Coursera, Inc.
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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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, 2026 · Filed Nov 5, 2026
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 2026-06-30; filed 2026-08-05.
0001651562-26-000063
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001651562-26-000072
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 200 previous paragraphs and 203 current paragraphs.
132 unchanged; 58 reworded; 13 added; 10 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 18 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 (13)
Current report
•our ability to identify, complete, and realize the expected benefits of strategic investments, acquisitions, and other transactions, and the effects of any such transactions on our business and financial results;
Current report
July 2026 Merger-Related Synergy Initiative
Current report
•Gross profit was $220.1 million, compared to $106.0 million a year ago. Non-GAAP gross profit was $240.0 million, compared to $108.0 million a year ago.
Current report
•Adjusted EBITDA was $61.5 million, compared to $15.6 million a year ago.
Current report
•Net cash provided by operating activities was $15.5 million, compared to $33.9 million a year ago.
Current report
Research and development expenses for the nine months ended September 30, 2026 were $127.1 million compared to $88.8 million for the nine months ended September 30, 2025. The increase was primarily due to a $22.9 million increase in personnel-related expenses, which was primarily attributable to the Merger, a $13.3 million increase in software subscription and allocated expenses, and a $1.4 million increase in consulting and professional service expenses.
Current report
General and administrative expenses for the three months ended September 30, 2026 were $36.6 million compared to $24.2 million for the prior-year quarter. The increase was primarily driven by the Merger, including a $4.2 million increase in personnel-related expenses, a $3.5 million increase in consulting and professional services, a $2.5 million increase in software subscription and allocated expenses, and a $0.6 million increase in charges to the credit losses reserve. Additionally, there was a $1.3 million increase related to business taxes and other tax reserves, as well as a $1.4 million increase in other non-recurring legal and regulatory matters. These increases were partially offset by a $2.1 million decrease related to stock-based compensation expense.
Current report
General and administrative expenses for the nine months ended September 30, 2026 were $90.5 million compared to $76.0 million for the nine months ended September 30, 2025. The increase was primarily driven by the Merger, including a $8.1 million increase in personnel-related expenses, a $4.9 million increase in consulting and professional services, a $3.6 million increase software subscription and allocated expenses, and a $0.8 million increase in charges to the credit losses reserve. Additionally, there was a $3.0 million increase related to business taxes and other tax reserves, as well as a $0.9 million increase in other non-recurring legal and regulatory matters. These increases were partially offset by a decrease of $8.4 million in stock-based compensation expense partially related to our former CEO’s leadership transition in the nine months ended September 30, 2025.
Current report
Goodwill Impairment Assessment
Current report
We evaluate goodwill for impairment on an annual basis, during the fourth quarter, or whenever events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. The fourth quarter of the fiscal year ending December 31, 2026, will be the first time goodwill will be tested for impairment following the Merger. When a quantitative assessment is required, this assessment requires the use of accounting estimates that require consideration of forecasted financial information to determine the fair value of our reporting units. These estimates include the use of discounted cash flow models under the income approach, and market data of comparable guideline companies under the market approach. Significant judgment is involved in performing these estimates.
Current report
Subsequent to September 30, 2026 and through the date of filing, we experienced a decline in our market capitalization as a result of the decline in our stock price. Should this decline continue or not reverse, we would incorporate this as a consideration in the goodwill impairment test performed during the fourth quarter of 2026. If our fourth quarter impairment test indicates that a reporting unit’s carrying amount exceeds its fair value, we would recognize a non-cash goodwill impairment charge. Such a charge could be material to our results of operations and financial position, although it would not affect our cash flows.
Current report
As of September 30, 2026, the aggregate carrying value of goodwill is $182.7 million, with $113.9 million assigned to our Enterprise reporting unit, and $68.8 million assigned to our Consumer reporting unit.
Current report
Table of Contents
Removed paragraphs (10)
Previous report
CFO Appointment
Previous report
The Board appointed Michael Foley as Senior Vice President, Chief Financial Officer and Treasurer, and principal financial officer on an interim basis, effective November 17, 2025, and as principal accounting officer, effective January 3, 2026. Mr. Foley was appointed to these roles on a permanent basis effective March 16, 2026.
Previous report
Restructuring and Expense Reduction Initiatives
Previous report
LearnVector is an AI-native learning company founded by Andrew Ng, who also serves as Chairman of Coursera’s Board of Directors (the “Board”). In light of the relationship between Mr. Ng and Coursera, in considering the Investment, the Board established a Special Committee comprised solely of directors that the Board determined to be independent and disinterested in the Investment (the “Special Committee”). The Board delegated to the Special Committee the power and authority to evaluate, negotiate, approve, or disapprove, the Investment and the Transaction Agreements. The Special Committee unanimously approved the Investment and authorized and directed Coursera to execute the Transaction Agreements.
