Coursera Inc
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
COUR$3.74-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001651562-24-000049
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0001651562-24-000058
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 163 current paragraphs.
110 unchanged; 45 reworded; 8 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 21 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
•our expense reduction initiatives and their anticipated timing and impact;
Current report
Restructuring and Expense Reduction Initiatives
Current report
As we refine our business strategy and hone our focus, we have also been reducing our expenses and prioritizing investments in key initiatives that are expected to drive long-term, sustainable growth.
Current report
In January 2024, we implemented a plan to restructure our Enterprise segment sales force and recognized incremental operating expenses related to the restructuring of $2.1 million during the first quarter of 2024, substantially all of which was paid within the same quarter.
Current report
On October 24, 2024, we announced a commitment to reducing overall expenses, focusing efforts, and prioritizing future investments in key initiatives that are expected to drive long-term, sustainable growth. We expect this initiative to generate at least $30 million in annualized structural cost savings, creating capacity for targeted investments, as well as incremental profitability. In connection with this effort, we plan to reduce our global workforce by approximately 10% to better align our cost structure and personnel needs with our business objectives, growth opportunities, and operational priorities. Expense reduction efforts will begin in the fourth quarter of 2024 and are expected to be primarily completed by March 31, 2025.
Current report
As a result of this initiative, we expect to recognize incremental expenses of $7 million to $9 million, primarily within operating expenses in the fourth quarter of 2024 and mainly consisting of personnel expenses, such as employee severance and benefits costs, all of which will result in cash expenditures over the next two fiscal quarters. We also expect the reversal of stock-based compensation expense of $2 million to $3 million, the majority of which will be recognized in the first quarter of 2025, when the forfeiture of unvested restricted stock units (“RSUs”) and stock options is expected to occur. As a result of the foregoing, the net effect on operating expenses is estimated to be $5 million to $7 million over the next two fiscal quarters. The charges that we expect to incur and the timing of related cash expenditures are subject to a number of assumptions, and actual expenses and timing may differ materially from these estimates.
Current report
Cost of revenue for the three months ended September 30, 2024 was $79.9 million compared to $82.3 million for the three months ended September 30, 2023. The primary drivers of the decrease were lower cost to perform language translations resulting in savings of $2.1 million and lower residual support services expenses and credit card processing fees of $1.4 million.
Current report
Table of Contents
Removed paragraphs (2)
Previous report
•our share repurchase program;
Previous report
Cost of revenue for the six months ended June 30, 2024 was $159.7 million compared to $144.2 million for the six months ended June 30, 2023. The primary driver for the increase was revenue growth that resulted in an increase of $15.2 million in educator partner fees and an increase of $1.9 million in amortization expense, partially offset by a decrease of $1.8 million in language translation expenses.
Reworded paragraphs (45)
Previous wording
As shifts in the digital economy are increasing the need for new skills, Coursera’s online learning offerings can meet this global demand and provide access to world-class education to learners, organizations, and institutions worldwide. We partner with over 325 leading global university and industry partners to create and distribute high-quality content that is modular, flexible, and affordable. As of June 30, 2024, approximately 155 million learners are registered on our platform to engage with a wide range of offerings from industry microcredentials, including entry-level Professional Certificates, to bachelor’s and master’s degree programs.
Current wording
As shifts in the digital economy are increasing the need for new skills, Coursera’s online learning offerings can meet this global demand and provide access to world-class education to learners, organizations, and institutions worldwide. We partner with over 350 leading global university and industry partners to create and distribute high-quality content that is modular, flexible, and affordable. As of September 30, 2024, approximately 162 million learners have registered on our platform to engage with a wide range of offerings from industry microcredentials, including entry-level Professional Certificates, to bachelor’s and master’s degree programs.
Previous wording
For the three months ended June 30, 2024 and 2023, we generated a net loss of $23.0 million and $31.7 million, which included stock-based compensation expense of $30.0 million and $29.3 million, and a net loss margin as a percentage of revenue of 13% and 21%.
