10-Q: Coursera Q1 2026 Financial Results and Merger Update

Coursera reported Q1 2026 revenue of $195.7 million, a 9% year-over-year increase, while advancing its merger with Udemy.

Summary

• Total revenue reached $195.7 million, up 9% from $179.3 million in Q1 2025.
• Net loss widened to $20.5 million compared to $7.8 million in the prior-year quarter.
• Registered Learners grew 17% year-over-year to 205 million.
• Paid Enterprise Customers increased 5% to 1,729.
• Gross profit was $108.6 million, with a gross margin of 55.5%.
• Operating expenses rose to $133.9 million, driven by M&A transaction and integration costs related to the Udemy merger.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral report; while top-line growth and learner acquisition remain strong, the widening net loss and significant merger-related costs create near-term uncertainty.

Positives

• Revenue growth of 9% year-over-year.
• 17% growth in Registered Learners, reaching 205 million.
• Gross margin improved to 55.5% from 54.6% in the prior-year quarter.
• Strong cash position with $789.8 million in cash and cash equivalents.

Negatives

• Net loss increased to $20.5 million from $7.8 million in Q1 2025.
• Adjusted EBITDA declined to $13.5 million from $18.7 million in the prior-year quarter.
• Free Cash Flow dropped significantly to $3.0 million from $25.3 million in Q1 2025.
• Net Retention Rate for Paid Enterprise Customers slightly decreased to 90% from 91%.

Risks

• Uncertainty regarding the completion and integration of the proposed merger with Udemy.
• Potential for increased operating costs and management distraction due to the merger.
• Reliance on a small number of large content creators for a significant portion of revenue.
• Intense competition in the online learning and generative AI space.
• Regulatory and legal risks associated with online education and AI technologies.
• Macroeconomic conditions, including inflation, impacting discretionary spending.

Future Outlook

The company continues to focus on platform innovation, including generative AI features, and is working toward completing the merger with Udemy, subject to regulatory approvals and closing conditions.

Management Comments

• Management highlighted the 9% revenue growth and the 17% increase in Registered Learners.
• Management noted that the increase in operating expenses was primarily driven by M&A transaction and integration costs related to the Udemy merger.

Industry Context

StockSavvy.ai notes that the EdTech sector is experiencing consolidation, as evidenced by the Coursera-Udemy merger, and is under pressure to demonstrate profitability while integrating generative AI to maintain competitive relevance.

Comparison to Industry Standards

• Coursera's revenue growth of 9% is consistent with moderate growth expectations in the maturing online learning market.
• The company's focus on both Consumer and Enterprise segments aligns with industry leaders like LinkedIn Learning and Udemy.
• The shift toward engagement-based content creator compensation is a strategic move to improve platform quality, similar to trends seen in other content-driven marketplaces.

Management Changes

Corporate Governance

Legal Proceedings

• The company is not currently party to any legal proceeding that it believes could have a material adverse effect on its business.

Related Party Transactions

• Ongoing content sourcing agreement with DeepLearning.AI Corp, owned by chairman Dr. Andrew Ng, with $1.9 million in fees recognized in Q1 2026.

Stakeholder Impact

• Shareholders face potential dilution and integration risks from the Udemy merger.
• Employees may experience organizational changes during the merger integration.
• Content creators may see shifts in compensation models based on learner engagement.

Next Steps

• Complete the merger with Udemy, subject to regulatory approvals.
• Continue integration planning for the combined entity.
• Ongoing investment in AI-powered platform features.

Key Dates

Recommendation

Investors should maintain a hold position until the merger with Udemy is finalized and the company demonstrates a clear path to improved profitability and successful integration of the two platforms.

Keywords

Coursera, Online Learning, EdTech, Udemy Merger, Enterprise Learning, Generative AI, Financial Results