Previous report
•Gross profit was $173.4 million, compared to $102.7 million a year ago. Non-GAAP gross profit was $185.8 million, compared to $104.7 million a year ago.
Previous report
•Adjusted EBITDA was $42.7 million, compared to $18.0 million a year ago.
Previous report
•Net cash (used in) provided by operating activities was $(19.8) million, compared to $35.5 million a year ago. Free Cash Flow was $(32.6) million, compared to $28.6 million a year ago.
Previous report
Research and development expenses for the six months ended June 30, 2026 were $75.0 million compared to $58.8 million for the six months ended June 30, 2025. The increase was primarily due to a $9.9 million increase in personnel-related expenses, which was primarily attributable to the Merger, and a $6.3 million increase in software subscription and allocated expenses.
Previous report
General and administrative expenses for the three months ended June 30, 2026 were $30.6 million compared to $24.9 million for the prior-year quarter. The increase was primarily driven by a $5.9 million increase in personnel-related expenses, which was primarily attributable to the Merger.
Previous report
General and administrative expenses for the six months ended June 30, 2026 were $53.9 million compared to $51.8 million for the six months ended June 30, 2025. The increase was driven by the Merger, primarily consisting of a $6.1 million increase in personnel-related expenses, although largely offset by a decrease of $6.1 million in stock-based compensation expense partially related to our former CEO’s leadership transition in the six months ended June 30, 2025.
Reworded paragraphs (58)
Previous wording
The following section discusses financial condition and results of operations of Coursera, Inc. and its subsidiaries (“Coursera,” the“Company,” “we,” “us,” or“our”) and should be read in conjunction with our Condensed Consolidated Financial Statements (Unaudited) and the related notes included in Item 1 of Part I of this report and together with our Consolidated Financial Statements and the related notes and the discussions under the heading“Management’s Discussions and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2025 included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 23, 2026 (“Form 10-K”).
Current wording
The following section discusses financial condition and results of operations of Coursera, Inc. and its subsidiaries (“Coursera,” the“Company,” “we,” “us,” or“our”) and should be read in conjunction with our Condensed Consolidated Financial Statements (Unaudited) and the related notes included in Item 1 of Part I of this report and together with our Consolidated Financial Statements and the related notes and the discussions under the heading“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2025 included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on February 23, 2026 (“Form 10-K”), and amended on April 30, 2026.
Previous wording
•our ability to successfully develop, launch, maintain, expand, integrate, and scale new programs, offerings, and features, including artificial intelligence (“AI”) technologies;
Current wording
•our ability to successfully develop, launch, maintain, expand, integrate, and scale new programs, offerings, and features, including artificial intelligence (“AI”) technologies, such as our unified, next-generation platform, code-named Project Helix;
Previous wording
We partner with over 100,000 instructors, encompassing expert practitioners and more than 400 university and industry partners, to develop and distribute educational content that is modular, flexible, and affordable.
Current wording
We partner with over 100,000 instructors, encompassing expert practitioners and over 425 university and industry partners, to develop and distribute educational content that is modular, flexible, and affordable.
Previous wording
Coursera offers a range of learning products to meet diverse educational and professional development needs, from hands-on labs to build practical skills to industry micro-credentials and accredited degree programs that can advance a career. We continue to invest in platform capabilities to enhance and personalize learning experiences and deliver skills development solutions on a global scale. We are also investing in a unified, next-generation platform designed to connect trusted content, skills intelligence, and AI-powered learning experiences across our global ecosystem. Recent innovations include generative AI-powered capabilities for tutoring, translation, interactive role play, and course authoring, as well as role-based learning solutions such as Skills Tracks. These capabilities enable content creators and institutions to deliver targeted learning aligned with evolving workforce needs. Organizations across the public and private sectors use Coursera to upskill and reskill employees, students, and citizens in fields such as generative AI, data science, technology, and business.
Current wording
Coursera offers a range of learning products to meet diverse educational and professional development needs, from hands-on labs to build practical skills to industry micro-credentials and accredited degree programs that can advance a career. We continue to invest in platform capabilities to enhance and personalize learning experiences and deliver skills development solutions on a global scale. We are also investing in a unified, next-generation platform, code-named Project Helix, designed to connect trusted content, skills intelligence, and AI-powered learning experiences across our global ecosystem. Recent innovations include generative AI-powered capabilities for tutoring, translation, interactive role play, and course authoring, as well as administrator dashboards that provide insights into workforce skills development to help customers assess readiness and guide learning priorities. These capabilities enable content creators and institutions to deliver targeted learning aligned with evolving workforce needs. Organizations across the public and private sectors use Coursera to upskill and reskill employees, students, and citizens in fields such as generative AI, data science, technology, and business.
