Coursera Inc (COUR) has reported its financial results for the third quarter of 2024, demonstrating steady growth amidst a challenging economic landscape. The company recorded a 6% year-over-year increase in revenue, achieving $176.1 million. This period also saw Coursera advancing its strategy to expand its learning ecosystem, welcoming new partners and introducing innovative industry micro-credentials.
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Key Insights from Coursera Inc Earning Report:
For Q3 2024, Coursera reported significant improvements in profitability metrics. The gross profit margin increased to 55%, up from 50% last year, while the net loss narrowed substantially to $13.7 million, compared to $32.1 million in Q3 2023. Notably, the non-GAAP net income turned positive at $16.6 million, reversing a loss of $2.1 million from the same period last year. The adjusted EBITDA of $13.3 million and the free cash flow of $16.7 million further indicate Coursera’s focus on operational efficiency.
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The company’s segment-wise performance showed growth in its core revenue streams. The Consumer segment achieved $102.3 million in revenue, a 3% increase driven by Coursera Plus subscriptions. The Enterprise and Degrees segments also reported notable growth, with the latter segment showing a 15% increase in revenue due to scaling new programs.
Management Discussion and Analysis:
CEO Jeff Maggioncalda attributed the company’s strong financial results to strategic partnerships and the expansion of credentials in emerging fields like generative AI. He emphasized Coursera’s aim to become a premier platform for learners and institutions seeking to acquire in-demand skills.
CFO Ken Hahn highlighted the focus on profitability and cost management, as seen in the raised full-year adjusted EBITDA margin outlook to 5.4%. The company’s planned 10% workforce reduction and a $30 million cost-cutting initiative underscore Coursera’s commitment to achieving long-term sustainable growth while ensuring targeted investments in key areas.
Stock Target Advisor’s Analysis on Coursera Inc:
Stock Target Advisor’s rating on Coursera Inc is slightly bearish, reflecting a cautious market sentiment despite its high market capitalization and positive cash flow. Based on the analysis of 11 analysts, the average target price for Coursera Inc stands at $15.08, indicating a potential upside from its current price of $7.62. Coursera’s recent stock performance has been volatile, with a sharp one-year decline of 55.65%.
While the stock has exhibited top-quartile revenue growth over the last five years, its earnings growth remains below the median of its sector peers. Investors are advised to remain cautious due to Coursera’s below-median risk-adjusted returns and high valuations relative to its cash flow and book value.
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Conclusion:
Coursera’s Q3 2024 financial results demonstrate the company’s strategic emphasis on growth and operational efficiency. With solid revenue performance across its key segments and a strengthened focus on profitability, Coursera is poised to leverage its industry partnerships and innovative credentials to drive long-term value.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
