “Company”) was incorporated in January 2010 under the laws of the state of Delaware. The Company is headquartered in San Francisco, California.
Udemy is a global technology company enabling organizations and individuals to develop in-demand skills and capabilities needed to thrive in a rapidly evolving world of work. The Company’s AI-powered platform offers consumers the option to purchase either subscription-based plans or a non-exclusive lifetime license to a single course on the Udemy marketplace. The Company also curates its highest-quality content for its enterprise platform, Udemy Business (“UB”), which enables companies around the world to offer on-demand learning across their organizations through various modalities.
Leadership Transition
Effective March 12, 2025, the Company’s Board of Directors appointed Hugo Sarrazin to succeed Greg Brown as the Company’s President and Chief Executive Officer. As of the same date, the Board appointed Mr. Sarrazin to serve as a Class III director, with a term expiring at the Company’s 2027 annual meeting of stockholders. Pursuant to the terms of his offer letter, the Board granted Mr. Sarrazin a new hire equity award consisting of 1,062,055 restricted stock units (“RSUs”). One third of the RSUs vest after one year, and the remaining two thirds will vest equally over the following 8 quarters, subject to continual service.
Effective March 12, 2025, Mr. Brown ceased to be the Company’s President and Chief Executive Officer, although he remained a full-time, non-executive employee during a transition period which ended on June 30, 2025. Thereafter, Mr. Brown will serve as a consultant, pursuant to a post-employment consulting agreement, from July 1, 2025 through December 31, 2025, unless the agreement is terminated earlier in accordance with its terms. Mr. Brown’s existing equity incentive awards will continue to vest during the term of the consulting period, and he will continue to be deemed a service provider for purposes of the Company’s equity incentive plans. The Company determined that there was a substantive reduction in the scope of services to be provided by Mr. Brown subsequent to March 12, 2025. As a result, the Company recognized $0.9 million in severance and personnel costs and $1.2 million in stock-based compensation within general and administrative expenses in the Company’s condensed consolidated statement of operations during the three months ended March 31, 2025, that would have otherwise been recognized from April 2025 to December 2025.

2. Summary of significant accounting policies
Basis of consolidation and presentation— The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation, and all other normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results of the periods presented have been made.
Segment information— On March 12, 2025, Hugo Sarrazin became the Company’s new Chief Executive Officer and chief operating decision maker (“CODM”). The Company defines its segments as those operations the CODM regularly reviews to allocate resources and assess performance. For the three months ended June 30, 2025 and 2024, the Company had two operating and reportable segments: Enterprise and Consumer. The Company continually monitors and reviews its segment reporting structure in accordance with Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, to determine whether any changes have occurred that would impact its reportable segments. For further information on the Company’s segment reporting, see Note 13 – Segment and geographic information.
Use of estimates— The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the results of operations during the reporting periods.
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Significant estimates and assumptions reflected in the condensed consolidated financial statements include, but are not limited to, allowance for credit losses, capitalization of internally developed software and content assets and their associated useful lives, stock-based compensation, determination of the income tax valuation allowance and the potential outcome of uncertain tax positions, estimated service period for consumer single course purchases, recognition pattern of breakage revenue on Udemy credits, the period of benefit for deferred commissions, the fair value and associated useful lives of acquired intangible assets and goodwill, the valuation of marketable securities and privately-held strategic investments, including impairments, and the carrying value of our operating lease right-of-use (“ROU”) assets. Management periodically evaluates such estimates and assumptions for continued reasonableness.
Actual results may ultimately differ from management’s estimates and such differences could be material to the Company’s financial position and results of operations.
Concentration of credit risk— Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, restricted cash, and accounts receivable. For cash and restricted cash, the Company is exposed to credit risk in the event of default by the financial institutions to the extent the amounts recorded on the accompanying condensed consolidated balance sheets are in excess of federal insurance limits. The Company’s investments that are classified as cash equivalents and marketable securities consist of high-credit-quality instruments and fixed-income securities.
The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing evaluations of its customers’ financial condition and maintains an allowance based upon expected credit losses of outstanding receivables. The Company had one customer, Benesse Corporation (“Benesse”), a reseller partner for the Enterprise segment, who accounted for more than 10% of accounts receivable as of June 30, 2025. The Company had no customers who accounted for more than 10% of total accounts receivable as of December 31, 2024. No customer accounted for more than 10% of total revenue during the three and six months ended June 30, 2025 or 2024.

Summary of significant accounting policies— There have been no significant changes to the policies as disclosed in Note 2 – Summary of significant accounting policies of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 19, 2025 (the “Annual Report”), other than those discussed below.
Revenue recognition— In certain circumstances, consumer customers who purchase a single course may request a refund in the form of Udemy credits instead of a cash refund. Customers with Udemy credit balances may apply these credits toward future purchases.
During the second quarter of 2025, as a result of a change in the entity structure servicing the Udemy credits program, the Company determined it was entitled to recognize breakage for unredeemed Udemy credits. The breakage rate for Udemy credits is calculated based on historical redemption patterns specific to the Company. Breakage revenue is recognized using the proportionate method.
Due to the above, the Company recognized $2.6 million of breakage revenue for Udemy credits during the three and six months ended June 30, 2025, compared to zero during the three and six months ended June 30, 2024. Of the $2.6 million in breakage revenue recognized during the second quarter of 2025, $2.5 million related to previously satisfied performance obligations.
Net income (loss) per share— Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method. For periods in which the Company reports net losses, diluted net loss per share is the same as basic net loss per share, because potentially dilutive common shares are anti-dilutive.
Accounts receivable, net— Accounts receivable primarily represent amounts owed to the Company for Enterprise subscriptions. Also included in accounts receivable are amounts due from payment processors or mobile application store partners that settle over a period longer than five business days. Accounts receivable balances are recorded at the invoiced amount and are non-interest-bearing. Accounts receivable is presented net of allowance for credit losses in the accompanying condensed consolidated balance sheets.
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The Company maintains an allowance based upon expected credit losses of outstanding receivables. Management derives its estimate using a variety of factors, including historical collection and loss patterns; the current aging of receivables; geographic and other customer-specific credit risk factors; and reasonable and supportable forecasts of future economic conditions which inform adjustments to historical loss patterns. The provision for expected credit losses is recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations. Accounts receivable deemed to be uncollectible are written off, net of expected or actual recoveries.
Balance at Beginning of Period Charged to Expenses Charges Utilized/Written-off, Net of Recoveries Balance at End of Period
Allowance for credit losses (in thousands)
Six Months Ended June 30, 2025 $ 1,096  $ 2,391  $ (981) $ 2,506 
Six Months Ended June 30, 2024
 $ 1,270  $ 743  $ (1,081) $ 932 
Deferred contract costs— Sales commissions earned by the Company’s sales force on both new and renewal business are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for new contracts and incremental sales to existing customers are deferred and then amortized on a straight-line basis over an estimated period of benefit of four years. This period of benefit was determined by taking into consideration term lengths of Enterprise customer contracts, changes and enhancements in course offerings, and other factors. Beginning January 1, 2025, the Company began paying commissions on the renewing portion of existing contracts. Commissions that are commensurate with renewal contracts are deferred and amortized on a straight-line basis over the average renewal term, which is estimated to be 18 months.
In addition, a portion of the revenue share retained by enterprise reseller partners from sales to UB customers is considered an incremental and recoverable cost of obtaining a contract with a customer. This cost is deferred and amortized on a straight-line basis over the service term of the corresponding contractual subscription term, as commissions paid to resellers on initial and renewal contracts are generally commensurate.
Amounts expected to be recognized within one year of the condensed consolidated balance sheet dates are recorded as deferred contract costs, current, while the remaining portion is recorded as deferred contract costs, non-current in the condensed consolidated balance sheets. Deferred contract costs are periodically analyzed for impairment. Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of operations.
Capitalized software, net— The Company capitalizes costs directly associated with the development of software for internal use and certain content assets hosted on the Company's platform. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Once the software or content being developed has reached the application development stage, qualifying internal and external costs are capitalized until the software or content asset is substantially complete and ready for its intended use. Once the software or content is ready for its intended use, capitalized costs are amortized on a straight-line basis over an estimated useful life, which is generally three years for internal use software and two years for content assets. The Company evaluates the useful lives of these assets and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.
Acquisitions— The Company assesses whether an acquisition is a business combination or an asset acquisition. If substantially all of the gross assets acquired are concentrated in a single asset or group of similar assets, then the acquisition is accounted for as an asset acquisition, where the purchase consideration is allocated on a relative fair value basis to the assets acquired. Goodwill is not recorded in an asset acquisition. If the gross assets are not concentrated in a single asset or group of similar assets, then the Company determines if the set of assets acquired represents a business. A business is an integrated set of activities and assets capable of being conducted and managed for the purpose of providing a return. Depending on the nature of the acquisition, judgment may be required to determine if the set of assets acquired is a business combination or not.
Debt— Amounts drawn under revolving lines of credit are classified as current or noncurrent liabilities based on several factors, including but not limited to stated maturity dates and whether the Company has the ability and intent to repay the debt within one year from the reporting date. Direct and incremental costs incurred to obtain lines of credit are capitalized as noncurrent other assets on our balance sheets and amortized ratably over the term of the arrangement into interest expense in the Company’s condensed consolidated statement of operations.
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Recently Adopted Accounting Pronouncements Adopted in 2025
There are no recently issued accounting pronouncements that were adopted by the Company during the three and six months ended June 30, 2025.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. The standard will become effective for the Company’s fiscal year ended December 31, 2025, with early adoption permitted. The Company is currently assessing the potential impact of the new standard on the Company’s condensed consolidated financial statements and expects the adoption to result in disclosure changes only.
In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed information about the types of expenses (including employee compensation and depreciation and amortization) included within income statement expense captions. The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all periods presented in the financial statements. The Company is currently assessing the potential impact of the new standard on the Company’s condensed consolidated financial statements.
3. Revenue recognition

Deferred revenue—Revenue recognized for the three months ended June 30, 2025, from amounts included in deferred revenue as of March 31, 2025 was $158.4 million. Revenue recognized for the three months ended June 30, 2024, from amounts included in deferred revenue as of March 31, 2024 was $152.6 million.
Revenue recognized for the six months ended June 30, 2025, from amounts included in deferred revenue as of December 31, 2024 was $225.7 million. Revenue recognized for the six months ended June 30, 2024, from amounts included in deferred revenue as of December 31, 2023 was $213.6 million.

The below table presents a summary of deferred revenue balances by reportable segment (in thousands):
June 30, December 31, December 31,
2025 2024 2023
Deferred revenue:
Enterprise $ 260,605  $ 233,466  $ 220,127 
Consumer 52,253  60,078  62,287 
Total deferred revenue $ 312,858  $ 293,544  $ 282,414 

Remaining performance obligations— Remaining performance obligations represent the aggregate amount of the transaction price in contracts for performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligations primarily relate to deferred revenue as well as unbilled revenue from multi-year Enterprise subscription contracts with future installment billings, as well as unearned revenue from Consumer single course purchases and subscriptions at the end of any given period. As of June 30, 2025, the aggregate transaction price for remaining performance obligations was $553.2 million, of which 74% is expected to be recognized over the next twelve months and the remainder thereafter.

Deferred contract costs— The following table represents a roll forward of the Company’s deferred contract costs (in thousands):
Balance at Beginning of Period Additions Amortization Expense Balance at End of Period
Six Months Ended June 30, 2025 $ 73,053  $ 34,992  $ (31,612) $ 76,433 
Six Months Ended June 30, 2024 $ 74,374  $ 32,734  $ (28,642) $ 78,466 
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4. Investments and fair value measurements

The following tables present the Company’s assets that are measured at fair value on a recurring basis within the fair value hierarchy (in thousands):

As of June 30, 2025
 Level 1 Level 2 Level 3
Assets
Cash equivalents(1):
Money market funds $ 172,448  $ —  $ — 
Time deposits
 5,597  —  — 
Marketable securities:
U.S. government securities —  161,718  — 
Total assets
 $ 178,045  $ 161,718  $ — 

As of December 31, 2024
 Level 1 Level 2 Level 3
Assets
Cash equivalents(1):
Money market funds $ 136,771  $ —  $ — 
Time deposits
 9,809  —  — 
U.S. government securities
 —  1,686  — 
Marketable securities:
U.S. government securities —  163,844  — 
Total assets
 $ 146,580  $ 165,530  $ — 
1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets, in addition to $52.2 million and $42.3 million of cash as of June 30, 2025 and December 31, 2024, respectively.

The Company’s money market funds and time deposits are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. The Company’s investments in U.S. government securities are classified within Level 2 of the fair value hierarchy because they have been valued using inputs other than quoted prices in active markets that are directly or indirectly observable. The Company’s strategic investments are classified within Level 3 of the fair value hierarchy because they have been valued using significant unobservable inputs for which the Company has been required to develop its own assumptions.
A summary of the changes in the fair value of Level 3 financial instruments, of which impairment of strategic investments is recognized in the consolidated statements of operations, is as follows (in thousands):
Balance— March 31, 2024
 $ 10,311 
Unrealized loss on strategic investments
 (10,311)
Balance— June 30, 2024
 $ — 
Balance— December 31, 2023
 $ 10,311 
Unrealized loss on strategic investments (10,311)
Balance— June 30, 2024
 $ — 

There were no material changes in the fair value of Level 3 financial instruments during the three and six months ended June 30, 2025.
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The Company evaluates its strategic investments for impairment at each reporting period. This evaluation considers several potential qualitative and quantitative impairment indicators including, but not limited to, the investee's financial metrics, whether there were any significant adverse changes in the economic environment or general market conditions of the geographies and industries in which the investee operates, and any other publicly available information that may affect the value of the investment.
The cost basis of the Company’s strategic investments is $15.0 million. The Company previously recorded impairment charges of $10.3 million during the second quarter of 2024, $1.8 million during the second quarter of 2023 and $2.9 million during the third quarter of 2022. There have been no observable price changes in orderly transactions for identical or similar investments of the same issuer during the periods presented. As such, the Company’s carrying amount of its strategic investment was zero as of June 30, 2025 and December 31, 2024.
5. Consolidated balance sheet components

Cash, cash equivalents, and marketable securities— The amortized cost, unrealized gains and losses, and estimated fair value of cash, cash equivalents, and marketable securities consisted of the following (in thousands):
As of June 30, 2025
 Amortized Cost Unrealized Gains Unrealized Losses Fair Value
Cash and cash equivalents:
Cash $ 52,213  $ —  $ —  $ 52,213 
Money market funds 172,448  —  —  172,448 
Time deposits
 5,597  —  —  5,597 
Total cash and cash equivalents 230,258  —  —  230,258 
Marketable securities:
U.S. government securities 161,685  48  (15) 161,718 
Total cash, cash equivalents, and marketable securities $ 391,943  $ 48  $ (15) $ 391,976 

As of December 31, 2024
 Amortized Cost Unrealized Gains Unrealized Losses Fair Value
Cash and cash equivalents:
Cash $ 42,326  $ —  $ —  $ 42,326 
Money market funds 136,771  —  —  136,771 
Time deposits
 9,809  —  —  9,809 
U.S. government securities 1,686  —  —  1,686 
Total cash and cash equivalents 190,592  —  —  190,592 
Marketable securities:
U.S. government securities 163,747  97  —  163,844 
Total cash, cash equivalents, and marketable securities $ 354,339  $ 97  $ —  $ 354,436 

Cash equivalents and marketable securities in an unrealized loss position consisted of the following (in thousands):
June 30, 2025 December 31, 2024
Fair Value Gross Unrealized Losses Fair Value
Gross Unrealized Losses(1)
Marketable securities:
U.S. government securities
$ 74,508  $ (15) $ 4,898  $ — 
Total securities in an unrealized loss position
 $ 74,508  $ (15) $ 4,898  $ — 
(1) Gross unrealized losses as of December 31, 2024 were less than one thousand dollars and rounded to zero.

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Realized gains and losses reclassified from accumulated other comprehensive loss to other income (expense), net were zero for the three and six months ended June 30, 2025 and 2024.

No securities had been in a continuous unrealized loss position for twelve months or longer as of June 30, 2025 or December 31, 2024. The Company does not intend to sell available-for-sale marketable debt securities in unrealized loss positions, and it is more likely than not that the Company will hold these securities until maturity or recovery of the cost basis. As of June 30, 2025 and December 31, 2024, the Company did not have an allowance for credit losses related to its available-for-sale debt securities due to a zero loss expectation for the portfolio which consists solely of U.S. government securities.

As of June 30, 2025, the entirety of the Company’s marketable securities portfolio had remaining contractual maturities of one year or less.

Property and equipment, net— Property and equipment, net consisted of the following (in thousands):
June 30, December 31,
2025 2024
Leasehold improvements $ 22,622  $ 19,064 
Computers and equipment 9,112  8,317 
Furniture and fixtures 5,813  4,737 
Purchased software 383  383 
Construction in progress 78  1,757 
Total property and equipment 38,008  34,258 
Less accumulated depreciation and amortization (30,822) (29,724)
Property and equipment, net $ 7,186  $ 4,534 
Depreciation expense was $0.9 million and $0.8 million for the three months ended June 30, 2025 and 2024, respectively, and $1.6 million and $1.5 million for the six months ended June 30, 2025 and 2024, respectively.
Capitalized software, net— Capitalized software, net consisted of the following (in thousands):
June 30, December 31,
2025 2024
Internal use software
 $ 113,713  $ 105,162 
Content assets
 253  — 
Total capitalized software
 113,966  105,162 
Less accumulated amortization (84,476) (73,614)
Capitalized software, net $ 29,490  $ 31,548 
Amortization expense of capitalized software was $5.6 million and $5.0 million for the three months ended June 30, 2025 and 2024, respectively, and $10.9 million and $9.8 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, expected amortization expense for capitalized software over the remaining asset lives was as follows (in thousands):

2025 $ 9,255 
2026 13,161 
2027 6,262 
2028
 812 
Total expected amortization $ 29,490 
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Intangible assets, net and goodwill— On April 8, 2025, the Company entered into a $1.5 million asset purchase agreement with a private entity. The transaction was accounted for as an asset acquisition in accordance with ASC 805, Business Combinations, and the assembled workforce represented substantially all of the fair value of the acquired assets.

As of June 30, 2025, intangible assets, net were as follows (in thousands):

Estimated Useful Lives Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net
Customer relationships 6 years $ 5,500  $ (3,531) $ 1,969 
Assembled workforce
2 years
 1,500  (188) 1,312 
Vendor relationships 3 years 4,500  (4,500) — 
Developed technology 3 years 4,200  (4,200) — 
Tradename 2 years 900  (900) — 
Total $ 16,600  $ (13,319) $ 3,281 

As of December 31, 2024, intangible assets, net were as follows (in thousands):
Estimated Useful Lives Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net
Customer relationships 6 years $ 5,500  $ (3,072) $ 2,428 
Vendor relationships 3 years 4,500  (4,500) — 
Developed technology 3 years 4,200  (4,200) — 
Tradename 2 years 900  (900) — 
Total $ 15,100  $ (12,672) $ 2,428 

Amortization expense of intangible assets was $0.4 million and $1.0 million for the three months ended June 30, 2025 and 2024, respectively, and $0.6 million and $1.9 million for the six months ended June 30, 2025 and 2024, respectively.

The expected future amortization expense for intangible assets as of June 30, 2025 was as follows (in thousands):

2025 $ 833 
2026 1,667 
2027 781 
Total expected amortization $ 3,281 

Goodwill in the amount of $12.6 million was established as part of the CorpU acquisition on August 24, 2021, and allocated to the Enterprise segment. This amount represents the excess of the purchase price over the fair value of net assets acquired. There have been no adjustments to the carrying amount of goodwill as of June 30, 2025.
The Company tests for impairment at least annually, or whenever events or changes in circumstances occur that could impact the recoverability of these assets. No such triggering events were identified during the six month periods ended June 30, 2025 and 2024.

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Accrued expenses and other current liabilities— Accrued expenses and other current liabilities consisted of the following (in thousands):

June 30, December 31,
2025 2024
Accrued expenses $ 15,311  $ 14,518 
Indirect tax reserves 3,085  2,225 
Indirect tax payables 6,759  8,952 
Other current liabilities 2,430  5,461 
Accrued expenses and other current liabilities $ 27,585  $ 31,156 

6. Debt
In May 2025, the Company, as borrower, entered into a Credit Agreement with Citibank, as administrative agent, collateral agent and a lender, and certain other financial institutions, as lenders (the facility established thereby, the “Revolving Credit Facility”). The Revolving Credit Facility, which matures in May 2030, provides the Company with revolving commitments in an aggregate principal amount of $200.0 million, with a $10.0 million sublimit for the issuance of letters of credit and a $10.0 million sublimit for swingline borrowings. The Company, subject to the satisfaction of certain conditions, including obtaining commitments from new or existing lenders, may increase the commitments under the Revolving Credit Facility by an aggregate principal amount of up to the greater of $100.0 million or 100% of trailing twelve months adjusted EBITDA (calculated in accordance with the terms of the Revolving Credit Facility). The obligations of the Company under the Revolving Credit Facility are secured on a first priority basis by a lien on substantially all of the assets of the Company.
Borrowings under the Revolving Credit Facility bear interest through maturity and, at the Company’s election, at a variable rate based upon either (i) an adjusted term SOFR rate (based on one-, three- or six-month interest periods), plus an applicable margin (“SOFR Borrowings”) or (ii) an alternative base rate, plus an applicable margin (“ABR Borrowings”). The applicable margin for SOFR Borrowings is between 2.0% and 2.5%, and the applicable margin for ABR Borrowings is between 1.0% to 1.5%, in each case depending on the Company’s consolidated net leverage ratio calculated in accordance with the terms of the Revolving Credit Facility. The Revolving Credit Facility bears a commitment fee on the daily undrawn amount of revolving commitments ranging from 0.25% to 0.35% per annum payable quarterly in arrears, depending on the Company’s consolidated total net leverage ratio.
The Revolving Credit Facility contains customary affirmative and negative covenants, including negative covenants imposing limitations on, among others, incurring additional indebtedness, granting liens, making certain restricted payments (including stock repurchases or the payment of cash dividends), making investments and entering into certain transactions with affiliates. The Company is also subject to financial covenants to maintain a minimum consolidated interest coverage ratio of 3.0 to 1.0 and a maximum consolidated net leverage ratio of 3.5 to 1.0, in each case calculated in accordance with the terms of the Revolving Credit Facility. Noncompliance with these covenants, or the occurrence of certain other events specified in the Revolving Credit Facility, could result in an event of default under the Revolving Credit Facility. Upon the occurrence and during the continuance of an event of default, any outstanding principal, interest, and fees could become immediately due and payable. As of June 30, 2025, the Company was in compliance with all covenants under the Revolving Credit Facility.
As of June 30, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility.
The Company incurred $1.4 million worth of debt issuance costs and recorded an immaterial amount of interest expense in connection with the Revolving Credit Facility for the three and six months ended June 30, 2025.

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7. Leases
The Company applies the guidance under Topic 842 for leases of real estate facilities under non-cancelable operating leases with various expiration dates through fiscal year 2029.
As a result of new leasing activity during fiscal year 2024, the Company is entitled to receive $2.1 million in tenant incentives for leasehold improvements constructed by the Company. The total amount of tenant incentives was still outstanding as of June 30, 2025, and is expected to be received in 2025.
The Company recognized the following amounts related to its operating leases in its condensed consolidated statements of operations and cash flows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Operating lease costs $ 1,101  $ 1,255  $ 2,199  $ 2,805 
Variable lease costs $ 193  $ 308  $ 492  $ 553 
Short-term lease costs
 $ 153  $ 138  $ 408  $ 234 
Cash paid for amounts included in the measurement of operating lease liabilities
 $ 2,250  $ 3,673 
Future minimum lease payments (net of expected tenant incentives) under noncancellable operating leases with initial lease terms in excess of one year as of June 30, 2025, were as follows (in thousands):

2025 $ 534 
2026 4,134 
2027 2,231 
2028 2,298 
2029 1,166 
Gross lease payments 10,363 
Less imputed interest (1,144)
Present value of operating lease liabilities $ 9,219 

8. Commitments and contingencies
Noncancellable purchase commitments— The Company has noncancellable contractual commitments with its cloud infrastructure provider, paid advertising and sponsorship vendors, and software subscriptions to support operations in the ordinary course of business. As of June 30, 2025, the Company had $25.3 million of future minimum payments under noncancellable purchase commitments with remaining terms in excess of one year, which are expected to be paid through 2027.
Indemnification— The Company enters into indemnification provisions under agreements with other parties in the ordinary course of business, including certain business partners, investors, contractors, and the Company’s officers, directors, and certain employees. The Company has agreed to indemnify and defend the indemnified party’s claims and related losses suffered or incurred by the indemnified party resulting from actual or threatened third-party claims because of the Company’s activities or, in some cases, non-compliance with certain representations and warranties made by the Company. In general, the Company does not record any liability for these indemnities in the accompanying condensed consolidated balance sheets as the amounts cannot be reasonably estimated and are not considered probable. The Company does, however, accrue for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. To date, losses recorded in the Company’s condensed consolidated statements of operations in connection with the indemnification provisions have not been material.
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Litigation— From time to time, in the ordinary course of business, the Company is subject to legal proceedings, claims, investigations, and other proceedings, including claims of alleged infringement of third-party patents and other intellectual property rights, and commercial, employment, and other matters. In accordance with generally accepted accounting principles, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least annually and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. The outcome of such litigation is not expected to have a material effect on the financial position, results of operation and cash flows of the Company. The Company has recorded an immaterial amount related to all outstanding litigation matters in the accrued expenses and other current liabilities caption of the accompanying condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024.

9. Income taxes
The provision for income taxes for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that are taken into consideration in the relevant period. Each quarter, the Company updates the estimate of the annual effective tax rate, and if the estimated tax rate changes, the Company records a cumulative adjustment to the provision.
The Company had an effective tax rate of 15.31% and (2.59)% for the three months ended June 30, 2025 and 2024, respectively, and 31.54% and (3.78)% for the six months ended June 30, 2025 and 2024, respectively. The effective tax rate for the quarter differed from the federal statutory rate of 21% primarily due to the impact of a valuation allowance on certain deferred tax assets and the mix of earnings among taxing jurisdictions.
The Organization for Economic Cooperation and Development ("OECD") introduced a framework under Pillar 2 including a 15% global minimum tax rate. Some jurisdictions in which the Company does business have started to enact laws implementing a minimum tax under Pillar Two. The Company is monitoring these developments and currently does not believe the rules have a material impact on its effective tax rate.
In July 2025, the United States enacted tax legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBB Act”). The OBBB Act, among other things, extends certain provisions of 2017 U.S. federal tax legislation relating to federal bonus depreciation and immediate expensing for domestic research and development expenditures. The Company is currently assessing the potential impact the OBBB Act will have on its condensed consolidated financial statements.
As of June 30, 2025 and December 31, 2024, the Company has provided a valuation allowance against U.S. federal and state deferred tax assets. Management continues to evaluate the realizability of deferred tax assets and the related valuation allowance. If management's assessment of the deferred tax assets or the corresponding valuation allowance were to change, the Company would record the related adjustment to income during the period in which management makes the determination.
The Company recognizes interest and penalties associated with uncertain tax positions as part of the income tax provision. To date, the Company has not recognized any interest and penalties in its condensed consolidated statements of operations, nor has it accrued for or made payments for interest and penalties.
The Company is subject to taxation in the U.S. and various foreign jurisdictions. Due to NOL carryforwards and tax credit carryforwards, the statutes of limitations remain open for tax years from inception of the Company through 2024. There are currently no income tax audits underway by U.S. federal or state tax authorities. The Company’s subsidiary, Udemy India LLP, has received tax assessments from the India Income Tax Department. These assessments have challenged the transfer pricing methodology used by Udemy India LLP for the fiscal years ended March 31, 2022 and 2021. The Company believes the proposed adjustments are without merit and will vigorously defend its position; however, it could take a number of years to reach resolution of this matter.