Previous wording
Coursera serves individual learners and institutional customers through two operating segments: Enterprise and Consumer. The Enterprise segment engages employers, academic institutions, and government organizations through a direct sales team and reseller partnerships, as well as data-driven insights derived from activity on the Consumer platform. The Consumer segment focuses on attracting learners through branded content, institutional partnerships, and digital marketing, supported by personalized discovery and localized recommendations. Together, our Enterprise and Consumer segments create a connected ecosystem that enables us to serve individuals and organizations throughout their skills development journeys while continuously improving our products through shared data, skills intelligence, and learning insights.
Current wording
Coursera serves individual learners and institutional customers through two operating segments: Enterprise and Consumer. The Enterprise segment engages employers, academic institutions, and government organizations through a direct sales team and reseller partnerships, supported by data-driven insights derived from activity on the Consumer platforms. The Consumer segment focuses on attracting learners through branded content, institutional partnerships, and digital marketing, supported by personalized discovery and localized recommendations. Together, our Enterprise and Consumer segments create connected ecosystems that enable us to serve individuals and organizations throughout their skills development journeys while continuously improving our products through shared data, skills intelligence, and learning insights.
Previous wording
On May 11, 2026 (“Closing Date”), we completed an Agreement and Plan of Merger (the “Merger Agreement”) to combine with Udemy, Inc. (“Udemy”), an online learning platform (the “Merger”). Under the terms of the Merger Agreement, each issued and outstanding share of Udemy common stock was converted into the right to receive 0.800 shares of our common stock. We accounted for the Merger as a business combination, and the financial results of Udemy are included in our Condensed Consolidated Financial Statements (Unaudited) prospectively from the Closing Date. Prior period financial statements have not been recast and do not include the financials results of Udemy. Refer to Note 4, Business Combination, included in Part I, Item 1 of this Form 10-Q for further information.
Current wording
On May 11, 2026 (“Closing Date”), we completed the merger (the “Merger”) with Udemy, Inc. (“Udemy”), an online learning platform, pursuant to our previously executed Agreement and Plan of Merger (the “Merger Agreement”). Under the terms of the Merger Agreement, each issued and outstanding share of Udemy common stock was converted into the right to receive 0.800 shares of our common stock. We accounted for the Merger as a business combination, and the financial results of Udemy are included in our Condensed Consolidated Financial Statements (Unaudited) prospectively from the Closing Date. Prior period financial statements have not been recast and do not include the financial results of Udemy. Refer to Note 4, Business Combination, included in Part I, Item 1 of this Form 10-Q for further information.
Previous wording
During the second quarter of 2026, we incurred significant cash and non-cash charges related to the Merger and the integration of Udemy, primarily consisting of transaction and integration costs, as well as personnel and severance costs incurred as a direct result of the Merger. These costs are associated with our efforts to complete the Merger, integrate the businesses, and realize the operational synergies expected from the Merger. Refer to Note 15, Merger, integration, and restructuring related costs, included in Part I, Item 1 of this Form 10-Q for further information.
Current wording
During the three and nine months ended September 30, 2026, we incurred significant cash and non-cash charges related to the Merger and the integration of Udemy, primarily consisting of transaction and integration costs, as well as personnel and severance costs incurred as a direct result of the Merger. These costs are associated with our efforts to complete the Merger, integrate the businesses, and realize the operational synergies expected from the Merger. Refer to Note 15, Merger, integration, and restructuring related costs, included in Part I, Item 1 of this Form 10-Q for further information.
Previous wording
On July 6, 2026, in connection with the Merger and our integration and synergy plans, we announced a commitment to a workforce reduction plan intended to align our cost structure, operating model, and personnel needs with our business objectives and operational priorities. As a result of this initiative, we expect to recognize expenses of approximately $9 million to $11 million, primarily consisting of termination benefits to the impacted employees, including severance payments and healthcare benefits. We expect substantially all of these charges to be cash expenditures incurred during the third and fourth quarters of 2026. Stock-based compensation expenses associated with the workforce reduction plan are not expected to be material.
Current wording
On July 6, 2026, in connection with the Merger and our integration and synergy plans, we announced a commitment to a workforce reduction plan intended to align our cost structure, operating model, and personnel needs with our business objectives and operational priorities. As a result of this initiative, we recognized restructuring charges of $12.9 million mainly related to personnel expenses, primarily consisting of termination benefits to the impacted employees, including severance payments and healthcare benefits, as well as an immaterial amount of stock-based compensation expense. As of September 30, 2026, there were $1.5 million of unpaid liabilities included in the Condensed Consolidated Balance Sheets as accrued compensation and benefits, substantially all of which are expected to be paid during the year ended December 31, 2026.
