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• Direct-to-Consumer Learning Marketplace: A platform allowing individual learners to access and purchase a vast library of courses covering technical, business, and personal development skills.
• Udemy Business (Enterprise Learning Solution): A subscription-based service providing organizations with curated course content and tools for employee training, reskilling, and professional development.

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Major Customers of Udemy (UDMY)

• Individual Learners for Professional Development: This category includes professionals and job seekers who utilize Udemy to "reskill or upskill in technology and business." These learners are motivated by career advancement, transitioning into new roles, or staying competitive in their fields by acquiring new technical, business, and soft skills.
• Individual Learners for Personal Enrichment: This segment comprises individuals seeking "personal development courses" or acquiring general knowledge and soft skills for personal growth, hobbies, or self-improvement, outside of direct career objectives.
• Enterprise Customers (Udemy Business): These are companies and organizations that leverage the "Udemy Business" offering to provide comprehensive learning and development solutions for their employees. Businesses subscribe to Udemy's extensive course library to facilitate corporate training, employee skill enhancement, and team development initiatives.

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Major Suppliers:

• Amazon Web Services (AWS) - Subsidiary of Amazon.com, Inc. (AMZN)

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Hugo Sarrazin, Chief Executive Officer

Hugo Sarrazin was appointed CEO of Udemy in March 2025. Prior to joining Udemy, he served as President and Chief Product and Technology Officer at UKG from October 2021 to February 2025. Before UKG, Sarrazin spent 26 years at McKinsey & Co., where he was a senior partner and co-founded McKinsey Digital Labs and McKinsey Design. He advised Fortune 500 companies and private equity investors on product scaling, SaaS strategy, and mergers and acquisitions.

Sarah Blanchard, Chief Financial Officer

Sarah Blanchard has served as Udemy's Chief Financial Officer since April 2021. Her previous roles include Chief Financial Officer and Chief Operating Officer of Omada Health from March 2019 to April 2021. She also served as Chief Financial Officer of CoreOS from October 2017 until its acquisition by Red Hat in January 2018. Earlier in her career, Blanchard was the Vice President of Finance for Silver Spring Networks.

Rob Rosenthal, President, Udemy Business

Rob Rosenthal became President of Udemy Business in April 2025, having previously been Udemy's Chief Revenue Officer since June 2024. With over 25 years of experience in the software industry, he served as Chief Revenue Officer at Bloomreach prior to Udemy, where he was instrumental in tripling the organization's revenue.

Karen Fascenda, Chief People Officer

Karen Fascenda has been Udemy's Chief People Officer since January 2023. Before joining Udemy, she was the Vice President, People, at Gopuff from June 2020 to January 2023. Fascenda also held multiple human resources positions at Comcast and spent more than four years at eBay, Inc.

Neeracha Taychakhoonavudh, Chief Customer Experience Officer

Neeracha Taychakhoonavudh joined Udemy as Chief Customer Experience Officer in April 2025. She brings over 25 years of experience as a SaaS executive, having previously served as Chief Customer Officer at Asana starting in 2023. Prior to Asana, she spent 14 years at Salesforce in various leadership roles within customer success, renewals, partner strategy, industry solutions, and sales operations.

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1. Intense Competition and Dynamic Market: Udemy operates in a highly competitive and rapidly evolving online learning market, facing numerous platforms, including tech giants and specialized providers, all vying for both learners and instructors. This competitive landscape leads to significant marketing expenses to acquire new users and makes differentiation challenging. The fast-paced evolution of the market also makes it difficult for Udemy to accurately assess future prospects and manage its growth effectively.
2. Reliance on Instructors and Potential Dissatisfaction: As a marketplace platform, Udemy's business relies heavily on its instructors to create and maintain a vast library of courses. Recent changes in instructor revenue share models and policies have led to declining payouts and dissatisfaction among instructors, with some potentially leaving the platform or becoming demotivated. Concerns about limited creative freedom and arbitrary course removals further contribute to this risk, as the loss of key instructor relationships could negatively impact the platform's attractiveness and content quality.
3. Strategic Pivot and Decline in Consumer Segment Revenue: Udemy is actively pursuing a strategic shift towards a subscription-first model, particularly through its Udemy Business offerings, aiming for a more predictable revenue stream. While intended for long-term benefits, this strategic pivot is expected to cause a near-term decline in revenue from the direct-to-consumer (consumer segment) side of the business, with an anticipated decrease of approximately 9% for the full year 2025. This intentional reduction in transactional course sales creates "measurable headwinds" and slows down overall near-term top-line growth.