Current wording
For the three months ended September 30, 2024 and 2023, we generated a net loss of $13.7 million and $32.1 million, which included stock-based compensation expense of $25.3 million and $27.9 million, and a net loss margin as a percentage of revenue of 8% and 19%.
Previous wording
For the six months ended June 30, 2024 and 2023, we generated a net loss of $44.2 million and $64.1 million, which included stock-based compensation expense of $57.9 million and$54.1 million, and a net loss margin as a percentage of revenue of 13% and 21%.
Current wording
For the nine months ended September 30, 2024 and 2023, we generated a net loss of $57.9 million and $96.2 million, which included stock-based compensation expense of $83.1 million and$81.9 million, and a net loss margin as a percentage of revenue of 11% and 21%.
Previous wording
Ability to attract, engage, and retain new learners, Enterprise customers, and Degrees students. In order to grow our business, we must attract new learners, Enterprise customers, and Degrees students efficiently and increase engagement on our platform over time. Our Consumer learners are the most important source of our overall learner base, as they contribute to both our Enterprise and Degrees revenue in addition to the Consumer revenue they may provide, and increase engagement and retention on our platform over time. We continue to refine our Degrees business model and may need to adjust it as laws, regulations, and market demands change. As a result, we have experienced and may continue to experience shifts in our related customer base, including university partners and Degrees students.
Current wording
Ability to attract, engage, and retain learners, Enterprise customers, and Degrees students. In order to grow our business, we must attract learners, Enterprise customers, and Degrees students efficiently and increase engagement on our platform over time. Our Consumer learners are the most important source of our overall learner base, as they contribute to both our Enterprise and Degrees revenue in addition to the Consumer revenue they may provide, and increase engagement and retention on our platform over time. In recent months, we have observed weaker Consumer learner month over month retention rates within our subscription offerings. We continue to produce and release new content on our platform to retain and attract learners, but learner behavior may change over time due to a number of factors. We continue to refine our Degrees business model, including how we serve the needs of academic institutions across our platform, and may need to adjust it as laws, regulations, and market demands change. As a result, we have experienced and may continue to experience shifts in our related customer base, including university partners and Degrees students.
Previous wording
We believe that our reach, scale, and reputation provide an attractive value proposition for leading organizations and institutions to partner with Coursera to develop and distribute content and credentials. To be the platform of choice for educator partners, we continue to invest in increasing the size and engagement of our learner base, developing a suite of academic integrity features (e.g., identity verification and anti-plagiarism detection), improving recommendation and personalization features, developing marketing capabilities that drive higher conversion into paid offerings, and improving the analytics tools available for learners, educators, organizations, and institutions.
Current wording
We believe that our reach, scale, and reputation provide an attractive value proposition for leading organizations and institutions to partner with Coursera to develop and distribute content and credentials. To be the platform of choice for educator partners, we continue to invest in increasing the size and engagement of our learner base, developing AI-powered product innovations (e.g., Course Builder and Coach), a suite of academic integrity features (e.g., identity verification and anti-plagiarism detection), improving recommendation and personalization features, developing marketing capabilities that drive higher conversion into paid offerings, and improving the analytics tools available for learners, educators, organizations, and institutions.
Previous wording
Ability to expand our international footprint. We see a significant opportunity to expand our offerings into other regions, particularly in regions with large, underserved adult learning populations. We have invested, and plan to continue to invest, in personnel and marketing efforts to support our international growth as part of our strategy to grow our customer and learner base.
Current wording
Ability to expand our international footprint. We see a significant opportunity to expand our offerings into other regions, particularly in regions with large, underserved adult learning populations. We have invested, and plan to continue to invest, in personnel and marketing efforts to support our international growth as part of our strategy to grow our customer and learner base. We also have been investing in improving the front-end experience for our Consumer learners and have been tailoring our pricing and check-out options, including selling our offerings in foreign currency, in select markets. Our business results and operations will depend on our ability to effectively price and package our Consumer products to meet demand and manage foreign currency risk.
