Coursera, Inc.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In millions, except per share amounts and percentages)

1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

Basis of Presentation

The accompanying Condensed Consolidated Financial Statements (Unaudited) of Coursera, Inc., a Delaware public benefit corporation, and its subsidiaries (“Coursera,” the “Company,” “we,” “us,” or “our”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and following the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. These Condensed Consolidated Financial Statements (Unaudited) have been prepared on the same basis as our annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair statement of our financial information. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or for any other interim period or for any other future year.

These Condensed Consolidated Financial Statements (Unaudited) should be read in conjunction with the Consolidated Financial Statements contained 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”) as amended on April 30, 2026.

Description of Business

Coursera operates global online learning platforms that aim to provide access to world-class, affordable, and relevant education and skills training by connecting learners, institutions, and content creators across our global ecosystem. We deliver trusted content, branded credentials, and product capabilities through our platforms, leveraging our global reach, data, and technology to make learning more customizable, contextual, and extensible for both individual learners and institutions. We partner with trusted content creators, from expert practitioners to university and industry partners, to offer high-quality adult education and workforce training solutions to a wide range of individuals, businesses, organizations, and governments. We serve individual learners directly and also sell to institutions, including employers, colleges and universities, and governments, enabling their employees, students, and citizens to develop and demonstrate critical skills aligned with evolving workforce needs. Our corporate headquarters is located in Mountain View, California.

Reporting Segments

We conduct our operations throughtwo reporting segments: Enterprise and Consumer. Refer to Note 14 for additional information.

Transaction with Udemy

On May 11, 2026 (“Closing Date”), we completed our previously announced all-stock combination with Udemy, Inc. (“Udemy”), an online learning platform, (the “Merger”) pursuant to an agreement and plan of merger dated as of December 17, 2025 (the “Merger Agreement”). Pursuant to the terms of the Merger Agreement, Udemy became a wholly-owned subsidiary of Coursera, Inc. Refer to Note 4 for additional information.

Reclassification

As of September 30, 2026, we changed the presentation of our Condensed Consolidated Balance Sheets to separately present “Strategic investments,” which were previously included within “Other assets.” Prior period amounts have been reclassified to conform to the current period presentation. As a result, as of December 31, 2025, $1.7 million was reclassified from “Other assets” to “Strategic investments.” The reclassification had no impact on total assets, total liabilities, stockholders’ equity, results of operations, or cash flows, and did not result in a restatement of previously reported financial statements.

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During the three months ended June 30, 2026, we changed the caption for “Restructuring related charges” to “Merger, integration, and restructuring related costs” within operating expenses in our Condensed Consolidated Statements of Operations. In conjunction with this update, $6.2 million of merger and acquisition related transaction costs and $3.8 million of integration related costs recorded in “General and administrative expenses” during the three months ended March 31, 2026 are now reflected in “Merger, integration, and restructuring related costs.” Additionally, an insignificant amount of other restructuring costs recorded in “Restructuring related charges” during the nine months ended September 30, 2025 are now reflected in “Merger, integration, and restructuring related costs.” This reclassification had no impact on total operating expenses, loss from operations, net loss, or net loss per share previously reported in any of the periods presented.

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The Condensed Consolidated Financial Statements (Unaudited) include the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Summary of Significant Accounting Policies

There have been no significant changes to our significant accounting policies as of and for the three and nine months ended September 30, 2026, as compared to the significant accounting policies described in our Form 10-K, other than those described below.

Concentrations of Risk

Financial instruments that potentially subject us to concentration of credit risk consist of cash, cash equivalents, and marketable securities. We only invest in high-credit-quality instruments and maintain our cash equivalents and marketable securities in fixed-income securities. We place our cash primarily with domestic financial institutions that are federally insured within statutory limits.

For the purpose of assessing the concentration of credit risk with respect to accounts receivable and significant customers, we treat a group of customers under common control or customers that are affiliates of each other as a single customer. For the three and nine months ended September 30, 2026 and 2025, we did not have any customers that accounted for more than 10% of our revenue. As of September 30, 2026, we did not have any customers that accounted for more than 10% of our net accounts receivable balance.

Our business model relies on educational content and credentialing programs from content creators. Our largest content creator has global brand recognition and supplies a variety of in-demand content across multiple domains. The loss of, or significant reduction in, this partnership or one of our other large content creator relationships could have a material adverse effect on our financial position, results of operations, and cash flows.

