10-Q: Coursera's Q2 Revenue Surges Post-Udemy Merger

Coursera reported a 60% year-over-year revenue increase to $298.6 million in Q2 2026, largely due to the Udemy acquisition, though net loss widened.

Summary

• Coursera's Q2 2026 revenue reached $298.6 million, a 60% increase from $187.1 million in Q2 2025, primarily driven by the acquisition of Udemy.
• The company reported a net loss of $80.4 million for Q2 2026, a significant increase from the $7.8 million net loss in the prior year's quarter.
• Gross profit improved to $173.4 million from $102.7 million, with gross margin increasing to 58.1% from 54.9%.
• Operating expenses more than doubled to $258.1 million, largely due to merger, integration, and restructuring costs.
• The company repurchased $90.3 million of its common stock in Q2 2026 under a new $500 million repurchase program.
• As of June 30, 2026, Coursera had $982.2 million in cash, cash equivalents, and marketable securities.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as cautiously optimistic, with significant revenue growth driven by the Udemy acquisition, but offset by increased net losses and integration costs.

Positives

• Significant revenue growth of 60% year-over-year, reaching $298.6 million in Q2 2026, largely attributed to the Udemy acquisition.
• Gross profit increased by 69% to $173.4 million, with gross margin improving to 58.1% from 54.9%.
• Enterprise segment revenue more than doubled, increasing by 118% to $140.0 million.
• Consumer segment revenue grew by 29% to $158.6 million.
• Paid Subscribers increased by 44% year-over-year to 1,655,000.
• Net Retention Rate for Enterprise Customers remained strong at 91%.

Negatives

• Net loss widened significantly to $80.4 million in Q2 2026 from $7.8 million in Q2 2025.
• Operating expenses increased by 119% to $258.1 million, heavily impacted by merger, integration, and restructuring costs.
• Merger, integration, and restructuring related costs amounted to $79.8 million in Q2 2026.
• Net cash used in operating activities was $5.2 million for the six months ended June 30, 2026, compared to net cash provided by operating activities of $69.0 million in the prior year period.
• Free Cash Flow was negative $29.6 million for the six months ended June 30, 2026, compared to positive $53.9 million in the prior year period.

Risks

• The company's ability to successfully integrate Udemy and realize anticipated benefits of the merger.
• Potential for increased competition and market adoption of online learning solutions and generative AI.
• Changes in economic or other terms of relationships with content creators.
• Risks associated with expanding international operations and managing diverse regulatory environments.
• Potential for impairment of goodwill and intangible assets if anticipated benefits are not realized.
• Reliance on third-party service providers for platform operations and infrastructure.
• Cybersecurity threats and the potential disclosure of sensitive information.
• The company's ability to manage growth and complexity, and potential impact of workforce reduction plans.

Future Outlook

The company expects to continue investing in platform capabilities, AI-powered learning experiences, and expanding its global customer base. The integration of Udemy is a key focus, with ongoing efforts to realize synergies and align cost structures. A workforce reduction plan was announced in July 2026, expected to incur $9-$11 million in expenses.

Management Comments

• The company believes the Merger with Udemy enables them to build a more comprehensive skills platform and unite a global ecosystem.
• Significant cash and non-cash charges were incurred related to the Merger and integration of Udemy.
• The company is investing in a unified, next-generation platform designed to connect trusted content, skills intelligence, and AI-powered learning experiences.
• The company expects to recognize expenses of approximately $9 million to $11 million related to the workforce reduction plan announced in July 2026.

Industry Context

StockSavvy.ai notes that Coursera's performance reflects the ongoing consolidation and investment in the online learning sector, particularly with the integration of AI capabilities. The significant revenue uplift from the Udemy acquisition highlights the strategic importance of scale in this competitive landscape.

Comparison to Industry Standards

• Coursera's reported gross margin of 58.1% for Q2 2026 is higher than its own prior year margin of 54.9%, indicating improved operational efficiency or favorable content economics post-merger.
• The company's Net Retention Rate for Enterprise Customers of 91% is a key metric for SaaS businesses, and while slightly down from 95% year-over-year, it remains a strong indicator of customer value and stickiness.
• The significant increase in operating expenses, particularly merger and integration costs, is common in large-scale M&A activities within the tech and education sectors, impacting short-term profitability.
• The company's investment in AI capabilities aligns with broader industry trends, as competitors like LinkedIn Learning (Microsoft) and Google are also integrating AI into their learning platforms.

Legal Proceedings

• The company is not currently party to any legal proceeding that it believes could have a material adverse effect on its business, operating results, cash flows, or financial condition if resolved unfavorably.

Related Party Transactions

• Ongoing content sourcing agreement with DeepLearning.AI Corp, owned by Chairman and co-founder Dr. Andrew Ng, with fees included in cost of revenue.
• Strategic equity investment in LearnVector Inc., an AI-native learning company founded by Dr. Andrew Ng, approved by a Special Committee of independent directors.

Stakeholder Impact

• Shareholders: Dilution from Udemy merger shares, but potential long-term value creation from integration. Share repurchase program may return value.
• Employees: Workforce reduction plan announced, impacting personnel. Integration may lead to cultural shifts.
• Content Creators: Potential changes in economic terms due to integration and platform fees. Strong learner engagement incentivizes content development.
• Learners: Access to a broader, more integrated platform post-Udemy merger. Continued investment in AI-powered features.
• Customers (Enterprise): Potential for unified offerings and enhanced value proposition from combined entities.

Next Steps

• Continue integration of Udemy to realize synergies and operational efficiencies.
• Execute workforce reduction plan to align cost structure.
• Further develop and scale AI-powered learning experiences.
• Monitor and manage the impact of macroeconomic conditions on business performance.
• Continue to attract and retain content creators and learners.
• Evaluate and potentially execute further strategic investments.

Key Dates

Recommendation

The acquisition of Udemy has significantly boosted revenue and gross profit, demonstrating strong execution in integrating a major asset. However, the widening net loss and increased operating expenses due to integration costs, coupled with a negative free cash flow, warrant a cautious approach. The company's strategic investments and focus on AI are positive long-term indicators, but near-term profitability concerns and integration execution risks suggest a 'hold' rating until clearer signs of sustained profitability and synergy realization emerge.

Keywords

Coursera, Udemy, Merger, Online Learning, EdTech, Enterprise Segment, Consumer Segment, Revenue Growth