Previous wording
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Current wording
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
Previous wording
Revenue for the six months ended June 30, 2024 was $339.4 million compared to $301.3 million for the six months ended June 30, 2023. Revenue increased by $38.1 million, or 13%, compared to the six months ended June 30, 2023. The increase was primarily driven by a 20% increase in the average total number of registered learners resulting in more paid learners, a 17% increase in the average total number of Paid Enterprise Customers, and a 19% increase in the number of Degrees students.
Current wording
Revenue for the three months ended September 30, 2024 was $176.1 million compared to $165.5 million for the three months ended September 30, 2023. Revenue increased by $10.5 million, or 6%, compared to the three months ended September 30, 2023. Revenue growth was primarily driven by a 19% increase in the average total number of registered learners resulting in more new paid learners, a 19% increase in the average total number of Paid Enterprise Customers, and a 29% increase in the number of Degrees students. The revenue growth contribution from these increases was partially offset by lower learner and customer retention in our Consumer and Enterprise segments globally as well as fewer new paid learners and Degrees students coming from our higher-priced regions.
Previous wording
For the three months ended June 30, 2024, Consumer revenue increased by $10.3 million, or 12%, compared to the three months ended June 30, 2023. New learners that registered after June 30, 2023 contributed $40.0 million to Consumer revenue of $97.3 million for the three months ended June 30, 2024. The remaining $57.3 million of Consumer revenue was attributable to learners that were registered on our platform as of June 30, 2023, thus retaining 66% of the revenue from those registered learners.
Current wording
For the three months ended September 30, 2024, Consumer revenue increased by $3.3 million, or 3%, compared to the three months ended September 30, 2023. New learners that registered after September 30, 2023 contributed $41.2 million to Consumer revenue of $102.3 million for the three months ended September 30, 2024. The remaining $61.1 million of Consumer revenue was attributable to learners that were registered on our platform as of September 30, 2023, thus retaining 62% of the revenue from those registered learners.
Previous wording
For the three months ended June 30, 2024, Enterprise revenue increased by $4.5 million, or 8%, compared to the three months ended June 30, 2023 attributable to an increase in new customers. Acquisitions of new customers drove an increase of $10.7 million, offset by a $6.2 million decrease attributable to contraction of existing customer spend.
Current wording
For the three months ended September 30, 2024, Enterprise revenue increased by $5.5 million, or 10%, compared to the three months ended September 30, 2023 attributable to an increase in new customers. Acquisitions of new customers drove an increase of $10.9 million, offset by a $5.4 million decrease attributable to contraction of existing customer spend.
Previous wording
For the three months ended June 30, 2024, Degrees revenue increased by $1.8 million, or 14%, compared to the three months ended June 30, 2023. The $1.8 million increase in revenue was primarily attributable to $3.2 million in revenue from an increase in the number of Degrees students, partially offset by a decrease of $1.4 million due to lower revenue per student resulting from student growth in lower-priced regions.
Current wording
For the three months ended September 30, 2024, Degrees revenue increased by $1.7 million, or 15%, compared to the three months ended September 30, 2023. This increase was primarily attributable to $3.4 million in revenue from an increase in the number of Degrees students, partially offset by a decrease of $1.7 million due to lower revenue per student resulting from fewer new Degrees students in our higher-priced regions.
Previous wording
Revenue for the three months ended June 30, 2024 was $170.3 million compared to $153.7 million for the three months ended June 30, 2023. Revenue increased by $16.6 million, or 11%, compared to the three months ended June 30, 2023. The increase was primarily driven by a 20% increase in the average total number of registered learners resulting in more paid learners, a 17% increase in the average total number of Paid Enterprise Customers, and a 19% increase in the number of Degrees students.