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10. Related party transactions
Naspers Ltd. (“Naspers”), through an investment entity controlled by Prosus N.V. (“Prosus”), beneficially owns more than 5% of the Company’s outstanding capital stock. During the year ended December 31, 2024, a current member of the Company’s Board of Directors was employed by Prosus as an operating partner and by OLX Group B.V., a Prosus operating subsidiary, as chief executive officer; these affiliations ceased as of December 31, 2024. Naspers and certain entities directly and indirectly controlled by Naspers are customers of the Company’s Enterprise subscription offering.
Insight Partners (“Insight”), where a member of the Company’s Board of Directors is a Managing Director, has certain affiliates who are customers of the Company’s Enterprise subscription offering. Insight Partners is also affiliated with certain vendors that the Company has contracted to provide technology and software solutions.
Certain members of the Company’s Board of Directors also serve as executive officers for customers of the Company’s Enterprise subscription offering.
The following tables summarize the Company’s related party transactions (in millions):
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Revenue recognized from services provided to customers
Naspers and affiliates $ 0.5  $ 0.4  $ 0.9  $ 0.8 
Insight and affiliates 0.1  0.2  0.2  0.4 
Companies affiliated with Board members immaterial 0.1  immaterial 0.2 
Expense recognized from services provided by vendors
Insight and affiliates 0.3  0.2  0.5  0.4 

June 30, December 31,
2025 2024
Amounts in accounts receivable
Naspers and affiliates $ 0.1  $ — 
Insight and affiliates —  0.1 
Companies affiliated with Board members —  0.1 
Amounts in accounts payable and accrued expenses and other current liabilities
Insight and affiliates immaterial — 

11. Stockholders' equity
Preferred stock— Under its amended and restated certificate of incorporation, the Company is authorized to issue 50,000,000 shares of undesignated preferred stock with a par value of $0.00001 per share with rights and preferences, including voting rights, as designated from time to time by the board of directors. As of June 30, 2025 and December 31, 2024, there were zero shares of preferred stock issued and outstanding.
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Common stock— Common stockholders are entitled to one vote per share. Shares of common stock reserved for future issuance consisted of the following:
June 30, December 31,
2025 2024
2010 Equity Incentive Plan:
Stock options outstanding 1,136,508  1,401,086 
2021 Equity Incentive Plan:
RSUs outstanding and PSUs(1)
 17,762,840  15,809,202 
Shares available for future issuance under:
2021 Equity Incentive Plan 14,193,028  10,514,374 
2021 Employee Stock Purchase Plan 4,033,734  2,986,132 
Total shares of common stock reserved 37,126,110  30,710,794 
(1) For those PSUs in their respective performance periods, the number of shares reserved for issuance is based on the maximum achievement of the corporate performance metrics.
Share repurchase program— During the fiscal year ended December 31, 2024, the Board of Directors approved a share repurchase program, which authorized the purchase of up to $150 million of Udemy common stock from time to time through open market purchases, in privately negotiated transactions, or by other means, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The share repurchase program was completed in November 2024.
Equity incentive plans— In 2010, the Company adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan provided for incentive stock options (“ISOs”), non-statutory stock options (“NSOs”, collectively with ISOs, “stock options”), stock appreciation rights (“SARs”), restricted stock, and restricted stock units (“RSUs”) to be granted to eligible employees, directors, and consultants. The 2010 Plan was terminated in October 2021 in connection with the IPO but continues to govern the terms and conditions of the outstanding awards granted pursuant to the 2010 Plan. No further equity awards will be granted under the 2010 Plan.
The Company adopted the 2021 Equity Incentive Plan (the "2021 Plan") in September 2021, which became effective on October 28, 2021 (collectively with the 2010 Plan, the “Equity Incentive Plans”) and was approved by the Company’s stockholders. The 2021 Plan provides for the granting of ISOs, NSOs, SARs, restricted stock, RSUs, and performance awards to eligible employees, directors, and consultants.
The Company initially reserved 13,800,000 shares for issuance under the 2021 Plan. The amount available for issuance is subject to an annual increase on the first day of each calendar year, beginning on January 1, 2023, in an amount equal to 5% of the outstanding shares of the Company’s common stock on the last day of the immediately preceding calendar year or a lesser amount determined by the Company’s Board of Directors or compensation committee. The amount available for issuance shall also include Returning Shares, which are any shares subject to awards granted under the 2010 Plan that, on or after October 29, 2021, expire or otherwise terminate without having been exercised in full, are tendered to or withheld by the Company for payment of an exercise price or for tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest. Additionally, any difference in (i) the number of PSUs reserved for future issuance based on maximum achievement of the corporate performance metric and (ii) the number of PSUs issued based on actual attainment are returned to the 2021 Plan.
On January 1, 2025, the shares available for future grants under the 2021 Plan automatically increased by 7,374,214 pursuant to the above evergreen provision of the 2021 Plan.
Restricted stock units and performance-based restricted stock units— The fair value of RSUs and PSUs are determined using the fair value of the Company’s common stock on the date of grant. The Company recognizes stock-based compensation expense for RSUs with service-based vesting conditions on a straight-line basis over the requisite service period for each award, which is typically between two to four years.
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Each PSU conveys a right to receive one share of the Company’s common stock on the date it vests, provided that the number of PSUs that will ultimately vest may vary based upon achievement of the corporate performance metrics at the end of the performance period. During the performance period, Management estimates the number of PSUs that are expected to vest based on the anticipated achievement. If the performance-based vesting condition is considered probable of being achieved, the Company recognizes expense over the requisite service period based on the probable outcome of achievement. If the performance goals are not met, or are considered improbable, no compensation cost is recognized, and any previously recognized compensation cost is reversed. Total stock-based compensation expense to be recognized may fluctuate during the performance period due to changes in forecasted achievement.
During the first quarter of 2025, the Company granted 372,044 PSUs at target to certain executives, with payout achievement ranging from 0% to 150% of target. One third of the eligible PSUs vest upon certification of the corporate performance metrics by the Board of Directors’ compensation committee in the first quarter of 2026, and the remaining two thirds will vest equally over the following 8 quarters, subject to continual service by the grantee. Achievement has been considered probable since the grant date, and, as of June 30, 2025, the Company estimated a payout rate of 40% of target based on forecasted achievement.
During the first quarter of 2024, the Company granted 553,568 PSUs at target to certain executives, with payout achievement ranging from 0% to 150% of target. In February 2025, the Board of Directors’ compensation committee certified actual achievement against target of 45%. As a result, 218,565 shares were awarded to the grantees, of which one quarter vested in the quarter of certification, while the remaining 75% will vest equally over the following 12 quarters, subject to continual service by the grantee. The difference in the number of shares granted at target and the shares certified by the Board based on actual achievement were canceled and returned to the pool of available for future issuance under the 2021 Plan.
A summary of RSU and PSU activity under the 2021 Plan is as follows:
RSUs Outstanding Weighted Average Grant Date Fair Value
PSUs Outstanding (1)
 Weighted Average Grant Date Fair Value
Balance - December 31, 2024
 14,892,768 $ 10.74  673,578 $ 10.40 
Granted 7,025,101 7.09  372,044 8.23 
Released (3,021,086) 12.27  (108,550) 10.18 
Canceled (1,948,598) 10.90  (308,426) 10.89 
Balance - June 30, 2025
 16,948,185 $ 8.93  628,646 $ 8.91 
Unvested - June 30, 2025
 16,877,851 $ 8.93  628,646 $ 8.91 
Awards vested, not yet released - June 30, 2025
 70,334 $ 8.18  — $ — 
(1) Canceled PSU shares consist of awards forfeited as well as the difference in the number of shares granted at target and the shares certified by the Board based on actual achievement.
As of June 30, 2025, total unrecognized stock-based compensation expense related to unvested RSUs was $132.9 million, which will be recognized over a weighted average period of 2.5 years.
As of June 30, 2025, total unrecognized stock-based compensation expense related to unvested PSUs was $1.5 million, which will be recognized over a weighted average period of 1.4 years.
Stock options— The Company may grant stock options at exercise prices not less than the fair market value at the date of grant. These options generally expire 10 years from the date of grant. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period for each award, which is generally even over four years.
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The following is a summary of activity for stock options having only service-based vesting conditions under the Equity Incentive Plans:
Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value
(In Thousands)
Balance - December 31, 2024
 1,351,086  $ 5.28  4.05 $ 4,666 
Granted —  — 
Exercised (180,949) 4.01 
Canceled (83,629) 6.67 
Balance - June 30, 2025
1,086,508  $ 5.38  3.73 $ 2,561 
Vested & expected to vest as of June 30, 2025
1,086,508  $ 5.38  3.73 $ 2,561 
Exercisable as of June 30, 2025
1,086,201  $ 5.38  3.73 $ 2,561 
As of June 30, 2025, total unrecognized stock-based compensation expense related to unvested stock options was immaterial.
Performance-based stock options— Other than those described below, there have been no other changes to the Company’s performance-based stock options compared to those described in Note 11— Stockholders’ equity, included in Part II, Item 8 of the Company’s Annual Report.
As of June 30, 2025, there were 50,000 performance-based stock options outstanding, of which 44,791 were exercisable. As of June 30, 2025, total unrecognized stock-based compensation expense related to unvested performance-based stock options was immaterial.
Employee stock purchase plan— The 2021 Employee Stock Purchase Plan (the “ESPP”) became effective on October 29, 2021. The Company initially reserved 2,800,000 shares of the Company's common stock under the ESPP. Shares reserved for issuance shall increase on the first day of the fiscal year, beginning in fiscal 2023, in an amount equal to the least of 1% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, three times the initial number of shares reserved under the ESPP, or a lesser amount determined by the Company’s Board of Directors or compensation committee. On January 1, 2025, the shares available for future grants under the ESPP automatically increased by 1,474,842 pursuant to the above evergreen provision of the 2021 ESPP.
During the six months ended June 30, 2025, 430,926 shares of common stock were issued under the ESPP.
On May 20, 2025, the Company’s ESPP purchase price was reset for the November 2024 offering period. Under the reset provision, if the closing stock price on the purchase date falls below the closing stock price on the offering date of an ongoing offering period, the ongoing offering period terminates immediately following the purchase of ESPP shares on the purchase date. Participants in the terminated offering period are then automatically enrolled in the new offering period. The ESPP reset resulted in incremental compensation cost of $1.7 million for the reset participants. This amount, along with the unrecognized expense remaining from the original grant date fair value, will be recognized on a straight-line basis over the new offering period ending in May 2027.
The following table summarizes the weighted-average assumptions used in the Black-Scholes option-pricing model to estimate the fair value of employee stock purchase rights granted under the new ESPP offering period:
Three and Six Months Ended
June 30, 2025
June 30, 2024
Risk-free interest rate 4.1  % 5.1  %
Expected volatility 57.9  % 51.9  %
Expected life (in years) 1.3 1.3
Expected dividend yield —  — 

As of June 30, 2025, total unrecognized compensation cost for the ESPP was $5.2 million, which will be recognized over a weighted average period of 1.9 years.
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Total stock-based compensation expense included in the condensed consolidated statements of operations was as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Cost of revenue $ 1,782  $ 1,813  $ 3,354  $ 3,470 
Sales and marketing 5,608  7,664  11,015  15,005 
Research and development 4,920  7,329  9,628  14,004 
General and administrative 5,110  7,511  11,390  14,543 
Total stock-based compensation expense $ 17,420  $ 24,317  $ 35,387  $ 47,022 

The Company capitalized $1.6 million and $2.2 million of stock-based compensation expense as capitalized software during the three months ended June 30, 2025 and 2024, respectively, and $3.2 million and $4.5 million during the six months ended June 30, 2025 and 2024, respectively.

12. Net income (loss) per share
The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except share and per share amounts):

Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Numerator:
Net income (loss)
 $ 6,265  $ (31,814) $ 4,494  $ (50,153)
Denominator:
Weighted-average shares used in computing net income (loss) per share
Basic
 149,246,828  152,987,927  148,649,838  154,779,176 
Dilutive effect of awards issued under equity incentive plans
 1,245,175  —  2,066,347  — 
Diluted
 150,492,003  152,987,927  150,716,185  154,779,176 
Net income (loss) per share:
Basic
 $ 0.04  $ (0.21) $ 0.03  $ (0.32)
Diluted
 $ 0.04  $ (0.21) $ 0.03  $ (0.32)

The following potentially dilutive securities were excluded from the computation of diluted net income (loss) per share because the impact of including them would have been anti-dilutive:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
RSUs, PSUs, and restricted stock 12,171,047  18,187,009  10,435,350  18,187,009 
Stock options 150,380  2,417,020  170,641  2,417,020 
Contingently issuable shares under ESPP 108,298  150,511  108,298  150,511 
Total potentially dilutive securities 12,429,725  20,754,540  10,714,289  20,754,540 

13. Segment and geographic information
The Company’s Chief Executive Officer is its CODM. The CODM reviews separate financial information for the Company’s two operating and reportable segments, Enterprise and Consumer, in order to allocate resources and evaluate the Company’s financial performance.
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The Enterprise segment primarily generates revenue by selling subscription licenses to a variety of enterprise and government customers. The Consumer segment primarily generates revenue by selling access to course content directly to individual learners. The CODM assesses each segment's performance based on segment adjusted gross profit. The CODM uses segment adjusted gross profit during the annual budgeting process and considers budget to actual variances on a monthly basis when making decisions about the allocation of resources to each segment.
Segment adjusted gross profit, as presented below, is defined as segment revenue less segment adjusted cost of revenue. Segment adjusted cost of revenue includes content costs, customer support services, hosting and platform costs, and payment processing fees that are allocable to each segment. Segment adjusted gross profit excludes amortization of capitalized software, depreciation, stock-based compensation, and amortization of intangible assets included in cost of revenue, as the CODM does not include the information in his measurement of the performance of the operating segments. Additionally, the Company does not allocate sales and marketing expenses, research and development expenses, and general and administrative expenses because the CODM does not include the information in his measurement of the performance of the operating segments. The Udemy platform supports the operations of each segment.
The CODM does not use asset information by segments to assess performance and make decisions regarding allocation of resources, and the Company does not track its long-lived assets by segment. The geographic identification of these assets is set forth below.

Financial information for each reportable segment was as follows (in thousands):
Three Months Ended June 30, 2025
Enterprise Consumer Total
Revenue $ 129,297  $ 70,582  $ 199,879 
Content costs (20,483) (21,127) (41,610)
Customer support (9,754) (1,923) (11,677)
Other segment items (1)
 (1,532) (5,480) (7,012)
Segment adjusted gross profit $ 97,528  $ 42,052  $ 139,580 
Three Months Ended June 30, 2024
Enterprise Consumer Total
Revenue $ 120,556  $ 73,804  $ 194,360 
Content costs (22,086) (24,704) (46,790)
Customer support (9,841) (1,811) (11,652)
Other segment items (1)
 (1,389) (5,784) (7,173)
Segment adjusted gross profit $ 87,240  $ 41,505  $ 128,745 
Six Months Ended June 30, 2025
Enterprise Consumer Total
Revenue $ 257,045  $ 143,134  $ 400,179 
Content costs (40,854) (45,933) (86,787)
Customer support (19,639) (3,599) (23,238)
Other segment items (1)
 (3,040) (11,149) (14,189)
Segment adjusted gross profit $ 193,512  $ 82,453  $ 275,965 
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Six Months Ended June 30, 2024
Enterprise Consumer Total
Revenue $ 238,196  $ 153,010  $ 391,206 
Content costs (43,240) (52,749) (95,989)
Customer support (20,325) (3,642) (23,967)
Other segment items (1)
 (2,749) (11,906) (14,655)
Segment adjusted gross profit $ 171,882  $ 84,713  $ 256,595 
(1) Other segment items for each segment across all periods presented consisted of payment and mobile processing fees and costs associated with hosting digital content.
The following table provides a reconciliation from segment adjusted gross profit to net income (loss) before taxes (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Segment adjusted gross profit
 $ 139,580  $ 128,745  $ 275,965  $ 256,595 
Other costs of revenue (1)
 (7,531) (7,629) (14,473) (14,915)
Sales and marketing (79,820) (86,990) (162,320) (174,291)
Research and development (26,361) (32,408) (51,319) (63,631)
General and administrative (21,831) (27,264) (46,839) (52,033)
Restructuring charges (109) —  (1,578) — 
Total other income (expense), net 3,470  (5,466) 7,128  (49)
Net income (loss) before taxes
 $ 7,398  $ (31,012) $ 6,564  $ (48,324)
(1) Consists of amortization of capitalized software, depreciation, stock-based compensation, and amortization of intangible assets that are included in cost of revenue but excluded from segment adjusted gross profit.

Geographic information
Revenue: The following table summarizes the revenue by region based on the billing address of the Company’s customers (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
North America $ 79,146  $ 77,271  $ 157,624  $ 154,492 
Europe, Middle East, Africa 58,798  58,912  119,059  120,269 
Asia Pacific 48,084  44,334  95,978  89,212 
Latin America 13,851  13,843  27,518  27,233 
Total revenue $ 199,879  $ 194,360  $ 400,179  $ 391,206 
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The following table presents the percentage of revenue recognized in countries that individually accounted for at least 10% of total revenue for the periods presented:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
United States
 36  % 36  % 36  % 36  %
Japan
 12  % 11  % 12  % 11  %
Long-lived assets: The following table presents the Company’s long-lived assets, which consist of tangible property and equipment, net of depreciation, and operating lease ROU assets, by geographic region (in thousands):
June 30, December 31,
2025 2024
United States
 $ 10,758  $ 9,166 
Rest of world 5,534  6,320 
Total long-lived assets $ 16,292  $ 15,486 

14. Restructuring charges
2024 Restructuring— On September 11, 2024, the Company committed to a restructuring plan aimed at driving greater operational efficiencies through the reduction of organizational layers, optimization of the Company’s go-to-market organization, and relocating certain roles to lower cost locations (collectively, the “2024 Restructuring”). The 2024 Restructuring impacted approximately 280 of the Company’s global workforce, primarily those located in higher-cost regions, such as the United States, as well as those within the Company’s sales and marketing and research and development functions. Of those impacted, approximately 57% had no future substantive service requirement as of the communication date, while the remaining population provided services as employees during retention periods to assist with transition and training that were substantially completed by March 31, 2025.
As a result, the Company recognized total restructuring charges of $18.3 million. Of this total, $0.1 million and $1.6 million were recognized into expense during the three and six months ended June 30, 2025, respectively. The majority of the charges recognized were personnel-related costs, consisting of one-time severance payments, salary and wages earned over required retention periods, and other benefits.
For impacted employees with no future substantive service requirement, restructuring costs were recognized in-full as of the communication date. For employees rendering services through a retention period, one-time severance costs settled at the end of the retention period were recognized as restructuring costs on a straight-line basis from the communication date to the end of the required retention period. Other direct and incremental costs were recognized as incurred.
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Restructuring charges are presented as separate operating expenses within the Company’s condensed consolidated statements of operations. The following tables summarize activities related to the restructuring liabilities recorded in accrued compensation and benefits in the accompanying condensed consolidated balance sheets (in thousands):

Beginning balance — March 31, 2025
 $ 2,708 
Restructuring charges 109 
Settlements (2,659)
Ending balance — June 30, 2025
 $ 158 
Beginning balance — December 31, 2024
 $ 6,489 
Restructuring charges 1,578 
Settlements (7,909)
Ending balance — June 30, 2025
 $ 158 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q. In addition to historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. You should review the sections titled “Special Note Regarding Forward-Looking Statements” for a discussion of forward-looking statements and in Part II, Item 1A, “Risk Factors” for a discussion of factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis and elsewhere in this Form 10-Q.
Overview
Our mission is to transform lives through learning.
We believe traditional skills development and validation methods are fast becoming outdated. Technological advancements, such as generative artificial intelligence (“AI”), have significantly altered the types of skills required of workers across nearly every industry and role, and lifelong training and continuous skills acquisition are becoming the norm. Udemy’s AI-powered skills acceleration platform empowers organizations and individuals with effective skill acquisition and development through various modalities, connecting learners around the world with relevant and up-to-date content created by experts and practitioners.
Udemy’s consumer marketplace has attracted nearly 81 million learners in over 180 countries who are looking to develop the skills they need to attain in-demand jobs and advance their career. Our expansive ecosystem comprises more than 85,000 instructors who have developed and published over 250,000 courses across 75 languages, spanning critical skill domains including technology, business, leadership, and personal development. Based on ratings and reviews from enrolled learners on our marketplace, we curate our highest-quality content for Udemy’s enterprise SaaS platform, Udemy Business (UB), which enables companies around the world to offer effective on-demand skills development solutions for employees, immersive laboratory-style learning for technology teams, and cohort-based learning focused on leadership development.
Our dual-revenue model offers consumers flexible purchasing options: either subscription-based plans providing unlimited access to a curated selection of premium content for monthly or annual periods, or perpetual single-course purchases granting lifetime access to specific content. These offerings allow us to capitalize on both recurring revenue opportunities and individual transaction value, while simultaneously addressing varying consumer preferences for skill development across global markets and enhancing our ability to monetize effectively.
Advancements in AI are fundamentally transforming our learning platform capabilities beyond traditional linear video instruction, enabling Udemy to deliver more personalized, efficient, and measurable skill development experiences. Our AI investments power sophisticated skills assessment technology that evaluates a learner's existing competencies and automatically generates customized learning paths tailored to individual development needs. This has expanded our product offering to include high-engagement modalities, such as interactive simulations, AI-powered role-play exercises, microlearning content, and continuous knowledge reinforcement tools that verify skill mastery and retention. These capabilities represent substantial differentiation in the learning marketplace, can accelerate time-to-proficiency for learners, and help strengthen our value proposition for both enterprise customers and individual learners.
Recent Developments
In May 2025, we entered into a Credit Agreement with Citibank and certain other financial institutions. The revolving credit facility established by this agreement provides us with revolving commitments in an aggregate principal amount of $200.0 million, all of which were undrawn as of June 30, 2025. The revolving credit facility matures in May 2030.
Key factors impacting our performance
We believe that the growth of our business and our future success are dependent upon many factors. While each of these factors presents significant opportunities for us, these factors also pose challenges that we must successfully address in order to sustain the growth of our business and enhance our results of operations.
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Ability to attract and engage new learners and Udemy Business customers
To grow our business, we must attract new learners and UB customers efficiently and increase engagement on our platform over time. We acquire a substantial portion of our learners via organic channels and also use paid marketing to further enhance the growth of our learner base. Our organic channels include those outside of our paid marketing efforts, such as a Udemy brand name internet search. Once we bring new learners and UB customers onto our platform, we work to create a best-in-class experience to encourage engagement to deliver measurable career and business outcomes.
Ability to retain and expand our existing learner and customer relationships
Our business and results of operations will depend on our ability to drive greater retention and expansion within our existing customer base and expand adoption of our subscription offerings within our existing learner base.
Our efforts to grow our UB offering are focused primarily on corporate and government customers. Historically, we have expanded from individual department to multi-department to enterprise-wide sales as our value is proven. Building upon this success, we believe a significant opportunity exists for us to acquire new UB customers and expand our existing UB customers’ license count by identifying new use cases and increasing the size of existing deployments. In particular, we believe that our UB Large Customers, which we define as companies with at least 1,000 employees, present the most significant opportunities for us to retain and grow revenue over time, given the wider range of potential use cases and expansion opportunities.
We often enter into customized contractual arrangements with our UB customers in which we offer more favorable pricing terms in exchange for larger total contract values that accompany larger deployments and longer terms. Over the long term, as we drive a greater portion of our revenue through our deployments with UB customers, we expect that our revenue will continue to grow, but the price we charge UB customers per seat may decline, which could reduce margins in the future.
Our efforts to grow our existing relationships with our consumer learners are focused on increasing their engagement and converting free learners first into purchasers of individual courses, and then into monthly or annual subscribers. New learners to our platform may first engage with our free courses, which serve as a funnel to grow our total learner base and drive purchases of our paid offerings, including UB referrals and consumer subscription offerings.
As of June 30, 2025, subscription offerings across both our Consumer and Enterprise segments accounted for approximately 70% of our consolidated revenue. We expect growth in our subscription offerings to improve the predictability of our revenue period-to-period; however, the impact of new or renewed subscriptions, or a decline in subscriptions, during any one period may not be fully or immediately reflected in our revenue for that period.
Ability to source in-demand content from our instructors
We believe that learners and UB customers are attracted to Udemy largely because of the high quality and wide selection of content our instructors offer. Continuing to source in-demand content across various modalities from our instructors will be an important factor in attracting learners and UB customers and growing our revenue over time. When we offer content as part of the UB and consumer subscription offerings, our instructors agree to distribute such content exclusively through our platform, which we believe demonstrates our ability to increase the value of our platform through unique content.
We view the breadth and diverse expertise of our instructors as one of our competitive advantages. Our ability to create attractive content creation incentive opportunities while optimizing the revenue share structure is a key element of supporting the long-term growth of our business. Furthermore, a significant portion of the most popular content on our platform, and as a result a significant portion of our revenue, is attributable to a limited number of our instructors. We experienced minimal turnover among top instructors during the three and six months ended June 30, 2025.
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Impact of mix of Enterprise and Consumer segments
Our mix of revenue continues to shift toward our higher-margin Enterprise segment from our Consumer segment. Our Enterprise segment’s higher gross margins are primarily driven by comparably lower content costs, though partially offset by higher customer support costs. The mix of customer acquisition methods in our Consumer segment will substantially impact our financial performance. We presently expect that revenue from our Enterprise segment will continue to grow faster than our Consumer segment, which will be beneficial to our overall margins.
Ability to expand our international footprint
We currently generate a majority of our revenue outside North America. We see a significant opportunity to expand our offerings into regions with large underserved adult and corporate learning populations. We have invested, and plan to continue to invest, in personnel and marketing efforts to support our international growth and expand our international operations as part of our strategy to grow our customer and learner base, particularly among our UB customers. We also plan to continue investing in strategic partnerships that either extend our marketing reach or the capabilities and reach of our global go-to-market sales team. Our success in certain markets, such as Japan, depends on strategic partnerships with key resellers.
Our investment in growth
We are actively investing in our business as we believe that we are only just beginning to penetrate our market opportunity. We are prioritizing resources for high-growth opportunities through expanding and deepening our opportunities with larger enterprise customers, further penetrating our existing customer base, and pursuing strategic partnerships and acquisitions. As we continue to build our sales and marketing efforts, expand our content catalog, develop our immersive learning capabilities, execute on our operational efficiency initiatives, and invest in our technology development, including investments in generative AI, we anticipate our operating expenses will generally decrease as a percentage of revenue over time. Any investments we make to facilitate our future growth, whether organically or through acquisitions or strategic partnerships, will occur in advance of the benefits from such investments.
Pace of adoption of cloud-based skill development solutions
Our ability to grow our learner base and drive market adoption of our platform is affected by the overall demand for cloud-based skill development solutions. The market for cloud-based skill development is less mature than the market for in-person, instructor-led-training, and potential customers may be slow or unwilling to migrate from these legacy approaches. We believe that as technology becomes increasingly critical to business operations, the need for cloud-based skill development solutions, particularly an integrated enterprise-grade platform such as ours, will increase, and our customer base and the breadth and deployment of usage in our customer base will also increase. However, it is difficult to predict customer adoption rates and demand, the future growth rate and size of the market for cloud-based skill development solutions, or the entry of competitive solutions.
Components of results of operations
Revenue
We recognize revenue from contracts with UB customers and paid consumer learners by delivering access to our skill development platform.
Enterprise revenue primarily relates to enterprise license subscription contracts with annual or multi-year subscription terms. Enterprise license subscriptions include Team Plan, Enterprise Plan, Udemy Business Pro, and Leadership Academy. Enterprise subscriptions are typically billed in advance on a quarterly or annual basis. Subscription revenue excludes any taxes to be remitted to governmental authorities. Access to the Udemy platform represents a series of distinct services as we continually provide access to skill development content and fulfill our obligation to the UB customer over the subscription term. Because the series of distinct services represents a single performance obligation that is satisfied over time, we recognize revenue ratably over the contractual subscription term. Enterprise revenue recognized from professional services, in which Udemy provides customers with effective support and strategic guidance to enable learners and align with business goals, was immaterial for the periods presented.
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Consumer revenue consists of individual content purchases made by individual learners, as well as our consumer subscription offerings. Consumer revenue includes the gross transaction value paid by the learner at checkout, net of (a) actual and estimated refunds and (b) passthrough taxes collected from learners and remitted to governmental authorities. After a successful checkout, consumer learners receive a non-exclusive license to the digital course content in addition to stand-ready access to the Udemy platform hosting services needed to access the content. Access to the online content on the Udemy platform represents a series of distinct services as we continually provide access to and fulfill our hosting obligation to the learner. This series of distinct services represents a single performance obligation that is satisfied over time. Revenue from single course purchases is recognized ratably over the estimated service period, which is four months from the date of enrollment, while revenue from consumer subscriptions is recognized ratably over the contractual subscription term.
We are the principal with respect to revenue generated from sales to UB and consumer customers as we control the performance obligation and are the primary obligor with respect to delivering our customers access to the course content.
Cost of revenue
Cost of revenue primarily consists of content costs, which are the payments to our instructors. Content costs are driven by the means by which we acquired the learner consuming the content. For courses offered on Udemy’s consumer marketplace, instructors earn a specific percentage of the net sale amount when a learner purchases the instructor’s course. For courses offered through Udemy Business or a consumer subscription offering, instructors earn a pro-rata share of a monthly instructor payments pool for that subscription offering. Each month, Udemy calculates the revenue for each subscription offering, with a fixed percentage allocated as an instructor payments pool. Instructors whose content is included in the collection earn a prorated portion of this pool based on the number of minutes of consumption their courses achieved that month.
Content costs are recorded as cost of revenue in the period earned by our instructors. Content costs as a percentage of revenue for our UB and consumer subscription offerings are lower relative to individual course content purchases in our consumer offering. As a result, shifts in the mix between offerings and changes to the revenue share structure for UB and consumer subscriptions are expected to be a significant driver of future changes in gross margin. We are reducing the instructor revenue share for our subscription offerings, which are derived as a percentage of total UB and consumer subscription revenue, to 15% by 2026. The first rate adjustment to 20% was effective on January 1, 2024, and the second rate adjustment to 17.5% was effective on January 1, 2025.
For consumer single course purchases, content costs are incurred at the time of purchase. As consumer course content revenue is recognized ratably over an estimated service period of four months, consumer gross margins are lower in the period of purchase, and higher in the remaining periods of the estimated service period over which revenue is recognized. For our UB and consumer subscription offerings, content costs are incurred based on monthly subscription fees, and margins are more stable from period to period.
Cost of revenue also includes payment and mobile processing fees, costs associated with hosting digital content, employee related expenses for our customer support organization, including salaries, benefits, stock-based compensation, facilities and other expenses, depreciation of network equipment, amortization of capitalized software, amortization of vendor relationship and developed technology intangible assets acquired through business combinations, and the portion of fees paid to certain reseller partners attributable to their providing customer support services to UB customers. We expect cost of revenue as a percentage of revenue to generally decrease, as we increase the percentage of revenue derived from our UB offering and decrease the instructor revenue share percentage.
Operating expenses
Operating expenses consist of sales and marketing, research and development, general and administrative expenses, and restructuring charges. Personnel costs are the most significant component of our operating expenses and consist of salaries, benefits, bonuses, stock-based compensation, and commissions. Our operating expenses also include allocated costs of facilities, information technology, depreciation, and amortization. We are focused on investing in initiatives which will drive operational efficiency while focusing resources on high-growth opportunities, and as a result we anticipate our operating expenses will generally decrease as a percentage of revenue over time.
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Sales and marketing
Our sales and marketing expenses consist primarily of personnel-related costs, including stock-based compensation, marketing costs, sponsorship and brand costs, costs related to customer and instructor acquisition, amortization of deferred contract costs, and amortization of trade name and customer relationship intangible assets acquired through business combinations. Sales and marketing expenses also consist of costs incurred for hosting and customer support services related to providing our platform to free learners. While sales and marketing expenses as a percentage of revenue may vary from period to period, in part due to the extent and timing of sales and marketing initiatives, we generally expect this percentage to decrease over the long term given our focus on sales efficiency and our expansion strategy.
Research and development
Our research and development expenses consist primarily of personnel-related costs, including stock-based compensation, costs related to the ongoing management, maintenance, and expansion of features and services offered on our platform, and amortization of assembled workforce intangible assets acquired through asset acquisitions. Research and development costs also include contracted services, supplies, and other miscellaneous expenses. We believe that continued investment in our platform is important to our future growth and to maintain and attract learners and UB customers to our platform. While research and development expenses as a percentage of revenue may vary from period to period, in part due to the timing of investments in our platform, we generally expect this percentage to decrease over the long term given our focus on operational efficiency and high-growth opportunities.
General and administrative
Our general and administrative expenses consist primarily of personnel-related costs, including stock-based compensation, costs related to our executive, legal, finance, and human resources departments, as well as charges for indirect tax reserves, allowance for credit losses, professional fees, and other corporate expenses. We expect general and administrative expenses as a percentage of revenue to vary from period to period but generally decrease over the long term as we benefit from greater operational scale and efficiency.
Restructuring charges
Our restructuring charges consist primarily of personnel expenses, such as employee severance, benefits costs, and stock-based compensation, as well as other direct and incremental costs incurred as a result of non-recurring restructuring activities that we committed to during the third quarter of 2024.
Interest income
Interest income consists primarily of interest income earned on our cash equivalents and short-term investments, including amortization of premiums and accretion of discounts related to our available-for-sale marketable securities, net of associated fees.
Interest expense
Interest expense consists primarily of interest expense related to our revolving credit facility and certain indirect tax reserves.
Other income (expense), net
Other expense, net consists of foreign currency transaction gains and losses, as well as changes in the valuation of strategic investments, if any.
Income tax provision
Our income tax provision consists primarily of income taxes in certain foreign jurisdictions in which we conduct business. We have a full valuation allowance against our U.S. federal and state deferred tax assets as the realization of the full amount of these deferred tax assets is uncertain, including net operating loss carryforwards and tax credits related primarily to research and development. The valuation allowance is driven by our historical overall loss position, and we will not be able to utilize any of these favorable tax attributes until we are consistently in a taxable income position. When we begin to consistently operate in a taxable income position, we may release portions of the valuation allowance to recognize and use those tax attributes. Until then, we expect to maintain this full valuation allowance until it becomes more likely than not that the deferred tax assets will be realized.
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Results of operations
The following table summarizes our results of operations for the periods presented. The results below are not necessarily indicative of results to be expected for future periods. Results are as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025
 2024
Revenue $ 199,879  $ 194,360  $ 400,179  $ 391,206 
Cost of revenue (1)(2) 67,830  73,244  138,687  149,526 
Gross profit 132,049  121,116  261,492  241,680 
Operating expenses (1)(2)
Sales and marketing 79,820  86,990  162,320  174,291 
Research and development 26,361  32,408  51,319  63,631 
General and administrative 21,831  27,264  46,839  52,033 
Restructuring charges 109  —  1,578  — 
Total operating expenses 128,121  146,662  262,056  289,955 
Income (loss) from operations
 3,928  (25,546) (564) (48,275)
Other income (expense), net
Interest income 3,663  5,195  7,238  10,923 
Interest expense (120) (77) (135) (80)
Other income (expense), net (73) (10,584) 25  (10,892)
Total other income (expense), net 3,470  (5,466) 7,128  (49)
Net income (loss) before taxes
 7,398  (31,012) 6,564  (48,324)
Income tax provision 1,133  802  2,070  1,829 
Net income (loss)
 $ 6,265  $ (31,814) $ 4,494  $ (50,153)
(1)Includes stock-based compensation expense as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Cost of revenue $ 1,782  $ 1,813  $ 3,354  $ 3,470 
Sales and marketing 5,608  7,664  11,015  15,005 
Research and development 4,920  7,329  9,628  14,004 
General and administrative 5,110  7,511  11,390  14,543 
Total stock-based compensation expense $ 17,420  $ 24,317  $ 35,387  $ 47,022 
(2)    Includes amortization of intangible assets as follows (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025
 2024
Cost of revenue $ —  $ 725  $ —  $ 1,450 
Sales and marketing 229  229  459  458 
Research and development
 188  —  188  — 
Total amortization of intangible assets $ 417  $ 954  $ 647  $ 1,908 



