Coursera Reports First Quarter Fiscal 2021 Financial .

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Earnings ReleaseQ1 FY21Coursera Reports First Quarter Fiscal 2021 Financial Results Revenue grows 64% Year Over YearProfessional Certificates momentum drives registered learners to 82 millionMay 4, 2021MOUNTAIN VIEW, Calif. (BUSINESS WIRE) – Coursera (NYSE: COUR) today announcedfinancial results for its first quarter of fiscal 2021, ended March 31, 2021.“The COVID-19 pandemic has dramatically changed the way we learn, teach, and work. Ourstrong first-quarter performance reflects the continued trend of individuals and institutionsembracing online learning to develop skills for a digital future,” said Coursera CEO JeffMaggioncalda. “We believe the digital transformation of higher education is only in the earlyinnings, and we see many opportunities to drive growth for Coursera in the years ahead.”Financial Highlights for First Quarter Fiscal 2021 Total revenue was 88.4 million, up 64% from 53.8 million a year ago.Gross profit was 49.5 million or 56.1% of revenue, up 71% from 28.9 million a yearago. Non-GAAP gross profit was 49.6 million or 56.2% of revenue, up 71% from 29.0million a year ago.Net loss was (18.7) million or (21.1)% of revenue, compared to (14.3) million or(26.6)% of revenue a year ago. Non-GAAP net loss was (13.4) million or (15.1)% ofrevenue, compared to (11.3) million or (21.0)% of revenue a year ago.Adjusted EBITDA was (10.1) million or (11.5)% of revenue, compared to (9.9) millionor (18.4)% of revenue a year ago.Net cash used in operating activities was (4.3) million, compared to (7.5) million a yearago. Free cash flow was (8.6) million, compared to (9.9) million a year ago.For more information regarding the non-GAAP financial measures discussed in this pressrelease, please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to NonGAAP Financial Measures" below.“During the first quarter, we demonstrated our ability to scale all parts of our business withrevenue growth of 64% year-on-year,” said Ken Hahn, Coursera’s CFO. “Our freemium modelallows us to acquire learners at a low cost and meet their lifelong learning needs with a growingselection of premium, job-relevant content and credentials.”Operating Segment Highlights Consumer revenue for the first quarter was 51.9 million, up 61% from a year ago onbroad-based strength across all regions and strong adoption of recently launchedProfessional Certificates. Segment gross margin was 29.7 million, or 57% of Consumer1

Earnings ReleaseQ1 FY21 revenue, compared to 54% a year ago. The company added 5 million new registeredlearners during the quarter for a total of 82 million.Enterprise revenue for the first quarter was 24.5 million, up 63% from a year ago. PaidEnterprise Customers increased 84% from a year ago to 479 as businesses,governments, and campuses deploy Coursera to upskill and re-skill individuals. Segmentgross margin was 16.6 million, or 68% of Enterprise revenue, compared to 70% a yearago. Our Net Retention Rate (NRR) for Paid Enterprise Customers was 113%.Degrees revenue for the first quarter was 12.0 million, up 81% from a year ago as priorcohorts scale and students begin newly launched programs. Segment gross margin was100% of Degrees revenue. There is no content cost attributable to the Degrees segmentas students pay tuition directly to the university, and the university pays us a fee basedon the amount of tuition. The total number of Degrees Students reached 13,493, up 88%from a year ago.All key business metrics are as of March 31, 2021. For more information regarding the metricsdiscussed in this press release, please see "Key Business Metrics Definitions" below.Content and Platform Highlights Content and Credentials: Expanded our stackable system of branded content andcredentials from leading universities and companies: Announced 5 new degrees, 6 MasterTrack programs, 4 university certificates,and a growing selection of Guided Projects to prepare learners for in-demandjobs. Launched 3 additional entry-level Professional Certificates from leadingtechnology companies, including IBM and Salesforce. Welcomed 10 new university partners, spanning the globe from the U.S. andLatin America to the Middle East and Asia.Learning Platform: Announced new platform features and functionality to supportlearner goals, educator efficiency, and skill-based learning within institutions: Learners: New features include real-time, personalized contentrecommendations, preferred language subtitle translations for over 2,000 topcourses, and WCAG 2.1AA accessibility support across desktop and mobileexperiences for learners of all abilities. Educators: Piloted scalable tools for educators to author content efficiently andeffectively including upload-based authoring and LMS content ingestion toCoursera, speeding up the authoring process and saving educators time buildingtheir course. Institutions: New features include the Data Science Academy and SkillSets tohelp organizations develop, measure, and benchmark skills.Highlights reflect developments since December 31, 2020 through today’s announcement. Foradditional information on these developments, see the Coursera Blog at