Use of Estimates

The preparation of the Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and related disclosures as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience, current conditions, and various other factors that we believe to be reasonable under the circumstances. Significant items subject to such estimates, judgments, and assumptions include, but are not limited to, those related to the determination of principal versus agent and variable consideration in our revenue contracts; stock-based compensation expense; period of benefit for capitalized commissions; internal-use software costs; useful lives of long-lived assets; the carrying value of operating lease right-of-use assets; the fair value and associated useful lives of intangible assets and goodwill acquired through business combinations; loss contingencies and potential recoveries; the valuation of marketable securities and strategic investments in privately held companies, including impairments; the estimated service period for consumer revenue arrangements with lifetime access; and income tax expense, including the valuation of deferred tax assets and liabilities, among others. Actual results could differ from those estimates, and any such differences could be material to our Condensed Consolidated Financial Statements (Unaudited).

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Marketable Securities

Marketable securities consist of U.S. Treasury securities, with an original maturity between three months and one year at the date of purchase, and are classified as available-for-sale (“AFS”) debt securities. We view these securities as available to support current operations and have classified all AFS debt securities as current assets. AFS debt securities are initially recorded at cost and periodically adjusted to fair value with unrealized gains and losses reported as a component of accumulated other comprehensive income in the Condensed Consolidated Balance Sheets. We evaluate our AFS debt securities with an unamortized cost basis in excess of estimated fair value to determine what amount of that difference, if any, is caused by expected credit losses. Realized gains and losses as well as credit-related impairment losses are included in other expense, net in the Condensed Consolidated Statements of Operations. Any remaining impairment is included in accumulated other comprehensive income (loss).

Strategic investments primarily consist of investments in equity securities of privately held companies without readily determinable fair values and in which we do not have controlling interests. We also hold a convertible note investment with a private company.

Investments in equity securities without readily determinable fair values are initially recorded at cost and are subsequently adjusted to fair value only in the event of either price changes from observable transactions in the same or a similar security from the same issuer or impairment. This practice is referred to as the measurement alternative. We evaluate our strategic investments measured under the measurement alternative for impairment at each reporting period. This evaluation consists of several potential qualitative and quantitative impairment indicators including, but not limited to, the investee's financial metrics, whether there were any significant adverse changes in the economic environment or general market conditions of the geographies and industries in which the investee operates, and any other publicly available information that may affect the value of the investment.

When remeasured to fair value, privately held equity securities are valued using significant unobservable inputs or data in inactive markets. This valuation requires judgment due to the absence of market prices and inherent lack of liquidity. In determining the estimated fair value of investments in privately held companies, we utilize the most recent data available including observed transactions, such as equity financing transactions of the investees and sales of the existing shares of the investees’ securities. In addition, the determination of whether an observed transaction is similar to the equity securities we hold requires significant management judgment based on the rights and preferences of the securities.

We elected to account for the convertible note investment using the fair value option. The determination of fair market value is based on a variety of significant unobservable inputs or data that require judgment, including but not limited to time to liquidity and note maturity, interest rates and equity volatility.

We recognize unrealized gains or losses on the fair value of strategic investments, as well as accrued interest (if applicable), in other income (expense), net on the Condensed Consolidated Statements of Operations. Refer to Note 5 for more information.

Contract Acquisition and Fulfillment Costs

Deferred Commissions

Contract acquisition costs consist of sales commissions and related payroll taxes earned by our Enterprise sales force that are directly related to securing a contract with Enterprise customers. Contract acquisition costs for contracts with new customers and incremental sales to existing customers are deferred and amortized on a straight-line basis over an estimated period of benefit offour years, as the commissions paid upon a contract renewal are not commensurate with the commissions paid on the initial contract. Contract acquisition costs for contract renewals that are commensurate with anticipated renewal commissions are deferred and amortized on a straight-line basis over the renewal term, which is generally between 18 and 24 months. On an annual basis, we assess the expected period of benefit, considering the average contract term length, the life of the underlying technology, and other factors.

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In addition, a portion of the revenue share retained by certain reseller partners from sales to certain Enterprise customers is considered an incremental and recoverable cost of obtaining a contract with a customer. This cost is deferred and amortized on a straight-line basis over the corresponding contractual subscription term, as commissions paid to resellers on initial and renewal contracts are generally commensurate.

Amounts expected to be recognized within one year of the Condensed Consolidated Balance Sheet dates are recorded as deferred costs, while the remaining portion is recorded as other assets in the Condensed Consolidated Balance Sheets. Deferred costs are periodically analyzed for impairment. Amortization expense is included in sales and marketing in the Condensed Consolidated Statements of Operations.

Business Combinations

We account for our business combinations using the acquisition method of accounting, which requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, we make estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing acquired intangible assets include, but are not limited to, future expected cash flows and operating results, the selected valuation approaches and methods, useful lives, royalty and discount rates, the rate of technological obsolescence, customer retention rates, and the time to rebuild acquired content creator relationships. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the Condensed Consolidated Statements of Operations.

Transaction costs are expensed as incurred and recorded in Merger, integration, and restructuring related costs in the Condensed Consolidated Statements of Operations.