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The following table summarizes our results of operations as a percentage of revenue for each of the periods indicated:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024
2025
 2024
Revenue 100  % 100  % 100  % 100  %
Cost of revenue 34  38  35  38 
Gross profit 66  62  65  62 
Operating expenses — 
Sales and marketing 40  45  41  45 
Research and development 13  17  13  16 
General and administrative 11  14  11  14 
Restructuring charges —  —  —  — 
Total operating expenses 64  76  65  75 
Income (loss) from operations
 2  (14) —  (13)
Other income (expense), net
Interest income 2  3  2  3 
Interest expense —  —  —  — 
Other income (expense), net —  (5) —  (3)
Total other income (expense), net 2  (2) 2  — 
Net income (loss) before taxes
 4  (16) 2  (13)
Income tax provision 1  —  1  — 
Net income (loss)
 3  % (16) % 1  % (13) %
Comparison of the three and six months ended June 30, 2025 and 2024
Revenue
Three Months Ended June 30, Change Six Months Ended June 30, Change
2025
 2024 $ %
2025
 2024 $ %
Revenue
(in thousands, except percentages)
Enterprise $ 129,297  $ 120,556  $ 8,741  7  % $ 257,045  $ 238,196  $ 18,849  8  %
Consumer 70,582  73,804  (3,222) (4) % 143,134  153,010  (9,876) (6) %
Total revenue $ 199,879  $ 194,360  $ 5,519  3  % $ 400,179  $ 391,206  $ 8,973  2  %
Revenue for the three months ended June 30, 2025, was $199.9 million, compared to $194.4 million for the same period in the prior year, which represents an increase of $5.5 million, or 3%. The increase in revenue for the three months ended June 30, 2025 was primarily driven by an increase in revenue from our Enterprise segment while being partially offset by a decrease in revenue from our Consumer segment.
For the three months ended June 30, 2025, Enterprise revenue was $129.3 million, or 65% of total revenue, compared to $120.6 million, or 62% of total revenue, for the same period in the prior year. The $8.7 million, or 7%, increase in Enterprise revenue was driven by increases in both the number of UB customers and average deal sizes for new customers, and was partially offset by lower net retention rates. Although churn outpaced expansion across all existing UB customers, as reflected by our UB NDRR of 95% as of June 30, 2025, net retention among our UB Large Customers was higher, as reflected by our UB Large Customer NDRR of 99% as of June 30, 2025.
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For the three months ended June 30, 2025, Consumer revenue was $70.6 million, or 35% of total revenue, compared to $73.8 million or 38% of total revenue, for the same period in the prior year. The $3.2 million, or 4%, decrease in Consumer revenue was primarily due to a decrease in revenue recognized from single course purchases. Monthly average buyers purchasing single courses, as well as the amount of revenue recognized in the current period that was deferred from course purchases in the prior period, each decreased across the comparative periods. Foreign currency exchange rates also contributed to the decrease. These factors were partially offset by an increase in revenue recognized from consumer subscriptions and a $2.6 million increase in breakage revenue related to Udemy credits, of which $2.5 million related to previously satisfied performance obligations, after the Company determined it was entitled to recognize breakage for unredeemed Udemy credits during the second quarter of 2025.
Revenue for the six months ended June 30, 2025, was $400.2 million, compared to $391.2 million for the same period in the prior year, which represents an increase of $9.0 million, or 2%. The increase in revenue for the six months ended June 30, 2025 was primarily driven by an increase in revenue from our Enterprise segment while being partially offset by a decrease in revenue from our Consumer segment.
For the six months ended June 30, 2025, Enterprise revenue was $257.0 million, or 64% of total revenue, compared to $238.2 million, or 61% of total revenue, for the same period in the prior year. The $18.8 million, or 8%, increase in Enterprise revenue was driven by increases in both the number of UB customers and average deal sizes for new customers, and was partially offset by lower net retention rates. Although churn outpaced expansion across all existing UB customers, as reflected by our UB NDRR of 95% as of June 30, 2025, net retention among our UB Large Customers was higher, as reflected by our UB Large Customer NDRR of 99% as of June 30, 2025.
For the six months ended June 30, 2025, Consumer revenue was $143.1 million, or 36% of total revenue, compared to $153.0 million, or 39% of total revenue, for the same period in the prior year. The $9.9 million, or 6%, decrease in Consumer revenue was primarily due to a decrease in revenue recognized from single course purchases. Monthly average buyers purchasing single courses, as well as the amount of revenue recognized in the current period that was deferred from course purchases in the prior period, each decreased across the comparative periods. Foreign currency exchange rates also contributed to the decrease. These factors were partially offset by an increase in revenue recognized from consumer subscriptions and a $2.6 million increase in breakage revenue related to Udemy credits, of which $2.5 million related to previously satisfied performance obligations, after the Company determined it was entitled to recognize breakage for unredeemed Udemy credits during the second quarter of 2025.
Cost of revenue, gross profit and gross margin
Three Months Ended June 30, Change Six Months Ended June 30, Change
2025
 2024 $ %
2025
 2024 $ %
(in thousands, except percentages)
Cost of revenue 67,830  73,244  $ (5,414) (7) % 138,687  149,526  $ (10,839) (7) %
Gross profit 132,049  121,116  $ 10,933  9  % 261,492  241,680  $ 19,812  8  %
Gross margin 66  % 62  % 65  % 62  %
Cost of revenue for the three months ended June 30, 2025, was $67.8 million, compared to $73.2 million for the same period in the prior year. The decrease of $5.4 million, or 7%, across the comparative periods was driven by a $5.2 million decrease in content costs and a $0.7 million decrease in amortization of intangible assets, which were partially offset by a $0.6 million increase in amortization of capitalized software.
Content costs for the Enterprise and Consumer segments were $20.5 million and $21.1 million for the three months ended June 30, 2025, respectively, compared to $22.1 million and $24.7 million for the same period in the prior year, respectively. Segment content costs as a percentage of segment revenue for the Enterprise and Consumer segments were 16% and 30% for the three months ended June 30, 2025, respectively, compared to 18% and 33% for the same period in the prior year, respectively. The reduction in content costs as a percentage of revenue was primarily driven by the reduction in instructor revenue share from 20% to 17.5% for all subscription offerings, which became effective on January 1, 2025, as well as the continued mix shift from single course purchases to subscription purchases in our Consumer segment.
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In our Enterprise segment, customer support costs and other segment items were generally consistent with those costs incurred the same period in the prior year. In our Consumer segment, customer support costs and other segment items were generally consistent with those costs incurred the same period in the prior year.
Gross margin was 66% for the three months ended June 30, 2025, compared to 62% for the same period in the prior year. The increase in gross margin was primarily due to the reduction in instructor revenue share for all subscription offerings, the continued shift in mix of revenue toward our Enterprise segment and subscription offerings, and the impact of breakage revenue as discussed above.
Cost of revenue for the six months ended June 30, 2025, was $138.7 million, compared to $149.5 million for the same period in the prior year. The decrease of $10.8 million, or 7%, across the comparative periods was driven by a $9.2 million decrease in content costs and a $1.5 million decrease in amortization of intangible assets.
Content costs for the Enterprise and Consumer segments were $40.9 million and $45.9 million for the six months ended June 30, 2025, respectively, compared to $43.2 million and $52.7 million for the same period in the prior year, respectively. Segment content costs as a percentage of segment revenue for the Enterprise and Consumer segments were 16% and 32% for the six months ended June 30, 2025, respectively, compared to 18% and 34% for the same period in the prior year, respectively. The reduction in content costs as a percentage of revenue was primarily driven by the reduction in instructor revenue share from 20% to 17.5% for all subscription offerings, which became effective on January 1, 2025, as well as the continued mix shift from single course purchases to subscription purchases in our Consumer segment.
In our Enterprise segment, customer support costs decreased by $0.7 million as compared to the same period in the prior year. In our Consumer segment, other segment items, comprised of payment processing fees and hosting costs, decreased by $0.8 million as compared to the same period in the prior year.
Gross margin was 65% for the six months ended June 30, 2025, compared to 62% for the same period in the prior year. The increase in gross margin was primarily due to the reduction in instructor revenue share for all subscription offerings, the continued shift in mix of revenue toward our Enterprise segment and subscription offerings, and the impact of breakage revenue as discussed above.
Operating expenses
Three Months Ended June 30, Change Six Months Ended June 30, Change
2025
 2024 $ %
2025
 2024 $ %
Operating expenses (in thousands, except percentages)
Sales and marketing $ 79,820  $ 86,990  $ (7,170) (8) % $ 162,320  $ 174,291  $ (11,971) (7) %
Research and development 26,361  32,408  (6,047) (19) % 51,319  63,631  (12,312) (19) %
General and administrative 21,831  27,264  (5,433) (20) % 46,839  52,033  (5,194) (10) %
Restructuring charges 109  —  109  n/m 1,578  —  1,578  n/m
Total operating expenses $ 128,121  $ 146,662  $ (18,541) (13) % $ 262,056  $ 289,955  $ (27,899) (10) %
n/m - not meaningful
Sales and marketing. Sales and marketing expenses for the three months ended June 30, 2025 were $79.8 million, compared to $87.0 million for the same period in the prior year. The $7.2 million decrease in sales and marketing expense was primarily due to a $3.5 million decrease in personnel-related expenses, a $2.4 million decrease in direct marketing costs, and a $2.1 million decrease in stock-based compensation expense. These decreases were partially offset by a $1.4 million increase in amortization of deferred contract costs.
Sales and marketing expenses for the six months ended June 30, 2025 were $162.3 million, compared to $174.3 million for the same period in the prior year. The $12.0 million decrease in sales and marketing expense was primarily due to a $6.0 million decrease in direct marketing costs, a $5.5 million decrease in personnel-related expenses, and a $4.0 million decrease in stock-based compensation expense. These decreases were partially offset by a $3.0 million increase in amortization of deferred contract costs.
Research and development. Research and development expenses for the three months ended June 30, 2025 were $26.4 million, compared to $32.4 million for the same period in the prior year. The $6.0 million decrease was primarily due to a $3.6 million decrease in personnel-related expenses and a $2.4 million decrease in stock-based compensation expense.
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Research and development expenses for the six months ended June 30, 2025 were $51.3 million, compared to $63.6 million for the same period in the prior year. The $12.3 million decrease was primarily due to a $7.5 million decrease in personnel-related expenses and a $4.4 million decrease in stock-based compensation expense.
General and administrative. General and administrative expenses for the three months ended June 30, 2025 were $21.8 million, compared to $27.3 million for the same period in the prior year. The $5.4 million decrease was primarily due to $4.5 million of professional services costs incurred in the comparative period that were not part of ongoing operations and a $2.4 million decrease in stock-based compensation expense. These costs were partially offset by a $1.2 million increase in professional services in support of ongoing operations.
General and administrative expenses for the six months ended June 30, 2025 were $46.8 million, compared to $52.0 million for the same period in the prior year. The $5.2 million decrease was primarily due to $4.5 million of professional services costs incurred in the comparative period that were not part of ongoing operations and a $3.2 million decrease in stock-based compensation expense. These costs were partially offset by a $1.6 million increase in current period charges to the credit losses reserve and a $1.1 million increase in professional services in support of ongoing operations.
Restructuring charges. As a result of the strategic restructuring activities announced in September 2024, we recognized $0.1 million and $1.6 million of restructuring charges during the three and six months ended June 30, 2025, respectively. The majority of the charges recognized were made up of personnel-related costs, consisting of one-time severance payments, salary and wages earned over required retention periods, and other benefits. There were no restructuring charges recorded during the three and six months ended June 30, 2024.

Total other income (expense), net
Three Months Ended June 30, Change Six Months Ended June 30, Change
2025
 2024 $ %
2025
 2024 $ %
Other income (expense), net (in thousands, except percentages)
Interest income $ 3,663  $ 5,195  $ (1,532) (29) % $ 7,238  $ 10,923  $ (3,685) (34) %
Interest expense (120) (77) (43) 56  % (135) (80) (55) 69  %
Other income (expense), net (73) (10,584) 10,511  (99) % 25  (10,892) 10,917  (100) %
Total other income (expense), net $ 3,470  $ (5,466) $ 8,936  (163) % $ 7,128  $ (49) $ 7,177  n/m
n/m - not meaningful
We recorded total other income, net of $3.5 million for the three months ended June 30, 2025, compared to total other expense, net of $5.5 million for the same period in the prior year. The $8.9 million increase in total other income (expense), net was primarily driven by an impairment charge of $10.3 million recognized on our strategic investments in the three months ended June 30, 2024, which was partially offset by a $1.5 million decrease in interest and accretion income on our existing cash, cash equivalents, and marketable securities portfolio.
We recorded total other income, net of $7.1 million for the six months ended June 30, 2025, compared to an immaterial amount of total other expense, net for the same period in the prior year. The $7.2 million increase in total other income (expense), net was primarily driven by an impairment charge of $10.3 million recognized on our strategic investments in the six months ended June 30, 2024, which was partially offset by a $3.7 million decrease in interest and accretion income on our existing cash, cash equivalents, and marketable securities portfolio.
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Income tax provision
Three Months Ended June 30, Change Six Months Ended June 30, Change
2025
 2024 $ %
2025
 2024 $ %
(in thousands, except percentages)
Income tax provision $ 1,133  $ 802  $ 331  41  % $ 2,070  $ 1,829  $ 241  13  %
For the three months ended June 30, 2025, we recognized income tax expense of $1.1 million compared to $0.8 million for the same period in the prior year. Income tax expense for the three months ended June 30, 2025 and 2024, was primarily comprised of foreign and state taxes.
For the six months ended June 30, 2025, we recognized income tax expense of $2.1 million, compared to $1.8 million for the same period in the prior year. Income tax expense for the six months ended June 30, 2025 and 2024, was primarily comprised of foreign and state taxes.
Certain key business metrics and non-GAAP financial metrics
In addition to the measures presented in our condensed consolidated financial statements, we use the key business metrics and non-GAAP financial metrics identified below to help us assess the health of our community, evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.
Udemy Business customers
We count the total number of UB customers at the end of each period. To do so, we generally count unique customers using the concept of a domestic ultimate parent, defined as the highest business in the family tree that is in the same country as the contracted entity. In some cases, we deviate from this methodology, defining the contracted entity as a unique customer despite the existence of a domestic ultimate parent. This often occurs where the domestic ultimate parent is a financial owner, government entity, conglomerate, or acquisition target where we have contracted directly with the subsidiary. We define a UB customer as a customer who purchases Udemy via our direct sales force, reseller partnerships or through our self-service platform. We believe that the number of UB customers and our ability to increase this number is an important indicator of the growth of our UB and future revenue trends. The increase in UB customers is primarily attributable to the continued pursuit of our global expansion strategy.

June 30,
2025
 2024
%
Udemy Business customers 17,107  16,595  3%
Udemy Business Annual Recurring Revenue
We disclose our UB Annual Recurring Revenue (“ARR”) as a measure of our Enterprise revenue growth. ARR represents the annualized value of our UB customer contracts on the last day of a given period. Only revenue from closed UB contracts with active seats as of the last day of the period are included. The increase in UB ARR was primarily driven by an increase in the number of UB customers, as well as increased average deal size in new customers, and was partially offset by churn outpacing expansion across all existing customers, although net retention among our UB Large Customers was higher.

June 30,
2025
 2024
%
(in thousands, except percentages)
Udemy Business annual recurring revenue $ 520,010  $ 492,583  6%
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Udemy Business Net Dollar Retention Rate and Udemy Business Large Customer Net Dollar Retention Rate
We disclose UB Net Dollar Retention Rate, or UB NDRR, as a measure of revenue growth for all UB customers within our Enterprise segment, including UB Large Customers, which we define as companies with at least 1,000 employees. We believe UB NDRR is an important metric that provides insight into the long-term value of our UB subscription agreements and our ability to retain and grow revenue from our UB customers. We believe UB Large Customer NDRR reflects our ability to retain and expand our footprint with larger organizations, who present greater opportunities for us to retain and grow revenue given the wider range of potential use cases and expansion opportunities.
We calculate UB NDRR as the total ARR at the end of a trailing twelve-month period divided by the total ARR at the beginning of a trailing twelve-month period for the cohort of all UB customers active at the beginning of the trailing twelve-month period. We calculate UB Large Customer NDRR as the total UB Large Customer ARR at the end of a trailing twelve-month period divided by the total Large Customer ARR at the beginning of a trailing twelve-month period for the cohort of UB customers with at least 1,000 employees active at the beginning of the trailing twelve-month period. Total ARR and Large Customer ARR at the end of a trailing twelve-month period are calculated as ARR and Large Customer ARR, respectively, at the beginning of a trailing twelve-month period that are then adjusted for upsells, downsells, and churns for the same cohort of customers during that period. Large Customer ARR represents the annualized value of contracts for UB customers with active seats and having at least 1,000 employees on the last day of a given period.
Our UB NDRR and UB Large Customer NDRR are expected to fluctuate in future periods due to a number of factors, including the growth of our revenue base, the penetration within our learner base, expansion of products and features, and our ability to retain our UB customers. The decreases in our NDRR metrics were driven by lower rates of upsells and expansions and lower net retention rates across all existing customers, although net retention among our UB Large Customers was higher.
June 30,
2025
 2024
Udemy Business net dollar retention rate 95  % 101  %
Udemy Business Large Customer net dollar retention rate 99  % 108  %
Monthly average buyers
A buyer is a consumer who purchases a course or subscription through our direct-to-consumer offering. We first determine the number of monthly buyers by taking the total buyers of single courses during a given month plus the total active, paid consumer subscribers at any point in that month, adjusting for duplicate buyers that may be present in both totals. We then calculate monthly average buyers by taking an average of the monthly buyer totals over a particular period, such as a fiscal year. Our monthly average buyer count is not intended as a measure of active engagement, as not all buyers are active at any given time or over any given period. We believe that the number of monthly average buyers in a given period is an important indicator of the growth of our business and potential future revenue trends. Our monthly average buyers count is expected to fluctuate in future periods due to a number of factors, including the growth of our customer base, expansion of products and features, and our ability to retain our Consumer customers.

Three Months Ended June 30, Six Months Ended June 30,
2025
 2024
%
2025
 2024
%
(in thousands, except percentages)
Monthly average buyers 1,241  1,286  (3)% 1,326  1,364  (3)%
Segment revenue and segment adjusted gross profit
Our revenue is generated from our UB and Consumer offerings, which respectively correspond to our two operating and reportable segments, Enterprise and Consumer. Segment revenue represents the revenue recognized from each of these offerings and is a key measure of the performance of our platform, and in turn drives our financial performance.
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We also monitor segment adjusted gross profit as a key metric to help evaluate the financial performance of our individual segments and our business as a whole. Segment adjusted gross profit is defined as segment revenue less segment adjusted cost of revenue. Segment adjusted cost of revenue includes content costs, customer support services, hosting and platform costs, and payment processing fees that are allocable to each segment. Segment adjusted gross profit excludes amortization of capitalized software, depreciation, stock-based compensation, and amortization of intangible assets included in cost of revenue as our chief operating decision maker does not include the information in his measurement of the performance of the operating segments. Content costs, which are payments made to our instructors, are the largest individual component of segment adjusted cost of revenue. We expect to increase the percentage of our revenue derived from our Enterprise segment over time, which we expect will improve our gross margins.
Three Months Ended June 30, Six Months Ended June 30,
2025
 2024
2025
 2024
(in thousands, except percentages)
Enterprise segment revenue $ 129,297  $ 120,556  $ 257,045  $ 238,196 
Enterprise segment adjusted gross profit
 $ 97,528  $ 87,240  $ 193,512  $ 171,882 
Enterprise segment adjusted gross margin 75  % 72  % 75  % 72  %
Consumer segment revenue $ 70,582  $ 73,804  $ 143,134  $ 153,010 
Consumer segment adjusted gross profit
 $ 42,052  $ 41,505  $ 82,453  $ 84,713 
Consumer segment adjusted gross margin 60  % 56  % 58  % 55  %
For the three months ended June 30, 2025, the increase in Enterprise segment adjusted gross margin was primarily due to the reduction in instructor revenue share from 20% to 17.5% for all subscription offerings, which was effective on January 1, 2025. The mix of other segment items allocable to the Enterprise segment as a percentage of Enterprise revenue were generally consistent when compared to the same period in the prior year.
For the three months ended June 30, 2025, the increase in Consumer segment adjusted gross margin was primarily due to the relative increase in consumer subscriptions as a percentage of total Consumer revenue, the reduction in instructor revenue share from 20% to 17.5% for consumer subscriptions, and the impact of breakage revenue as discussed above.
For the six months ended June 30, 2025, the increase in Enterprise segment adjusted gross margin was primarily due to the reduction in instructor revenue share from 20% to 17.5% for all subscription offerings, which was effective on January 1, 2025. In addition, customer support costs allocable to the Enterprise segment as a percentage of Enterprise revenue also decreased when compared to the same period in the prior year. The mix of other segment items allocable to the Enterprise segment as a percentage of Enterprise revenue were generally consistent when compared to the same period in the prior year.
For the six months ended June 30, 2025, the increase in Consumer segment adjusted gross margin was primarily due to the relative increase in consumer subscriptions as a percentage of total Consumer revenue, the reduction in instructor revenue share from 20% to 17.5% for consumer subscriptions, and the impact of breakage revenue as discussed above.
Non-GAAP financial metrics
In addition to the measures presented in our condensed consolidated financial statements, we use the following non-GAAP financial metrics identified below to help us evaluate our business, formulate business plans, and make strategic decisions.
Adjusted EBITDA and adjusted EBITDA margin
As adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. In addition, it provides a useful measure for period-to-period comparisons of our business, as it removes the effect of certain non-cash expenses and certain variable charges.
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We define adjusted EBITDA as net income (loss), adjusted to exclude:
•interest income;
•interest expense;
•provision for income taxes;
•depreciation and amortization;
•stock-based compensation expense;
•other expense, net; and
•restructuring charges.
We define adjusted EBITDA margin as adjusted EBITDA divided by revenue for the same period.
The following table provides a reconciliation of net income (loss), the most directly comparable GAAP financial measure, to adjusted EBITDA (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2025
 2024
2025
 2024
Net income (loss)
 $ 6,265  $ (31,814) $ 4,494  $ (50,153)
Adjusted to exclude the following:
Interest income (3,663) (5,195) (7,238) (10,923)
Interest expense
 120  77  135  80 
Income tax provision 1,133  802  2,070  1,829 
Depreciation and amortization 6,941  6,692  13,146  13,175 
Stock-based compensation expense 17,420  24,317  35,387  47,022 
Other income (expense), net 73  10,584  (25) 10,892 
Restructuring charges 109  —  1,578  — 
Adjusted EBITDA $ 28,398  $ 5,463  $ 49,547  $ 11,922 
The following table provides a reconciliation of net income (loss) margin, the most directly comparable GAAP financial measure, to adjusted EBITDA margin (in thousands, except percentages):
Three Months Ended June 30, Six Months Ended June 30,
2025
 2024
2025
 2024
Revenue $ 199,879  $ 194,360  $ 400,179  $ 391,206 
Net income (loss)
 $ 6,265  $ (31,814) $ 4,494  $ (50,153)
Net income (loss) margin
 3  % (16) % 1  % (13) %
Revenue $ 199,879  $ 194,360  $ 400,179  $ 391,206 
Adjusted EBITDA $ 28,398  $ 5,463  $ 49,547  $ 11,922 
Adjusted EBITDA margin 14  % 3  % 12  % 3  %
Net income (loss) increased by $38.1 million and $54.6 million during three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year. The increase in net income (loss) was driven by the reduction in the instructor revenue share all subscription offerings, the continued shift in mix of revenue toward our Enterprise segment and subscription offerings, decreases in direct marketing and stock-based compensation costs, and lower personnel costs as a result of our operational efficiency initiatives. Additionally, during the three and six months ended June 30, 2024, we recognized $10.3 million of impairment charges on our strategic investments and $4.5 million of professional services costs that were not part of ongoing operations, whereas there was no such activity during the three and six months ended June 30, 2025.
Adjusted EBITDA improved by $22.9 million and by $37.6 million during three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year.
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The increase in adjusted EBITDA was driven by the reduction in the instructor revenue share for all subscription offerings, the continued shift in mix of revenue toward our Enterprise segment and subscription offerings, decreases in direct marketing costs, lower personnel costs as a result of our operational efficiency initiatives, and the professional services costs that were not part of ongoing operations as discussed above.
Free cash flow
We define free cash flow as net cash provided by operating activities, less purchases of property and equipment and capitalized software costs, as we consider these capital expenditures necessary to support our ongoing operations.
We consider free cash flow to be a liquidity measure that provides our management, board of directors, and investors with information about our ability to generate or use cash to enhance the strength of our balance sheet, further invest in our business, and pursue potential strategic initiatives.
We expect our free cash flow to generally increase in the near term due to our operational efficiency initiatives. We expect our purchases of property and equipment to vary based on the timing of leasing activities and renovations to our office real estate portfolio. We anticipate that our capitalized software costs will generally remain consistent in future periods as we continue to invest in our platform and new offerings. The timing of our operating expenses may cause free cash flow to vary from period to period as a percentage of revenue.
The following table provides a reconciliation of net cash provided by operating activities, the most directly comparable GAAP financial measure, to free cash flow (in thousands):
Three Months Ended June 30,
Six Months Ended June 30,
2025 2024 2025 2024
Net cash provided by operating activities
 $ 44,203  $ 28,592  $ 56,413  $ 49,561 
Less: purchases of property and equipment
 (2,280) (357) (4,661) (554)
Less: capitalized software costs
 (2,912) (3,450) (5,651) (6,711)
Free cash flow
 $ 39,011  $ 24,785  $ 46,101  $ 42,296 
Our free cash flow increased for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, primarily due to increases in our cash provided by operating activities due to the increase in net income, the timing of billings and collections on accounts receivable, and the timing of certain accounts payable, accrued expenses and other liabilities activities, including restructuring costs accrued for in prior periods, offset by increased purchases of property and equipment related to renovation projects on our leased office space portfolio.
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Liquidity and capital resources
As of June 30, 2025, our principal sources of liquidity were cash, cash equivalents and restricted cash of $231.4 million, marketable securities of $161.7 million, and $200.0 million of available capacity under a revolving credit facility. Cash and cash equivalents includes money market funds, certain U.S. government securities purchased with original maturities of less than 90 days, time and on demand deposits, and amounts in transit from certain payment processors for credit and debit card transactions. Restricted cash totaled $1.1 million and consists of cash deposited with financial institutions held as collateral for our obligations under various facility leases. Marketable securities are comprised of investments in U.S. government securities with an original maturity greater than 90 days at the date of purchase. Our non-U.S. cash and cash equivalents have been earmarked for indefinite investment in our operations outside the U.S., and consequently no U.S. current or deferred taxes have been accrued on such amounts. We believe that our existing cash and cash equivalents and our expected cash flows from operations will be sufficient to meet our cash needs for at least the next 12 months.
In May 2025, we entered into a credit agreement with Citibank and certain other financial institutions. The revolving credit facility established by this agreement provides us with revolving commitments in an aggregate principal amount of $200.0 million, all of which were undrawn as of June 30, 2025. The revolving credit facility matures in May 2030. Refer to Note 6 – Debt for additional details.
As of June 30, 2025, there have been no material changes to our commitments and contractual obligations, in comparison to those set forth in our Annual Report, that occurred outside the ordinary course of business. Refer to Note 7 – Leases and Note 8 – Commitments and contingencies in our unaudited condensed consolidated financial statements, included in Part I, Item 1 of this Form 10-Q, for our outstanding commitments and contractual obligations as of June 30, 2025.
As discussed above, we committed to a restructuring plan in September 2024. As a result, we have incurred cash-based restructuring charges, primarily consisting of one-time severance payments, salary and wages earned over required retention periods, and other benefits. The restructuring plan was substantially completed as of March 31, 2025, though we expect to incur immaterial restructuring charges and make cash payments related to the plan through the third quarter of 2025. These amounts may impact our operating cash flows until then. We plan to pay these amounts using our existing cash and cash equivalents.
Over the long term, we plan to continue investing in the growth and development of our platform. If our available funds are insufficient to fund these future activities or execute on our business strategies, we may raise additional capital through equity, equity-linked or debt financing, to the extent such funding sources are available. Alternatively, we may be required to reduce expenses to manage liquidity; however, any such reductions could adversely impact our business and competitive position.
Sources of funds
We have historically financed our operations primarily through revenue, as well as proceeds from issuances of our capital stock. As noted above, in May 2025, we entered into a revolving credit facility with Citibank and certain other financial institutions. From time to time, we may explore additional financing sources, which could include equity, equity-linked or debt financing. In addition, in connection with any future acquisitions or strategic investments, we may pursue additional funding, which could include debt, equity or equity-linked financings, or a combination of these methods. We can provide no assurance that any additional financing will be available to us on acceptable terms.


