Online learning platform Coursera (NYSE:COUR) reported revenue ahead of Wall Street’s expectations in Q4 CY2024, with sales up 6.1% year on year to $179.2 million. On the other hand, next quarter’s revenue guidance of $175 million was less impressive, coming in 1.8% below analysts’ estimates. Its non-GAAP profit of $0.08 per share was 82.2% above analysts’ consensus estimates.
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Coursera (COUR) Q4 CY2024 Highlights:
- Revenue: $179.2 million vs analyst estimates of $176.4 million (6.1% year-on-year growth, 1.6% beat)
- Adjusted EPS: $0.08 vs analyst estimates of $0.05 (82.2% beat)
- Adjusted EBITDA: $9.47 million vs analyst estimates of $5.79 million (5.3% margin, 63.4% beat)
- Revenue Guidance for Q1 CY2025 is $175 million at the midpoint, below analyst estimates of $178.2 million
- EBITDA guidance for Q1 CY2025 is $10 million at the midpoint, below analyst estimates of $10.79 million
- Operating Margin: -17%, in line with the same quarter last year
- Free Cash Flow Margin: 4.1%, down from 9.5% in the previous quarter
- Paying Users : 168 million, up 26.03 million year on year
- Market Capitalization: $1.52 billion
“We made significant strides throughout 2024 in expanding our content catalog, launching new entry-level Professional Certificates, generative AI courses, and healthcare micro-credentials designed to meet the needs of learners and customers,” said Coursera CEO Jeff Maggioncalda.
Company Overview
Founded by two Stanford University computer science professors, Coursera (NYSE:COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Consumer Subscription
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Luckily, Coursera’s sales grew at an impressive 18.7% compounded annual growth rate over the last three years. Its growth beat the average consumer internet company and shows its offerings resonate with customers.
This quarter, Coursera reported year-on-year revenue growth of 6.1%, and its $179.2 million of revenue exceeded Wall Street’s estimates by 1.6%. Company management is currently guiding for a 3.5% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 6.2% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
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Paying Users
User Growth
As a subscription-based app, Coursera generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.
Over the last two years, Coursera’s paying users
, a key performance metric for the company, increased by 20% annually to 168 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. 
In Q4, Coursera added 26.03 million paying users , leading to 18.3% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating user growth just yet.
Revenue Per User
Average revenue per user (ARPU) is a critical metric to track for consumer subscription businesses like Coursera because it measures how much the average user spends. ARPU is also a key indicator of how valuable its users are (and can be over time).
Coursera’s ARPU fell over the last two years, averaging 3.8% annual declines. This isn’t great, but the increase in paying users
is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Coursera tries boosting ARPU by taking a more aggressive approach to monetization, it’s unclear whether users can continue growing at the current pace. 
This quarter, Coursera’s ARPU clocked in at $1.07. It declined 10.3% year on year, worse than the change in its paying users .
Key Takeaways from Coursera’s Q4 Results
We were impressed by how significantly Coursera blew past analysts’ EBITDA expectations this quarter. We were also glad it expanded its number of users and beat analysts' revenue estimates. On the other hand, its revenue and EBITDA guidance for next quarter missed by a wide margin, sending shares lower. Overall, this was a softer quarter. The stock traded down 12.2% to $8.41 immediately following the results.
The latest quarter from Coursera’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