Goodwill Impairment Assessment

Goodwill represents the excess of the purchase price over the fair value of the net tangible assets and identifiable intangible assets acquired in a business combination. Goodwill is not amortized, but is subject to impairment testing. We test goodwill for impairment at the reporting unit level annually during the fourth quarter, or whenever events or changes in circumstances between annual tests indicate that goodwill may be impaired. We first assess goodwill for possible impairment by performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If we conclude this is not the case, we do not need to perform any further assessment. Otherwise, we must perform a quantitative assessment to estimate the fair value of our reporting units, and compare the fair value of each reporting unit to its carrying value, including goodwill.

During the nine months ended September 30, 2026, we did not identify any events or changes in circumstances requiring an interim goodwill impairment test.

Revenue Recognition

Enterprise

Enterprise subscription revenue is recognized ratably over the subscription term once access has been granted to the customer. Enterprise contracts are typically betweenone andthree years in length and consist of selling a fixed quantity of catalog licenses that grant each learner access to our learning platforms and unlimited course enrollments over the license term. Other Enterprise revenue is primarily comprised of professional services arrangements, which are generally offered as fixed price contracts and recognized on a proportional performance basis.

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Consumer

Consumer subscription revenue is recognized ratably over the subscription term once access has been granted to the learner, as learners have unlimited access to the course content during the contract term. Transactional and other revenue is primarily comprised of sales of single courses, which are recognized ratably over the applicable contractual access period, which is generallysix months for fixed term arrangements, and over an estimated service period offour months for arrangements with lifetime access, as well as other products sold on the consumer marketplace on a non-recurring basis, which were not material for the periods presented. Revenue generated from contracts with universities where we facilitate the delivery of their bachelor’s and master’s degree programs or postgraduate diplomas is dependent upon the number of learners enrolled and the tuition charged by the university. This is a form of variable consideration, and we estimate the amount of revenue using an expected value method. There is no direct contractual revenue arrangement between Coursera and degree students; therefore, we recognize only the service fee we receive from the universities as revenue.

Principal Versus Agent

We are generally the principal with respect to our Consumer and Enterprise revenue arrangements as we control the performance obligation and are the primary obligor with respect to delivering access to course content. Additionally, we have inventory risk through recoupable advances sometimes paid to content creators. Therefore, we record the gross purchase price paid by the customer related to these arrangements within revenue on the Condensed Consolidated Statements of Operations, and we record payments to content creators as content costs within cost of revenue. Furthermore, we are the principal in certain contracts sold through our reseller partners. For arrangements where we have visibility into the price paid by the end customer, we recognize the gross transaction price as revenue, and allocate amounts retained by the reseller between deferred sales commissions within sales and marketing and, to the extent applicable, customer support costs within cost of revenue.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires disclosure, on an annual and interim basis, of specified disaggregated information about certain costs and expenses. Additionally, in January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), to clarify the effective date of ASU 2024-03. ASU 2024-03 will be effective for annual reporting periods beginning with our fiscal year ending December 31, 2027 and for interim reporting periods beginning with our fiscal quarter ending March 31, 2028, with early adoption permitted. The amendments may be applied either prospectively or retrospectively. We are currently evaluating the impact ASU 2024-03 will have on our Condensed Consolidated Financial Statements (Unaudited) and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under Accounting Standards Codification 606, Revenue from Contracts with Customers. The practical expedient allows entities to assume that current conditions as of the balance sheet date remain unchanged over the remaining life of the asset. This ASU will be effective for annual reporting periods beginning with our fiscal year ending December 31, 2026, and for interim reporting periods beginning with our fiscal quarter ending March 31, 2027, with early adoption permitted. The amendments are to be applied prospectively. We are currently evaluating the impact ASU 2025-05 will have on our Condensed Consolidated Financial Statements (Unaudited) and related disclosures.

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In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which aims to modernize the accounting for internal-use software costs by eliminating references to software development stages and introducing a new threshold for capitalization. Under the updated guidance, capitalization begins when (1) management authorizes and commits to funding the project and (2) it is probable that the project will be completed and the software will be used for its intended purpose. The ASU also provides enhanced guidance on evaluating the “probable-to-complete” threshold and consolidates website development cost guidance into Subtopic 350-40. This ASU will be effective for annual reporting periods beginning with our fiscal year ending December 31, 2028 and for interim reporting periods beginning with our fiscal quarter ending March 31, 2029, with early adoption permitted. The amendments may be applied prospectively, retrospectively, or using a modified retrospective approach. We are currently evaluating the impact ASU 2025-06 will have on our Condensed Consolidated Financial Statements (Unaudited) and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, to provide clarifications intended to improve the consistency and usability of interim disclosure requirements, including a comprehensive listing of required interim disclosures and a new disclosure principle for reporting material events occurring after the most recent annual period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. The guidance is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years. We are currently evaluating the impact ASU 2025-11 will have on our Condensed Consolidated Financial Statements (Unaudited) and related disclosures.