Previous wording
On July 28, 2026, we announced a strategic equity investment in LearnVector Inc. (“LearnVector”) pursuant to which we entered into a Series A Preferred Stock Purchase Agreement and related ancillary agreements (collectively, the “Transaction Agreements”) with LearnVector. Pursuant to the Transaction Agreements, we purchased shares of LearnVector’s Series A Preferred Stock for an aggregate purchase price of $100 million (the “Investment”), representing 33.33% of the ownership interest in LearnVector on a fully diluted basis as of the date of the Investment.
Current wording
In July 2026, we made a strategic equity investment in LearnVector Inc. (“LearnVector”), purchasing shares of LearnVector’s Series A Preferred Stock for an aggregate purchase price of $100 million, representing 33.33% of the ownership interest in LearnVector on a fully diluted basis as of the date of the investment. LearnVector is an AI-native learning company founded and led by Dr. Andrew Ng, Coursera’s co-founder and Chair of our Board of Directors, and is therefore considered a related party. The investment and the investment agreements were approved by a Special Committee of the Board composed solely of directors whom the Board determined to be independent and disinterested. Refer to Note 13, Related Party Transactions, included in Part I, Item 1 of this Form 10-Q for further information.
Previous wording
Key Financial Results for Second Quarter 2026
Current wording
Key Financial Results for Third Quarter 2026
Previous wording
•Total revenue was $298.6 million, including $103.8 million relating to the Merger with Udemy, up 60% from $187.1 million a year ago.
Current wording
•Total revenue was $376.7 million, including $181.8 million relating to the Merger with Udemy, up 94% from $194.2 million a year ago.
Previous wording
•Net loss was $(80.4) million, compared to $(7.8) million a year ago. Non-GAAP net income was $40.4 million, compared to $19.3 million a year ago.
Current wording
•Net loss was $(25.6) million, compared to $(8.6) million a year ago. Non-GAAP net income was $57.1 million, compared to $16.7 million a year ago.
Previous wording
•Net loss per share was $(0.34), compared to $(0.05) a year ago. Non-GAAP net income per share was $0.17, compared to $0.12 a year ago.
Current wording
•Net loss per share was $(0.10), compared to $(0.05) a year ago. Non-GAAP net income per share was $0.21, compared to $0.10 a year ago.
Previous wording
Ability to attract and retain trusted content creators. We believe our reach, scale, and reputation position us as a valuable partner for leading organizations and institutions seeking to develop and distribute content and credentials to a global audience. To remain a preferred platform for trusted content creators, we continue to invest in growing and engaging our learner base, enhancing the learning and authoring experience through AI-powered product innovations (e.g., Coach, AI powered role play and translations, and Course Builder), and providing a suite of academic integrity features to verify skills mastery (e.g., identity verification and anti-plagiarism detection). Additionally, we are focused on providing personalized discovery, career guidance, and recommendations, increasing conversion into paid offerings through efficient marketing, and enhancing data-driven insights and tools for learners, content creators, organizations, and institutions.
Current wording
Ability to attract and retain trusted content creators. We believe our reach, scale, and reputation position us as a valuable partner for expert practitioners, leading organizations, and institutional partners seeking to develop and distribute content and credentials to a global audience. To remain a preferred platform for trusted content creators, we continue to invest in growing and engaging our learner base, enhancing the learning and authoring experience through AI-powered product innovations (e.g., tutoring, role play, translations, and course creation capabilities), and providing a suite of academic integrity features to verify skills mastery (e.g., identity verification and anti-plagiarism detection). Additionally, we are focused on providing personalized discovery, career guidance, and recommendations, increasing conversion into paid offerings through efficient marketing, and enhancing data-driven insights and tools for learners, content creators, organizations, and institutions.
Previous wording
Comparison of the Three and Six Months Ended June 30, 2026 and 2025
Current wording
Comparison of the Three and Nine Months Ended September 30, 2026 and 2025
Previous wording
The comparability of our operating results is impacted by the Merger with Udemy, which closed on May 11, 2026, given the timing of the acquisition and the relative size of the acquired business. We expect the trends and results of operations of the combined company to be materially different than our financial results prior to the Closing Date. When comparing the results of operations for the three and six months ended June 30, 2026 to the same periods in the prior year, we may provide qualitative or quantitative disclosure about revenue, cost of revenue, and operating expenses contributed by Udemy after the Closing Date, where such disclosure would be meaningful and the impact is separately identifiable.