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The clear emerging threat for Udemy stems from the rapid advancements and widespread adoption of Generative Artificial Intelligence (AI) and Large Language Models (LLMs).

These technologies pose a fundamental challenge to Udemy's marketplace model by potentially disrupting the creation, delivery, and personalization of learning content:

• Automated Content Creation: AI can generate high-quality text, code, explanations, quizzes, and even full course outlines and lessons at a speed and scale unachievable by human instructors. This could reduce the reliance on individual human instructors for content creation, eroding the distinctiveness of Udemy's human-curated marketplace.
• Hyper-Personalized Learning: LLMs are capable of providing real-time, adaptive, and highly personalized learning experiences, acting as intelligent tutors that can answer specific questions, explain complex concepts in multiple ways, provide tailored feedback on exercises, and adapt learning paths dynamically to individual learner needs. This could offer a more engaging and effective learning experience than static video lectures and basic Q&A forums.
• Lower Cost Structures: If AI can automate a significant portion of content creation and instructional support, the cost of developing and delivering educational content could dramatically decrease, putting pressure on Udemy's existing pricing and revenue models.

This threat is emerging and clear because the capabilities of current LLMs are evident, and their application in various forms of content generation and interactive assistance is already being explored and deployed across industries, including education. This represents a potential paradigm shift in online learning, akin to how streaming fundamentally changed media consumption or how smartphones altered personal computing, rather than just a new competitor using a similar model.

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Udemy (UDMY) operates in several large addressable markets:

• For its direct-to-consumer offerings targeting individual learners, the global online education market was valued at approximately USD 61.0 billion in 2024. This market is projected to grow to USD 454.49 billion by 2033, with a compound annual growth rate (CAGR) of 25% from 2026 to 2033.
• For its Udemy Business offerings for enterprise customers, the global corporate e-learning market is projected to grow from USD 526.81 billion in 2025 to USD 1,229.07 billion by 2030, at a CAGR of 18.5%.
• Additionally, the global upskilling and reskilling market, which is highly relevant to Udemy Business, reached USD 35.2 billion in 2024. This market is poised to grow to USD 96.6 billion by 2033, reflecting a CAGR of 11.8% from 2025 to 2033.

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Capital Allocation Decisions for Udemy (UDMY)

Share Repurchases

• Udemy's Board of Directors approved a share repurchase program authorizing the purchase of up to $100 million of the Company's common stock on February 14, 2024.
• A subsequent share repurchase program was approved by the Board of Directors on September 10, 2025, authorizing the purchase of up to $50 million of the Company's common stock.

Share Issuance

• Udemy completed its Initial Public Offering (IPO) on October 26, 2021, issuing 14,500,000 shares and raising approximately $406 million to $420.5 million.
• Following the expiration of IPO lock-up agreements, 124,380,752 shares became eligible for sale in the public market on April 27, 2022.

Inbound Investments

• Udemy finalized a $200 million senior secured revolving credit facility on June 3, 2025, aimed at enhancing financial flexibility and supporting long-term growth, which remained undrawn at closing.
• In February 2020, prior to the 3-5 year window but as a notable strategic investment, Benesse Holdings, Inc. invested $50 million in Udemy.

Outbound Investments

• Udemy acquired CorpU for $30 million in August 2021.
• Udemy acquired Lummi, an AI-generated stock photos platform, in June 2025 for an undisclosed amount.

Capital Expenditures

• Capital expenditures for Udemy were approximately $5.335 million in 2021, $1.564 million in 2022, $0.632 million in 2023, $2.3 million in 2024, and $5.803 million in 2025.
• Expected capital expenditures are projected to be around $14.6 million for 2026 and $18 million for 2027.
• Capital expenditures typically include purchases of property and equipment and capitalized software costs, considered essential for ongoing operations.