Current wording
Revenue for the nine months ended September 30, 2024 was $515.5 million compared to $466.9 million for the nine months ended September 30, 2023. Revenue increased by $48.6 million, or 10%, compared to the nine months ended September 30, 2023. Revenue growth was primarily driven by a 19% increase in the average total number of registered learners resulting in more paid learners, a 19% increase in the average total number of Paid Enterprise Customers, and a 29% increase in the number of Degrees students. The revenue growth contribution from these increases was partially offset by fewer new paid learners and Degrees students coming from our higher-priced regions.
Previous wording
For the six months ended June 30, 2024, Consumer revenue increased by $25.0 million, or 15%, compared to the six months ended June 30, 2023. New learners that registered after June 30, 2023 contributed $74.1 million to Consumer revenue of $194.1 million for the six months ended June 30, 2024. The remaining $120.0 million of Consumer revenue was attributable to learners that were registered on our platform as of June 30, 2023, thus retaining 71% of the revenue from those registered learners.
Current wording
For the nine months ended September 30, 2024, Consumer revenue increased by $28.4 million, or 11%, compared to the nine months ended September 30, 2023. New learners that registered after September 30, 2023 contributed $96.6 million to Consumer revenue of $296.4 million for the nine months ended September 30, 2024. The remaining $199.8 million of Consumer revenue was attributable to learners that were registered on our platform as of September 30, 2023, thus retaining 75% of the revenue from those registered learners.
Previous wording
For the six months ended June 30, 2024, Enterprise revenue increased by $9.9 million, or 9%, compared to the six months ended June 30, 2023 attributable to an increase in new customers. Acquisitions of new customers drove an increase of $18.4 million, offset by an $8.5 million decrease attributable to contraction of existing customer spend.
Current wording
For the nine months ended September 30, 2024, Enterprise revenue increased by $15.4 million, or 10%, compared to the nine months ended September 30, 2023 attributable to an increase in new customers. Acquisitions of new customers drove an increase of $27.3 million, offset by an $11.9 million decrease attributable to contraction of existing customer spend.
Previous wording
For the six months ended June 30, 2024, Degrees revenue increased by $3.2 million, or 12%, compared to the six months ended June 30, 2023. The $3.2 million increase in revenue was primarily attributable to $5.4 million in revenue from an increase in the number of Degrees students, partially offset by a decrease of $2.2 million due to lower revenue per student resulting from student growth in lower-priced regions.
Current wording
For the nine months ended September 30, 2024, Degrees revenue increased by $4.9 million, or 13%, compared to the nine months ended September 30, 2023. This increase was primarily attributable to $9.0 million in revenue from an increase in the number of Degrees students, partially offset by a decrease of $4.1 million due to lower revenue per student resulting from fewer new Degrees students in our higher-priced regions.
Previous wording
Content costs for the Consumer segment were $45.0 million and $41.9 million for the three months ended June 30, 2024 and 2023, with content costs as a percentage of revenue of 46% and 48% for the same periods, due to a shift in mix to lower-cost content. Content costs for the Enterprise segment were $18.9 million and $15.5 million for the three months ended June 30, 2024 and 2023, with content costs as a percentage of revenue of 32% and 29% for the same periods, with the increase due to a one-time benefit associated with a contract amendment with one of our educator partners in the prior period.
Current wording
Content costs for the Consumer segment were $47.0 million and $47.2 million for the three months ended September 30, 2024 and 2023, with content costs as a percentage of revenue of 46% and 48% for the same periods, due to a shift in mix to lower-cost content. Content costs for the Enterprise segment were $18.1 million and $17.8 million for the three months ended September 30, 2024 and 2023, with content costs as a percentage of revenue of 30% and 32% for the same periods, due to a shift in mix to lower-cost content and a one-time current period benefit from a significant contract that was enrolled in lower-cost content.
Previous wording
Gross margin was 53% for the six months ended June 30, 2024, compared to 52% for the six months ended June 30, 2023. The increase in gross margin was driven by a lower revenue content cost rate in our Consumer segment.