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Use of funds
Our principal uses of cash are funding our operations, capital expenditures and working capital requirements. We have generated significant net losses from our operations as reflected in our accumulated deficit of $800.5 million as of June 30, 2025. We have historically incurred operating losses and generated negative cash flows from operations as we have invested in growing our business. Our operating cash requirements may increase in the future as we continue to invest in the development of our platform and the growth of our business. We cannot be certain our revenue will grow sufficiently to offset our operating expense increases. As a result, we may need to raise additional funds to support our operations, and such funding may not be available to us on acceptable terms, if at all.
The following table summarizes our cash flows for the periods indicated (in thousands):
Six Months Ended June 30,
2025
 2024
Net cash provided by (used in):
Operating activities $ 56,413  $ 49,561 
Investing activities (7,617) 19,907 
Financing activities (9,402) (105,420)
Effect of foreign exchange rates on cash flows 172  (21)
Net increase (decrease) in cash, cash equivalents and restricted cash
 $ 39,566  $ (35,973)
Operating activities
Cash provided by operating activities mainly consists of our net income (loss), adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization, amortization of deferred sales commissions, as well as the effect of changes in operating assets and liabilities during each period.
Our main source of operating cash is payments received from our customers. Our primary use of cash from operating activities are for personnel-related expenses, instructor payments, advertising and marketing expenses, indirect taxes, and third-party cloud infrastructure expenses.
For the six months ended June 30, 2025, cash provided by operating activities was $56.4 million, primarily consisting of our net income of $4.5 million, adjusted for non-cash charges of $82.9 million and net cash outflows of $31.0 million provided by changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were a $35.0 million increase in deferred contract costs, a $10.2 million decrease in accounts payable, accrued expenses and other liabilities, and a $4.4 million decrease in content costs payable. These changes were offset by a $19.3 million increase in deferred revenue.
For the six months ended June 30, 2024, cash provided by operating activities was $49.6 million, primarily consisting of our net loss of $50.2 million, adjusted for non-cash charges of $98.7 million and net cash outflows of $1.0 million provided by changes in our operating assets and liabilities. The main drivers of the changes in operating assets and liabilities were a $29.8 million increase in deferred revenue and a $9.7 million decrease in accounts receivable, as cash collections from customers outpaced new billings. These changes were offset by a $32.7 million increase in deferred contract costs, due to continued expansion in our Enterprise business, a $4.6 million decrease in content costs payable, and a $3.5 million increase in lease liabilities.
Net cash provided by operating activities increased by $6.9 million for the six months ended June 30, 2025, compared to the same period in the prior year, primarily due to the increase in net income, the timing of billings and collections on accounts receivable, and the timing of certain accounts payable, accrued expenses and other liabilities activities, including restructuring costs accrued for in prior periods.
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Investing activities
For the six months ended June 30, 2025, net cash used in investing activities was $7.6 million, primarily as a result of $112.5 million in purchases of marketable securities, $5.7 million related to capitalized software costs, $4.7 million in purchases of property and equipment, and $1.5 million for payments related to asset acquisitions. These changes were partially offset by $116.7 million of proceeds received from the maturity of marketable securities.
For the six months ended June 30, 2024, net cash provided by investing activities was $19.9 million, primarily as a result of $173.6 million of proceeds received from the maturity of marketable securities. These proceeds were partially offset by $146.4 million in purchases of marketable securities and $6.7 million related to capitalized software costs.
Financing activities
For the six months ended June 30, 2025, net cash used in financing activities was $9.4 million, primarily driven by taxes paid related to net share settlement of employee equity awards of $9.9 million and payments of debt issuance costs of $1.2 million. This was partially offset by $2.6 million of proceeds from issuances of common stock under our employee stock purchase plan.
For the six months ended June 30, 2024, net cash used in financing activities was $105.4 million, driven by $90.6 million in repurchases of common stock and $19.8 million in taxes paid related to net share settlement of employee equity awards. This was partially offset by $4.5 million of proceeds from issuances of common stock under our employee stock purchase plan.
Off-balance sheet arrangements
During the periods presented, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical accounting policies and estimates
Our condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results may differ from these estimates. To the extent that there are material differences between these estimates and our actual results, our future financial statements will be affected.
There have been no material changes to our critical accounting policies and estimates as compared to those described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Part II, Item 7 of our Annual Report.
Recent accounting pronouncements
See Note 2 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for information regarding recently issued accounting pronouncements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest rate sensitivity
As of June 30, 2025 we had $230.3 million of cash and cash equivalents, which includes money market funds, certain U.S. government securities purchased with original maturities of less than 90 days, time and on demand deposits, and amounts in transit from certain payment processors for credit and debit card transactions. We also held $161.7 million of marketable securities, consisting of investments in various U.S. government securities. We had $1.1 million of restricted cash, primarily consisting of cash deposited with financial institutions held as collateral for our obligations under various facility leases.
Our cash and cash equivalents are held for working capital purposes. Given the above facts and circumstances, hypothetical changes in interest rates of 100 basis points would not result in a material increase or decrease of either the market value of our portfolio of cash equivalents and marketable securities as of June 30, 2025, or interest income earned from our portfolio during the three and six months ended June 30, 2025.
We are subject to market risk exposure related to changes in interest rates on borrowings under our revolving credit facility. Interest on borrowings under the revolving credit facility is based on Term SOFR or alternate base rate, in each case plus an applicable margin. At June 30, 2025, we had no borrowings outstanding under the revolving credit facility. We did not hold any debt during the three and six months ended June 30, 2025 or 2024.
Foreign currency risk
The Company’s reporting currency is the U.S. dollar. We determine the functional currency for each of our foreign subsidiaries by reviewing their operations and currencies used in their primary economic environments. Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our condensed consolidated statement of operations, or translation gains and losses in accumulated other comprehensive income (loss) as a component of stockholders’ equity. Our marketable securities portfolio is also held in U.S. dollar investments, and to date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments, although we may choose to do so in the future. As such, a hypothetical 10% increase or decrease in current exchange rates would not have had a material impact on income or expense for the three and six months ended June 30, 2025 or 2024.

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Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in internal control over financial reporting
There were no changes to our internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent limitations on the effectiveness of internal controls over financial reporting
Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. However, our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our company have been detected.
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PART II.

Item 1. Legal Proceedings
From time to time, we are involved in legal proceedings and subject to claims that arise in the ordinary course of our business. Although the results of legal proceedings and claims cannot be predicted with certainty, we believe we are not currently party to any legal proceedings which, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results or financial condition.
Video Privacy Protection Act class action complaint and threatened arbitration demands
On December 12, 2022, a putative class action complaint captioned Mohamed Saleh v. Udemy, Inc., was filed against us in the United States District Court for the District of New Jersey, alleging violations of the Video Privacy Protection Act (the “VPPA”) and claiming that Udemy violated the VPPA by knowingly sharing personally identifiable information about the viewing history of Udemy courses with an advertiser.
The complaint seeks declaratory relief, injunctive relief, statutory, liquidated, and punitive damages, as well as reasonable attorney fees and costs. On August 30, 2023, we filed a motion to compel arbitration and on March 21, 2024, the motion was granted and the matter stayed and administratively terminated pending individual arbitration.
In addition, several law firms have threatened to file individual arbitration demands against us on behalf of approximately 20,000 purported Udemy learners. The firms threaten claims similar to those in the class action complaint described above arising under the VPPA and/or California state privacy laws. Udemy has resolved substantially all of the claims of these purported learners for an immaterial amount. We intend to vigorously defend ourselves in the remaining matters.
Other legal proceedings
We are subject to other legal proceedings and claims that arise in the ordinary course of business from time to time, as well as governmental and other regulatory investigations and proceedings. In addition, third parties may from time to time assert claims against us in the form of letters and other communications. We are not currently a party to any legal proceedings that, if determined adversely to us, would, in our opinion, have a material adverse effect on our business, financial condition, results of operations, or cash flows. Future litigation may be necessary to defend ourselves and our business partners and to determine the scope, enforceability, and validity of third-party proprietary rights, or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
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Item 1A. Risk Factors
Certain factors may have a material adverse effect on our business, financial condition, and results of operations. You should carefully consider the following risks, together with all of the other information contained in this Form 10-Q, including the sections titled “Special Note Regarding Forward-Looking Statements” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes included elsewhere in this Form 10-Q. Any of the following risks could have an adverse effect on our business, financial condition, operating results, or prospects and could cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment. Our business, financial condition, operating results, or prospects could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. Our risk factors are not guarantees that no such conditions exist as of the date of this report and should not be interpreted as an affirmative statement that such risks or conditions have not materialized, in whole or in part.
Risks related to our business and operations
We have a history of losses, and we may not be able to generate sufficient revenue to increase or sustain profitability in the future.
We reported net income (loss) of $4.5 million and $(50.2) million during the three months ended June 30, 2025 and 2024, respectively, and, as of June 30, 2025, we had an accumulated deficit of $800.5 million. We may incur losses in the near-term as we continue to make targeted investments towards growing our business and operating as a public company. We have invested, and expect to continue to invest, substantial financial and other resources in developing our platform, including expanding our platform offerings, developing or acquiring new platform features and services, expanding into new markets and geographies, and increasing our sales and marketing efforts. These expenditures may make achieving and maintaining profitability more difficult, and these efforts may also be more costly than we expect and may not result in increased revenue or growth in our business.
We have undertaken, and are continuing to undertake, measures intended to accelerate our operational efficiency and position our company for long-term profitability. However, we cannot guarantee that these measures will be successful. We may experience delays or unanticipated costs in implementing these measures, which could prevent the timely or full realization of the anticipated benefits. Even if we successfully execute on our operational efficiency measures, these measures may not be sufficient to ensure our investments and other expenses keep pace with our revenue.
As a result, we can provide no assurance as to whether we can increase or sustain profitability in the future. If we are not able to do so, the value of our company and our common stock could decline significantly, and you could lose some or all of your investment.
We operate in an emerging and dynamic market, which makes it difficult to evaluate our prospects and future results of operations.
The market for online learning solutions is relatively new and continues to evolve rapidly. These factors may make it difficult to accurately assess our future prospects and the risks, challenges, and uncertainties that we may encounter. These uncertainties include:
•maintaining and increasing a base of learners, instructors, and UB customers using our platform;
•successfully competing with existing and future participants in the market for online learning solutions;
•successfully expanding our business in existing markets and entering new markets and geographies;
•anticipating and responding to market and broader economic conditions;
•avoiding interruptions or disruptions in the service of our platform;
•accurately forecasting our revenue and operating expenses on a quarterly and annual basis;
•maintaining and enhancing the value of our reputation and brand;
•attracting, hiring, and retaining qualified personnel to manage our operations and further develop our platform;
•effectively managing growth in our operations, including personnel; and
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•successfully implementing and executing our business strategies.
Additionally, because we operate in a rapidly evolving market, any predictions about our future revenue and expenses may not be as accurate as they would be if we operated in a more established and predictable market. We have encountered in the past, and will encounter in the future, risks, challenges, and uncertainties frequently experienced by companies operating in emerging markets. If our assumptions regarding any of these risks, challenges, or uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address them successfully, our results of operations could differ materially from our expectations and our business, financial condition, and results of operations could be adversely affected.
Our results of operations may fluctuate significantly from period to period due to a wide range of factors, which makes our future results difficult to predict.
Our results of operations have historically varied from period to period, and we expect that our results of operations will continue to vary significantly from quarter to quarter and year to year because of a variety of factors, many of which are outside of our control. As a result, comparing our results of operations on a period-to-period basis may not be meaningful. Factors that may contribute to the variability of our quarterly and annual results include, but are not limited to:
•our ability to attract and retain learners, instructors, and enterprises that use our platform in a cost-effective manner;
•our ability to accurately forecast revenue and operating expenses;
•the effects of increased competition on our business;
•the impact of worldwide economic conditions, including the resulting effect on consumer and business spending on online learning solutions;
•our ability to successfully expand in existing markets and successfully enter new markets and manage the risks associated with doing so;
•our ability to successfully leverage our resellers and other strategic relationships to market and sell our products;
•changes in learner or customer behavior with respect to online learning solutions;
•increases in marketing, sales, and other operating expenses that we may incur to grow and acquire new learners, instructors, and customers;
•the revenue mix between our consumer and UB offerings;
•our ability to maintain an adequate rate of growth and effectively manage that growth;
•the effects of changes in search engine placement and prominence;
•our ability to keep pace with technology changes in our industry;
•the success of our sales and marketing efforts;
•our ability to protect, maintain, and enforce our intellectual property rights;
•costs associated with defending claims, including intellectual property infringement claims, and related judgments or settlements;
•changes in governmental or other regulations affecting our business;
•actual or anticipated changes in international trade policies, including those resulting from tariffs, trade barriers and other trade regulations, as well as the actual or anticipated effect of such policies on us and our customers;
•interruptions in service and any related impact on our business, reputation, or brand;
•the attraction and engagement of qualified employees and key personnel;
•our ability to choose and effectively manage third-party service providers;
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•the effects of natural or man-made catastrophic events, including wars and other armed conflicts, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East;
•the impact of actual or anticipated public health emergencies, such as an outbreak of an epidemic or pandemic;
•potential volatility in our gross margins, including due to revenue mix shifts between our Enterprise and Consumer segments, changes in our pricing policies, increased use of subscriptions in our Consumer segment, and timing differences between recognition of revenue and related content costs for courses;
•the effectiveness of our internal controls over financial reporting;
•the impact of payment processor costs and procedures; and
•changes in our tax rates or exposure to additional tax liabilities.
The unpredictability of our results of operations could cause our results to vary from period to period or to fall below our public guidance or the expectations of analysts and investors for a given period, which will adversely affect our business, financial condition, and results of operations.
Our growth may not be sustainable and depends on our ability to attract new learners, instructors, and organizations and retain existing ones.
Our success depends, in part, on growing the number of learners and instructors engaging with our platform. We believe the increase in the number of instructors increases the quality and quantity of the content available on our platform, in turn making our platform more appealing and engaging to learners in both our Enterprise and Consumer segments. This increase in learners then attracts more instructors to our platform. This dynamic marketplace model takes time to build and may grow at a slower pace than we expect. In addition, although the number of individual and UB learners and instructors engaging with our platform has grown in recent years, there can be no assurance that this growth will continue. For example, there is significant uncertainty regarding the adoption and growth of remote, online and asynchronous learning and training, as well as skills-based learning, compared to the traditional models of education and training, which may adversely affect demand for our platform. We have also experienced elongated sales cycles for our UB offerings as a result of what we believe to be budget tightening as a result of economic uncertainty. Additionally, our average sales cycle may lengthen as we focus more on our UB Large Customers, which we define as companies with at least 1,000 employees, and which tend to have longer procurement processes than smaller customers. If we fail to grow or maintain the number of learners and instructors engaging with our platform, the value of our platform will diminish and our revenue will decline.
We believe that many of our new learners find us by word of mouth and other non-paid referrals from existing learners. If existing learners do not find our platform or its content appealing and engaging, whether because of a negative experience with, declining interest in or relevancy of the content, they may stop referring others to us. In turn, if instructors perceive that our platform lacks an adequate learner audience, instructors may be less willing to provide content for our platform, and the experience of learners could be further negatively impacted. The willingness or ability of instructors to provide content for our platform could also be negatively impacted by other factors, such as:
•complaints or negative publicity about us or our platform, even if factually incorrect or based on isolated incidents;
•changes to our terms and policies that our instructors find, or even perceive, to be unpopular or that are not clearly articulated to them; or
•our failure or perceived failure to enforce our policies fairly and transparently.
In addition, the costs associated with retaining learners and instructors are substantially lower than those associated with acquiring new learners and instructors. As a result, if we are unable to retain existing learners and instructors, even if such losses are offset by an increase in revenue resulting from new learners and instructors, it could harm our growth prospects and have a material adverse effect on our business, financial condition, and results of operations.
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Our platform relies on a limited number of instructors who create a significant portion of the most popular content on our platform, and the loss of these instructor relationships could adversely affect our business, financial condition, and results of operations.
We strive to build meaningful connections with instructors, ranging from those that are well known and have created extensively to those that have just begun the process of creating courses. As of June 30, 2025, we had relationships with more than 85,000 instructors. Although we view the breadth and diverse expertise of our instructor base and the content they create as one of our competitive advantages, a significant portion of the most popular content on our platform—and consequently a significant portion of our revenue—is attributable to a limited number of our instructors. Instructors may unpublish content or choose to leave the Udemy platform altogether, subject to certain contractual limitations, for a variety of reasons. For example, in November 2023 we announced changes to our instructor revenue share model, the first and second rate adjustments of which became effective at the beginning of 2024 and 2025, respectively; these changes, together with any future changes we may announce in the future, could result in instructor attrition. Although we do not believe the loss of any one instructor would materially impact our business, significant attrition by multiple instructors, as well as any failure to attract additional instructors or source replacement content as needed, could adversely affect our ability to provide high-quality, engaging, and relevant content for one or more subject matters, slow the pace at which we provide such content, and reduce the attractiveness of our platform to learners and customers, any of which could negatively impact our business, financial condition, and results of operations.
If we fail to maintain and expand our relationships with UB customers, our ability to grow our business and revenue will suffer.
Revenue from our Enterprise segment represented 65% and 62% of total revenue during the three months ended June 30, 2025 and 2024, respectively, and 64% and 61% of total revenue during the six months ended June 30, 2025 and 2024, respectively. We believe that our future success depends, in part, on our ability to grow this offering, both by retaining and expanding our relationship with existing customers and attracting new customers. Many customers initially use our platform within specific groups or departments within their organizations, or for specific use cases. Our ability to grow our UB business depends, in part, on our ability to persuade these customers to expand their use of our platform to address additional use cases. Further, the continued growth of our business requires that our customers renew their subscriptions with us and that we expand our relationships with our existing customers. Customers may decide not to renew their subscriptions with a similar contract period, at the same prices and terms, with the same or a greater number of users, or at all. It is difficult to accurately predict whether we will have future success in retaining customers or expanding our relationships with them. We have experienced significant growth in the number of customers subscribing to our UB offerings, but we do not know whether we will continue to achieve similar growth, or achieve any growth at all, in the future. Our ability to retain UB customers and expand our deployments with them may decline or fluctuate as a result of a number of factors, including customers’ satisfaction with our platform, the quality and timeliness of our customer success and customer support services, our prices, the prices and features of competing solutions, customers’ spending levels, sufficient adoption of our platform by our customers’ constituents, and customers’ satisfaction with new feature releases, any of which could cause our revenue to decline or grow less quickly than anticipated, which would harm our business, financial condition, and results of operations.
We operate in a highly competitive market, and we may not be able to compete successfully against current and future competitors.
We operate in a highly competitive environment, as the market for online learning is relatively new, fragmented, and rapidly evolving, with limited barriers to entry. We compete for learners, enterprise customers, and instructors:
•Learners: We compete for learners based on our course catalog, instructors, and learning tools.
•UB customers: We compete for customers based on our up-to-date content, the breadth and depth of that content across the full range of core business functions, and advanced product features that optimize self-paced learning and enable organizations to effectively drive programmatic learning.
•Instructors: We compete for instructors based on our ability to promote monetization opportunities.
Our competition includes corporate training offerings, direct-to-consumer training offerings, specialized content training offerings, and free online resources used to gather and share knowledge and skills.
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We expect our existing competitors and new entrants to the online learning market to continually evolve and improve their business models. If these or other market participants introduce new or improved delivery of online education and technology-enabled services that are more compelling or widely accepted than ours, our ability to grow our revenue and achieve profitability could suffer. The emergence of enhanced generative AI capabilities could provide competitors with an advantage. Several new and existing companies in the online education industry provide or may provide offerings similar to what we offer on our platform, and, despite any exclusivity arrangements we have with our instructors, these companies may nonetheless pursue relationships with our instructors that may reduce, or stop altogether, the content our instructors produce for our platform. In addition, enterprise customers may choose to continue using or develop their own online learning or training solutions in-house rather than pay for our platform.
We believe that our ability to successfully compete depends on a range of factors, both within and beyond our control, including:
•the availability or development of alternative online learning platforms that are more compelling to learners, instructors, or organizations than ours;
•changes in pricing policies and terms offered by our competitors or by us, including the 2024 change to our instructor revenue sharing model;
•the ability to adapt to or compete with new technologies and changes in requirements of our learners, instructors, and UB customers;
•the ability to adapt to disruptive innovation that may significantly alter or transform the competitive landscape, such as natural language processing, AI and machine learning;
•costs associated with acquiring and retaining learners, instructors, and UB customers;
•the ability of our current and future competitors to establish relationships with customers;
•industry consolidation and the number and rate of new entrants;
•difficulties with software development that could delay or prevent the development, introduction or implementation of platform modifications and enhancements; and
•costs associated with improving and maintaining our platform.
Current and potential competitors (including any new entrants into the market) may enjoy substantial competitive advantages over us, such as greater name recognition, longer operating histories, market- or industry-specific knowledge, more successful marketing capabilities, more successful adaptation to or integration of emerging technologies such as AI, and substantially greater financial, technical, and other resources than we have. Our current or new competitors may adopt certain aspects of our business model, which could reduce our ability to differentiate our services. Furthermore, online educational content is not typically marketed exclusively through any single channel and, accordingly, our competitors could aggregate a set of online learning courses similar to ours. Competition may intensify as our competitors raise additional capital or as new participants, including established companies, enter the markets in which we compete. Our ability to grow our business and achieve profitability could be impaired if we cannot compete successfully.
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The market for online learning solutions may not grow as we expect, which may harm our business, financial condition, and results of operations.
Our future success depends in part on the future growth in the demand for online learning solutions. We expect that broader societal and macroeconomic conditions, including inflation, interest rates, general economic uncertainty, and the prevalence of remote or hybrid work, will influence the further development of the online learning market and the growth rate of remote, online and asynchronous learning and training solutions such as ours. In addition, the rate at which online learning solutions are adopted by learners or UB customers may also depend on a variety of factors specific to individual learners or UB customers, such as budget constraints and training needs. Consequently, it is difficult to predict demand for and continued use of our platform by learners, instructors, and UB customers, the rate at which existing learners and instructors expand their engagement with our platform, the size and growth rate of the market for our platform, the entry of competitive offerings into the market, or the success of existing competitive offerings. Even if market demand for online learning solutions generally increases, we cannot assure you that adoption of our platform will also increase. If the market for online learning solutions does not grow as we expect or our platform does not achieve widespread adoption, it could result in reduced learner and customer spending, reduced engagement from instructors, attrition by learners, instructors, and UB customers, and decreased revenue, any of which would adversely affect our business, financial condition, and results of operations.
Our revolving credit facility contains customary affirmative and negative covenants, including financial covenants, that may limit our operating flexibility.
Our revolving credit facility contains customary affirmative and negative covenants that limit our ability to, among other things, transfer or dispose of assets, merge with other companies or consummate certain other changes of control, acquire other companies, pay dividends, incur additional indebtedness and liens, make certain investments and engage in new businesses unrelated to our current business. We therefore may not be able to engage in any of the foregoing transactions unless we obtain the consent of the lenders or terminate the credit facility, which may limit our operating flexibility. In addition, our credit facility is secured by substantially all of our assets, including our intellectual property, and requires us to satisfy certain financial covenants. If we do not meet the financial covenants as specified in the credit facility, we may require forbearance or relief from our financial covenant violations from the lenders or be required to arrange alternative financing.
There is no guarantee that we will be able to generate sufficient cash flow or sales to meet these financial covenants or pay the principal and interest on any such debt. Furthermore, there is no guarantee that future working capital, borrowings or equity financings will be available to repay or refinance any such debt. A breach of any of these covenants or the occurrence of certain other events specified in the credit agreement governing our revolving credit facility and/or the related collateral documents could result in an event of default under the credit agreement. If an event of default has occurred and is continuing, the lenders could elect to declare all amounts outstanding under the credit facility immediately due and payable. If we are unable to repay those amounts, the lenders could foreclose on the collateral granted to them to secure our obligations under our revolving credit facility. If the lenders accelerate the repayment of borrowings, if any, we may not have sufficient funds to repay our existing debt.
Our ability to meet the financial covenants could be affected by events beyond our control. Any inability to make scheduled payments or meet the financial covenants of our credit facility would adversely affect our business.
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We may need to change our pricing, subscription, and contract models for our platform’s offerings, which in turn could adversely impact our results of operations.
We have in the past, and expect that we may in the future, need to change the pricing, subscription, and contract models for our platform’s offerings from time to time. As the market for our learning platform develops, as new competitors introduce competitive applications or services, or as we enter into new international markets, we may be unable to attract new learners or UB customers at the same price or based on the same pricing or subscription models we have historically used, or for contract lengths consistent with our historical averages. In addition, as we introduce new products, or improve existing ones, we may not be successful in developing appealing pricing, subscription and contract models for these products. Decisions we make may also impact the mix of adoption among our offerings, including the mix between subscription- and transaction-based offerings, and negatively impact our overall revenue and results. Competition may also require us to make substantial price concessions. Moreover, our consumer pricing model and methodology has been, and may in the future become, subject to legal challenge under applicable federal or state laws, regulations, and guidelines relating to promotional pricing practices. Our results of operations may be adversely affected by any of the foregoing, and consequently we may have increased difficulty achieving or maintaining profitability.
Failure to effectively leverage our strategic partnerships to market and sell our products could impact our ability to increase brand awareness and grow our revenue.
We rely on strategic partners, including resellers, for certain sales and marketing efforts. We plan to continue to establish and maintain similar strategic relationships as part of our growth strategy, and we expect these partners to become an increasingly important aspect of our business. Identifying partners and negotiating terms with them requires significant time and resources, and we are dependent on our ability to negotiate terms that are favorable to us and provide sufficient incentives for our partners to promote our products. If our partners do not effectively sell or market our products, choose to promote our competitors’ products or otherwise choose not to devote sufficient efforts to our business, our ability to grow our revenue may be impaired, and our results of operations may suffer.
In addition, we have granted exclusivity to resellers in certain geographies for UB, and so we are dependent on the sales efforts of our resellers in those geographies. For example, we have partnered with Benesse as our exclusive reseller in Japan. If we fail to effectively manage our existing resellers, or if our reseller partners are unsuccessful in fulfilling the orders for our products, or if we are unable to enter into arrangements with, and retain a sufficient number of, high quality reseller partners in each of the regions in which they sell products and keep them motivated to sell our products, our ability to sell our products and operating results will be harmed. Any negative changes in our relationship with our reseller partners, including the loss of a reseller or a significant reduction in business with a reseller, could adversely impact our sales in particular geographies, which could, in turn, negatively impact our results of operations.
Failure to effectively expand our sales and marketing capabilities could harm our ability to increase our base of learners and UB customers and achieve broader market acceptance.
Our ability to broaden our base of both consumer learners and UB customers, and achieve broader market acceptance of our marketplace platform, will depend to a significant extent on the ability of our sales and marketing organizations to work together to drive our sales pipeline and cultivate customer relationships. Our marketing efforts include the use of search engine optimization, paid search, email marketing, and television.
We have invested in and plan to continue expanding our sales and marketing organizations, both domestically and internationally. Identifying, recruiting, training, and retaining talented sales and marketing personnel will require significant time, expense, and attention, and if we are unable to do so, or if the hired personnel are unable to achieve desired productivity levels in a reasonable period of time, or if our sales and marketing programs are not effective, our ability to broaden our customer base and achieve broader market acceptance of our platform could be harmed. In addition, the investments we make in our sales and marketing organizations will occur in advance of experiencing benefits from such investments, making it difficult to determine in a timely manner if we are efficiently allocating our resources in these areas.
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If we are not able to maintain and enhance our brand, our reputation and business may suffer.
We believe that maintaining and enhancing our reputation and brand recognition is critical to our ability to attract and retain learners, instructors, and UB customers, as well as commercial and strategic partners, and that the importance of our reputation and brand recognition will continue to increase as competition in the markets in which we operate continues to develop. Our success in this arena will depend on a range of factors, both within and beyond our control. Factors affecting our reputation and brand recognition that are within our control include our ability to:
•market our platform effectively and efficiently;
•maintain a useful, innovative, and reliable platform;
•maintain a high satisfaction among learners, instructors, and UB customers;
•provide a high quality and perceived value for our platform;
•successfully differentiate our platform from competing offerings;
•maintain a consistently high level of customer service; and
•prevent any actual or perceived data security breach or incident or data loss, or misuse or perceived misuse of our platform.
Additionally, our reputation and brand recognition may be affected by factors that are beyond our control, such as:
•the actions of competitors or other third parties;
•the quality and quantity of, as well as the nature and subject matter of, content available from instructors on our platform;
•positive or negative publicity, including with respect to events or activities attributed to us, our employees, instructors, or our commercial partners;
•interruptions, delays, or attacks on our platform; and
•litigation or legal developments.
Damage to our reputation and brand, from the factors listed above or otherwise, may reduce demand for our platform and have an adverse effect on our business, operating results and financial condition. Moreover, any attempts to rehabilitate our reputation and brand recognition may be costly and time-consuming, and there can be no assurance that any such efforts will ultimately be successful.
We could face liability, or our reputation might be harmed, as a result of courses posted to our platform.
Instructors at times post courses and related materials to our platform that contain content owned by third parties, and we do not proactively review content for potential infringement of intellectual property rights. Although we maintain and enforce terms and policies requiring instructors to respect the intellectual property rights of others, they may not do so. As a result, we are subject to potential liability to third parties for the unauthorized duplication, distribution, or other use of this material. In addition, third parties have alleged, and in the future may allege, misappropriation, plagiarism, defamation, disparagement or similar claims related to content appearing on our platform. Any such claims could subject us to costly litigation, regardless of whether the claims have merit. Moreover, there can be no assurance that our responses to complaints by third-party content owners regarding intellectual property violations will be sufficient to protect us from adverse claims. Our various liability insurance coverages may not cover potential claims of this type adequately or at all, and we may be required to alter or cease our uses of such material, which may include removing course content or altering the functionality of our platform, or be required to pay monetary damages.
Where applicable, we rely on a variety of statutory and common law frameworks and defenses, including those provided by the Digital Millennium Copyright Act of 1998, the Communications Decency Act (the “CDA”), the fair-use doctrine in the United States and the E-Commerce Directive in the European Union (the “E.U.”). However, the availability, scope, and application of such frameworks, defenses, and statutes varies across the many jurisdictions in which we operate, and the applicable limitations on immunity, requirements to maintain immunity, and moderation efforts required in the many jurisdictions in which we operate may affect our ability to rely on these frameworks and defenses, or create uncertainty regarding liability for content posted to our platform.
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Moreover, regulators in the United States, the E.U., and in other jurisdictions in which we operate may introduce new regulatory regimes or modify existing regulatory regimes, including in ways that increase potential liability for information or content available on or through our platform or the content moderation decisions we make with respect to our platform, or which impose additional obligations to monitor such information or content, which could increase our costs. For example, the E.U.’s Digital Services Act (the “DSA”), which imposes new content moderation obligations, notice and transparency requirements, advertising limitations, and other consumer protection requirements, became fully applicable in February 2024. Non-compliance with the DSA could result in fines of up to 6% of global turnover, and could potentially subject us to litigation, enforcement actions, or other claims. Additionally, E.U. jurisdictions have imposed, and may in the future impose, additional content moderation requirements beyond those established by the DSA. For example, the Irish Online Safety Code, which became effective in October 2024, introduces additional obligations on video-sharing platforms to restrict the spread of harmful video and associated content. Non-compliance with the Online Safety Code could result in fines of up to the greater of €20 million or 10% of annual turnover.
Failure of our resellers or other commercial partners to use acceptable ethical business practices or comply with applicable laws could negatively impact our business.
In certain jurisdictions, such as Japan, we rely on third-party resellers and other commercial partners to distribute and market our offerings. We expect these resellers and partners to operate in compliance with applicable laws, rules, and regulations, but we cannot control their conduct. If any of our resellers or partners violates applicable laws or implements business practices that are regarded as unethical, the distribution of our platform in those jurisdictions could be interrupted, usage of our platform could decline, our reputation could be damaged and we may be subject to liability. Any of these events could have a negative impact on our business, financial condition, and results of operations.
Our revenue, results of operations, and financial condition could be negatively affected by general economic conditions.
Our business is sensitive to trends in the general economy, which is unpredictable. Therefore, our operating results, to the extent they reflect changes in the broader economy, may be subject to significant fluctuations. Since online learning is generally dependent on discretionary spending, negative general economic or financial conditions or uncertainty regarding future economic or financial conditions could significantly reduce the overall amount that learners and organizations spend on, and the frequency of, online learning or result in delays to planned spending on online learning. Any or all of these factors could reduce the demand for our services, reducing our revenue and potentially increasing our need to make significant expenditures to continue to attract learners and UB customers to our platform. Additionally, adverse developments affecting the banking or financial services industries or the financial and capital markets, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could negatively affect our revenue, results of operations and financial condition.
Our business and operations could be materially and adversely affected by natural disasters, public health emergencies, political crises, or other catastrophic events.
Our business and operations could be materially and adversely affected by catastrophic events, such as earthquakes, floods, fires, telecommunications failures, power losses, break-ins, acts of terrorism, wars and other armed conflicts, political or geopolitical crises, inclement weather and public health emergencies. In particular, our corporate headquarters are located in San Francisco, California, an earthquake-sensitive area and one that has been increasingly vulnerable to wildfires, and damage to or total destruction of our executive offices resulting from earthquakes may not be covered in whole or in part by any insurance we may have. If catastrophic events were to cause damage to our properties or interrupt our operations, our results of operations would suffer. Global climate change may result in natural disasters, such as drought, wildfires, severe storms, flooding, and heat waves, occurring more frequently or with greater intensity. We may not be able to effectively adapt our operations to avoid disruptions arising from the occurrence of such events, and our business could be affected adversely as a result.
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Our business could be harmed if we fail to manage our growth effectively.
The growth we have experienced, and may continue to experience, in our business places significant demands on our operational infrastructure. The scalability and flexibility of our platform depends on the functionality of our technology and network infrastructure and our ability to handle increased traffic and demand for bandwidth. The growth in the number of learners and instructors using our platform and the amount of educational content available through our platform has increased the amount of data and requests that we process. Any problems with the transmission of increased data and requests could result in harm to our brand or reputation. Moreover, as our business grows, we will need to devote additional resources to improving our operational infrastructure and enhancing our scalability in order to maintain the performance of our platform.
Our growth has placed, and will likely continue to place, a significant strain on our managerial, administrative, operational, financial, and other resources. Future growth in our organization could place additional strain on our existing resources and processes, and we could experience systemic operating difficulties in managing our business, which may negatively impact our gross profit or operating expenses.
Our future success depends on our ability to retain our senior management team and other highly skilled employees and to attract, retain, and motivate our qualified personnel.
We depend on the continued services and performance of our senior management team, key technical employees, and other key personnel. Although we have entered into employment agreements with senior management team members, each of them may terminate their employment with us at any time or not be able to perform the services we require in the future. We do not maintain “key person” insurance for any of our executives or other employees. Similarly, third parties may attempt to encourage our senior management team or other key employees to leave for other employment. The loss of one or more of the members of our senior management team or other key personnel for any reason could disrupt our operations, create uncertainty among investors, adversely impact employee retention and morale and significantly harm our business. Some members of our senior leadership team have been with our company for a short period of time. For example, in March 2025, Hugo Sarrazin joined our company as President and Chief Executive Officer.
From time to time we have experienced, and may continue to experience, difficulty in hiring and retaining employees with the appropriate level of qualifications. The companies with which we compete for qualified employees may have greater resources than we have and may offer compensation packages that are perceived to be better than ours. We use restricted stock units and performance-based restricted stock units, among other things, to help attract and retain employees; however, if our stock price performs poorly, these equity incentives may not be sufficient to achieve these goals. Additionally, changes in our compensation structure, workforce reductions and other cost reduction efforts (including our ongoing operational efficiency initiatives and the restructuring plan announced in September 2024) may be negatively received by employees and result in attrition or recruiting difficulties.

