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Coursera Inc(COUR-N)
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Coursera (NYSE:COUR) Q2 Sales Beat Estimates, Stock Soars

StockStory - Thu Jul 27, 2023

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Online learning platform Coursera (NYSE:COUR) reported Q2 FY2023 results exceeding Wall Street analysts' expectations, with revenue up 23.2% year on year to $153.7 million. Guidance for next quarter's revenue was also optimistic at $158 million at the midpoint, 2.68% above analysts' estimates. Coursera made a GAAP loss of $31.7 million, improving from its loss of $49.3 million in the same quarter last year.

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Coursera (COUR) Q2 FY2023 Highlights:

  • Revenue: $153.7 million vs analyst estimates of $146.2 million (5.13% beat)
  • EPS: -$0.21 vs analyst estimates of -$0.29 (26.7% beat)
  • Revenue guidance for Q3 2023 is $158 million at the midpoint, above analyst estimates of $153.9 million
  • The company lifted revenue guidance for the full year from $605 million to $620 million at the midpoint, a 2.48% increase
  • Free cash flow was -$11.5 million, down from $1.53 million in the previous quarter
  • Gross Margin (GAAP): 51.9%, down from 62.9% in the same quarter last year
  • Paying Users: 129 million, up 22 million year on year

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.

Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to or what movie they watch, or finding a date, online consumer businesses today are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have increased usage and stickiness of many online consumer services.

Sales Growth

Coursera's revenue growth over the last three years has been very strong, averaging 32.6% annually. This quarter, Coursera beat analysts' estimates and reported decent 23.2% year-on-year revenue growth.

Coursera Total Revenue

Guidance for the next quarter indicates Coursera is expecting revenue to grow 15.8% year on year to $158 million, slowing down from the 24.1% year-on-year increase it recorded in the same quarter last year. Ahead of the earnings results, analysts covering the company were projecting sales to grow 12.5% over the next 12 months.

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Usage 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 users, a key performance metric for the company, grew 22.3% annually to 129 million. This is strong growth for a consumer internet company.

Coursera Paying Users

In Q2, Coursera added 22 million users, translating into 20.6% year-on-year growth.

Key Takeaways from Coursera's Q2 Results

Although Coursera, which has a market capitalization of $2.01 billion, has been burning cash over the last 12 months, its more than $716.9 million in cash on hand gives it the flexibility to continue prioritizing growth over profitability.

We enjoyed seeing Coursera exceed analysts' revenue expectations this quarter. We were also glad that next quarter's revenue guidance came in higher than Wall Street's expectations. Overall, we think this was a really good quarter that should please shareholders. The stock is up 7.62% after reporting and currently trades at $13.99 per share.

So should you invest in Coursera right now? When making that decision, it's important to consider its valuation, business qualities, and what's happened in the latest quarter. We cover this and more in our full company report, and it's free.

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The author has no position in any of the stocks mentioned in this report.