Current wording
Gross margin was 55% for the three months ended September 30, 2024, compared to 50% for the three months ended September 30, 2023. The increase in gross margin was driven by a lower revenue content cost rate in both our Consumer and Enterprise segments and savings in language translation expenses and lower residual credit card processing fees.
Previous wording
Cost of revenue for the three months ended June 30, 2024 was $80.2 million compared to $74.0 million for the three months ended June 30, 2023. The primary driver for the increase was revenue growth that resulted in an increase of $6.4 million in educator partner fees and an increase of $1.0 million in amortization expense, partially offset by a decrease of $1.3 million in language translation expenses.
Current wording
Cost of revenue for the nine months ended September 30, 2024 was $239.6 million compared to $226.4 million for the nine months ended September 30, 2023. The primary drivers for the increase were revenue growth that resulted in an increase of $15.3 million in educator partner fees and an increase of $1.3 million in amortization expense for internal-use software and website development costs, partially offset by lower cost to perform language translations resulting in savings of $3.9 million in language translation expenses.
Previous wording
Content costs for the Consumer segment were $89.9 million and $79.3 million for the six months ended June 30, 2024 and 2023, with content costs as a percentage of revenue of 46% and 47% for the same periods, due to a shift in mix to lower-cost content. Content costs for the Enterprise segment were $37.2 million and $32.7 million for the six months ended June 30, 2024 and 2023, with content costs as a percentage of revenue of 32% and 31% for the same periods, with the increase due to a one-time benefit associated with a contract amendment with one of our educator partners in the prior period.
Current wording
Content costs for the Consumer segment were $137.0 million and $126.5 million for the nine months ended September 30, 2024 and 2023, with content costs as a percentage of revenue of 46% and 47% for the same periods, due to a shift in mix to lower-cost content. Content costs for the Enterprise segment were $55.3 million and $50.5 million for the nine months ended September 30, 2024 and 2023, with content costs as a percentage of revenue of 31% for both periods.
Previous wording
Gross margin was 53% for the three months ended June 30, 2024, compared to 52% for the three months ended June 30, 2023. The increase in gross margin was driven by a lower revenue content cost rate in our Consumer segment.
Current wording
Gross margin was 54% for the nine months ended September 30, 2024, compared to 51% for the nine months ended September 30, 2023. The increase in gross margin was driven by a lower revenue content cost rate in our Consumer segment, savings in language translation expenses, and lower residual credit card processing fees.
Previous wording
Total operating expenses for thethree and six months ended June 30, 2024 were $121.4 million and $240.6 million compared to $118.1 million and $234.6 million for thethree and six months ended June 30, 2023.
Current wording
Total operating expenses for thethree and nine months ended September 30, 2024 were $118.0 million and $358.6 million compared to $122.9 million and $357.5 million for thethree and nine months ended September 30, 2023.
Previous wording
Research and development expenses for the three months ended June 30, 2024 were $33.7 million compared to $41.3 million for the three months ended June 30, 2023. The decrease was primarily due to lower personnel-related expenses of $5.5 million, including stock-based compensation expense of $2.6 million, and lower content creation costs of $1.1 million.
Current wording
Research and development expenses for the three months ended September 30, 2024 were $31.6 million compared to $37.6 million for the three months ended September 30, 2023. The decrease was primarily due to lower personnel-related expenses of $3.7 million, including stock-based compensation expense of $1.5 million, from shifting resources to lower cost regions, and lower content creation costs of $1.7 million.
Previous wording
Research and development expenses for the six months ended June 30, 2024 were $68.3 million compared to $85.1 million for the six months ended June 30, 2023. The decrease was primarily due to lower personnel-related expenses of $11.5 million, including stock-based compensation expense of $5.0 million, and lower content creation costs of $3.7 million.