If we fail to attract new employees or fail to retain and motivate our current employees, our business and future growth prospects could be adversely affected.
Acquisitions and other strategic investments may expose us to significant risks, any of which could materially and adversely affect our business, financial condition, and results of operations.
We have in the past pursued, and may in the future pursue, acquisitions of, or strategic investments in, businesses, technologies, services and other assets that complement our business. For example, in 2021 we acquired CUX, Inc. (d/b/a CorpU) (“CorpU”), an online leadership development platform that we have rebranded as our UB Leadership Academy. We have limited experience as an organization with successfully executing and managing acquisitions and strategic investments. These kinds of transactions involve numerous risks, including the following:
•difficulties in realizing the anticipated economic, operational and other benefits of the acquisition or strategic investment successfully or in a timely manner;
•failure of businesses we acquire or invest in to achieve anticipated revenue, earnings, or cash flow;
•diversion of management’s attention or other resources from our existing business;
•any inability to maintain the key customers, business relationships, suppliers, and brand potential of businesses we acquire or invest in;
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•uncertainty of entry into businesses or geographies in which we have limited or no prior experience or in which competitors have stronger positions;
•unanticipated or greater costs than expected associated with pursuing acquisitions or investments;
•difficulties in, or costs associated with, any integration process, such as challenges associated with assigning or transferring acquired intellectual property or intellectual property licenses; integrating and auditing financial statements of acquired companies that have not historically prepared financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”); and integrating the workforce of acquired companies and the potential loss of key employees of the acquired companies;
•responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, such as liabilities arising out of the failure to maintain effective privacy, data protection and cybersecurity controls, and liabilities arising out of the failure to comply with applicable laws and regulations, including tax laws;
•inability to maintain our culture and values, ethical standards, controls, procedures, and policies; and
•asset write-offs and impairments of goodwill and intangible assets in connection with any acquisition or strategic investment, as well as any inability to accurately forecast such impacts.
We may not succeed in addressing these or other risks in connection with any acquisitions or strategic investments we undertake, which could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, we may have to pay cash, incur additional debt or issue equity or equity-linked securities to finance any acquisitions or investments, which could also adversely affect our financial condition or the trading price of our securities, and the sale of equity or equity-linked securities could result in dilution to our stockholders.
We may need to raise additional funds to pursue our growth strategy or continue operations, and we may be unable to raise capital when needed or on acceptable terms.
From time to time, we may seek additional equity or debt financing to fund our growth, enhance our platform, respond to competitive pressures, or make acquisitions or other investments. Our business plans may change, general economic, financial or political conditions in our markets may deteriorate or other circumstances may arise, in each case that have a material adverse effect on our cash flows and the anticipated cash needs of our business. Any of these events or circumstances could result in significant additional funding needs, requiring us to raise additional capital. We cannot predict the timing or amount of any such capital requirements at this time. If financing is not available on satisfactory terms, or at all, we may be unable to expand our business at the rate desired and our results of operations may suffer.
We operate internationally and we plan to continue expanding our international operations, which exposes us to risks inherent in international operations.
Managing a global organization requires significant resources and management attention. We currently maintain operations outside of the United States, including in Ireland, Turkey, India, Australia, and Mexico, and we plan to expand our international operations in the future.
We generated 60% of our total revenue outside of North America during both the three months ended June 30, 2025 and 2024, and 61% of our total revenue outside of North America during both the six months ended June 30, 2025 and 2024. Based on our instructor registration records, we estimate that a majority of our instructors are located outside the United States. Any further international expansion efforts that we may undertake may not be as successful as we expect or at all.
Additionally, conducting international operations subjects us to risks that we have not generally faced in the United States. These risks include:
•the cost and resources required to localize our services, which requires the translation of our websites into foreign languages and adaptation for local practices and regulatory requirements;
•competition with local market participants who understand the local market better than we do or who have pre-existing relationships with our potential learners and UB customers in those markets;
•greater reliance on third-party resellers and other commercial partners for the distribution and marketing of our offerings;
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•legal uncertainty regarding the operations of our platform and our liability for the content and services provided by our instructors, including as a result of evolving local laws or a lack of clear precedent of applicable law;
•the burdens of complying with a wide variety of foreign laws and legal standards;
•lack of familiarity with and unexpected changes in foreign regulatory requirements;
•adapting to variations in methods of payment from learners and UB customers;
•difficulties in managing and staffing international operations;
•fluctuations in currency exchange rates;
•risks associated with foreign tax regimes, trade tariffs, foreign investment restrictions or requirements, or similar issues, which could negatively impact international adoption of our offerings;
•potentially adverse tax consequences, including the complexities of foreign value added tax systems, digital services tax and restrictions on the repatriation of earnings;
•increased financial accounting, reporting, and other regulatory burdens and complexities, as well as difficulties in implementing and maintaining adequate internal controls over the same;
•political, social, and economic instability abroad, wars and other armed conflicts, terrorist attacks, and security concerns in general, including Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East;
•reduced or varied protection for intellectual property rights in some countries; and
•higher telecommunications and internet service provider costs.
Operating in international markets also requires significant management attention and financial resources. The investment and additional resources required to establish operations and manage growth in other countries may not produce desired levels of revenue or profitability.
Our strategic and other relationships with partners overseas may also subject us to additional regulatory scrutiny in the United States and other jurisdictions. Operating in international markets could also increase our business exposure to the effects of trade and economic sanctions regulations. See “—We are subject to governmental export and import controls and regulations that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.”
Further, as we continue to expand internationally, we could also become subject to increased difficulties in collecting accounts receivable (including as a result of international sanctions or other trade restrictions affecting the geographies in which we or our learners or customers are present), repatriating money without adverse tax consequences, and risks relating to foreign currency exchange rate fluctuations. We have not engaged in currency hedging activities to limit risk of exchange rate fluctuations, and while we may decide to do so in the future, the availability and effectiveness of these hedging transactions may be limited. Changes in exchange rates affect our costs and earnings, and may also affect the book value of our assets located outside the United States and the amount of our stockholders’ equity.
We are subject to laws and regulations worldwide, and failure to comply with such laws and regulations could subject us to claims or otherwise adversely affect our business, financial condition and results of operations.
We are subject to a variety of laws in the U.S. and abroad that affect our business. As a global platform with learners and instructors in over 180 countries, we are subject to a wide range of laws and regulations regarding consumer protection, advertising, electronic marketing, privacy, data protection and cybersecurity, data localization requirements, online services, freedom of speech, labor, real estate, taxation, intellectual property ownership and infringement, export and national security, tariffs, anti-corruption and telecommunications, all of which are continuously evolving and developing.
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The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly laws outside the U.S., and compliance with laws, regulations and similar requirements may be burdensome and expensive. Because these laws and regulations are subject to change over time, we must continue to dedicate resources to monitoring developments in the law and ensuring compliance. Laws and regulations may be inconsistent from jurisdiction to jurisdiction, and certain jurisdictions may impose more stringent regulatory requirements than the U.S., which may increase the cost of compliance and doing business and expose us to possible litigation, penalties, or fines. Any such costs, which may rise in the future as a result of changes in these laws and regulations or in their interpretation, could make our platform less attractive to learners, instructors, or enterprise customers or cause us to change or limit our ability to make available our platform. We have policies and procedures designed to ensure compliance with applicable laws and regulations, but we cannot assure you that we will not experience violations of such laws and regulations or our policies and procedures. Any such violations could subject us to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties, or injunctions. If any governmental sanctions are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, and financial condition could be materially adversely affected. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could harm our business, operating results, and financial condition.
We are subject to governmental export and import controls and regulations that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws.
Our business activities are subject to various restrictions under U.S. export and similar laws and regulations, including trade and economic sanctions regulations. The U.S. export control and economic sanctions laws and regulations include restrictions or prohibitions on the sale of certain services to U.S. embargoed or sanctioned countries, governments, persons, and entities which in some cases might apply to our activities. In addition, various countries regulate the import of certain technology and have enacted or could enact laws that could limit our ability to provide learners access to our platform or could limit our learners’ ability to access or use our services in those countries.
Although we take precautions to prevent our platform from being provided in violation of such laws and regulations, our platform could nevertheless be provided inadvertently in violation of such laws. Complying with these laws and regulations could be particularly difficult because our products are widely available worldwide, in some cases, by providing only minimal information at registration. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to civil or criminal penalties. We also may be adversely affected through penalties, reputational harm, loss of access to certain markets, or otherwise. In addition, various countries regulate the import and export of certain encryption and other technology, including import and export permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our platform or could limit our learners’ ability to access our platform in those countries. Changes in our platform, or future changes in export and import regulations, may prevent our international learners or instructors from using our platform or, in some cases, prevent the export or import of our platform to certain countries, governments, or persons altogether. Any change in export or import regulations, economic sanctions, or related legislation or changes in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform.
Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws, and similar laws, could subject us to penalties and other adverse consequences.
We are subject to the anti-bribery and anti-money laundering laws in the U.S. and other applicable jurisdictions. Anti-corruption and anti-bribery laws have been enforced aggressively in recent years and are interpreted broadly to generally prohibit companies, their employees, agents, representatives, business partners, and third-party intermediaries from authorizing, offering, or providing, directly or indirectly, improper payments or benefits to recipients in the public or private sector.
We sometimes engage third parties to sell our products and conduct our business abroad. We and our employees, agents, representatives, business partners, or third-party intermediaries may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities and may be held liable for the corrupt or other illegal activities of these employees, agents, representatives, business partners, or third-party intermediaries even if we do not explicitly authorize such activities. We cannot assure you that none of our employees and agents will take actions in violation of applicable law, for which we may be ultimately held responsible.
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These laws also require that we keep accurate books and records and maintain internal controls and compliance procedures designed to prevent any such actions. While we have policies and procedures to address compliance with such laws, we cannot assure you that none of our employees, agents, representatives, business partners, or third-party intermediaries will take actions in violation of our policies and applicable law, for which we may be ultimately held responsible.
Any allegations or violations of applicable anti-bribery and anti-corruption laws and anti-money laundering laws could result in whistleblower complaints, sanctions, settlements, prosecution, enforcement actions, fines, damages, adverse media coverage, investigations, loss of export privileges, severe criminal or civil sanctions, or suspension or debarment from U.S. government contracts, all of which may have an adverse effect on our reputation, business, financial condition, results of operations, and prospects. Responding to any investigation or action will likely result in a materially significant diversion of management’s attention and resources and significant defense costs and other professional fees.
We are from time to time involved in claims, lawsuits, government investigations, and other proceedings that could adversely affect our business, financial condition, and results of operations.
We are involved in litigation matters from time to time, such as matters incidental to the ordinary course of our business, including intellectual property, commercial, employment, class action, whistleblower, accessibility, and other litigation and claims, and governmental and other regulatory investigations and proceedings. Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability, or require us to change our business practices. In addition, the expense of litigation and the timing of these expenses from period to period are difficult to estimate, subject to change, and could adversely affect our financial condition and results of operations. Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing could adversely affect our business, financial condition, and results of operations.
Our sales to government clients expose us to additional risks.
We derive a portion of our revenue from sales to US federal, state and local governmental agencies, as well as foreign governments and agencies. Sales to government customers may be subject to lengthy and complex procurement processes, including technology and security assessments, budget approvals and competitive bidding requirements. Government demand for our offerings may be impacted by government shutdowns, public sector budgetary cycles, contracting requirements, and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our products and subscriptions. Further, governmental entities may demand contract terms that differ from our standard arrangements and are less favorable than terms agreed with private sector customers, including terms that may allow a government to terminate without cause and provide for higher liability limits for certain losses.
In addition, as a government contractor, we must comply with laws, regulations, and contractual provisions relating to the formation, administration, and performance of government contracts, which affect how we do business with government agencies. Governmental entities may also be subject to a rapidly evolving regulatory framework that may impact their ability to use our platform and products. As a result of actual or perceived noncompliance with these laws, regulations, or contractual provisions, or applicable executive orders, we may be subject to non-ordinary course audits and internal investigations, which may prove costly to our business, divert management time, or limit our ability to continue selling our products and services to our government customers. Any violation of government contracting laws and regulations or contract terms could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments and fines, treble damages, and suspension from future government contracting. Also, engaging in sales activities to foreign governments introduces additional compliance risks specific to the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, and other similar statutory requirements prohibiting bribery and corruption in the jurisdictions in which we operate. All these factors add further risk to business conducted with these customers.
Adherence to our values and our focus on long-term sustainability may negatively impact our short- or medium-term financial performance.
Our values motivate everything we do, and we accordingly intend to focus on the long-term sustainability of our business and platform. We may take actions that we believe will benefit our business and our ecosystem and, therefore, our stockholders over a period of time, even if those actions do not maximize short- or medium-term financial results.
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However, these longer-term benefits may not materialize within the timeframe we expect or at all. For example:
•we may choose to prohibit certain content from our platform that we believe is inconsistent with our values even though we could benefit financially from the sale of that content;
•we may choose to revise our policies in ways that we believe will be beneficial to our learners, instructors, and UB customers in the long term even though the changes may be perceived unfavorably among our existing learners, instructors, and customers; or
•we may take actions, such as locating our servers in low-impact data centers, that reduce our environmental footprint even though these actions may be more costly than other alternatives.
Inadequate self-insurance accruals or insurance coverage for employee healthcare benefits could have an adverse effect on our business, financial results or financial condition.
Beginning in 2023, we became self-insured for certain medical benefits, up to certain stop-loss limits. We accrue these costs based on known claims and estimates of incurred but not reported claims. Our actual liabilities may exceed our estimates of losses. We may also experience an unexpectedly large number of claims that result in costs or liabilities in excess of our projections, which could cause us to record additional expenses.
Risks related to technology, privacy, and cybersecurity
Changes in laws or regulations relating to privacy, data protection, or cybersecurity, including those relating to the protection or transfer of data relating to individuals, or any actual or perceived failure by us to comply with such laws and regulations or any other obligations, could adversely affect our business.
We receive, transmit, store, and otherwise process personal information and other data relating to our learners, instructors, and other individuals, such as our employees. Numerous local, municipal, state, federal, and international laws and regulations address privacy, data protection, cybersecurity, and the collection, storage, use, disclosure, protection, and other processing of certain types of data. These laws, rules, and regulations evolve frequently and their scope may continually change, through new legislation, amendments to existing legislation, and changes in enforcement, and may be inconsistent from one jurisdiction to another.
For example, the E.U. General Data Protection Regulation (“GDPR”) has resulted and will continue to result in significantly greater compliance burdens and costs for companies like ours. The GDPR regulates our collection, control, sharing, use, disclosure, and other processing of personal data of individuals in the E.U. Actual or alleged failure to comply with the GDPR may result in fines of up to 20 million euros or up to 4% of the annual global revenue of the infringer, whichever is greater. It may also lead to civil litigation, with the risks of damages, injunctive relief, or regulatory orders adversely impacting our processing of personal data.
The United Kingdom maintains a United Kingdom version of the GDPR (combining the GDPR and the United Kingdom Data Protection Act of 2018), referred to as the U.K. GDPR, which provides for fines of up to 17.5 million British pounds sterling or 4% of global turnover, whichever is greater. The relationship between the United Kingdom and the E.U. in relation to certain aspects of data protection law is subject to uncertainty. On June 28, 2021, the European Commission announced a decision of “adequacy” concluding that the United Kingdom ensures an equivalent level of data protection to the GDPR, generally permitting personal data transfers from the European Economic Area (the “EEA”) to the United Kingdom. This adequacy determination must, however, be renewed after December 2025 and is subject to modification or revocation. In June 2025, the United Kingdom adopted the Data (Use and Access) Act 2025 (the “DUAA”), which amends and supplements the U.K. GDPR and is expected to become fully effective by June 2026. We cannot fully predict whether or how the DUAA will impact the European Commission’s adequacy determination with the respect to the United Kingdom, nor how the United Kingdom’s data protection regime may continue to develop. Changes with respect to any of these matters may lead to additional costs and increase our risk exposure.
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Additionally, we are or may become subject to laws, rules, and regulations regarding cross-border transfers of personal data, including transfers of personal data outside the EEA, Switzerland and the United Kingdom. Recent developments have created complexity and uncertainty regarding transfers of personal data from the EEA to the U.S. and other jurisdictions. In 2020, the Court of Justice of the European Union (the “CJEU”) invalidated the E.U.-U.S. Privacy Shield Framework (the “Privacy Shield”), under which personal data could be transferred from the EEA. The CJEU also noted that standard contractual clauses (approved by the European Commission as an adequate personal data transfer mechanism) may not necessarily be relied upon in all circumstances. In addition to other mechanisms, in limited circumstances we may rely on Privacy Shield certifications of third parties (for example, vendors and partners). The European Commission and the United Kingdom’s Information Commissioner’s Office have published new standard contractual clauses that are required to be implemented.
Following issuance of a U.S. Executive Order, a new framework, the EU-U.S. Data Privacy Framework (“EU-U.S. DPF”) was created as a successor to the Privacy Shield. Following an adequacy decision issued by the European Commission on July 10, 2023, the DPF, along with a UK extension to the EU-U.S. DPF that allows the transfer of personal data from the UK to the U.S. (the “UK DPF Extension”), is available for companies as a lawful transfer mechanism for personal data transfers to the U.S. from the EEA and UK. The Swiss-U.S. Data Privacy Framework (“Swiss-U.S. DPF”) also has been established to serve as a lawful transfer mechanism for personal data transfers to the U.S. from Switzerland. We have self-certified to the EU-U.S. DPF, the UK DPF Extension, and the Swiss-U.S. DPF. The EU-U.S. DPF has been the subject of legal challenge, however, and more generally, these frameworks may be subject to legal challenges from privacy advocacy groups or others. Additionally, the European Commission's adequacy decision regarding the DPF provides that the DPF will be subject to future reviews and may be subject to suspension, amendment, repeal, or limitations in scope by the European Commission. These developments regarding cross-border data transfers have created uncertainty and increased the risk around our international operations and may require us to review and amend the legal mechanisms by which we make or receive personal data transfers to the U.S. and other jurisdictions. We may, among other things, be required to implement additional contractual and technical safeguards for any personal data transferred out of the EEA, Switzerland, the United Kingdom or other regions which may increase compliance costs, lead to increased regulatory scrutiny or liability, may require additional contractual negotiations, and may adversely impact our business, financial condition and operating results.
The California Consumer Protection Act (“CCPA”), which went into effect on January 1, 2020, among other things, requires covered companies to provide specified disclosures to California consumers and affords such consumers the ability to opt out of certain types of data sharing and sales. The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches. Additionally, in November 2020, California voters passed the California Privacy Rights and Enforcement Act of 2020 (the “CPRA”). As of January 1, 2023, the CPRA expanded the CCPA with additional requirements that may impact our business and establishes a regulatory agency dedicated to enforcing the law. More than a dozen U.S. states have enacted comprehensive privacy laws similar to the CCPA and CPRA, including Virginia, Colorado, Connecticut, Utah, Iowa, Indiana, Tennessee, Montana, Texas, Oregon, Delaware, New Jersey, New Hampshire, Minnesota, Nebraska, Florida, Kentucky, Maryland, and Rhode Island, with additional states continuing to consider similar legislation. Many of these state privacy laws have taken effect or will take effect in coming years, creating a patchwork of overlapping but different state laws and reflecting a trend of increasingly stringent privacy legislation in the U.S., which could increase our potential liability and adversely affect our business, financial condition, and results of operations.
Outside of Europe, many other countries, including countries where we have operations or otherwise do business, have adopted or are considering adopting data protection legislation, including, for example, regimes adopted in Australia, India, and Mexico. Many of these data protection regimes are based upon principles underlying the GDPR or its predecessor, the E.U. Data Protection Directive, and provide for substantial obligations and penalties for non-compliance. In addition, the Personal Information Protection Law (the “PIPL”), went into effect in the People’s Republic of China (the “PRC”) on November 1, 2021. The PIPL shares similarities with the GDPR, including extraterritorial application, data minimization, data localization, and purpose limitation requirements, and obligations to provide certain notices and rights to PRC citizens. The PIPL allows for fines of up to 50 million renminbi or 5% of a covered company’s revenue in the prior year.
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Aspects of the interpretation and enforcement of the CCPA, as amended by the CPRA, and other evolving federal, state, and foreign laws and regulations relating to privacy and the collection, storing, sharing, use, disclosure, protection, and other processing of certain types of data are subject to varying enforcement and new and changing interpretations by courts, and may impose different or inconsistent obligations. These laws or regulations, particularly any new or modified laws or regulations, or changes to the interpretation or enforcement of laws or regulations, that require enhanced protection of certain data or new obligations, could greatly increase the cost of providing our platform, require significant changes to our data processing practices and other aspects of our operations, or prevent us from providing our platform in jurisdictions in which we currently operate and in which we may operate in the future.
Additionally, we have incurred, and may continue to incur, significant expenses in efforts to comply with privacy, data protection, and cybersecurity standards and protocols imposed by law, regulation, industry standards, or contractual obligations. We may be subject to investigation or enforcement actions by regulators if our statements, policies or practices relating to privacy, data protection, or cybersecurity are alleged to be deficient, lacking transparency, deceptive, unfair, or misrepresentative. We are also bound by contractual obligations related to our collection, use, disclosure, protection, and other processing of personal data and other types of data. Our efforts to comply with such obligations may not be successful or may have other negative consequences. With laws, regulations, and other actual and asserted obligations relating to privacy, data protection, and cybersecurity imposing new and relatively burdensome obligations and with uncertainty over their interpretation and application, we may face challenges in addressing their requirements and making necessary changes to our policies and practices and may incur significant costs and expenses in efforts to do so. Despite our efforts, our interpretations of the law or our practices, policies, or platform or other services or offerings could be inconsistent with, or fail or be alleged to fail to meet all requirements of, such laws, regulations, or obligations. Any actual or perceived failure, or consequences associated with our efforts, to comply with applicable laws or regulations or any other obligations relating to privacy, data protection, cybersecurity, or data processing, or any compromise of security that results in unauthorized access to, or use or release of data relating to learners, instructors, or other individuals could damage our reputation, discourage new and existing learners, instructors, and UB customers from using our platform, and could result in investigations, or other proceedings by governmental agencies, private claims and litigation, and fines, penalties, and other liabilities, any of which could adversely affect our business, financial condition and operating results. Even if not subject to legal challenge, concerns relating to privacy, data protection, or cybersecurity, whether or not valid, may harm our reputation and brand adversely affect our business, financial condition, and operating results.
A cybersecurity attack or other security breach or incident could delay or interrupt service to our learners, instructors, and UB customers, harm our reputation or subject us to significant liability.
Our platform involves the processing of significant amounts of data relating to learners, instructors, and UB customers interacting with our platform, including personal data and personal information. Additionally, we collect and store certain sensitive and proprietary information, and personal information, in the operation of our business, including trade secrets, intellectual property, employee data, and other confidential data.
We engage third-party service providers to store and otherwise process certain data, including sensitive and personal information. Our service providers have been, and in the future may be, the targets of cyberattacks, malicious software, phishing schemes, fraud, intentional and unintentional insider threats, and other risks to the confidentiality, security, integrity, and availability of their systems and the data they process for us. Our ability to monitor our service providers’ cybersecurity is limited, and third parties may be able to circumvent those security measures, resulting in the unauthorized access to, misuse, disclosure, loss, unavailability, destruction or other processing of data they process for us, including sensitive and personal information. There have been and may continue to be significant supply chain attacks, and we cannot guarantee that our or our third-party providers’ systems and networks have not been breached or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the systems and networks of third parties that support us and our services.
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While we have taken measures to protect our own proprietary and confidential information, as well as the personal data and confidential information that we otherwise process, and measures to protect our platform, we, our third-party service providers, other third parties on which we rely, and the networks and systems used in our business, including those of third-party service providers, have been subject to, and we, our service providers and our platform may in the future be subject to, cybersecurity attacks or other security breaches or incidents. Cybersecurity attacks may take the form of denial of service attacks, attacks using ransomware or other malware, or other attacks, and can come from insider threats as well as individual hackers, criminal groups, and state-sponsored organizations. These sources have used AI and machine learning to launch more automated, targeted and sophisticated attacks against targets. They can also implement social engineering techniques to induce our employees, contractors, or customers to disclose passwords or other sensitive information or take other actions to gain access to data, and these social engineering attacks have become more sophisticated as attackers leverage AI and “deepfake” technologies to craft increasingly convincing fraudulent communications and scenarios. Additionally, we and many other companies with whom we interact increasingly rely on automated systems and processes, which creates and heightens certain security threats. Further, we and our platform otherwise may be subject to security breaches and incidents resulting from employee or contractor error or malfeasance, including as a result of intentional or accidental misuse of authorized access to our systems. These and other threats may be heightened by geopolitical tensions and conflicts. We also may be more susceptible to cyberattacks and other security breaches and other security incidents while many of our employees work remotely, because we have less ability to implement, monitor, and enforce our information security and data protection policies.
More generally, we cannot guarantee that applicable recovery systems, security and data encryption protocols, network protection mechanisms, and other procedures of ourselves or our third-party service providers, or other third parties on which we rely, are or will be adequate to prevent network and service interruption, system failure or loss, corruption, or unauthorized access to, or disclosure, acquisition, unavailability, destruction, or other processing of, data, including personal data and other sensitive information that we or they process or maintain. Moreover, our platform could be breached or disrupted if vulnerabilities in our platform are exploited by unauthorized third parties. Techniques used to obtain unauthorized access change frequently and the volumes of cybersecurity attacks and of security breaches and incidents generally are increasing. We and our third-party service providers, and other third parties on which we rely, may be unable to implement adequate preventative measures or stop any attacks while they are occurring. A cybersecurity attack or security breach or incident could delay, disrupt or interrupt our platform and services and may deter learners, instructors, or organizations from using our platform, and we and our service providers may face difficulties or delays in identifying, remediating, and otherwise responding to any cybersecurity attack or other security breach or incident. In addition, any actual or perceived cybersecurity attack or security breach or incident could damage our reputation and brand, expose us to a risk of claims, litigation, regulatory investigations or other proceedings and possible fines, penalties, or other liability and require us to expend significant capital and other resources.
We incur significant costs in an effort to detect and prevent security breaches and other security-related incidents, including costs associated with training our employees to identify and avoid potential security risks, and we expect our costs will increase as we make improvements to our systems and processes to prevent future breaches and incidents. Some jurisdictions have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data. Any disclosures relating to an actual or perceived cybersecurity attack or other security breach or incident suffered by us or any of our third-party service providers, or other third parties on which we rely, could lead to negative publicity and any such disclosures, or any belief that a cybersecurity attack, or a security breach or incident, has impacted us, our platform, or our service providers, or other third parties on which we rely, may cause our learners, instructors, or UB customers to lose confidence in the security of our platform and the effectiveness of the cybersecurity measures we and our service providers utilize.
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Further, any limitations of liability provisions in our customer and user agreements, contracts with third-party service providers, or other contracts may not be enforceable or adequate or otherwise protect us from any liabilities or damages with respect to any particular claim relating to a security breach or incident or other security-related matter. While our insurance policies include liability coverage for certain of these matters, subject to applicable deductibles, any cybersecurity attack or other security breach or other incident, could subject us to claims or damages that exceed our insurance coverage. Our insurance coverage might not be adequate for liabilities actually incurred relating to any security breach or incident, such insurance may not continue to be available to us in the future on economically reasonable terms, or at all, and insurers may deny us coverage as to any future claim. The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, including our financial condition, operating results, and reputation.
We may not be able to successfully deploy AI, machine learning, and other evolving technologies.
We leverage generative AI, machine learning, and other evolving technologies throughout our business, including to enhance our platform and offerings. For example, in October 2024, we announced the release of the Udemy AI Assistant, a natural-language chat interface designed to help learners better discover and engage with our content, as well as our AI Skills Mapping tool. We expect AI to become more important to our operations and future growth over time. However, we may not be able to realize the desired or anticipated benefits from our investments in, and use of, AI. We also may not be able to properly develop, implement, or market AI-related features. Our competitors or other third parties may also incorporate AI into their offerings more quickly or more successfully than us, which could impair our competitiveness and adversely affect our business, operating results, and growth prospects.
Additionally, our use of AI systems may subject us to legal liability, whether to private parties or regulatory authorities, as well as brand or reputational harm. If the outputs of our AI systems are, or are alleged to be, deficient, inaccurate, or biased, if such outputs or systems are, or are alleged to be, infringing or misappropriating others’ intellectual property rights or otherwise violating applicable laws or regulations, or if any of these had occurred, or were alleged to have occurred, previously, then our business, operating results, financial condition, and growth prospects could be adversely affected. Further, if our employees, contractors or other agents input inappropriate or confidential information into an AI system, our business data and operations could be compromised or otherwise disrupted.
The legal and regulatory frameworks governing AI continue to evolve rapidly. For example, the E.U. Artificial Intelligence Act (the “E.U. AI Act”) entered into force on August 1, 2024 and will mostly take full effect by 2026. The E.U. AI Act establishes a risk-based framework for the regulation of AI systems, and will require operators of AI systems to comply with various risk management, data governance, technical documentation, oversight, transparency, and other obligations, depending on the risk classification of the AI systems being used by such operator. Actual or alleged failures to comply with the E.U. AI Act may result in penalties of up to 35 million euros or up to 7% of an operator’s total worldwide annual turnover, whichever is greater. Various U.S. states, including California and Colorado, have also recently adopted laws and regulations applicable to the development and use of AI systems and outputs, and U.S. federal legislation addressing AI has also been introduced. Such laws and regulations will have a material impact on the adoption and use of AI systems. Compliance with these laws and regulations may affect our ability to deploy AI systems in our business or integrate AI features into our platform, require changes to our operations and processes, result in heightened compliance burdens and costs, or expose us to additional legal liabilities, any of which could negatively impact our business, financial condition, or operating results.
Interruptions or performance problems associated with our technology and infrastructure could adversely affect our business and results of operations.
Our continued growth partially depends on the ability of learners and instructors to access our platform at any time. Our platform has encountered, and may in the future encounter, disruptions, outages, and other performance problems due to a variety of factors, including infrastructure changes, introductions of new capabilities, human or technology errors, distributed denial of service attacks, or other security related incidents. In some instances, we may not be able to identify the cause or causes of these performance problems in a timely manner. It may become increasingly difficult to maintain and improve the performance of our platform as it grows and becomes more complex, and in the future we may be required to allocate significant resources to augment and update our technology and network infrastructure. If learners or instructors are unable to access our platform within a reasonable amount of time, or at all, our business will be harmed.
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Applicable regulations that permit ISPs to limit internet consumption could harm our business.
The current legislative and regulatory landscape regarding the regulation of the Internet and, in particular, Internet neutrality, in the United States is subject to uncertainty. In 2018, the Federal Communications Commission (the “FCC”) repealed its open internet rules, which prohibited internet service providers from charging content providers higher rates in order to deliver their content over certain “fast traffic” lanes. In response, California and several other U.S. states have implemented their own open internet or net neutrality rules. In 2024, the FCC voted to reinstate, with certain modifications, its open internet rules; however, in January 2025, the U.S. Court of Appeals for the Sixth Circuit struck down the FCC’s 2024 order, holding that the FCC lacks statutory authority to regulate broadband internet service as a telecommunications service. As a result, there are currently no federal net neutrality rules in effect, though state-level net neutrality laws, including California’s comprehensive net neutrality statute, remain in place. We cannot predict whether Congress will enact federal net neutrality legislation, or whether state initiatives regulating providers will be modified, overturned, or vacated by legal action, or the degree to which the current regulatory uncertainty would adversely affect our business, if at all.
Similarly, the EU requires equal access to internet content, but as part of its Digital Single Market initiative, the EU may impose network security and disability access requirements, which could increase our costs. Outside these jurisdictions, government regulation of the internet, including the idea of network neutrality, may be developing or non-existent. It is possible that governments of one or more foreign countries may seek to censor content available on our platform or may even attempt to block access to our platform. If we are restricted from operating in one or more countries, our ability to attract and retain learners, instructors, and customers may be adversely affected and we may not be able to grow our business as we anticipate.
We rely on Amazon Web Services for a substantial portion of our platform services. Any disruption of, or interference with, our use of Amazon Web Services could negatively impact our business and operations.
Amazon Web Services provides distributed computing infrastructure platforms for business operations, commonly referred to as “cloud” computing services. We currently run a significant portion of our platform’s computing on Amazon Web Services, and any significant disruption of, or interference with, our use of Amazon Web Services would negatively impact our operations and our business would be seriously harmed. If learners or instructors are unable to access our platform through Amazon Web Services or encounter difficulties in doing so, we may lose learners, instructors, and UB customers. The level of service provided by Amazon Web Services may also impact the adoption and perception of our platform. If Amazon Web Services experiences interruptions in service regularly or for a prolonged basis, or other similar issues, our business would be seriously harmed. Hosting costs will also increase if and as our base of learners, instructors, and UB customers grows, and our business, financial condition, and results of operations may be adversely affected if we are unable to grow our revenue faster than the cost of using Amazon Web Services or similar providers increases.
Amazon Web Services may take actions beyond our control that could seriously harm our business, including discontinuing or limiting access to Amazon Web Services, increasing pricing terms, terminating our contract, establishing more favorable terms with one or more of our competitors, and modifying or interpreting its terms of service or other policies in a manner that impacts our ability to administer our business and operations.
Our payments system depends on third-party providers and is subject to evolving laws and regulations.
We rely on third-party payment processors to process payments made by learners and customers, and to instructors, on our platform. We have engaged third-party service providers to perform underlying card processing, currency exchange, identity verification, and fraud analysis services. If these service providers do not perform adequately or if our relationships with these service providers end for any reason, we will need to find an alternate payment processor and may not be able to secure similar terms or replace such payment processors in an acceptable time frame. Further, the software and services provided by our third-party payment processors may not meet our expectations, contain errors or vulnerabilities, be compromised, or experience outages. Any of these risks could cause us to lose our ability to accept online payments, make payments to our instructors or conduct other payment transactions, any of which could make our platform less convenient and attractive and harm our ability to attract and retain learners, instructors, and customers. In addition, if these providers increase the fees they charge us, our operating expenses could increase.
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The laws and regulations related to payments are complex and vary across different jurisdictions in the United States and globally. As a result, we are required to spend significant time and effort to comply with those laws and regulations. Any failure or claim of our failure to comply, or any failure by our third-party service providers to comply, could cost us substantial resources, result in liabilities, or force us to stop offering certain third-party payment services. In addition, as we expand our international operations, we will need to accommodate international payment method alternatives. As we expand the availability of new payment methods in the future, including internationally, we may become subject to additional regulations and compliance requirements.
Further, through our agreement with our third-party credit card processors, we are indirectly subject to payment card association operating rules and certification requirements, including the Payment Card Industry Data Security Standard. We are also subject to rules governing electronic funds transfers. Any change in these rules and requirements could make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to additional fines and higher transaction fees and lose our ability to accept credit and debit card payments from our learners and UB customers, process electronic funds transfers or facilitate other types of online payments, and our business and operating results could be adversely affected.
The use of our platform could be adversely affected if our mobile apps are not effective.
Learners have been increasingly accessing our platform on mobile devices through our Udemy and UB apps in recent years. The smaller screen size and reduced functionality associated with some mobile devices may make the use of our platform more difficult. Those accessing our platform primarily on mobile devices may not enroll in the courses offered on our platform as often as those accessing our platform through personal computers, which could result in less revenue for us. If we are not able to provide a rewarding experience on mobile devices, our ability to attract learners to our platform could be impaired, and consequently our business may suffer.
As new mobile devices and mobile features are released, we may encounter problems in developing or supporting apps for them. In addition, supporting new devices and mobile device operating systems may require substantial time and resources.
The success of our mobile apps could also be harmed by factors outside our control, including:
•actions taken by mobile app distributors, including the Apple App Store and the Google Play Store;
•unfavorable treatment received by our mobile apps, especially as compared to competing apps, such as the placement of our mobile apps in a mobile app download store;
•increased costs in the distribution and use our mobile app; or
•changes in mobile operating systems, such as iOS and Android, that degrade the functionality of our mobile website or mobile apps or that give preferential treatment to competitive offerings.
If our learners encounter difficulty accessing or using, or if they choose not to use, our mobile platform, our business and results of operations may be adversely affected.
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Internet search engines drive traffic to our platform and, if we fail to appear prominently in search results, our growth rate could decline and our business, financial condition and results of operations could be adversely affected.
Many learners find our website through internet search engines, like Google. A critical factor in attracting learners to our website is how prominently we are displayed in response to search queries. Search engine companies typically provide two types of search results: algorithmic listings and paid advertisements. We rely on both types of search results to attract visitors to our website. Algorithmic search result listings are determined and displayed in accordance with a set of proprietary formulas or algorithms developed by particular search engine companies. From time to time, these companies revise their algorithms without notice. In some instances, these modifications have caused our website to be listed less prominently in search results. In addition, search engine companies retain broad discretion to remove from search results any company whose marketing practices are deemed to be inconsistent with the search engine companies’ guidelines. If our marketing practices violate or appear to violate search engine company guidelines, we may, without warning, not appear in search result listings at all. If we are listed less prominently or fail to appear in search result listings for any reason, visits by prospective learners to our website would likely decline. We may not be able to replace this traffic and any attempt to do so may require us to increase our sales and marketing expenditures, which may not be offset by additional revenue and could adversely affect our operating results.
Risks related to our intellectual property
We may be unable to adequately obtain, maintain, protect, and enforce our intellectual property and proprietary information, which could adversely affect our business, financial condition, and results of operations.
Our business depends on our intellectual property, the protection of which is critical to our success. We rely on a combination of intellectual property rights, including patents, trade secrets, trade dress, domain names, copyrights, and trademarks to protect our competitive advantage, all of which offer only limited protection. The steps we take to protect our intellectual property, including physical, operational, and managerial protections of our confidential information, contractual obligations of confidentiality, assignment agreements with our employees and contractors, license agreements, and the prosecution and maintenance of registrations and applications for registration of intellectual property rights, require significant resources and may be inadequate. We will not be able to protect our competitive advantage if we are unable to establish, protect, maintain, or enforce our rights or if we do not detect or are unable to address unauthorized use of our intellectual property. Some license provisions protecting against unauthorized use, copying, transfer, and disclosure of our proprietary information may be unenforceable under the laws of certain jurisdictions.
We hold various registered trademarks in the United States and in foreign jurisdictions. We also have common law rights in some trademarks and pending trademark applications in the United States and foreign jurisdictions. In addition, we have registered domain names for websites that we use in our business, such as www.udemy.com and some other variations. Competitors may adopt service names or domain names similar to ours, thereby harming our ability to build brand identity and possibly leading to user confusion. In addition, our registered or unregistered trademarks or trade names could be declared generic, and there could be potential trade name or trademark infringement claims brought by owners of other trademarks that are similar to our trademarks. If our trademarks and trade names are not adequately protected, we may not be able to build and maintain name recognition in our markets of interest and our business may be adversely affected. Effective trademark protection may not be available or may not be sought in every country in which our products are made available, in every class of goods and services in which we operate, and contractual disputes may affect the use of marks governed by private contract. Additionally, we may from time to time be subject to opposition or similar proceedings with respect to applications for registrations of our intellectual property, including trademarks. While we aim to acquire adequate protection of our brand through trademark registrations in key markets, occasionally third parties may have already registered or otherwise acquired rights to identical or similar marks for services that also address our market. We rely on our brand and trademarks to identify our platform and to differentiate our platform and services from those of our competitors, and if we are unable to adequately protect our trademarks, third parties may use our brand names or trademarks similar to ours in a manner that may cause confusion in the market, which could decrease the value of our brand and adversely affect our business and competitive advantages.