Current wording
The comparability of our operating results is impacted by the Merger with Udemy, which closed on May 11, 2026, given the timing of the acquisition and the relative size of the acquired business. We expect the trends and results of operations of the combined company to be materially different than our financial results prior to the Closing Date. When comparing the results of operations for the three and nine months ended September 30, 2026 to the same periods in the prior year, we may provide qualitative or quantitative disclosure about revenue, cost of revenue, and operating expenses contributed by Udemy after the Closing Date, where such disclosure would be meaningful and the impact is separately identifiable.
Previous wording
Revenue for the three months ended June 30, 2026 was $298.6 million, an increase of $111.5 million, or 60%, compared to $187.1 million for the prior-year quarter. Of this increase, $103.8 million was attributable to the inclusion of Udemy revenue following the completion of the Merger. Excluding the impact of the Merger, revenue increased $7.7 million, or 4%, supported by increased Coursera Plus subscription adoption, ongoing platform improvements, and localized pricing, payment, and promotional capabilities.
Current wording
Revenue for the three months ended September 30, 2026 was $376.7 million, an increase of $182.5 million, or 94%, compared to $194.2 million for the prior-year quarter. Of this increase, $181.8 million was attributable to the inclusion of Udemy revenue following the completion of the Merger. Excluding the impact of the Merger, revenue increased $0.7 million, or 0.3%, consisting of a $4.2 million increase in Enterprise revenue partially offset by a $3.5 million decrease in Consumer revenue.
Previous wording
Enterprise revenue for the three months ended June 30, 2026 increased by $75.7 million, or 118%, compared to the prior-year quarter. This increase was primarily driven by growth in subscription revenue of $75.3 million, largely due to the inclusion of Udemy revenue.
Current wording
Enterprise revenue for the three months ended September 30, 2026 increased by $137.0 million, or 214%, compared to the prior-year quarter. This increase was primarily driven by growth in subscription revenue of $136.2 million, largely due to the inclusion of Udemy revenue.
Previous wording
Consumer revenue for the three months ended June 30, 2026 increased by $35.8 million, or 29%, compared to the prior-year quarter. This growth was primarily driven by a $19.4 million increase in subscription revenue, which was attributable to the inclusion of $9.8 million of Udemy revenue and higher Coursera Plus adoption of $9.6 million. Additionally, transactional and other revenue increased by $18.7 million, largely due to the inclusion of Udemy revenue. These increases were partially offset by a $2.3 million decline in degrees revenue.
Current wording
Consumer revenue for the three months ended September 30, 2026 increased by $45.5 million, or 35%, compared to the prior-year quarter. This growth was primarily driven by a $19.4 million increase in subscription revenue, which was attributable to the inclusion of $18.4 million of Udemy revenue and higher Coursera subscription revenue of $1.0 million. Additionally, transactional and other revenue increased by $28.0 million, largely due to the inclusion of Udemy revenue. These increases were partially offset by a $1.9 million decline in degrees revenue.
Previous wording
Revenue for the six months ended June 30, 2026 was $494.3 million, an increase of $127.9 million, or 35%, compared to $366.4 million for the six months ended June 30, 2025. Of this increase, $103.8 million was attributable to the inclusion of Udemy revenue following the completion of the Merger. Excluding the impact of the Merger, revenue increased $24.1 million, or 7%, supported by increased Coursera Plus subscription adoption, ongoing platform improvements, and localized pricing, payment, and promotional capabilities.
Current wording
Revenue for the nine months ended September 30, 2026 was $871.0 million, an increase of $310.4 million, or 55%, compared to $560.6 million for the nine months ended September 30, 2025. Of this increase, $285.6 million was attributable to the inclusion of Udemy revenue following the completion of the Merger. Excluding the impact of the Merger, revenue increased $24.8 million, or 4.4%, consisting of a $15.0 million increase in Consumer revenue and a $9.8 million increase in Enterprise revenue.
Previous wording
Enterprise revenue for the six months ended June 30, 2026 increased by $80.2 million, or 64%, compared to the six months ended June 30, 2025. This increase was primarily driven by growth in subscription revenue of $79.8 million, largely due to the inclusion of Udemy revenue.
Current wording
Enterprise revenue for the nine months ended September 30, 2026 increased by $217.2 million, or 114%, compared to the nine months ended September 30, 2025. This increase was primarily driven by growth in subscription revenue of $216.0 million, largely due to the inclusion of Udemy revenue.