Current wording
Research and development expenses for the nine months ended September 30, 2024 were $99.9 million compared to $122.7 million for the nine months ended September 30, 2023. The decrease was primarily due to lower personnel-related expenses of $15.2 million, including stock-based compensation expense of $6.5 million, from shifting resources to lower cost regions, lower content creation costs of $5.4 million, and lower attributed facilities costs of $1.3 million.
Previous wording
Sales and marketing expenses for the three months ended June 30, 2024 were $58.1 million compared to $52.0 million for the three months ended June 30, 2023. The increase was primarily due to an increase in marketing and advertising expenses of $3.7 million and an increase in personnel-related expenses of $2.4 million.
Current wording
Sales and marketing expenses for the three months ended September 30, 2024 were $59.0 million compared to $59.8 million for the three months ended September 30, 2023. The decrease was primarily due to a decrease in stock-based compensation expense of $1.8 million, partially offset by an increase in marketing and advertising expenses of $1.1 million.
Previous wording
Sales and marketing expenses for the six months ended June 30, 2024 were $115.7 million compared to $104.9 million for the six months ended June 30, 2023. The increase was primarily due to an increase in marketing and advertising expenses of $7.7 million, and an increase in personnel-related expenses of $3.8 million.
Current wording
Sales and marketing expenses for the nine months ended September 30, 2024 were $174.7 million compared to $164.7 million for the nine months ended September 30, 2023. The increase was primarily due to an increase in marketing and advertising expenses of $8.8 million, and an increase in personnel-related expenses of $3.3 million. The increase was partially offset by a prior year non-recurring impairment charge of $1.5 million associated with Degrees content development grants.
Previous wording
General and administrative expenses for the three months ended June 30, 2024 were $29.6 million compared to $24.9 million for the three months ended June 30, 2023. The increase was primarily driven by $3.4 million in costs related to third party advisory, legal, and other professional fees associated with evaluating a merger and acquisition (“M&A”) transaction, $1.3 million in legal fees associated with significant and non-recurring legal matters, and an increase in personnel-related expenses of $2.9 million, including stock-based compensation expenses of $2.2 million. This increase was partially offset by a reduction of value-added tax expense of $2.4 million. Prior to November 2023, such taxes, as applicable to our Consumer revenue, were paid by Coursera to the taxing authorities. These taxes are now included in the fees charged to and paid by learners.
Current wording
General and administrative expenses for the three months ended September 30, 2024 were $27.4 million compared to $25.4 million for the three months ended September 30, 2023. The increase was primarily driven by a $3.1 million loss contingency recorded related to certain significant and non-recurring legal matters as described in Note 9, “Commitments and Contingencies” in the Notes to Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this Form 10-Q and an increase in personnel-related expenses of $2.0 million. This increase was partially offset by a reduction of value-added tax expense of $1.8 million. Prior to November 2023, such taxes, as applicable to our Consumer revenue, were paid by Coursera to the taxing authorities. These taxes are now included in the fees charged to and paid by learners.
Previous wording
General and administrative expenses for the six months ended June 30, 2024 were $54.5 million compared to $50.5 million for the six months ended June 30, 2023. The increase was primarily driven by $3.4 million related to third party advisory, legal, and other professional fees associated with evaluating an M&A transaction, $1.3 million in legal fees associated with significant and non-recurring legal matters, and an increase in personnel-related expenses of $4.0 million, including stock-based compensation expenses of $3.0 million. This increase was partially offset by a reduction of value-added tax expense of $5.1 million. Prior to November 2023, such taxes, as applicable to our Consumer revenue, were paid by Coursera to the taxing authorities. These taxes are now included in the fees charged to and paid by learners.