3. REVENUE RECOGNITION

Disaggregation of Revenue

The following table presents revenue disaggregated by product offering for each segment:

Deferred Revenue

Revenue recognized during the three months ended September 30, 2026 and 2025, which was included in the corresponding deferred revenue balance at the beginning of each year, was $28.1 million and $25.7 million, respectively.

Revenue recognized during the nine months ended September 30, 2026 and 2025, which was included in the corresponding deferred revenue balance at the beginning of each year, was $168.1 million and $149.2 million, respectively.

Remaining Performance Obligations

Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue in the Condensed Consolidated Balance Sheets and unbilled amounts that will be recognized as revenue in future periods. As of September 30, 2026, we had remaining performance obligations of $865.0 million and expect to recognize approximately 73% as revenue over the next 12 months and the remainder thereafter.

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Deferred Commissions

The following table presents the amounts of deferred commissions, as well as amortization expense recorded within sales and marketing in the Condensed Consolidated Statements of Operations:

Deferred commissions and related payroll tax expenditures, which are included in deferred costs and other assets, were as follows:

4. BUSINESS COMBINATION

On May 11, 2026, we completed the Merger with Udemy. 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, and Udemy became a wholly owned subsidiary of Coursera. Former Udemy stockholders received cash in lieu of any fractional share of Coursera common stock to which they otherwise would have been entitled. We believe that the Merger enables us to build a more comprehensive skills platform, through acquired developed technology and content creator relationships, as well as unite a global ecosystem through acquired customer relationships.

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 of May 11, 2026.

The acquisition date fair value of the Merger consideration was $673.6 million, which was comprised of the following:

(1) Excludes 0.7 million shares of Coursera common stock issued as restricted stock awards subject to future service conditions, for which unrecognized stock-based compensation expense was immaterial, and 0.3 million shares of Coursera common stock issued in exchange for then outstanding Udemy stock options and restricted stock units held by then members of Udemy’s board of directors.

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The allocation of the Merger consideration to tangible and intangible assets acquired and liabilities assumed on the Closing Date is based on estimated fair values and is as follows:

The excess of Merger consideration over the estimated fair value of the underlying net assets acquired was recorded as goodwill. The goodwill arising from the Merger is primarily attributable to the expected operational synergies between Coursera and Udemy and intangible assets that do not qualify for separate recognition.

The transaction is considered a non-taxable business combination, and goodwill isnot deductible for tax purposes.

The allocation of the Merger consideration is preliminary and subject to revision as additional information about fair value of assets and liabilities becomes available. Additional information that existed as of the Closing Date but is currently unknown to us may become known during the remainder of the measurement period, a period not to exceed 12 months from the Closing Date. For discussion pertaining to goodwill assignment by segment resulting from the Merger, refer to Note 6.

The valuation of the intangible assets acquired along with their estimated useful lives, is as follows:

(1) Customer relationships is comprised oftwo components: (1) an Enterprise customer relationship asset with a valuationof $155.3 million and an estimated useful life of 6 years, and (2) a Consumer customer relationship asset with a valuation of $9.2 million and anestimated useful life of 3 years.

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The fair values of all acquired intangible assets were estimated using the income approach. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. Customer relationships were valued under the multi-period excess earnings method, which assumes that the value of intangible assets is equal to the present value of the incremental after-tax cash flows attributable specifically to customer relationships. Developed technology and trade names were valued under the relief from royalty method, which assumes value to the extent that the acquired company is relieved of the obligation to pay royalties for the benefits received from them. Content creator relationships were valued using the with-and-without method which values the asset by comparing the cash flows of the business with and without the existing content creator relationships.

We incurred the following acquisition-related costs in connection with the Merger, which are recorded within Merger, integration, and restructuring related costs in the Condensed Consolidated Statements of Operations.

The amount of revenue and net loss of Udemy included in our Condensed Consolidated Statements of Operations and Comprehensive Loss from the Closing Date to September 30, 2026, were $285.6 million and $27.8 million, respectively.

Supplemental Pro Forma Financial Information (Unaudited)

The following unaudited pro forma financial information presents our combined results of operations for the periods presented, as if the Merger had occurred on January 1, 2025:

The unaudited supplemental pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Merger were completed at the beginning of fiscal year 2025 and is not indicative of the future operating results of the combined company.

The unaudited supplemental pro forma financial information includes the combined historical operating results of the Company and Udemy, with adjustments to give effect to the Merger. Pro forma adjustments have been made to reflect incremental intangible asset amortization to be incurred based on the fair values and useful lives of each identifiable intangible asset, incremental acquisition-related costs due to the Merger, and the elimination of historical asset amortization for internally developed software by Udemy.

The unaudited supplemental pro forma financial information does not give effect to the potential impact of current financial conditions, or any anticipated revenue enhancements, cost savings, or operational synergies that may result from the Merger.