Previous wording
Consumer revenue for the six months ended June 30, 2026 increased by $47.7 million, or 20%, compared to the six months ended June 30, 2025. This growth was primarily driven by a $32.1 million increase in subscription revenue, which was attributable to higher Coursera Plus subscription adoption of $22.3 million and the inclusion of $9.8 million of Udemy revenue. Additionally, transactional and other revenue increased by $18.4 million, largely due to the inclusion of Udemy revenue. These increases were partially offset by a $2.8 million decline in degrees revenue.
Current wording
Consumer revenue for the nine months ended September 30, 2026 increased by $93.2 million, or 25%, compared to the nine months ended September 30, 2025. This growth was primarily driven by a $51.5 million increase in subscription revenue, which was attributable to the inclusion of $28.1 million of Udemy revenue and higher Coursera subscription revenue of $23.4 million. Additionally, transactional and other revenue increased by $46.4 million, largely due to the inclusion of Udemy revenue. These increases were partially offset by a $4.7 million decline in degrees revenue.
Previous wording
Cost of revenue for the three months ended June 30, 2026 was $125.2 million compared to $84.4 million for the prior-year quarter. The primary drivers of the increase in cost of revenue were a $17.4 million increase in content-related costs, a $13.0 million increase in platform operation, customer support, and maintenance costs, and a $9.0 million increase in amortization expense of intangible assets, all of which were primarily attributable to the Merger.
Current wording
Cost of revenue for the three months ended September 30, 2026 was $156.6 million compared to $88.2 million for the prior-year quarter. The primary drivers of the increase in cost of revenue were a $27.8 million increase in content-related costs, a $21.9 million increase in platform operation, customer support, and maintenance costs, and a $16.7 million increase in amortization expense of intangible assets, all of which were primarily attributable to the Merger.
Previous wording
Content costs for the Enterprise segment were $29.0 million and $19.5 million for the three months ended June 30, 2026 and 2025, with content costs as a percentage of revenue of 20.7% and 30.3% for the same periods. Content costs for the Consumer segment were $55.4 million and $47.5 million for the three months ended June 30, 2026 and 2025, with content costs as a percentage of revenue of 34.9% and 38.7% for the same periods. Content costs as a percentage of revenue for both segments decreased due to higher learner engagement in content created under production arrangements with lower revenue share and the introduction of the platform maintenance fee in January 2026, plus the impact of the Merger contributing more favorable content economics and a continued shift toward subscription revenue.
Current wording
Content costs for the Enterprise segment were $37.5 million and $19.4 million for the three months ended September 30, 2026 and 2025, with content costs as a percentage of revenue of 18.7% and 30.4% for the same periods. Content costs for the Consumer segment were $60.3 million and $50.6 million for the three months ended September 30, 2026 and 2025, with content costs as a percentage of revenue of 34.3% and 38.8% for the same periods. Content costs as a percentage of revenue for both segments decreased due to the impact of the Merger contributing more favorable content economics and a continued shift toward subscription revenue, as well as the introduction of the platform maintenance fee in January 2026.
Previous wording
Gross margin was 58.1% for the three months ended June 30, 2026, an increase from 54.9% for the prior year quarter. The increase in gross margin was driven by lower content cost rates in both our Enterprise and Consumer segments, partially offset by increases in platform operation, customer support, and maintenance costs and amortization expense of intangible assets.
Current wording
Gross margin was 58.4% for the three months ended September 30, 2026, an increase from 54.6% for the prior year quarter. The increase in gross margin was driven by lower content cost rates in both our Enterprise and Consumer segments, partially offset by increases in platform operation, customer support, and maintenance costs and amortization expense of intangible assets.
Previous wording
Cost of revenue for the six months ended June 30, 2026 was $212.3 million compared to $165.8 million for the six months ended June 30, 2025. The primary drivers of the increase in cost of revenue were a $20.7 million increase in content-related costs, a $15.1 million increase in platform operation, customer support, and maintenance costs, and a $8.8 million increase in amortization expense of intangible assets, all of which were primarily attributable to the Merger.
Current wording
Cost of revenue for the nine months ended September 30, 2026 was $368.9 million compared to $254.0 million for the nine months ended September 30, 2025. The primary drivers of the increase in cost of revenue were a $48.5 million increase in content-related costs, a $37.0 million increase in platform operation, customer support, and maintenance costs, and a $25.5 million increase in amortization expense of intangible assets, all of which were primarily attributable to the Merger.
Previous wording
Content costs for the Enterprise segment were $48.3 million and $38.0 million for the six months ended June 30, 2026 and 2025, with content costs as a percentage of revenue of 23.4% and 30.2% for the same periods. Content costs for the Consumer segment were $103.1 million and $92.7 million for the six months ended June 30, 2026 and 2025, with content costs as a percentage of revenue of 35.8% and 38.6% for the same periods. Content costs as a percentage of revenue for both segments decreased due to higher learner engagement in content created under production arrangements with lower revenue share and the introduction of the platform maintenance fee in January 2026, plus the impact of the Merger contributing more favorable content economics and a continued shift toward subscription revenue.