Current wording
General and administrative expenses for the nine months ended September 30, 2024 were $81.9 million compared to $75.9 million for the nine months ended September 30, 2023. The increase was primarily driven by an increase in personnel-related expenses of $6.1 million, including stock-based compensation expenses of $3.0 million, a $3.4 million loss contingency recorded related to certain significant and non-recurring legal matters as described in Note 9, “Commitments and Contingencies” in the Notes to Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this Form 10-Q, $1.2 million in legal fees associated with significant and non-recurring legal matters, and $3.4 million related to third party advisory, legal, and other professional fees associated with evaluating an M&A transaction. This increase was partially offset by a reduction of value-added tax expense of $6.9 million. Prior to November 2023, such taxes, as applicable to our Consumer revenue, were paid by Coursera to the taxing authorities. These taxes are now included in the fees charged to and paid by learners.
Previous wording
Restructuring related charges for the three months ended June 30, 2024 and 2023 were immaterial.
Current wording
There were no restructuring related charges for the three months ended September 30, 2024 and 2023.
Previous wording
Restructuring related charges for the six months ended June 30, 2024 and 2023 were $2.1 million related to a plan implemented in January 2024 to restructure our Enterprise segment sales force compared to $(5.8) million for the six months ended June 30, 2023 primarily relating to the reversal of stock-based compensation expense for the forfeitures of restricted stock units (“RSUs”) and stock options resulting from our global workforce reduction initiated in November 2022. Refer to Note 14, “Restructuring Related Charges,” in the notes to our Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this Form 10-Q for further information.
Current wording
Restructuring related charges for the nine months ended September 30, 2024 were $2.1 million related to a plan implemented in January 2024 to restructure our Enterprise segment sales force compared to $(5.8) million for the nine months ended September 30, 2023 primarily relating to the reversal of stock-based compensation expense for the forfeitures of RSUs and stock options resulting from our global workforce reduction initiated in November 2022. Refer to Note 14, “Restructuring Related Charges,” in the Notes to Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this Form 10-Q for further information.
Previous wording
Total other income, net for the three and six months ended June 30, 2024 primarily reflected interest income earned on cash and cash equivalents. Interest income was higher during the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 due to a rise in interest rates and our average rate of return on investments in U.S. Treasury securities.
Current wording
Total other income, net for the three and nine months ended September 30, 2024 primarily reflected interest income earned on cash and cash equivalents. Interest income was higher during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 due to higher interest rates and our average rate of return on investments in U.S. Treasury securities.
Previous wording
Income tax expense for the three and six months ended June 30, 2024 and 2023 was primarily related to our foreign operations.
Current wording
Income tax expense for the three and nine months ended September 30, 2024 and 2023 was primarily related to our foreign sourced income.
Previous wording
As of June 30, 2024, our principal source of liquidity was cash and cash equivalents totaling $708.8 million.
Current wording
As of September 30, 2024, our principal source of liquidity was cash and cash equivalents totaling $719.4 million.
Previous wording
Except as discussed in Note 6, Leases, and Note 9, Commitments and Contingencies, in the notes to our Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this Form 10-Q, there were no material changes outside of the ordinary course of business in our commitments and contractual obligations for the three and six months ended June 30, 2024 as compared to those in“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, set forth in our Form 10-K.
Current wording
Except as discussed in Note 6, Leases, and Note 9, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements (Unaudited) included in Part I, Item 1 of this Form 10-Q, there were no material changes outside of the ordinary course of business in our commitments and contractual obligations for the three and nine months ended September 30, 2024 as compared to those in“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, set forth in our Form 10-K.
Previous wording
During the three and six months ended June 30, 2024, we repurchased an aggregate of 2,668,017 shares and 3,099,800 shares of our common stock for $30.7 million and $36.7 million. During the three and six months ended June 30, 2023, we repurchased an aggregate of 4,520,293 shares of our common stock for $54.5 million.
Current wording
During the nine months ended September 30, 2024, we repurchased an aggregate of 3,099,800 shares of our common stock for $36.7 million, and during the three and nine months ended September 30, 2023, we repurchased an aggregate of 309,510 and 4,829,803 shares of our common stock for $3.9 million and $58.5 million.
