Online learning platform Udemy (NASDAQ:UDMY) reported Q1 CY2025 results exceeding the market’s revenue expectations, with sales up 1.8% year on year to $200.3 million. The company expects next quarter’s revenue to be around $197 million, close to analysts’ estimates. Its non-GAAP profit of $0.12 per share was 20.5% above analysts’ consensus estimates.
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Udemy (UDMY) Q1 CY2025 Highlights:
- Revenue: $200.3 million vs analyst estimates of $197.2 million (1.8% year-on-year growth, 1.6% beat)
- Adjusted EPS: $0.12 vs analyst estimates of $0.10 (20.5% beat)
- Adjusted EBITDA: $21.1 million vs analyst estimates of $18.36 million (10.5% margin, 14.9% beat)
- The company dropped its revenue guidance for the full year to $783 million at the midpoint from $795 million, a 1.5% decrease
- EBITDA guidance for the full year is $82 million at the midpoint, above analyst estimates of $79.4 million
- Free Cash Flow Margin: 3.5%, similar to the previous quarter
- Monthly Active Buyers: 17,216, up 1,146 year on year
- Market Capitalization: $1.02 billion
Company Overview
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Udemy’s sales grew at a decent 13.3% compounded annual growth rate over the last three years. Its growth was slightly above the average consumer internet company and shows its offerings resonate with customers.
This quarter, Udemy reported modest year-on-year revenue growth of 1.8% but beat Wall Street’s estimates by 1.6%. Company management is currently guiding for a 1.4% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 1% over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and suggests its products and services will see some demand headwinds.
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Monthly Active Buyers
Buyer Growth
As a subscription-based app, Udemy generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.
Over the last two years, Udemy’s monthly active buyers, a key performance metric for the company, increased by 11.9% annually to 17,216 in the latest quarter. This growth rate is strong for a consumer internet business and indicates people love using its offerings. 
In Q1, Udemy added 1,146 monthly active buyers, leading to 7.1% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating buyer growth just yet.
Revenue Per Buyer
Average revenue per buyer (ARPB) is a critical metric to track because it measures how much the average buyer spends. ARPB is also a key indicator of how valuable its buyers are (and can be over time).
Udemy’s ARPB fell over the last two years, averaging 1.6% annual declines. This isn’t great, but the increase in monthly active buyers is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Udemy tries boosting ARPB by taking a more aggressive approach to monetization, it’s unclear whether buyers can continue growing at the current pace. 
This quarter, Udemy’s ARPB clocked in at $11,635. It declined 5% year on year, worse than the change in its monthly active buyers.
Key Takeaways from Udemy’s Q1 Results
We were impressed by Udemy’s optimistic EBITDA guidance for next quarter, which blew past analysts’ expectations. We were also excited its revenue, EPS, and EBITDA outperformed Wall Street’s estimates. On the other hand, it lowered its full-year revenue guidance. Overall, we still think this was a solid quarter with some key areas of upside. The stock traded up 3.6% to $7.13 immediately after reporting.
Udemy put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.