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5. INVESTMENTS

Investments Measured at Fair Value on a Recurring Basis

The following table summarizes our investments measured at fair value on a recurring basis by balance sheet classification and investment type:

The amortized cost, unrealized gains and losses, and estimated fair value of cash equivalents and marketable securities consisted of the following:

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Cash equivalents and marketable securities in an unrealized loss position consisted of the following:

Realized gains and losses related to our cash equivalents, marketable securities, and other assets were not material for the three and nine months ended September 30, 2026 and 2025.

No securities had been in a continuous unrealized loss position for twelve months or longer as of September 30, 2026. We do not intend to sell available-for-sale marketable debt securities in unrealized loss positions, and it is more likely than not that we will hold these securities until maturity or recovery of the cost basis. As of September 30, 2026, we did not have an allowance for credit losses related to our available-for-sale marketable debt securities due to a zero loss expectation for the portfolio which consists solely of U.S. government securities.

As of September 30, 2026, all of our available-for-sale marketable debt securities had contractual maturities of one year or less.

A summary of the changes in the carrying value of strategic investments is as follows:

On July 28, 2026, we made a strategic equity investment in LearnVector Inc., pursuant to which we purchased $100.0 million of Series A Preferred Stock. Refer to Note 13 for more information. We account for this investment under the measurement alternative.

In connection with the Merger with Udemy, we acquired a strategic investment consisting of a convertible note (“Note Investment”) with a private company (the “Note Issuer”). We recorded the Note Investment based on its Closing Date fair value of $8.5 million. The Note Investment accrues interest at 7.0% per annum, payable at maturity of the note or upon conversion, and matures on December 31, 2028, unless earlier converted into shares of the Note Issuer’s preferred stock in accordance with the terms of the Note Investment. We elected to continue measuring the Note Investment using the fair value option.

During the fiscal year ended December 31, 2023, we made a strategic equity investment of $1.7 million in a privately-held company, which is accounted for under the measurement alternative. The difference in the original investment amount and the $1.5 million carrying value as of September 30, 2026, is due to unrealized foreign currency exchange losses.

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Other than the foreign currency exchange losses discussed above, there were no impairments, observable price changes, or other changes in the carrying values of our strategic investments during the three and nine months ended September 30, 2026 and 2025.

6. CONSOLIDATED BALANCE SHEET COMPONENTS

Restricted Cash

The reconciliation of cash, cash equivalents, and restricted cash was as follows:

Accounts Receivable, Net

Accounts receivable, net consisted of the following:

Property, Equipment, and Software, Net

Property, equipment, and software, net consisted of the following:

The following table presents depreciation and amortization expense related to property, equipment, and software as well as the portion of amortization expense related to internal-use software and website development that is recorded within cost of revenue in the Condensed Consolidated Statements of Operations:

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Intangible Assets, Net

Intangible assets, net consisted of the following:

Within the Condensed Consolidated Statements of Operations, amortization expense related to our content assets, developed technology, and content creator relationships is recorded within cost of revenue, and amortization expense related to our customer relationships and trade name is recorded within sales and marketing.

Capitalization of content assets and amortization expense for intangible assets were as follows:

As of September 30, 2026, future expected amortization expense for intangible assets was as follows:

Goodwill

Goodwill in the amount of $182.7 million was established as part of the Merger on the Closing Date. This amount represents the excess of Merger consideration over the estimated fair value of the underlying net assets acquired. The amount recorded is based on preliminary estimates of the fair values of assets acquired and liabilities assumed and is subject to adjustment during the measurement period.

The following table summarizes goodwill by reportable segments:

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7. LEASES

We have entered into various non-cancelable office space operating leases with lease periods expiring through June 2030. In connection with the Udemy Merger, we assumed operating leases with various expiration dates through fiscal year 2029. The related operating lease right‑of‑use assets and operating lease liabilities recognized upon the Closing Date were not material and are included within other assets, other current liabilities, and other liabilities in the Condensed Consolidated Balance Sheets. These leases do not contain residual value guarantees, covenants, or other restrictions.

Future minimum lease payments under noncancellable operating leases with initial lease terms in excess of one year as of September 30, 2026, were as follows:

8. INCOME TAXES

Income tax expense or benefit for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are considered in the relevant period. Each quarter, we update the estimate of the annual effective tax rate, and if the estimated tax rate changes, we record a cumulative adjustment.

Our effective tax rate for the three months ended September 30, 2026 and 2025 was (11.3%) and (10.1%), respectively. For the nine months ended September 30, 2026 and 2025, our effective tax rate was (5.1%) and (14.5%), respectively. The difference between the effective tax rate and the United States (“U.S.”) federal statutory rate is primarily due to a valuation allowance for our federal and state net deferred tax assets, income taxes on foreign operations, U.S. state income taxes, and non-deductible stock-based compensation expense.