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We hold a small number of issued patents and thus have a limited ability to exclude or prevent our competitors from implementing technology, methods, and processes similar to our own. Further, we may not timely or successfully apply for a patent or register its trademarks or otherwise secure rights in our intellectual property. We expect to continue to expand internationally and, in some foreign countries, the mechanisms to establish and enforce intellectual property rights may be inadequate to protect our technology, which could harm our business.
It is our policy to enter into confidentiality and invention assignment agreements with our employees and consultants and enter into confidentiality agreements with the parties with whom we have strategic relationships. The confidentiality agreements on which we rely to protect certain technologies may be breached, may not be adequate to protect our confidential information, trade secrets, and proprietary technologies, and may not provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, trade secrets, or proprietary technology. Further, these agreements do not prevent our competitors or others from independently developing products that are substantially equivalent or superior to ours.
Our intellectual property rights and the enforcement or defense of such rights may be affected by developments or uncertainty in laws and regulations relating to intellectual property rights. Moreover, many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, which could make it difficult for us to stop the infringement, misappropriation, or other violation of our intellectual property or marketing of competing products in violation of our intellectual property rights generally.
Policing unauthorized use of our intellectual property and misappropriation of our technology and trade secrets is difficult and we may not always be aware of such unauthorized use or misappropriation. Despite our efforts to protect our intellectual property rights, unauthorized third parties may attempt to use, copy, or otherwise obtain and market or distribute our technology or otherwise develop services with the same or similar functionality as our platform. If our competitors infringe, misappropriate, or otherwise violate our intellectual property rights and we are not able to enforce our rights, or if our competitors are able to develop a platform with the same or similar functionality as ours without infringing our intellectual property, our competitive advantage and results of operations could be harmed. Litigation brought to protect and enforce our intellectual property rights could be costly, time consuming, and distracting to management and could result in the impairment or loss of portions of our intellectual property. As a result, we may be aware of infringement by our competitors but may choose not to bring litigation to protect our intellectual property rights due to the cost, time, and distraction of bringing such litigation. Furthermore, if we do decide to bring litigation, our efforts to enforce our intellectual property rights may be met with defenses, counterclaims, and countersuits challenging or opposing our right to use and otherwise exploit particular intellectual property, services, and technology or the enforceability of our intellectual property rights. Any failure to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further sales or the implementation of our products, impair the functionality of our platform, prevent or delay introductions of new or enhanced products or features, result in us substituting inferior or more costly technologies into our platform, or injure our reputation. Furthermore, many of our current and potential competitors may have the ability to dedicate substantially greater resources to developing and protecting their technology or intellectual property rights than we do.
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Intellectual property litigation, including litigation related to content available on our platform, could result in significant costs and adversely affect our business, financial condition, results of operations, and reputation.
Companies in the technology industry are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. We periodically receive notices that claim we have infringed, misappropriated, or misused other parties’ intellectual property rights, including with respect to content made available on our platform by instructors and other third parties. As we gain greater public recognition, we may face a higher risk of being the subject of intellectual property claims. Any intellectual property claims against us, with or without merit, could be time consuming and expensive to settle or litigate and could divert the attention of our management. Some of our competitors have extensive portfolios of issued patents. Many potential litigants, including some of our competitors and patent holding companies, have the ability to dedicate substantial resources to enforcing their intellectual property rights. Litigation regarding intellectual property rights is inherently uncertain due to the complex issues involved, and we may not be successful in defending ourselves in such matters. Furthermore, we may not qualify for the safe harbors established by laws in the United States and other countries protecting online service providers from claims related to content posted by users, or those laws could change in a manner making it difficult or impossible to qualify for such protection, increasing our exposure. While our terms and policies require instructors to respect the intellectual property rights of others, we have limited ability to influence the behavior of third parties, and there can be no assurance that these terms and policies will be sufficient to dissuade or prevent infringing activity by third parties on our platform. For more information, see “—Risks related to our business and operations—We could face liability, or our reputation might be harmed, as a result of courses posted to our platform.”
Any claims successfully brought against us could subject us to significant liability for damages and we may be required to stop using technology or other intellectual property alleged to be in violation of a third party’s rights. We also might be required to seek a license for third-party intellectual property. Even if a license is available, we could be required to pay significant royalties or submit to unreasonable terms, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, which could require significant time and expense. If we cannot license or develop technology for any allegedly infringing aspect of our business, we would be forced to limit our service and may be unable to compete effectively. Any of these results could harm our business.
Our platform contains third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could restrict our ability to provide our platform.
We use open source software in our platform and expect to continue to use open source software in the future. In addition, we contribute software source code to open source projects under open source licenses or release internal software projects under open source licenses and anticipate continuing to do so in the future. Additionally, under some open source licenses, if we combine our proprietary software with certain open source software in a certain manner, certain proprietary software (including our own software) or other intellectual property rights could become subject to obligations to be disclosed in source code form and licensed, including for the purpose of enabling further modification and distribution, and at no charge or for only a nominal fee. Third parties may also seek to enforce the terms of the applicable open source license through litigation which, if successful, could subject us to liability and require us to make our proprietary software source code available under an open source license, seek to purchase a license (which, if available, could be costly), and cease offering the implicated products or services unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources, and we may not be able to complete it successfully. Many of the terms of many open source licenses to which we are subject have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to provide or distribute our products or services. While we try to insulate our proprietary code from the effects of such open source license provisions, we cannot guarantee that we will be successful, that all open source software is reviewed prior to use in our products, that our developers have not incorporated open source software into our products in potentially disruptive ways, or that they will not do so in the future. In addition to risks related to open source license requirements, use of certain open source software may pose greater risks than use of third-party commercial software, since open source licensors generally do not provide warranties or controls on the origin of software. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could adversely affect our business, financial condition, and results of operations.
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Risks related to financial reporting, taxation, and operations as a public company
If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which may adversely affect investor confidence in us and, as a result, lead to a decline in the market price of our common stock.
As a public company, we are required to comply with the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and the rules and regulations of Nasdaq. The Sarbanes-Oxley Act, among other things, requires that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our management, including our principal executive and financial officers.
Under the Sarbanes-Oxley Act, we are required to make a formal assessment of the effectiveness of our internal control over financial reporting. The cost of our compliance with Section 404 will continue to divert resources and take significant time and effort. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. Our current controls and any new controls that we develop may become inadequate for a variety of reasons, including changes in conditions in our business. Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses. Our disclosure controls and procedures or our internal control over financial reporting are not expected to prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Any failure to implement and maintain effective disclosure controls and procedures and internal control over financial reporting, including the identification of one or more material weaknesses, could cause investors to lose confidence in the accuracy and completeness of our financial statements and reports, which would likely adversely affect the market price of our common stock. In addition, we could be subject to sanctions or investigations by Nasdaq, the SEC, and other regulatory authorities.
Operating as a public company requires us to incur substantial costs and administrative burdens, which could have an adverse effect on our business, financial condition and results of operations.
As a public company, we are subject to additional reporting and other obligations, such as the reporting requirements of the Exchange Act, the applicable requirements of the Sarbanes-Oxley Act, and the applicable listing standards of Nasdaq. Compliance with these rules and regulations results in legal and financial compliance costs and places demands on our systems. Our loss of “emerging growth company” status has required additional attention from management and will result in increased costs to us, which could include higher legal fees, accounting fees and fees associated with investor relations activities, among others. As a public company, we may also be subject to stockholder activism, which can lead to additional substantial costs, distract management, and impact the manner in which we operate our business in ways we cannot currently anticipate. Our business and financial condition will become more visible as a result of our reporting obligations as a public company, which may result in threatened or actual litigation, including by competitors.
Many members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, financial condition, and results of operations.
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Unanticipated changes in our effective tax rate and additional tax liabilities, including as a result of our international operations or implementation of new tax rules, could harm our future results of operations.
We are subject to income taxes in the United States and certain foreign jurisdictions. Our effective tax rate could be subject to volatility or adversely affected by several factors, many of which are outside of our control, including changes in the mix of earnings and losses in countries with differing statutory tax rates, changes in tax laws, rates, treaties, and regulations or the interpretation of the same, changes to the financial accounting rules for income taxes, the outcome of current and future tax audits, examinations or administrative appeals, certain non-deductible expenses and the valuation of deferred tax assets and liabilities. For example, in July 2025, the United States enacted tax legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBB Act”). We are currently assessing the potential impact the OBBB Act will have on our condensed consolidated financial statements. The Organization for Economic Cooperation and Development proposed a 15% global minimum tax framework (known as Pillar Two), which has been adopted by the European Union effective from January 1, 2024. Several other jurisdictions have adopted or are in the process of adopting laws to implement this initiative. In June 2025, the G7 released a joint statement announcing an understanding regarding a proposed “side-by-side” solution that would exempt U.S.-parented multinational businesses from certain provisions of Pillar Two; however, no agreement regarding implementation of the proposal has yet been reached. Increases in our effective tax rate would reduce profitability or increase losses. Changes in tax and trade laws, treaties, or regulations, or their interpretation or enforcement, have become more unpredictable and may become more stringent, which could have a material adverse effect on our tax position. We made significant judgments and assumptions in the interpretation of new laws and in our calculations reflected in our financial statements.
In addition, we are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions. We believe that we operate in compliance with applicable transfer pricing laws, but our transfer pricing procedures are not binding on applicable tax authorities. If such tax authorities were to successfully challenge our transfer pricing procedures, they could require us to adjust our transfer prices, which could result in a higher overall tax liability to us and possibly interest and penalties.
Further, we are subject to examination by tax authorities on income, employment, sales, and other tax matters. While we regularly assess the likelihood of adverse outcomes from such examinations and the adequacy of our provision for taxes, there can be no assurance that such provision is sufficient and that a determination by a tax authority would not have an adverse effect on our business, financial condition, and results of operations. We believe our income, employment, and transactional tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, but an adverse resolution of one or more uncertain tax positions in any period could have a material impact on the results of operations for that period.
Taxing authorities may successfully assert that we have not properly collected or remitted, or in the future should collect or remit, sales and use, gross receipts, value added, or similar taxes, or employment, payroll, or withholding taxes, and may successfully impose additional obligations on us, and any such assessments, obligations, or inaccuracies could adversely affect our business, financial condition, and results of operations.
The application of non-income, or indirect, taxes, such as sales and use tax, value-added tax, goods and services tax, business tax, and gross receipt tax, to businesses like ours is a complex and evolving issue. Significant judgment is required on an ongoing basis to evaluate applicable tax obligations, and as a result, amounts recorded are estimates and are subject to adjustments. In many cases, the ultimate tax determination is uncertain because it is not clear how new and existing statutes might apply to our business. In addition, we do not collect and remit indirect taxes in all jurisdictions in which we operate on the basis that such indirect taxes are not applicable to us. Certain jurisdictions in which we do not collect and remit such taxes may assert that such taxes are applicable, which could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest, could discourage learners, instructors, or organizations from using our platform, could increase the cost for consumers using our platform, or could otherwise harm our business, financial condition, and results of operations.
Additionally, one or more states, localities, or other taxing jurisdictions may seek to impose additional reporting, record-keeping, or indirect tax collection obligations on businesses like ours. Requiring tax reporting or collection could decrease learner or instructor activity, which would harm our business, and could require us to incur substantial costs in order to comply, including costs associated with tax calculation, collection, and remittance and audit requirements, which could make our offerings less attractive and could adversely affect our business, financial condition, and results of operations.
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Also, tax rules of certain countries, including the United States, generally require payors to report payments to unrelated parties to the applicable taxing authority and to withhold a percentage of certain amounts and remit such amounts to the applicable taxing authority. Failure to comply with such reporting and withholding obligations with respect to payments we make to our instructors could result in the imposition of liabilities for the under withheld amounts, fines, and penalties. In addition, a tax authority could assert that we should be withholding employment or other taxes from payments to instructors. Due to our large number of instructors and the amounts paid to each, process failures with respect to these reporting obligations could result in financial liability and other consequences to us if we were unable to remedy such failures in a timely manner.
As a result of these and other factors, the ultimate amount of tax obligations owed may differ from the amounts recorded in our financial statements and any such difference may adversely affect our results of operations in future periods in which we change our estimates of our tax obligations or in which the ultimate tax outcome is determined.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
We have incurred net operating losses (“NOLs”) during prior periods. As such, there is a risk that our existing NOLs could expire unused and be unavailable to offset future income tax liabilities. Specifically, the Tax Cuts and Jobs Act of 2017 imposes certain limitations on the deduction of NOLs generated in tax years that began on or after January 1, 2018, including a limitation on use of NOLs to offset only 80% of taxable income and the disallowance of NOL carrybacks. Although NOLs generated in tax years before 2018 may still be used to offset future income without limitation, the recent legislation, among other regulatory and economic changes, may limit our ability to use our NOLs to offset any future taxable income. Our NOLs may similarly expire under state laws.
In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOLs and federal tax credit carryforwards to offset its post-change taxable income, or reduce its federal income tax liability, may be limited. In general, an “ownership change” occurs when there is a cumulative change in our equity ownership by “5 percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Certain of our gross U.S. federal NOLs are subject to this limitation as a result of these ownership changes, and if it is determined that we have experienced additional ownership changes, our ability to use our NOLs and federal tax credit carryforwards to reduce future taxable income and tax liabilities may be further limited. Similar limitations may apply under state tax laws. In addition, in June 2024, California enacted a temporary suspension on the use of state NOLs in the taxable years 2024, 2025 and 2026, which would adversely affect us if we earn taxable income in the impacted taxable years. Other state tax limitations may also apply.
Our results of operations, which we report in U.S. dollars, could be adversely affected if currency exchange rates fluctuate substantially in the future.
We conduct our business across more than 180 countries around the world. As we continue to expand our international operations, we will become more exposed to the effects of fluctuations in currency exchange rates. This exposure is the result of selling in multiple currencies and operating in foreign countries where the functional currency is the local currency. During the six months ended June 30, 2025, 27% of our sales were denominated in currencies other than U.S. dollars, including euros, Indian rupees, British pounds sterling, Brazilian reais, and Japanese yen. Similarly, we incur expenses in multiple currencies. As a result, fluctuations in the value of the U.S. dollar against these foreign currencies may result in negative impacts to our revenue, costs and profit margins. Because we conduct business in currencies other than U.S. dollars, but report our results of operations in U.S. dollars, we also face remeasurement exposure to fluctuations in currency exchange rates, which could hinder our ability to predict our future results and earnings and could materially impact our results of operations. We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies.