Current wording
Content costs for the Enterprise segment were $85.8 million and $57.4 million for the nine months ended September 30, 2026 and 2025, with content costs as a percentage of revenue of 21.1% and 30.2% for the same periods. Content costs for the Consumer segment were $163.4 million and $143.3 million for the nine months ended September 30, 2026 and 2025, with content costs as a percentage of revenue of 35.2% and 38.7% for the same periods. Content costs as a percentage of revenue for both segments decreased due to the impact of the Merger contributing more favorable content economics and a continued shift toward subscription revenue, as well as the introduction of the platform maintenance fee in January 2026.
Previous wording
Gross margin was 57.1% for the six months ended June 30, 2026, an increase from 54.7% for the six months ended June 30, 2025. The increase in gross margin was driven by lower content cost rates in both our Enterprise and Consumer segments, partially offset by increases in platform operation, customer support, and maintenance costs and amortization expense of intangible assets.
Current wording
Gross margin was 57.6% for the nine months ended September 30, 2026, an increase from 54.7% for the nine months ended September 30, 2025. The increase in gross margin was driven by lower content cost rates in both our Enterprise and Consumer segments, partially offset by increases in platform operation, customer support, and maintenance costs and amortization expense of intangible assets.
Previous wording
Total operating expenses for thethree and six months ended June 30, 2026 were $258.1 million and $392.0 million compared to $117.8 million and $230.1 million for thethree and six months ended June 30, 2025.
Current wording
Total operating expenses for thethree and nine months ended September 30, 2026 were $249.0 million and $641.0 million compared to $121.6 million and $351.7 million for thethree and nine months ended September 30, 2025.
Previous wording
Research and development expenses for the three months ended June 30, 2026 were $43.7 million compared to $29.3 million for the prior-year quarter. The increase was primarily due to a $9.4 million increase in personnel-related expenses, which was primarily attributable to the Merger, and a $4.6 million increase in software subscription and allocated expenses.
Current wording
Research and development expenses for the three months ended September 30, 2026 were $52.1 million compared to $30.0 million for the prior-year quarter. The increase was primarily due to a $13.4 million increase in personnel-related expenses, a $6.9 million increase in software subscription and allocated expenses, and a $0.9 million increase in consulting and professional service expenses, all of which were primarily attributable to the Merger.
Previous wording
Sales and marketing expenses for the three months ended June 30, 2026 were $104.0 million compared to $63.6 million for the prior-year quarter. The increase was primarily due to a $15.3 million increase in personnel-related expenses, a $15.2 million increase in marketing and advertising expenses, a $4.6 million increase in amortization of acquired intangible assets, and a $4.2 million increase in software subscription and allocated expenses, all of which were primarily attributable to the Merger.
Current wording
Sales and marketing expenses for the three months ended September 30, 2026 were $129.5 million compared to $67.4 million for the prior-year quarter. The increase was primarily due to a $21.2 million increase in marketing and advertising expenses, a $17.6 million increase in personnel-related expenses, an $8.1 million increase in amortization of acquired intangible assets, a $7.3 million increase in software subscription and allocated expenses, a $3.0 million increase in consulting and professional services, a $2.8 million increase in amortization of deferred contract costs, and a $1.2 million increase in stock-based compensation expense, all of which were primarily attributable to the Merger.
Previous wording
Sales and marketing expenses for the six months ended June 30, 2026 were $173.3 million compared to $120.4 million for the six months ended June 30, 2025. The increase was primarily due to a $24.7 million increase in marketing and advertising expenses, a $17.0 million increase in personnel-related expenses, a $4.6 million increase in amortization of acquired intangible assets, and a $4.9 million increase in software subscription and allocated expenses, all of which were primarily attributable to the Merger.
Current wording
Sales and marketing expenses for the nine months ended September 30, 2026 were $302.8 million compared to $187.8 million for the nine months ended September 30, 2025. The increase was primarily due to a $45.9 million increase in marketing and advertising expenses, partially attributable to the Merger, a $33.3 million increase in personnel-related expenses, a $12.8 million increase in amortization of acquired intangible assets, a $12.1 million increase in software subscription and allocated expenses, a $4.8 million increase in consulting and professional services, a $3.0 million increase in amortization of deferred contract costs, and a $2.4 million increase in stock-based compensation expense, all of which were primarily attributable to the Merger.