As of September 30, 2026, we continued to have a full valuation allowance against our U.S. federal and state deferred tax assets. Management regularly evaluates the realizability of our deferred tax assets. Adjustments are recorded to income during the period in which management makes the determination a deferred tax asset is more likely than not to be realized.

9. NET LOSS PER SHARE

The following table presents the calculation of basic and diluted net loss per share:

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The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would have been anti-dilutive:

10. COMMITMENTS AND CONTINGENCIES

Purchase Obligations

Our purchase obligations primarily relate to third-party cloud infrastructure agreements, software subscription arrangements, and other service agreements to support ongoing operations. As of September 30, 2026, we had $33.8 million in future minimum payments due under our non-cancelable purchase obligations with a remaining term in excess of one year. These are expected to be paid through 2029 and exclude payments related to noncancellable operating leases as discussed in Note 7.

Legal Proceedings

From time to time, we may be subject to legal proceedings, as well as demands, claims, and threatened litigation. The outcomes of legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. Regardless of the outcome, litigation can have an adverse impact on our business because of defense and settlement costs, diversion of management resources, and other factors. We are not currently party to any legal proceeding that we believe, as of the filing of this Quarterly Report on Form 10-Q, could have a material adverse effect on our business, operating results, cash flows, or financial condition should such litigation or claim be resolved unfavorably.

We regularly review the status of each significant matter and assess its potential likelihood of loss or exposure. We record an accrual for loss contingencies for legal proceedings when we believe that an unfavorable outcome is both (i) probable and (ii) reasonably estimable in terms of the amount or range of any possible loss. The actual liability in any such matters may be materially different from the Company’s estimates, if any, which could result in the need to adjust the liability and record additional expenses.

Indemnifications

In the normal course of business, we enter into contracts and agreements that contain a variety of representations and warranties and provide for the potential of general indemnification obligations. Our exposure under these agreements is unknown because it involves future claims that may be made against us but have not yet been made. To date, we have not paid any material claims and have not been required to defend any actions related to our indemnification obligations; however, we may record charges in the future as a result of these indemnification obligations. In addition, we have indemnification agreements with certain of our directors, executive officers, and other employees that require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service with Coursera. The terms of such obligations may vary.

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11. STOCKHOLDERS’ EQUITY

Share Repurchase Program

On May 15, 2026, our board of directors (the “Board”) approved a share repurchase program authorizing Coursera to purchase up to $500 million of our common stock, excluding commissions and fees (the “Repurchase Program”). Under the Repurchase Program, Coursera mayrepurchase shares of common stock from time to time through open market purchases, including through the use of trading plans intended to qualify under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, in accordance with applicable securities laws and other restrictions. The Repurchase Program has no expiration date and continues unless otherwise suspended or discontinued. The number of shares to be repurchased and the timing of the repurchases will depend on several factors, including, without limitation, business, economic, and market conditions, corporate, legal, and regulatory requirements, prevailing stock prices, trading volume, and other considerations. The Repurchase Program may be suspended or discontinued at any time and does not obligate us to acquire any amount of common stock. Shares repurchased are accounted for on the trade date and are immediately retired and no longer considered issued or outstanding. The total cost to repurchase shares includes any direct costs incurred, including broker commissions and excise taxes, and is recorded as a reduction to additional paid in capital in the Condensed Consolidated Balance Sheets.

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, $1.2 million in unsettled repurchases of our common stock were recorded within other current liabilities in our Condensed Consolidated Balance Sheets. As of September 30, 2026, we had $308.6 million, excluding commissions, remaining under the Repurchase Program. To date, we have utilized our existing cash and cash equivalents to fund repurchases under the Repurchase Program.

12. EMPLOYEE BENEFIT PLANS

Merger-Related Equity Award Treatment

Under the terms of the Merger Agreement, at the Closing Date of May 11, 2026, each issued and outstanding share of Udemy common stock was converted into the right to receive 0.800 shares of our common stock, with cash paid in lieu of fractional shares. We issued 116.6 million shares of common stock with a fair value of $660.1 million as equity consideration to existing stockholders and equity consideration with a fair value of $13.5 million for the settlement of outstanding RSUs then held by members of Udemy's board of directors, stock options to purchase Udemy stock, and replacement equity awards attributable to pre-combination services. The remaining fair value of replacement equity awards attributable to post-combination service periods is $82.7 million and will be recognized as stock-based compensation expense over a weighted-average period of 1.9 years from the Closing Date.

Stock Incentive Plans

In connection with the Merger, we assumed the Udemy, Inc. 2021 Equity Incentive Plan (the “Udemy Plan”) including applicable vesting schedules. Common stock issuable under equity awards granted pursuant to the Udemy Plan excludes individuals who were employed by Coursera and its subsidiaries prior to the Closing Date.