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We could be adversely impacted by the effects of inflation.
Certain of our key markets, including the United States, are experiencing historically high rates of inflation, resulting from several macroeconomic and geopolitical factors, including supply chain constraints and rising oil and natural gas prices. Our operating costs have increased and may continue to increase due to rising inflation and as a result we may be required to take measures to respond to the impact of inflation. Among other things, we could be required to change our pricing model to offset inflationary pressures on our operating costs, but doing so could adversely affect customer acquisition and retention, negatively impacting our long-term growth, and could impair our competitive position if our competitors choose to absorb the cost of inflation. Alternatively, if we choose to absorb the cost of inflation to prioritize growth, our financial condition and results of operations may be negatively impacted. Moreover, our instructors may independently make pricing decisions with respect to the courses they offer on our platform as a result of inflationary pressures, and any price increase could negatively impact the attractiveness of our marketplace to learners. Inflation has also contributed to higher interest rates, which may make it more difficult for us to raise capital on acceptable terms, should we choose to pursue additional financing in the future.
In any case, there can be no assurance that any measures we take to mitigate or address the impact of inflation will be effective. Even if such mitigatory measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred.
Any failure to successfully manage the impact of inflation on our business in a timely manner could materially and adversely affect our business, financial condition, and results of operations.
Our reported financial results may be adversely affected by changes in generally accepted accounting principles.
Generally accepted accounting principles are subject to interpretation by the Financial Accounting Standards Board, the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on our reported results of operations and could affect the reporting of transactions completed before the announcement of a change. It is difficult to predict the impact of future changes to accounting principles or our accounting policies, any of which could negatively affect our reported results of operations.
Risks related to ownership of our common stock
The trading price of our common stock may be volatile, and you could lose all or part of your investment.
The market price of our common stock has, and may continue to, fluctuate substantially depending on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock. Factors that could cause fluctuations in the trading price of our common stock include the following:
•price and volume fluctuations in the overall stock market from time to time;
•volatility in the trading prices and trading volumes of technology stocks;
•changes in operating performance and stock market valuations of other technology companies generally, or those in our industry in particular;
•sales of shares of our common stock by us or our stockholders;
•failure of securities analysts to maintain coverage of us, changes in financial estimates by securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
•the financial projections we may provide to the public, any changes in those projections, or our failure to meet those projections;
•announcements by us or our competitors of new services or platform features;
•the public’s reaction to our press releases, other public announcements, and filings with the SEC;
•rumors and market speculation involving us or other companies in our industry;
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•actual or anticipated changes in our results of operations;
•actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally;
•litigation involving us, our industry or both, or investigations by regulators into our operations or those of our competitors;
•actual or perceived privacy or security breaches or other incidents;
•developments or disputes concerning our intellectual property or other proprietary rights;
•announced or completed acquisitions of businesses, services, or technologies by us or our competitors;
•new laws or regulations or new interpretations of existing laws or regulations applicable to our business;
•changes in accounting standards, policies, guidelines, interpretations, or principles;
•any significant change in our management;
•actual or anticipated changes in international trade policies, including those resulting from tariffs, trade barriers and other trade regulations, as well as the actual or anticipated effect of such policies on us and our customers;
•general economic conditions and slow or negative growth of our markets; and
•other events or factors, including those resulting from wars and other armed conflicts, such as Russia’s invasion of Ukraine and the ongoing conflicts in the Middle East, incidents of terrorism, natural disasters, public health emergencies, or natural disasters, as well as responses to any of these events.
In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.
Future sales of our common stock could depress the market price of our common stock.
The market price of our common stock could decline as a result of substantial sales of our common stock, particularly sales by our directors, executive officers, and significant stockholders, a large number of shares of our common stock becoming available for sale, or the perception in the market that such sales could occur.
Certain holders of our common stock are entitled to rights with respect to the registration of their shares under the Securities Act under our investors’ rights agreement. Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by our affiliates (as defined in Rule 144 under the Securities Act), which shares would be subject to the limitations of Rule 144. Sales of our securities or the perception that such sales could occur pursuant to these registration rights may make it more difficult for us to issue and sell securities in the future at a time and at a price that we deem appropriate. These sales could also adversely affect the trading price of our common stock and make it more difficult for you to sell shares of our common stock.
Future issuances of our common stock or rights to purchase common stock could result in additional dilution to our stockholders and cause the price of our common stock to decline.
We may issue additional common stock, convertible securities, or other equity from time to time. We also expect to issue common stock to our employees, directors, and other service providers pursuant to our equity incentive plans. Such issuances will be dilutive to investors and could cause the price of our common stock to decline. New investors in such issuances could also receive rights senior to those of holders of our common stock.
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If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about us, our business or our industry, or if they change their recommendation regarding our common stock adversely, the market price and trading volume of our common stock could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us, our business, our market, or our competitors. The analysts’ estimates are based upon their own opinions and are often different from our estimates or expectations. If any of the analysts who cover us change their recommendation regarding our common stock adversely, provide more favorable relative recommendations about our competitors, or publish inaccurate or unfavorable research about our business, the price of our securities would likely decline. If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets and demand for our securities could decrease, which could cause the price and trading volume of our common stock to decline.
We do not expect to pay dividends in the foreseeable future.
We have never declared nor paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the operation and expansion of our business, and we do not anticipate declaring or paying any dividends to holders of our capital stock in the foreseeable future. Consequently, stockholders must rely on sales of their shares of our common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.
Our directors, executive officers, and principal stockholders beneficially own a substantial percentage of our common stock and are able to exert significant control over matters subject to stockholder approval.
As of June 30, 2025, our directors, executive officers, and holders of more than 5% of our outstanding common stock, together with their respective affiliates, beneficially owned shares representing approximately 50% of our outstanding common stock. As a result, these stockholders, if they act together, will be able to influence our management and affairs and all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. This concentration of ownership may have the effect of delaying or preventing a change in control of our company and might affect the market price of our common stock.
Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws might delay, discourage or prevent a merger, tender offer or proxy contest, thereby depressing the market price of our common stock.
Our status as a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law (the “DGCL”), may discourage, delay or prevent a change in control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the date of the transaction in which the person became an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that may make any acquisition of our company more difficult or delay or prevent changes in control of our management. Among other things, these provisions:
•provide that our board of directors is expressly authorized to make, alter or repeal our bylaws;
•authorize our board of directors to issue shares of preferred stock and determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval;
•provide that the authorized number of directors may be changed only by resolution of the board of directors;
•provide that all vacancies on our board of directors and all newly created directorships may only be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director, except as otherwise required by law, our governing documents or resolution of our board of directors, and subject to the rights of the holders of our preferred stock;
•establish that our board of directors is divided into three classes, with each class serving staggered three-year terms;
•provide that a director may only be removed from the board of directors by the stockholders for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the issued and outstanding capital stock entitled to vote in the election of directors;
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•prohibit cumulative voting (therefore allowing the holders of a plurality of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose);
•require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent;
•require that stockholders give advance notice to nominate directors or submit proposals for consideration at stockholder meetings;
•provide that special meetings of our stockholders may be called only by the board of directors acting pursuant to a resolution adopted by the majority of the entire board of directors, the Chairperson of the board of directors, our Chief Executive Officer or our President;
•provide that, unless we otherwise consent in writing, a state or federal court located within the State of Delaware shall be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation, and our amended and restated bylaws, or (4) any action asserting a claim against us governed by the internal affairs doctrine;
•provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act; and
•require a super-majority vote of stockholders to amend some of the provisions described above.
These provisions, alone or together, could delay, discourage, or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors of their choosing and to cause us to take other corporate actions they desire, any of which, under certain circumstances, could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock.
Our amended and restated bylaws provide, to the fullest extent permitted by law, that the Court of Chancery of the State of Delaware and the federal district courts of the United States are the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, stockholders, or employees and, in turn, discourage lawsuits against our directors, officers, or employees.
Our amended and restated bylaws provide that, to the fullest extent permitted by applicable law and unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, another state court in Delaware or the federal district court for the District of Delaware) will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf; any action asserting a claim of breach of a fiduciary duty owed by any of our directors, stockholders, officers, or other employees to us or our stockholders; any action arising pursuant to any provision of the DGCL, our certificate of incorporation, or our bylaws; and any other action asserting a claim that is governed by the internal affairs doctrine. This exclusive forum provision would not apply to any action brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction.
Our amended and restated bylaws also provide that, to the fullest extent permitted by applicable law and unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States will be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act against any person in connection with any offering of our securities. The enforceability of similar exclusive federal forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and while the Delaware Supreme Court and certain other state courts have ruled that this type of exclusive federal forum provision is facially valid under Delaware law, there is uncertainty as to whether other courts would enforce such provisions and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. This exclusive federal forum provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts of the United States have exclusive jurisdiction.
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These exclusive forum provisions may discourage lawsuits against us and our current and former directors, officers, stockholders, and other employees. Alternatively, if a court were to find either exclusive forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving such action in other jurisdictions, all of which could have a material adverse effect on our business, financial condition, and results of operations.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
None.
Unregistered Sales of Equity Securities
None.
Working Capital Restrictions and Other Limitations on the Payment of Dividends
Our revolving credit facility includes certain limitations on our ability to pay cash dividends. For additional details, refer to Note 6 – Debt in our unaudited condensed consolidated financial statements, included in Part I, Item 1 of this Form 10-Q.
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Item 3. Defaults Upon Senior Securities
Not applicable.
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Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
Securities Trading Plans of Directors and Executive Officers
During the last fiscal quarter, no director or officer, as defined in Rule 16a-1(f) of the Exchange Act, adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408 of Regulation S-K, except as follows:
Name and Title
Character of Trading Arrangement (1)
Date Adopted
Date Terminated
Duration (2)
Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement
Greg Brown
 Rule 10b5-1 Trading Arrangement March 13, 2025 June 11, 2025 June 23, 2026 Up to 140,500 
Director(3)
(1)     Except as indicated by footnote, each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c), as amended.

(2)     Except as indicated by footnote, each trading arrangement permits transactions through and including the earlier of (a) the execution or expiration of all trades specified under the trading arrangement or (b) the date listed in the table. Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permits transactions upon expiration of the applicable mandatory cooling-off periods under Rule 10b5-1(c), as amended, and our insider trading policy.

(3)    Mr. Brown ceased serving as a member of our board of directors effective June 16, 2025.

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Item 6. Exhibits
The documents listed in the Exhibit Index of this Quarterly Report on Form 10-Q are herein incorporated by reference or are filed with this Quarterly Report on Form 10-Q, in each case as indicated therein (numbered in accordance with Item 601 of Regulation S-K).

EXHIBIT INDEX
Incorporated by Reference
Exhibit
No.		 Exhibit Description Form File Number Exhibit Filing Date
3.1(a)
 8-K 001-40956 3.1 November 2, 2021
3.1(b)
8-K
001-40956
3.1
June 18, 2025
3.2
10-K
 001-40956
3.2
February 27, 2023
10.1
8-K
001-40956
10.1
June 3, 2025
10.2*+
10.3+
8-K
001-40956
10.1
June 11, 2025
10.4+
8-K
001-40956
10.2
June 11, 2025
31.1*
31.2*
32.1**
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32.2**
101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*    Filed herewith.
+    Indicates management contract or compensatory plan.
**    The certifications attached as Exhibits 32.1 and 32.2 that accompany this Form 10-Q are deemed furnished and not filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Udemy, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Udemy, Inc.
Date: July 30, 2025
 By:
/s/ Hugo Sarrazin
Hugo Sarrazin
President and Chief Executive Officer
Date: July 30, 2025
 By: /s/ Sarah Blanchard
Sarah Blanchard
Chief Financial Officer


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EX-10.2 2 udemy-2021employeestockpur.htm EX-10.2 Document
Exhibit 10.2
UDEMY, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
Adopted September 15, 2021
Approved by stockholders September 24, 2021
As amended and restated May 19, 2025 (the “Second Amendment Effective Date”)

1.Purpose. The purpose of the Plan is to provide employees of the Company and its Designated Companies with an opportunity to purchase Common Stock through accumulated Contributions. The Company intends for the Plan to have two components: a component that is intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “423 Component”) and a component that is not intended to qualify as an “employee stock purchase plan” under Section 423 of the Code (the “Non-423 Component”). The provisions of the 423 Component, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code. An option to purchase shares of Common Stock under the Non-423 Component will be granted pursuant to rules, procedures, or sub-plans adopted by the Administrator designed to achieve tax, securities laws, or other objectives for Eligible Employees and the Company. Except as otherwise provided herein, the Non-423 Component will operate and be administered in the same manner as the 423 Component.
2.Definitions.
(a)“Administrator” means the Board or any Committee designated by the Board to administer the Plan pursuant to Section 14.
(b)“Affiliate” means any entity, other than a Subsidiary, in which the Company has an equity or other ownership interest.
(c)“Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where options are, or will be, granted under the Plan.
(d)“Board” means the Board of Directors of the Company.
(e)“Change in Control” means the occurrence of any of the following events:
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(i)A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change in Control. Further, if the stockholders of the Company immediately before such change in ownership continue to retain immediately after the change in ownership, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately prior to the change in ownership, direct or indirect beneficial ownership of fifty percent (50%) or more of the total voting power of the stock of the Company or of the ultimate parent entity of the Company, such event shall not be considered a Change in Control under this subsection (i). For this purpose, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company, as the case may be, either directly or through one or more subsidiary corporations or other business entities; or
(ii)A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12)-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this subsection (ii), if any Person is considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or
(iii)A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection, the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value

2
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or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase, or acquisition of stock, or similar business transaction with the Company.
Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final U.S. Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.
Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change the jurisdiction of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
(f)“Code” means the U.S. Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code will include such section or regulation, any valid regulation or other official applicable guidance promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
(g)“Committee” means a committee of the Board appointed in accordance with Section 14 hereof.
(h)“Common Stock” means the common stock of the Company.
(i)“Company” means Udemy, Inc., a Delaware corporation, or any successor thereto.
(j)“Compensation” includes an Eligible Employee’s base straight time gross earnings and cash-based bonuses and commissions, but excludes payments for overtime and shift premium, equity compensation income and other similar compensation. The Administrator, in its discretion, may, on a uniform and nondiscriminatory basis, establish a different definition of Compensation for a subsequent Offering Period.
(k)“Contributions” means the payroll deductions and other additional payments that the Company may permit to be made by a Participant to fund the exercise of options granted pursuant to the Plan.

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(l)“Designated Company” means any Subsidiary or Affiliate of the Company that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan. For purposes of the 423 Component, only the Company and its Subsidiaries may be Designated Companies, provided, however that at any given time, a Subsidiary that is a Designated Company under the 423 Component will not be a Designated Company under the Non-423 Component.
(m)“Director” means a member of the Board.
(n)“Eligible Employee” means any individual who is a common law employee providing services to the Company or a Designated Company and is customarily employed for at least twenty (20) hours per week and more than five (5) months in any calendar year by the Employer, or any lesser number of hours per week and/or number of months in any calendar year established by the Administrator (if required under applicable local law) for purposes of any separate Offering or the Non-423 Component. For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the Employer approves or is legally protected under Applicable Laws. Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three (3) months and one (1) day following the commencement of such leave. The Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date in an Offering, determine (for each Offering under the 423 Component, on a uniform and nondiscriminatory basis or as otherwise permitted by Treasury Regulation Section 1.423-2) that the definition of Eligible Employee will or will not include an individual if he or she: (i) has not completed at least two (2) years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week (or such lesser period of time as may be determined by the Administrator in its discretion), (iii) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (iv) is a highly compensated employee within the meaning of Section 414(q) of the Code, or (v) is a highly compensated employee within the meaning of Section 414(q) of the Code with compensation above a certain level or is an officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided the exclusion is applied with respect to each Offering under the 423 Component in an identical manner to all highly compensated individuals of the Employer whose Eligible Employees are participating in that Offering under the 423 Component. Each exclusion will be applied with respect to an Offering in a manner complying with U.S. Treasury Regulation Section 1.423-2(e)(2)(ii). Such exclusions may be applied with respect to an Offering under the Non- 423 Component without regard to the limitations of Treasury Regulation Section 1.423-2.
(o)“Employer” means the employer of the applicable Eligible Employee(s).
(p)“Enrollment Date” means the first Trading Day of an Offering Period.

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(q)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
(r)“Exercise Date” means the first Trading Day on or after May 20 and November 20 of each Purchase Period. Notwithstanding the foregoing, (i) the first Exercise Date of the first Offering Period will be May 20, 2022, and (ii) in the event that an Offering Period is terminated prior to its expiration pursuant to Section 20(a), the Administrator, in its sole discretion, may determine that any Purchase Period also terminating under such Offering Period will terminate without options being exercised on the Exercise Date that otherwise would have occurred on the last Trading Day of such Purchase Period.
(s)“Fair Market Value” means, as of any date, the value of a share of Common Stock determined as follows:
(i)For purposes of the Enrollment Date of the first Offering Period under the Plan, the Fair Market Value will be the initial price to the public as set forth in the final prospectus included within the Registration Statement; or
(ii)For all other purposes, the Fair Market Value will be the closing sales price for Common Stock as quoted on any established stock exchange or national market system (including without limitation the New York Stock Exchange, NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market) on which the Common Stock is listed on the date of determination (or the closing bid, if no sales were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable. If the determination date for the Fair Market Value occurs on a non-trading day (i.e., a weekend or holiday), the Fair Market Value will be such price on the immediately preceding trading day, unless otherwise determined by the Administrator. In the absence of an established market for the Common Stock, the Fair Market Value thereof will be determined in good faith by the Administrator.
The determination of fair market value for purposes of tax withholding may be made in the Administrator’s discretion subject to Applicable Laws and is not required to be consistent with the determination of Fair Market Value for other purposes.
(t)“Fiscal Year” means a fiscal year of the Company.
(u)“New Exercise Date” means a new Exercise Date if the Administrator shortens any Offering Period then in progress.

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(v)“Offering” means an offer under the Plan of an option that may be exercised during an Offering Period as further described in Section 4. For purposes of the Plan, the Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Eligible Employees of one or more Employers will participate, even if the dates of the applicable Offering Periods of each such Offering are identical and the provisions of the Plan will separately apply to each Offering. To the extent permitted by U.S. Treasury Regulation Section 1.423-2(a)(1), the terms of each Offering need not be identical provided that the terms of the Plan and an Offering together satisfy U.S. Treasury Regulation Section 1.423-2(a)(2) and (a)(3).
(w)“Offering Periods” means the periods of approximately twenty four (24) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after May 20 and November 20 of each year and terminating on the last Trading Day on or before May 20 and November 20, approximately twenty four (24) months later; provided, however, that the first Offering Period under the Plan will commence with the first Trading Day on or after the date on which the Securities and Exchange Commission declares the Company’s Registration Statement effective and will end on the last Trading Day on or before November 20, 2023, and provided, further, that the second Offering Period under the Plan will commence on the first Trading Day on or after May 20, 2022. The duration and timing of Offering Periods may be changed pursuant to Sections 4, 20, and 30.
(x)“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(y)“Participant” means an Eligible Employee that participates in the Plan.
(z)“Plan” means this Udemy, Inc. 2021 Employee Stock Purchase Plan.
(aa)“Purchase Period” means the periods during an Offering Period during which shares of Common Stock may be purchased on a Participant’s behalf in accordance with the terms of the Plan. Unless the Administrator provides otherwise, the Purchase Period shall mean the approximately six (6)-month period commencing on one Exercise Date and ending with the next Exercise Date, except that the first Purchase Period of any Offering Period shall commence on the Enrollment Date and end with the next Exercise Date.
(ab)“Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair Market Value on the Enrollment Date or on the Exercise Date, whichever is lower; provided, however, that the Purchase Price may be determined for subsequent Offering Periods by the Administrator subject to compliance with Section 423 of the Code (or any successor rule or provision or any other Applicable Law, regulation or stock exchange rule) or pursuant to Section 20.
(ac)“Registration Date” means the effective date of the Registration Statement.
(ad)“Registration Statement” means the registration statement on Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Common Stock.

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(ae)“Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
(af)“Trading Day” means a day on which the national stock exchange upon which the Common Stock is listed is open for trading.
(ag)“U.S. Treasury Regulations” means the Treasury regulations of the Code. Reference to a specific Treasury Regulation will include such Treasury Regulation, the section of the Code under which such regulation was promulgated, and any comparable provision of any future legislation or regulation amending, supplementing, or superseding such Section or regulation.
3.Eligibility.
(a)First Offering Period. Any individual who is an Eligible Employee immediately prior to the first Offering Period will be automatically enrolled in the first Offering Period.
(b)Subsequent Offering Periods. Any Eligible Employee on a given Enrollment Date subsequent to the first Offering Period will be eligible to participate in the Plan, subject to the requirements of Section 5.
(c)Non-U.S. Employees. Eligible Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from participation in the Plan or an Offering if the participation of such Eligible Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code. In the case of the Non-423 Component, Eligible Employees may be excluded from participation in the Plan or an Offering if the Administrator determines that participation of such Eligible Employees is not advisable or practicable.
(d)Limitations. Any provisions of the Plan to the contrary notwithstanding, no Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate, which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.

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4.Offering Periods. The Plan will be implemented by overlapping Offering Periods with a new Offering Period commencing on the first Trading Day on or after May 20 and November 20 each year, or on such other dates as the Administrator will determine; provided, however, that the first Offering Period under the Plan will commence with the first Trading Day on or after the Registration Date and end on the last Trading Day on or before November 20, 2023, and provided, further, that the second Offering Period under the Plan will commence on the first Trading Day on or after May 20, 2022. The Administrator will have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future Offerings without stockholder approval if such change is announced prior to the scheduled beginning of the first Offering Period to be affected thereafter; provided, however, that no Offering Period may last more than twenty-seven (27) months.
5.Participation.
(a)First Offering Period. An Eligible Employee will be entitled to continue to participate in the first Offering Period pursuant to Section 3(a) only if such individual submits a subscription agreement authorizing Contributions in a form determined by the Administrator (which may be similar to the form attached hereto as Exhibit A) to the Company’s designated plan administrator (i) no earlier than the effective date of the Form S-8 registration statement with respect to the issuance of Common Stock under this Plan and (ii) no later than fifteen (15) business days following the effective date of such S-8 registration statement or such date as the Administrator may determine (the “Enrollment Window”). An Eligible Employee’s failure to submit the subscription agreement during the Enrollment Window will result in the automatic termination of such individual’s participation in the first Offering Period.
(b)Subsequent Offering Periods. An Eligible Employee may participate in the Plan pursuant to Section 3(b) by (i) submitting to the Company’s stock administration office (or its designee) a properly completed subscription agreement authorizing Contributions in the form provided by the Administrator for such purpose or (ii) following an electronic or other enrollment procedure determined by the Administrator, in either case on or before a date determined by the Administrator prior to an applicable Enrollment Date.
6.Contributions.
(a)At the time a Participant enrolls in the Plan pursuant to Section 5, he or she will elect to have Contributions (in the form of payroll deductions or otherwise, to the extent permitted by the Administrator) made on each pay day during the Offering Period in an amount not exceeding fifteen percent (15%) of the Compensation that he or she receives on the pay day (provided that, should a pay day occur on an Exercise Date, a Participant will have any Contributions made on such day applied to his or her account under the immediately following Purchase Period or Offering Period, as applicable). The Administrator, in its sole discretion, may permit all Participants in a specified Offering to contribute amounts to the Plan through payment by cash, check, or other means set forth in the subscription agreement prior to each Exercise Date of each Purchase Period. A Participant’s subscription agreement will remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.

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(b)In the event Contributions are made in the form of payroll deductions, such payroll deductions for a Participant will commence on the first pay day following the Enrollment Date and will end on the last pay day on or prior to the last Exercise Date of such Offering Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Section 10 hereof; provided, however, that for the first Offering Period, payroll deductions will commence on the first pay day on or following the end of the Enrollment Window.
(c)All Contributions made for a Participant will be credited to his or her account under the Plan and Contributions will be made in whole percentages of his or her Compensation only. A Participant may not make any additional payments into such account.
(d)A Participant may discontinue his or her participation in the Plan as provided under Section 10. Unless otherwise determined by the Administrator, during an Offering Period, a Participant may not increase the rate of his or her Contributions, and during a Purchase Period, may only decrease the rate of his or her Contributions one (1) time to a Contribution rate that is less than the Participant’s original Contribution Rate in effect at the commencement of the applicable Offering Period. Any such decrease during a Purchase Period requires the Participant (i) properly completing and submitting to the Company’s stock administration office (or its designee) a new subscription agreement authorizing the change in Contribution rate in the form provided by the Administrator for such purpose or (ii) following an electronic or other procedure prescribed by the Administrator, in either case on or before a date determined by the Administrator prior to an applicable Exercise Date. If a Participant has not followed such procedures to change the rate of Contributions, the rate of his or her Contributions will continue at the originally elected rate throughout the Purchase Period and future Offering Periods and Purchase Periods (unless the Participant’s participation is terminated as provided in Sections 10 or 11). The Administrator may, in its sole discretion, amend the nature and/or number of Contribution rate changes that may be made by Participants during any Offering Period or Purchase Period and may establish other conditions or limitations as it deems appropriate for Plan administration. Any change in the rate of Contributions made pursuant to this Section 6(d) will be effective as of the first (1st) full payroll period following five (5) business days after the date on which the change is made by the Participant (unless the Administrator, in its sole discretion, elects to process a given change in payroll deduction rate more quickly).
(e)Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(d), a Participant’s Contributions may be decreased to zero percent (0%) at any time during a Purchase Period. Subject to Section 423(b)(8) of the Code and Section 3(d) hereof, Contributions will recommence at the rate originally elected by the Participant effective as of the beginning of the first Purchase Period scheduled to end in the following calendar year, unless terminated by the Participant as provided in Section 10.

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(f)Notwithstanding any provisions to the contrary in the Plan, the Administrator may allow Participants to participate in the Plan via cash contributions instead of payroll deductions if (i) payroll deductions are not permitted under applicable local law, (ii) the Administrator determines that cash contributions are permissible under Section 423 of the Code, or (iii) the Participants are participating in the Non-423 Component.
(g)At the time the option is exercised, in whole or in part, or at the time some or all of the Common Stock issued under the Plan is disposed of (or any other time that a taxable event related to the Plan occurs), the Participant must make adequate provision for the Company’s or Employer’s federal, state, local, or any other tax liability payable to any authority including taxes imposed by jurisdictions outside of the U.S., national insurance, social security, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock (or any other time that a taxable event related to the Plan occurs). At any time, the Company or the Employer may, but will not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company or the Employer to meet applicable withholding obligations, including any withholding required to make available to the Company or the Employer any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Eligible Employee. In addition, the Company or the Employer may, but will not be obligated to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the Company or the Employer deems appropriate to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
7.Grant of Option. On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of shares of Common Stock determined by dividing such Eligible Employee’s Contributions accumulated prior to such Exercise Date and retained in the Eligible Employee’s account as of the Exercise Date by the applicable Purchase Price; provided that in no event will an Eligible Employee be permitted to purchase during each Purchase Period more than 5,000 shares of Common Stock (subject to any adjustment pursuant to Section 19) and provided further that such purchase will be subject to the limitations set forth in Sections 3(d) and 13. The Eligible Employee may accept the grant of such option (i) with respect to the first Offering Period by submitting a properly completed subscription agreement in accordance with the requirements of Section 5 on or before the last day of the Enrollment Window, and (ii) with respect to any subsequent Offering Period under the Plan, by electing to participate in the Plan in accordance with the requirements of Section 5. The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of Common Stock that an Eligible Employee may purchase during each Purchase Period. Exercise of the option will occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section 10. The option will expire on the last day of the Offering Period.

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8.Exercise of Option.
(a)Unless a Participant withdraws from the Plan as provided in Section 10, his or her option for the purchase of shares of Common Stock will be exercised automatically on each Exercise Date, and the maximum number of full shares subject to the option will be purchased for such Participant at the applicable Purchase Price with the accumulated Contributions from his or her account. No fractional shares of Common Stock will be purchased; any Contributions accumulated in a Participant’s account which are not sufficient to purchase a full share will be retained in the Participant’s account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the Participant as provided in Section 10, or with respect to Offering Periods beginning on or after the Second Amendment Effective Date, will be returned to the Participant as soon as reasonably practicable following the Exercise Date (unless otherwise determined by the Administrator). Any other funds left over in a Participant’s account after the Exercise Date will be returned to the Participant. During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by him or her.
(b)If the Administrator determines that, on a given Exercise Date, the number of shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all Participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect or (y) provide that the Company will make a pro rata allocation of the shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20. The Company may make a pro rata allocation of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date.