Previous wording
For the six months ended June 30, 2024, net cash provided by operating activities was $48.3 million, primarily resulting from improved operating leverage and working capital driven by (i) an increase in accounts receivable collections and (ii) deferred revenue growth.
Current wording
For the nine months ended September 30, 2024, net cash provided by operating activities was $76.1 million, primarily resulting from improved operating leverage and working capital driven by (i) an increase in accounts receivable collections and (ii) deferred revenue growth.
Previous wording
For the six months ended June 30, 2023, net cash used in operating activities was $1.7 million, primarily resulting from our net loss and (i) an increase in accounts receivables caused by invoice timing and collections, (ii) an increase in educator partner grant payments, and (iii) an increase in deferred commissions, offset by (iv) deferred revenue growth and (v) an increase in content fees payable to our largest educator partner resulting from the extension of our multi-year agreement with them.
Current wording
For the nine months ended September 30, 2023, net cash provided by operating activities was $18.1 million, primarily resulting from improved working capital driven by (i) the timing of content fees payable to our largest educator partner due to the extension of our multi-year agreement with them and (ii) deferred revenue growth, partially offset by (iii) educator partner grants, and (iv) an increase in accounts receivables primarily from invoice and collection timing as well as an offset from an increase in our paid media spending.
Previous wording
Cash provided by operating activities increased by $50.0 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily resulting from (i) improved operating leverage and (ii) an increase in accounts receivables collections, partially offset by (iii) an increase in content fees payable to our largest educator partner resulting from the extension of our multi-year agreement with them.
Current wording
Cash provided by operating activities increased by $58.1 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily resulting from (i) improved operating leverage, (ii) an increase in accounts receivables collections, and (iii) a decrease in cash outflows related to educator partner grants as well as (iv) timing of prepayments to vendors, partially offset by (v) the timing of content fees payable to our largest educator partner resulting from the extension of our multi-year agreement with them.
Previous wording
For the six months ended June 30, 2024, net cash provided by investing activities was $52.8 million, primarily as a result of (i) proceeds from maturities of marketable securities, partially offset by (ii) capitalized internal-use software costs, (iii) purchases of content assets, and (iv) capital expenditures for property, equipment, and software.
Current wording
For the nine months ended September 30, 2024, net cash provided by investing activities was $41.7 million, primarily as a result of (i) proceeds from maturities of marketable securities, partially offset by (ii) capitalized internal-use software costs, (iii) purchases of content assets, and (iv) capital expenditures for property, equipment, and software.
Previous wording
For the six months ended June 30, 2023, net cash provided by investing activities was $103.6 million, primarily as a result of (i) proceeds from maturities of marketable securities, partially offset by (ii) purchases of marketable securities, (iii) capitalized internal-use software costs, (iv) capital expenditures of property, equipment, and software, and (v) purchases of content assets.
Current wording
For the nine months ended September 30, 2023, net cash provided by investing activities was $240.7 million, primarily as a result of (i) proceeds from maturities of marketable securities, partially offset by (ii) purchases of marketable securities, (iii) capitalized internal-use software costs, (iv) capital expenditures of property, equipment, and software, and (v) purchases of content assets.
Previous wording
For the six months ended June 30, 2024 and 2023, net cash used in financing activities was $48.7 million and $60.3 million, primarily as a result of (i) payments related to repurchases of common stock under the Repurchase Program and (ii) payments for tax withholdings on vesting of RSUs, partially offset by (iii) proceeds from the issuance of common stock from employee stock option exercises and (iv) proceeds from the employee stock purchase plan.
Current wording
For the nine months ended September 30, 2024 and 2023, net cash used in financing activities was $54.3 million and $72.7 million, primarily as a result of (i) payments related to repurchases of common stock under the Repurchase Program and (ii) payments for tax withholdings on vesting of RSUs, partially offset by (iii) proceeds from the issuance of common stock from employee stock option exercises and (iv) proceeds from the employee stock purchase plan.
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