As of September 30, 2026,22.2 million shares,8.2 million shares, and 7.2 million shares of our common stock were reserved for future issuance under our 2021 Stock Incentive Plan (the “2021 Plan”), the Udemy Plan, and 2021 Employee Stock Purchase Plan (the “ESPP”). Shares issuable under the 2021 Plan, the Udemy Plan, and the ESPP may be drawn from authorized but unissued shares or from treasury stock. In 2024, we began settling stock option exercises, vesting of RSUs, and ESPP purchases by reissuing shares of our common stock from treasury stock. In September 2025, we reissued all of our remaining treasury stock.

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Stock Options

We grant stock options at prices equal to the grant date fair value. Typically, these stock options expireten years from the grant date and vest ratably over afour-year service period.

Stock option activity for the nine months ended September 30, 2026 was as follows:

RSUs and PSUs

Restricted stock units issued under the 2021 Plan have a service-based vesting condition, which is satisfied generally either (i) over four years with a 25% cliff vesting period afterone year and 6.25% vesting each quarter thereafter for new hires, or (ii) over four years with 6.25% vesting each quarter for new grants to existing employees. The related stock-based compensation expense is recognized on a straight-line basis over the requisite service period.

Restricted stock units issued as replacement awards under the Udemy Plan have a service based vesting condition. Other than grants made to new hires, which are subject to aone year cliff, these awards generally vest on a quarterly basis. The related stock-based compensation expense is recognized on a straight-line basis over the requisite service period.

In 2025 and 2026, the Company granted PSUs to certain executives under the 2021 Plan. PSU grants have both performance and service-based vesting conditions. The ultimate number of units that will vest is determined based on the achievement of annual revenue against a pre-established target (with defined threshold and maximum amounts ranging from 50% to 150%, for 2025 grants, and 50% to 200%, for 2026 grants, of target). If annual revenue is below the threshold amount, none of the PSUs will vest. For 2025 grants, if annual revenue is equal to or exceeds the threshold amount,25% of the PSUs ultimately granted will vest afterone year, and 6.25% of the remaining PSUs will vest quarterly over the subsequent three years. For 2026 grants, if annual revenue is equal to or exceeds the threshold amount, the PSUs ultimately granted will vest 100% afterone year. Additionally, in March 2026, our Senior Vice President, Chief Financial Officer and Treasurer was granted PSUs in connection with his permanent appointment to that role. These PSUs have the same annual revenue target and threshold and maximum amounts as the 2026 grants, but 25% of the PSUs ultimately granted will vest afterone year, and 6.25% of the remaining PSUs will vest quarterly over the subsequent three years. The fair value of each unit is determined on the grant date, and the related stock-based compensation expense is recognized using the accelerated attribution method. We evaluate the vesting conditions on a quarterly basis and recognize stock-based compensation expense if the achievement of the performance condition is probable.

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RSU and PSU activity for the nine months ended September 30, 2026 was as follows:

(1) For PSUs, the amount presented as the number of units granted is based on the performance condition being achieved at the target level. Once the performance period is complete, the number of units that will vest may range from 0% to 200% of the target amount based on actual performance.

(2) Includes the service-based vesting in the nine months ended September 30, 2026 of the 0.5 million units or 110.66% of PSUs granted in 2025, certified as vested by our Human Resources and Compensation Committee in February 2026 based on attainment against the pre-established annual revenue target.

Stock-Based Compensation Expense

Stock-based compensation expense is classified in the Condensed Consolidated Statements of Operations as follows:

We capitalized $1.8 million and $2.0 million of stock-based compensation related to our internal-use software during the three months ended September 30, 2026 and 2025 and $6.1 million and $5.7 million during the nine months ended September 30, 2026 and 2025.

The table below presents unrecognized employee compensation cost related to unvested shares and the weighted-average period over which it is expected to be recognized:

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Common Stock Reserved for Issuance

The following table presents total shares of our common stock reserved for future issuance:

13. RELATED PARTY TRANSACTIONS

We have an ongoing content sourcing agreement with DeepLearning.AI Corp (“DeepLearning.AI”), which is owned by our chairman and co-founder, Dr. Andrew Ng. This agreement was entered into in the ordinary course of business and subject to standard commercial terms. Fees associated with this agreement are included within cost of revenue in the Condensed Consolidated Statements of Operations. We recognized content fees under this agreement of $1.3 million and $2.0 million during the three months ended September 30, 2026 and 2025 and $4.9 million and $6.6 million during the nine months ended September 30, 2026 and 2025. Related content liabilities were $1.3 million and $4.1 million as of September 30, 2026 and December 31, 2025.