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9.Delivery. As soon as reasonably practicable after each Exercise Date on which a purchase of shares of Common Stock occurs, the Company will arrange the delivery to each Participant of the shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The Company may permit or require that shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of share transfer. The Company may require that shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such shares. No Participant will have any voting, dividend, or other stockholder rights with respect to shares of Common Stock subject to any option granted under the Plan until such shares have been purchased and delivered to the Participant as provided in this Section 9.
10.Withdrawal.
(a)A Participant may withdraw all but not less than all the Contributions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by (i) submitting to the Company’s stock administration office (or its designee) a written notice of withdrawal in the form determined by the Administrator for such purpose (which may be similar to the form attached hereto as Exhibit B), or (ii) following an electronic or other withdrawal procedure determined by the Administrator. The Administrator may set forth a deadline of when a withdrawal must occur to be effective prior to a given Exercise Date in accordance with policies it may approve from time to time. All of the Participant’s Contributions credited to his or her account will be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s option for the Offering Period will be automatically terminated, and no further Contributions for the purchase of shares will be made for such Offering Period. If a Participant withdraws from an Offering Period, Contributions will not resume at the beginning of the succeeding Offering Period unless the Participant re-enrolls in the Plan in accordance with the provisions of Section 5.
(b)A Participant’s withdrawal from an Offering Period will not have any effect on his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or in succeeding Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.
11.Termination of Employment. Upon a Participant’s ceasing to be an Eligible Employee for any reason, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to such Participant’s account during the Offering Period but not yet used to purchase shares of Common Stock under the Plan will be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such Participant’s option will be automatically terminated. Unless otherwise provided by the Administrator, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Company will not be treated as terminated under the Plan; however, if a Participant transfers from an Offering under the 423 Component to the Non-423 Component, the exercise of the option will be qualified under the 423 Component only to the extent it complies with Section 423 of the Code, unless otherwise provided by the Administrator.

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12.Interest. No interest will accrue on the Contributions of a participant in the Plan, except as may be required by Applicable Law, as determined by the Company, and if so required by the laws of a particular jurisdiction, will apply to all Participants in the relevant Offering under the 423 Component, except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).
13.Stock. Subject to adjustment upon changes in capitalization of the Company as provided in Section 19 hereof, the maximum number of shares of Common Stock that will be made available for sale under the Plan will be 2,800,000 shares of Common Stock. The number of shares of Common Stock available for issuance under the Plan will be increased on the first day of each Fiscal Year beginning with the 2023 Fiscal Year equal to the least of (i) one percent (1%) of the outstanding shares of Common Stock on the last day of the immediately preceding Fiscal Year, (ii) three (3) times the initial number of shares reserved under the Plan as set forth in the immediately preceding sentence, or (iii) a lesser amount determined by the Administrator. Until the shares of Common Stock are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a Participant will have only the rights of an unsecured creditor with respect to such shares, and no right to vote or receive dividends or any other rights as a stockholder will exist with respect to such shares. Shares of Common Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse.
14.Administration. The Plan will be administered by the Board or a Committee appointed by the Board, which Committee will be constituted to comply with Applicable Laws. The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to delegate ministerial duties to any of the Company’s employees, to designate separate Offerings under the Plan, to designate Subsidiaries and Affiliates of the Company as participating in the 423 Component or Non-423 Component, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary for the administration of the Plan (including, without limitation, to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the U.S., the terms of which sub-plans may take precedence over other provisions of this Plan, with the exception of Section 13 hereof, but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan will govern the operation of such sub-plan). Unless otherwise determined by the Administrator, the Eligible Employees eligible to participate in each sub-plan will participate in a separate Offering or in the Non-423 Component. Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements. The Administrator also is authorized to determine that, to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f), the terms of an option granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Offering to employees resident solely in the U.S. Every finding, decision, and determination made by the Administrator will, to the full extent permitted by law, be final and binding upon all parties.

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15.Designation of Beneficiary.
(a)If permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any shares of Common Stock and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such Participant of such shares and cash. In addition, if permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the option. If a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
(b)Such designation of beneficiary may be changed by the Participant at any time by notice in a form determined by the Administrator. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company will deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
(c)All beneficiary designations will be in such form and manner as the Administrator may designate from time to time. Notwithstanding Sections 15(a) and (b) above, the Company and/or the Administrator may decide not to permit such designations by Participants in non-U.S. jurisdictions to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
16.Transferability. Neither Contributions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive shares of Common Stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15 hereof) by the Participant. Any such attempt at assignment, transfer, pledge, or other disposition will be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.

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17.Use of Funds. The Company may use all Contributions received or held by it under the Plan for any corporate purpose, and the Company will not be obligated to segregate such Contributions except under Offerings or for Participants in the Non-423 Component for which Applicable Laws require that Contributions to the Plan by Participants be segregated from the Company’s general corporate funds and/or deposited with an independent third party. Until shares of Common Stock are issued, Participants will have only the rights of an unsecured creditor with respect to such shares.
18.Reports. Individual accounts will be maintained for each Participant in the Plan. Statements of account will be given to participating Eligible Employees at least annually, which statements will set forth the amounts of Contributions, the Purchase Price, the number of shares of Common Stock purchased, and the remaining cash balance, if any.
19.Adjustments, Dissolution, Liquidation, Merger, or Change in Control.
(a)Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will, in such manner as it may deem equitable, adjust the number and class of Common Stock that may be delivered under the Plan, the Purchase Price per share and the number of shares of Common Stock covered by each option under the Plan that has not yet been exercised, and the numerical limits of Sections 7 and 13.
(b)Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, any Offering Period then in progress will be shortened by setting a New Exercise Date and will terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date will be before the date of the Company’s proposed dissolution or liquidation. The Administrator will notify each Participant in writing or electronically, prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.

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(c)Merger or Change in Control. In the event of a merger or Change in Control, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the option, the Offering Period with respect to which such option relates will be shortened by setting a New Exercise Date on which such Offering Period will end. The New Exercise Date will occur before the date of the Company’s proposed merger or Change in Control. The Administrator will notify each Participant in writing or electronically prior to the New Exercise Date that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.
20.Amendment or Termination.
(a)The Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason. If the Plan is terminated, the Administrator, in its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon completion of the purchase of shares of Common Stock on the next Exercise Date (which may be sooner than originally scheduled, if determined by the Administrator in its discretion), or may elect to permit Offering Periods to expire in accordance with their terms (and subject to any adjustment pursuant to Section 19). If the Offering Periods are terminated prior to expiration, all amounts then credited to Participants’ accounts that have not been used to purchase shares of Common Stock will be returned to the Participants (without interest thereon, except as otherwise required under Applicable Laws, as further set forth in Section 12 hereof) as soon as administratively practicable.
(b)Without stockholder consent and without limiting Section 20(a), the Administrator will be entitled to change the Offering Periods or Purchase Periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit Contributions in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed Contribution elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with Contribution amounts, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable that are consistent with the Plan.
(c)In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify, amend, or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:

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(i)amending the Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), including with respect to an Offering Period underway at the time;
(ii)altering the Purchase Price for any Offering Period or Purchase Period including an Offering Period or Purchase Period underway at the time of the change in Purchase Price;
(iii)shortening any Offering Period or Purchase Period by setting a New Exercise Date, including an Offering Period or Purchase Period underway at the time of the Administrator action;
(iv)reducing the maximum percentage of Compensation a Participant may elect to set aside as Contributions; and
(v)reducing the maximum number of shares of Common Stock a Participant may purchase during any Offering Period or Purchase Period.
Such modifications or amendments will not require stockholder approval or the consent of any Participant.
21.Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
22.Conditions Upon Issuance of Shares. Shares of Common Stock will not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation, the U.S. Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the shares may then be listed, and will be further subject to the approval of counsel for the Company with respect to such compliance.
23.As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.

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24.Code Section 409A. The 423 Component of the Plan is exempt from the application of Code Section 409A and any ambiguities herein will be interpreted to so be exempt from Code Section 409A. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Administrator determines that an option granted under the Plan may be subject to Code Section 409A or that any provision in the Plan would cause an option under the Plan to be subject to Code Section 409A, the Administrator may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Administrator determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Code Section 409A, but only to the extent any such amendments or action by the Administrator would not violate Code Section 409A. Notwithstanding the foregoing, the Company and any Parent, Subsidiary or Affiliate will have no liability to a Participant or any other party if the option to purchase Common Stock under the Plan that is intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for any action taken by the Administrator with respect thereto. The Company makes no representation that the option to purchase Common Stock under the Plan is compliant with Code Section 409A.
25.Term of Plan. The Plan will become effective upon the later to occur of (i) its adoption by the Board or (ii) the business day immediately prior to the Registration Date. It will continue in effect for a term of twenty (20) years, unless sooner terminated under Section 20.
26.Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
27.Governing Law. The Plan will be governed by, and construed in accordance with, the laws of the State of Delaware (except its choice-of-law provisions).
28.No Right to Employment. Participation in the Plan by a Participant will not be construed as giving a Participant the right to be retained as an employee of the Company or a Subsidiary or Affiliate of the Company, as applicable. Further, the Company or a Subsidiary or Affiliate of the Company may dismiss a Participant from employment at any time, free from any liability or any claim under the Plan.
29.Severability. If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality, or unenforceability will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.

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30.Compliance with Applicable Laws. The terms of this Plan are intended to comply with all Applicable Laws and will be construed accordingly.
31.Automatic Transfer to Low Price Offering Period. To the extent permitted by Applicable Laws, if the Fair Market Value on any Exercise Date in an Offering Period is lower than the Fair Market Value on the Enrollment Date of such Offering Period, then all Participants in such Offering Period automatically will be withdrawn from such Offering Period immediately after the exercise of their option on such Exercise Date and automatically re-enrolled in the immediately following Offering Period as of the first day thereof.

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EXHIBIT A

UDEMY, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
_____ Original Application                Offering Date:                 
_____ Change in Payroll Deduction Rate
1.____________________ (“Employee”) hereby elects to participate in the Udemy, Inc. 2021 Employee Stock Purchase Plan (the “Plan”) and subscribes to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Subscription Agreement.
2.Employee hereby authorizes payroll deductions from each paycheck in the amount of ____% (from zero percent (0%) to fifteen percent (15%) of his or her Compensation on each payday during the Offering Period in accordance with the Plan. (Please note that no fractional percentages are permitted.)
3.Employee understands that said payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable Purchase Price determined in accordance with the Plan. Employee understands that if he or she does not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise his or her option and purchase Common Stock under the Plan.
4.Employee has received a copy of the complete Plan and its accompanying prospectus. Employee understands that his or her participation in the Plan is in all respects subject to the terms of the Plan.
5.Shares of Common Stock purchased by Employee under the Plan should be issued in the name(s) of _____________ (Employee or Employee and Spouse only).
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6.If Employee is a U.S. taxpayer, Employee understands that if he or she disposes of any shares that he or she purchased under the Plan within two (2) years after the Enrollment Date (the first day of the Offering Period during which he or she purchased such shares) or one (1) year after the applicable Exercise Date, he or she will be treated for U.S. federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the excess of the fair market value of the shares at the time such shares were purchased over the price paid for the shares. Employee hereby agrees to notify the Company in writing within thirty (30) days after the date of any disposition of such shares and to make adequate provision for U.S. federal, state, or other tax withholding obligations, if any, that arise upon the disposition of such shares. The Company may, but will not be obligated to, withhold from Employee’s compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to Employee’s sale or early disposition of such shares. Employee understands that if he or she disposes of such shares at any time after the expiration of the two (2)-year and one-(1) year holding periods, he or she will be treated for U.S. federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (i) the excess of the fair market value of the shares at the time of such disposition over the purchase price paid for the shares, or (ii) fifteen percent (15%) of the fair market value of the shares on the first day of the Offering Period. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.
7.Employee hereby agrees to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement is dependent upon Employee’s eligibility to participate in the Plan.
8.Notwithstanding any provisions in this Subscription Agreement, Employee understands that if Employee is working or resident in a country other than the U.S., Employee’s participation in the Plan also will be subject to the additional terms and conditions set forth in Appendix A and any special terms and conditions for Employee’s country set forth in Appendix A. Moreover, if Employee relocates to one of the countries included in Appendix A, the special terms and conditions for such country will apply to Employee to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix A constitutes part of this Subscription Agreement and the provisions of this Subscription Agreement govern each Appendix (to the extent not superseded or supplemented by the terms and conditions set forth in the applicable Appendix).

Employee’s Social Security Number:                                
Employee’s Address:                                        
                                                
                                                

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EMPLOYEE UNDERSTANDS THAT THIS SUBSCRIPTION AGREEMENT WILL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY EMPLOYEE.
Dated:     
Signature of Employee    

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EXHIBIT B
UDEMY, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
Unless otherwise defined herein, the terms defined in the Udemy Inc. 2021 Employee Stock Purchase Plan (the “Plan”) shall have the same defined meanings in this Notice of Withdrawal.
The undersigned Participant in the Offering Period of the Plan that began on ____________ (the “Offering Date”) hereby notifies the Company that he or she hereby withdraws from the Offering Period. He or she hereby directs the Company to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be terminated automatically. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned will be eligible to participate in succeeding Offering Periods only by delivering to the Company a new Subscription Agreement.

Name and Address of Participant:
        
        
        
Signature:
        
Date:    

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APPENDIX A
UDEMY, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
COUNTRY ADDENDUM

Terms and Conditions
This Appendix includes (i) additional terms and conditions applicable to all Participants providing services to the Company or a Designated Company (as defined in the Plan) outside the United States, and (ii) additional terms and conditions applicable to Participants providing services to the Company or a Designated Company in the countries identified below. These terms and conditions are in addition to those set forth in the Subscription Agreement and to the extent there are any inconsistencies between these terms and conditions and those set forth in the Subscription Agreement, these terms and conditions shall prevail. Any capitalized term used in this Appendix without definition shall have the meaning ascribed to such term in the Plan or the Subscription Agreement, as applicable.
Participant understands that this Appendix includes additional terms and conditions that govern the options granted to Participant under the Plan if Participant works in one of the countries listed below. If Participant is a citizen or resident of a country other than the one in which Participant is currently working (or if Participant is considered as such for local law purposes) or if Participant transfers employment to another country after enrolling in the Plan, Participant acknowledges and agrees that the Company will, in its discretion, determine the extent to which the terms and conditions herein will be applicable to Participant.
This Appendix also includes notifications that contain information regarding securities laws, exchange controls, and certain other issues Participants should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective countries as of August 2021. Such laws are often complex and change frequently. As a result, the Company recommends that Participants not rely on the information in this Appendix as the only source of information relating to the consequences of participation in the Plan because the information included herein may be out of date at the time that Participants purchase shares of Common Stock under the Plan or subsequently sell such shares. Participants also should review the tax summary for their country which the Company will provide as a supplement to the Plan prospectus.
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In addition, the information contained herein is general in nature and may not apply to a Participant’s particular situation and the Company is not in a position to assure a Participant of any particular result. Accordingly, Participants are advised to seek appropriate professional advice as to how the relevant laws in their country may apply to their particular situation.
Finally, if Participant is a citizen or resident of a country other than the one in which he or she is currently working (or if he or she is considered as such for local law purposes) or if he or she moves to another country after enrolling in the Plan, the information contained herein may not be applicable to such Participant.
Participant acknowledges that Participant has been advised to seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s individual situation.


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I.GLOBAL PROVISIONS APPLICABLE TO PARTICIPANTS IN ALL COUNTRIES OTHER THAN THE UNITED STATES
1.Foreign Exchange Considerations. Participant understands and agrees that, if Participant’s Contributions under the Plan are made in any currency other than U.S. dollars, such Contributions will be converted to U.S. dollars on or prior to the Exercise Date using a prevailing exchange rate in effect at the time such conversion is performed, as determined by the Administrator. Participant understands and agrees that neither the Company nor any Affiliate, Parent, or Subsidiary shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the U.S. dollar that may affect the value of the options granted to Participant under the Plan, or of any amounts due to Participant under the Plan or as a result of the subsequent sale of any shares of Common Stock acquired under the Plan. Participant agrees and acknowledges that Participant will bear any and all risk associated with the exchange or fluctuation of currency associated with Participant’s participation in the Plan.
Furthermore, Participant acknowledges and agrees that Participant may be responsible for reporting inbound transactions or fund transfers that exceed a certain amount. Participant is aware that Participant is advised to seek appropriate professional advice as to how the exchange control regulations apply to Participant’s participation in the Plan and Participant’s specific situation; understanding that the relevant laws and regulations can change frequently and occasionally on a retroactive basis.
2.Tax Withholding Considerations. Participant acknowledges and agrees that, regardless of any action taken by the Company or any Affiliate, Parent, or Subsidiary with respect to any or all income tax, social security, social insurances, national insurance contributions, social insurance contributions, payroll tax, fringe benefit, or other tax-related items related to Participant’s participation in the Plan and legally applicable to Participant including, without limitation, in connection with the grant of the options, the purchase or sale of shares of Common Stock acquired under the Plan and/or the receipt of any dividends on such shares (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains Participant’s responsibility and may exceed the amount actually withheld by the Company or any Affiliate, Parent, or Subsidiary. Furthermore, Participant acknowledges that the Company and/or any Affiliate, Parent, or Subsidiary (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the options or other benefits under the Plan and (b) do not commit to and are under no obligation to structure the terms of the grant of options, other benefits or any aspect of Participant’s participation in the Plan to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant becomes subject to tax in more than one jurisdiction, or change Participant’s jurisdiction of

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primary residence or employment between the start of an Offering Period and the date of any relevant taxable or tax withholding event, as applicable, Participant acknowledges that the Company and/or any Affiliate, Parent, or Subsidiary (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
Prior to the purchase of shares of Common Stock under the Plan or any other relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to the Company and/or any Affiliate, Parent, or Subsidiary to satisfy all Tax-Related Items. In this regard, Participant authorizes the Company and/or any Affiliate, Parent or Subsidiary, or their respective agents, at their discretion, to satisfy the withholding obligations with regard to all Tax-Related Items by one or a combination of the following: (i) withholding from Participant’s wages or other compensation paid to Participant, (ii) withholding of shares of Common Stock otherwise issuable under the Plan and having an aggregate fair market value on the date of delivery sufficient to meet the withholding obligation, as determined by the Company in its sole discretion, or (iii) withholding from proceeds of the sale of the shares of Common Stock purchased under the Plan either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization). Depending on the withholding method, the Company may withhold or account for Tax-Related Items by considering applicable maximum applicable withholding rates, in which case Participant will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent.
Finally, Participant agrees to pay to the Company or applicable Affiliate, Parent, or Subsidiary any amount of Tax-Related Items that the Company or Affiliate, Parent, or Subsidiary may be required to withhold as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to purchase shares of Common Stock under the Plan on Participant’s behalf and/or refuse to issue or deliver the shares or the proceeds of the sale of shares if Participant fails to comply with Participant’s obligations in connection with the Tax-Related Items.
3.Additional Participant Acknowledgements. By electing to participate in the Plan, Participant acknowledges, understands, and agrees that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent provided for in the Plan;
(b)all decisions with respect to future grants of options under the Plan, if any, will be at the sole discretion of the Company;
(c)the grant of the options under the Plan shall not create a right to employment or be interpreted as forming an employment or service contract with the Company, or any Affiliate, Parent, Subsidiary of the Company, and shall not interfere with the ability of the Company or any Affiliate, Parent or Subsidiary, as applicable, to terminate Participant’s employment;

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(d)Participant is voluntarily participating in the Plan;
(e)the options granted under the Plan and the shares of Common Stock underlying such options, and the income and value of same, are not intended to replace any pension rights or compensation;
(f)the options granted under the Plan and the purchase of shares of Common Stock underlying such options, and the income and value of same, are not part of Participant’s normal or expected compensation for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement benefits or similar payments;
(g)the future value of the shares of Common Stock underlying the options granted under the Plan is unknown, indeterminable and cannot be predicted with certainty, and may be greater or less than the value of shares of Common Stock on the date hereof, the date of Participant’s contributions to the Plan, and/or the dates of any applicable purchases of shares under the Plan;
(h)the shares of Common Stock that Participant acquires under the Plan may increase or decrease in value, even below the Purchase Price;
(i)no claim or entitlement to compensation or damages shall arise from the forfeiture of all or any portion of the options granted to Participant under the Plan as a result of the termination of Participant’s status as an Eligible Employee (for any reason whatsoever, and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any) and, in consideration of the grant of the options under the Plan to which Participant is otherwise not entitled, Participant irrevocably agrees (i) never to institute a claim against the Company, or any Affiliate, Parent, or Subsidiary, (ii) to waive Participant’s ability, if any, to bring such claim, and (iii) to release the Company, any Affiliate, Parent or Subsidiary from any such claim that may arise; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, Participant shall be deemed irrevocably to have agreed to not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim;

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(j)in the event of the termination of Participant’s status as an Eligible Employee (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any), Participant’s right to participate in the Plan and all or any portion of the option granted to Participant under the Plan, if any, will terminate effective as of the date that Participant is no longer actively employed by the Company or a Designated Company, and, in any event, will not be extended by any notice period mandated under the employment laws in the jurisdiction in which Participant is employed or the terms of Participant’s employment agreement, if any (e.g., active employment would not include a period of “garden leave” or similar period pursuant to the employment laws in the jurisdiction in which Participant is employed or the terms of Participant’s employment agreement, if any); the Company shall have the exclusive discretion to determine when Participant is no longer actively employed for purposes of Participant’s participation in the Plan (including whether Participant may still be considered to be actively employed while on a leave of absence);
(k)in the event Participant is not an employee of the Company (as opposed to Participant’s local employer), Participant understands and agrees that neither the offer to participate in the Plan, nor Participant’s participation in the Plan, will be interpreted to form an employment relationship with the Company, and furthermore, nothing in the Plan, the Subscription Agreement nor Participant’s participation in the Plan will be interpreted to form an employment contract with the Company; and
(l)the grant of the options under the Plan and the benefits evidenced by the Subscription Agreement do not create any entitlement not otherwise specifically provided for in the Plan, or provided by the Company in its discretion, to have such rights or benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with a sale of substantially all of the Company’s assets or a merger of the Company in which the Company is not the surviving corporation.
4.Data Privacy. Participant understands that the Company and/or any Designated Company may collect, where permissible under applicable law certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all options granted under the Plan or any other entitlement to shares of Common Stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan. Participant understands that the Company may transfer Participant’s Data to the United States, which may have different, including less stringent, data protection laws than the laws in Participant’s country. Participant understands that the Company will transfer Participant’s Data to its designated broker, E*Trade, or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration, and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that a recipient’s country of operation (e.g., the United States) may have different, including less stringent, data privacy laws that Participant’s jurisdiction does not consider to be equivalent to the protections in Participant’s

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country. Participant understands that Participant may request a list with the names and addresses of any potential recipients of the Data by contacting Participant’s local human resources representative. Participant authorizes the Company, the Company’s designated broker and any other possible recipients which may assist the Company with implementing, administering, and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that that Participant may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Participant’s local human resources representative. Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment status or career with the Company or any Designated Company will not be adversely affected; the only consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant options under the Plan or other equity awards, or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant’s local human resources representative.
Participant hereby explicitly and unambiguously consents to the collection, use, and transfer, in electronic or other form, of Participant’s personal data as described herein and any other Plan materials by and among, as applicable, the Company or Affiliate, Parent, or Subsidiary of the Company for the exclusive purpose of implementing, administering, and managing Participant’s participation in the Plan. Participant understands that Participant’s consent will be sought and obtained for any processing or transfer of Participant’s data for any purpose other than as described herein and any other plan materials.
5.Recommendation Regarding External Advice. Participant understands and agrees that none of the Company, Affiliates, Parents, and Subsidiaries are providing any tax, legal or financial advice, nor is the Company or any Affiliate, Parent, or Subsidiary making any recommendations or assessments regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying shares of Common Stock, or any subsequent disposal or retention of such shares of Common Stock. Participant understands that Participant is hereby advised to consult with Participant’s own personal tax, legal, and financial advisors regarding Participant’s participation in the Plan before taking any action related to the Plan.

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6.Translated Documents. If Participant has received the Subscription Agreement or any other document related to the Plan translated into a language other than English, Participant understands that such translated documents were provided for convenience only, and that if the meaning of the translated version is different than the English version, the English version will control.


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II.GLOBAL PROVISIONS APPLICABLE TO PARTICIPANTS IN ALL COUNTRIES OTHER THAN THE UNITED STATES

Australia
General Advice Only. Any advice given by the Company or its affiliates, Parent, or Subsidiaries in relation to participation in the Plan does not take into account the objectives, financial situation, and needs of Participants in Australia (“Australian Participants”). Australian Participants should consider obtaining their own financial product advice from an independent person who is licensed by the Australian Securities & Investments Commission (“ASIC”) to give such advice.
Acquisition Price. The acquisition price payable by Australian Participants to purchase Common Stock under the Plan is an amount equal to eighty-five percent (85%) of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower.
Risks of Acquiring Shares. Investing in stock involves risk and the value of the options can rise and fall with any rise or fall with the value of the Common Stock. Any advice given by the Company in relation to the option does not take into account the personal objectives, financial situation, and needs of the Australian Participants. Before enrolling in the Plan and purchasing Common Stock, Australian Participants should satisfy themselves that they have a sufficient understanding of risks of acquiring and holding shares of Common Stock, and should consider whether the Common Stock is a suitable investment, considering the Australian Participants’ own investment objectives, financial circumstances, and taxation position. Accordingly, Australian Participants should consider obtaining their own financial advice by a financial advisor (licensed by ASIC to give such advice) regarding the merits of the offer in respect of the Australian Participants own circumstances.
In addition, there is no assurance that the Company will pay dividends or that such payments will remain constant or increase. Payment of future dividends, if any, and the timing and amount of any dividends the Company determines to pay, are at the discretion of the Company’s Board.
Market Price in Australian Dollars. An Australian Participant could, from time to time, ascertain the market price of the Common Stock by obtaining that price from the Company website or The Wall Street Journal, and multiplying that price by a published exchange rate to convert U.S. Dollars into Australian Dollars.
Deferral of Tax Payable. Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) applies to all options granted under this Subscription Agreement to Australian Participants.
Data Privacy. Participant acknowledges and agrees that if the Company or its Affiliates, Parent, and Subsidiaries discloses any personal information about Participant to a recipient outside of Australia then the Company, and its Affiliates, Parent, and Subsidiaries will not be required by law to take steps to ensure that the recipient complied with the Australian Privacy Principles or responsible for any breaches of the Australian Privacy Principles by the recipient in respect of that information.

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Participant consents to personal information collected by the Company, its Affiliates, Parent, and Subsidiaries about Participant under this Subscription Agreement being disclosed to recipients outside of Australia.
Exchange Control Information. Participant understands that Participant may have exchange control reporting obligations in connection with transfers that exceed A$10,000. The bank handling the transaction will generally complete the reporting requirements.

Brazil
Exchange Control Information. When transferring amounts resulting from the sale of shares of stock to Brazil, such funds must be transferred by wire and declared as such through the foreign exchange closing operations of the Participant’s preferred financial institution in Brazil. The amounts received from abroad also must, subsequently, be declared by the Participant for tax purposes. By participating in the Plan, Participant understands that Participant is generally required to make an annual report of shares held outside Brazil to the tax authorities and the Central Bank if such holdings exceed a specified limit (typically US$100,000).

India
Foreign Assets Reporting Information. Participant understands that Participant must declare foreign bank accounts and any foreign financial assets (including Common Stock purchased pursuant to the Plan held outside India) in Participant’s annual tax return. Participant further understands that it is Participant’s responsibility to comply with this reporting obligation and Participant should consult with his or her personal tax advisor in this regard. Indian residents should consult with their personal tax advisor to determine their personal reporting obligations.
Exchange Control Information. Participant understands that Participant must repatriate any proceeds from the sale of Common Stock acquired under the Plan or the receipt of any dividends to India within 90 days of receipt and convert such amounts to local currency within 180 days of receipt. Participant further understands that Participant must obtain a foreign inward remittance certificate (“FIRC”) from the bank where Participant deposits the foreign currency and maintain the FIRC as evidence of the repatriation of funds in the event the Reserve Bank of India or Participant’s employer requests proof of repatriation.


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Ireland
Director Reporting Obligation. Participant understands that if Participant is a director, shadow director, or secretary of an Affiliate, Parent, or Subsidiary in Ireland, Participant must notify the Irish Affiliate, Parent or Subsidiary in writing within five business days of receiving or disposing of an interest in the Company (e.g., Options, Common Stock), or within five business days of becoming aware of the event giving rise to the notification requirement or within five days of becoming a director or secretary if such an interest exists at the time. This notification requirement also applies with respect to the interests of Participant’s spouse or children under the age of 18 (whose interests will be attributed to the Participant if Participant is a director, shadow director or secretary).
Mexico
Securities Law Information. Participant acknowledges and agrees that that the option, the related shares of Common Stock, and the related offer thereof have not been registered with the National Registry of Securities (Registro Nacional de Valores) maintained by the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) and may not be offered or sold publicly in Mexico. This offer does not constitute a public offering under the Securities Market Law (Ley del Mercado de Valores) and is to be made according to the Plan information applicable to employees pursuant to paragraph iii, article 8 of such law. This private offering and all other information as contained in this document are exclusively for the benefit of and distribution of the eligible employees. This offering document and other offering materials may not be publicly distributed in Mexico.

Turkey
Securities Law Information. Participant acknowledges and agrees that this offer has been made by the Company to Participant personally in connection with an existing relationship with the Company or one or more of its Affiliates, Parent, Subsidiaries, and/or related companies, and further, that the option, the related shares of Common Stock, and the related offer thereof are not subject to regulation by any securities regulator in Turkey or otherwise outside of the United States.

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EX-31.1 3 udemy-10xq_exx311q22025.htm EX-31.1 Document

Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
I, Hugo Sarrazin, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Udemy, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 30, 2025
 By:
/s/ Hugo Sarrazin
Hugo Sarrazin
President and
Chief Executive Officer
(Principal Executive Officer)

EX-31.2 4 udemy-10xq_exx312q22025.htm EX-31.2 Document

Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Sarah Blanchard, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Udemy, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: July 30, 2025
 By:
/s/ Sarah Blanchard
Sarah Blanchard
Chief Financial Officer
(Principal Financial Officer)


EX-32.1 5 udemy-10xq_exx321q22025.htm EX-32.1 Document

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Udemy, Inc. (the “Company”) for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Udemy, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.


Date: July 30, 2025
 By:
/s/ Hugo Sarrazin
Hugo Sarrazin
President and
Chief Executive Officer
(Principal Executive Officer)


EX-32.2 6 udemy-10xq_exx322q22025.htm EX-32.2 Document

Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Udemy, Inc. (the “Company”) for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Udemy, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing.


Date: July 30, 2025
  
By:
/s/ Sarah Blanchard
Sarah Blanchard
Chief Financial Officer
(Principal Financial Officer)