Previous wording
Merger, integration, and restructuring related costs were $79.8 million and $89.8 million for the three and six months ended June 30, 2026, primarily consisting of legal and regulatory fees, transaction costs, other professional services, and personnel and severance costs that were incurred directly as a result of the Merger. For the three and six months ended June 30, 2025, merger, integration, and restructuring related costs were $0.0 million and $(0.9) million, relating to our restructuring initiative originally announced in October 2024. Refer to Note 15, Merger, integration, and restructuring related costs, included in Part I, Item 1 of this Form 10-Q for further information.
Current wording
Merger, integration, and restructuring related costs were $30.8 million and $120.6 million for the three and nine months ended September 30, 2026, primarily consisting of legal and regulatory fees, transaction costs, other professional services, and personnel and severance costs that were incurred directly as a result of the Merger. For the three and nine months ended September 30, 2025, merger, integration, and restructuring related costs were zero and $(0.9) million, relating to our restructuring initiative originally announced in October 2024. Refer to Note 15, Merger, integration, and restructuring related costs, 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, 2026 was primarily comprised of interest income earned on cash, cash equivalents, and marketable securities. Total other income, net decreased during the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, primarily due to lower interest income generated by existing investments, as interest rates declined across the comparative periods and previously-invested cash was used to fund share repurchase activities and costs related to the Merger. This was partially offset by an increase in interest income generated by investments in cash equivalents and marketable securities acquired in connection with the Merger with Udemy.
Current wording
Total other income, net for the three and nine months ended September 30, 2026 was primarily comprised of interest income earned on cash, cash equivalents, and marketable securities. Total other income, net decreased during the three and nine months ended September 30, 2026 compared to the corresponding periods in 2025, primarily due to higher interest expense related to indirect tax reserves and lower interest income earned on our invested cash, cash equivalents, and marketable securities balances due to lower average interest rates. Other expense, net for the three and nine months ended September 30, 2026 consisted primarily of foreign exchange gains and losses.
Previous wording
Income tax expense for the three and six months ended June 30, 2026 and 2025 was primarily related to state and foreign taxes.
Current wording
Income tax expense for the three and nine months ended September 30, 2026 and 2025 was primarily related to state and foreign taxes.
Previous wording
As of June 30, 2026, our principal source of liquidity was cash, cash equivalents, and marketable securities totaling $982.2 million.
Current wording
As of September 30, 2026, our principal source of liquidity was unrestricted cash, cash equivalents, and marketable securities totaling $775.5 million.
Previous wording
Since our inception, we have financed our operations primarily through proceeds from the issuance of redeemable convertible preferred stock, our initial public offering completed in April 2021, and cash generated from business operations. Our principal uses of cash in the three and six months ended June 30, 2026 and 2025 include the funding of our business operations, merger and integration related costs, investments in our internal-use software, purchases of content assets, and repurchases of our common stock, as discussed below.
Current wording
Since our inception, we have financed our operations primarily through proceeds from the issuance of redeemable convertible preferred stock, our initial public offering completed in April 2021, and cash generated from business operations. Our principal uses of cash in the three and nine months ended September 30, 2026 and 2025 include the funding of our business operations, merger and integration related costs, purchases of strategic investments, investments in our internal-use software, purchases of content assets, and repurchases of our common stock, as discussed below.
Previous wording
Except as discussed in Note 7, Leases, and Note 10, Commitments and Contingencies, 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, 2026 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 7, Leases, and Note 10, Commitments and Contingencies, 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, 2026 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, 2026, we repurchased an aggregate of approximately 16.5 million shares of our common stock for $90.3 million pursuant to a Rule 10b5-1 plan, including $0.2 million of commissions. As of June 30, 2026, we had $409.9 million remaining under the Repurchase Program.
Current wording
During the three months ended September 30, 2026, we repurchased an aggregate of 18.1 million shares of our common stock for $101.6 million pursuant to a Rule 10b5-1 plan, including $0.3 million of commissions. During the nine months ended September 30, 2026, we repurchased an aggregate of 34.6 million shares of our common stock for $191.9 million, including $0.5 million of commissions. As of September 30, 2026, we had $308.6 million remaining under the Repurchase Program.
Previous wording
In July 2026, we repurchased an aggregate of approximately 10.6 million shares of our common stock for $60.1 million, including $0.2 million of commissions. To date, we have utilized our existing cash and cash equivalents to fund repurchases under the Repurchase Program.
Current wording
Between October 1, 2026 and November 4, 2026, we repurchased 7.1 million shares of our common stock for $33.6 million, including $0.1 million of commissions. To date, we have utilized our existing cash and cash equivalents to fund repurchases under the Repurchase Program.
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