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 pursuant to a Series A Preferred Stock Purchase Agreement and related ancillary agreements. Our investment represented 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, who is Coursera’s co-founder and also serves as Chair of our Board, and is therefore considered a related party. In light of Dr. Ng’s relationships with both companies, the Board established a Special Committee of the Board composed solely of directors who the Board determined to be independent and disinterested, and delegated to it the power and authority to evaluate, negotiate, approve or disapprove the investment and the related transaction agreements. The Special Committee unanimously approved the investment and authorized and directed Coursera to execute the investment-related agreements.

As of September 30, 2026, there were no amounts due from or to LearnVector. On October 28, 2026, we entered into a Master Framework Agreement with LearnVector, which establishes a framework for commercial collaborations between the parties, including opportunities to commercialize LearnVector technologies with or through Coursera. Specific projects would be set out in separately negotiated statements of work. The Master Framework Agreement was unanimously approved by the Special Committee.

14. SEGMENT AND GEOGRAPHIC INFORMATION

Segment Information

Our chief operating decision maker (“CODM”) is our Chief Executive Officer. Based on how our CODM assesses performance and allocates resources, we have identifiedtwo reporting segments: Enterprise and Consumer. This is also consistent with how we disaggregate revenue. Following the Merger with Udemy, we continue to reporttwo reporting segments, Enterprise and Consumer, as the CODM reviews the combined segment results on an integrated basis.

Our CODM primarily measures each segment’s performance based on revenue and gross profit. Segment gross profit, as presented below, is defined as segment revenue less segment content costs within cost of revenue. These costs are considered significant segment expenses that are regularly reviewed by our CODM. Other costs of revenue, including platform operation and maintenance costs, customer support services, amortization of internal-use software and intangible assets, and stock-based compensation expense, are managed on an enterprise-wide basis and not reported by segment. In addition, we do not report operating expenses, other income (expense), net, or income tax expense (benefit) by segment because our CODM reviews this financial information on a consolidated basis.

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Our CODM does not use segment-level asset information to assess performance or allocate resources. Therefore, we do not track our long-lived assets by segment. The geographic identification of these assets is provided below.

Financial information for each reportable segment was as follows:

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Geographic Information

Revenue

The following table summarizes the amount of revenue recognized by region based on the billing address of our customers:

No single country other than the United States represented 10% or more of our total revenue during the three and nine months ended September 30, 2026 and 2025.

Long-lived Assets

The following table presents our long-lived assets, consisting of property, equipment, and software, net of depreciation and amortization, and operating lease right-of-use assets, by geographic region:

15. MERGER, INTEGRATION, AND RESTRUCTURING RELATED COSTS

Merger, integration, and restructuring related costs consisted of the following:

(1) Merger and integration related costs consist of legal and regulatory fees, transaction costs, and other professional services incurred in connection with the Merger and subsequent integration-related activities.

(2) Merger-related personnel and severance costs consist of personnel-related costs incurred directly as a result of the Merger, including subsequent workforce integration and synergy initiatives. Included in this amount are one-time severance payments and other benefits incurred pursuant to change in control and severance agreements with certain departing personnel, totaling $1.1 million and $9.3 million during the three and nine months ended September 30, 2026. In addition, we incurred $15.8 million of stock-based compensation expense during the nine months ended September 30, 2026 due to accelerated vesting of replacement equity awards upon qualifying terminations. The personnel and stock-based compensation expenses discussed above were contingent on post-combination employment decisions and therefore were accounted for as post-combination compensation. The majority of change in control and severance costs were settled as of June 30, 2026.

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In connection with the Merger, the Company also entered into agreements to pay a total of $26.3 million in cash-based retention payments to certain employees, comprised of acquisition-related payments as well as in support of integration efforts related to the Merger. Retention compensation that is contingent on future service is recognized into expense on a straight-line basis over the requisite service period, with various retention periods vesting primarily during the third and fourth quarters of 2026 and an immaterial amount vesting during 2027.

We recognized $4.3 million and $24.0 million of expense and made cash payments of $8.2 million and $18.6 million associated with retention agreements during the three and nine months ended September 30, 2026. Accrued, unpaid retention liabilities as of September 30, 2026, were $5.4 million, and are included within the accrued compensation and benefits caption of the accompanying Condensed Consolidated Balance Sheets.

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.

The following table summarizes activities related to the restructuring liabilities recorded in accrued compensation and benefits in the accompanying Condensed Consolidated Balance Sheets:

(3) Other restructuring costs consist of costs incurred for restructuring activities that were unrelated to the Merger. During the nine months ended September 30, 2025, we recognized restructuring related charges of $0.7 million, made cash payments of $5.2 million, and recognized a reversal of stock-based compensation of $1.6 million due to the forfeiture of RSUs and stock options, related to our commitment to reduce overall expenses, focus our efforts, and prioritize future investments in key initiatives that we expect will drive long-term, sustainable growth, announced in October 2024.

16. SUBSEQUENT EVENTS

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, pursuant to the Repurchase Program described in Note 11.