Online learning platform Coursera (NYSE:COUR) reported results ahead of analyst expectations in the Q1 FY2023 quarter, with revenue up 22.6% year on year to $147.6 million. The company expects that next quarter's revenue would be around $145 million, which is the midpoint of the guidance range. That was roughly in line with analyst expectations. Coursera made a GAAP loss of $32.4 million, improving on its loss of $38.3 million, in the same quarter last year.
Is now the time to buy Coursera? Access our full analysis of the earnings results here, it's free.
Coursera (COUR) Q1 FY2023 Highlights:
- Revenue: $147.6 million vs analyst estimates of $138.8 million (6.39% beat)
- EPS: -$0.22 vs analyst estimates of -$0.29 (25.1% beat)
- Revenue guidance for Q2 2023 is $145 million at the midpoint, above analyst estimates of $143.6 million
- The company reconfirmed revenue guidance for the full year, at $605 million at the midpoint
- Free cash flow of $1.53 million, up from negative free cash flow of $7.85 million in previous quarter
- Gross Margin (GAAP): 52.5%, down from 64.5% same quarter last year
- Paying Users : 124 million, up 22 million year on year
“The transformation of higher education has never been more urgent. We believe emerging AI technologies will usher in a new era of skilling imperatives for individuals, businesses, and governments globally,” said Coursera CEO Jeff Maggioncalda.
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.
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Sales Growth
Coursera's revenue growth over the last three years has been very strong, averaging 33.6% annually. This quarter, Coursera beat analyst estimates and reported a decent 22.6% year on year revenue growth.
Guidance for the next quarter indicates Coursera is expecting revenue to grow 16.2% year on year to $145 million, slowing down from the 22.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 13.5% over the next twelve months.
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Usage Growth
As a subscription app, Coursera generates revenue growth by growing both the subscriber base and how much each subscriber spends over time, on average.
Over the last two years the number of Coursera's paying users, a key usage metric for the company, grew 22.7% annually to 124 million. This is a strong growth for a consumer internet company.
In Q1 the company added 22 million paying users, translating to a 21.6% growth year on year.
Key Takeaways from Coursera's Q1 Results
With a market capitalization of $1.5 billion Coursera is among smaller companies, but its more than $267.8 million in cash and the fact it is operating close to free cash flow break-even put it in a robust financial position to invest in growth.
We liked to see that Coursera beat analysts’ revenue expectations pretty strongly this quarter. And we were also glad to see the user growth. Overall, we think this was a really good quarter, that should leave shareholders feeling very positive.The company is up on the results and currently trades at $11.00 per share.
Should you invest in Coursera right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.
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The author has no position in any of the stocks mentioned.
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