Earnings ReleaseQ1 FY21Financial Outlook Second quarter fiscal 2021: Revenue in the range of 89 to 93 million Adjusted EBITDA in the range of (9.5) to (12.5) millionFull-year fiscal 2021: Revenue in the range of 369 to 381 million Adjusted EBITDA in the range of (45.5) to (52.5) millionActual results may differ materially from Coursera’s Financial Outlook as a result of, amongother things, the factors described under “Special Note on Forward-Looking Statements” below.A reconciliation of non-GAAP guidance measures to corresponding GAAP guidance measuresis not available on a forward-looking basis without unreasonable effort due to the uncertaintyregarding, and the potential variability of, expenses that may be incurred in the future. Stockbased compensation expense-related charges, including employer payroll tax-related items onemployee stock transactions, are impacted by the timing of employee stock transactions, thefuture fair market value of our common stock, and our future hiring and retention needs, all ofwhich are difficult to predict and subject to constant change. We have provided a reconciliationof GAAP to non-GAAP financial measures in the financial statement tables for our historicalnon-GAAP financial results included in this press release.Conference Call DetailsAs previously announced, Coursera will hold a conference call to discuss its first quarterperformance today, May 4, 2021 at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).A live, audio-only webcast of the conference call and earnings release materials will beavailable to the public on the company’s Investor Relations page at Forthose unable to listen to the broadcast live, an archived replay will be accessible in the samelocation for one year.Disclosure InformationIn compliance with disclosure obligations under Regulation FD, Coursera announces materialinformation to the public through a variety of means, including filings with the Securities andExchange Commission, press releases, company blog posts, public conference calls andwebcasts, as well as the investor relations website.About CourseraCoursera was launched in 2012 by two Stanford Computer Science professors, Andrew Ng andDaphne Koller, with a mission to provide universal access to world-class learning. It is now oneof the largest online learning platforms in the world, with 82 million registered learners as ofMarch 31, 2021. Coursera partners with over 200 leading university and industry partners tooffer a broad catalog of content and credentials, including Guided Projects, courses,3

Earnings ReleaseQ1 FY21Specializations, certificates, and bachelor’s and master’s degrees. More than 6,000 institutionshave used Coursera to upskill and reskill their employees, citizens, and students, including inhigh-demand fields such as data science, technology, and business.Contacts:For investors: Cam Carey, [email protected] media: Arunav Sinha, [email protected]###Key Business Metrics DefinitionsRegistered LearnersWe count the total number of registered learners at the end of each period. For purposes ofdetermining our registered learner count, we treat each customer account that registers with aunique email as a registered learner and adjust for any spam, test accounts, and cancellations.Our registered learner count is not intended as a measure of active engagement. Newregistered learners are individuals that register in a particular period.Paid Enterprise CustomersWe count the total number of Paid Enterprise Customers at the end of each period. Forpurposes of determining our customer count, we treat each customer account that has acorresponding contract as a unique customer, and a single organization with multiple divisions,segments, or subsidiaries may be counted as multiple customers. We define a “Paid EnterpriseCustomer” as a customer who purchases Coursera via our direct sales force. For purposes ofdetermining our Paid Enterprise Customer count, we exclude our Enterprise customers who donot purchase Coursera via our direct sales force, which include organizations engaging on ourplatform through our Coursera for Teams offering or through our channel partners.Net Retention Rate (NRR) for Paid Enterprise CustomersWe calculate annual recurring revenue (“ARR”) by annualizing each customer’s monthlyrecurring revenue (“MRR”) for the most recent month at period end. We calculate “Net RetentionRate” as of a period end by starting with the ARR from all Paid Enterprise Customers as of thetwelve months prior to such period end, or Prior Period ARR. We then calculate the ARR fromthese same Paid Enterprise Customers as of the current period end, or Current Period ARR.Current Period ARR includes expansion within Paid Enterprise Customers and is net ofcontraction or attrition over the trailing twelve months, but excludes revenue from new PaidCustomers in the current period. We then divide the total Current Period ARR by the total PriorPeriod ARR to arrive at our Net Retention Rate.Number of Degrees StudentsWe count the total number of Degrees students for each period. For purposes of determiningour Degrees student count, we include all the students that are matriculated in a degree4

Earnings ReleaseQ1 FY21program and who are enrolled in one or more courses in such degree program during theperiod. If a degree term spans across multiple quarters, said student is counted as active in allquarters of the degree term. For purposes of determining our Degrees student count, we do notinclude students who are matriculated in the degree but are not enrolled in a course in thatperiod.Non-GAAP Financial MeasuresIn addition to financial information presented in accordance with GAAP, this press releaseincludes non-GAAP gross profit, non-GAAP net loss, adjusted EBITDA, adjusted EBITDAmargin and Free Cash Flow, each of which is a non-GAAP financial measure. These are keymeasures used by our management to help us analyze our financial results, establish budgetsand operational goals for managing our business, evaluate our performance, and makestrategic decisions. Accordingly, we believe that these non-GAAP financial measures provideuseful information to investors and others in understanding and evaluating our operating resultsin the same manner as our management and board of directors. In addition, we believe thesemeasures are useful for period-to-period comparisons of our business. We also believe that thepresentation of these non-GAAP financial measures provides an additional tool for investors touse in comparing our core business and results of operations over multiple periods with othercompanies in our industry, many of which present similar non-GAAP financial measures toinvestors, and to analyze our cash performance. However, the non-GAAP financial measurespresented may not be comparable to similarly titled measures reported by other companies dueto differences in the way that these measures are calculated. These non-GAAP financialmeasures are presented for supplemental informational purposes only and should not beconsidered as a substitute for or in isolation from financial information presented in accordancewith GAAP. These non-GAAP metrics have limitations as analytical tools.Non-GAAP Gross Profit and Non-GAAP Net LossWe define non-GAAP gross profit and non-GAAP net loss as GAAP gross profit and GAAP netloss excluding the impact of stock-based compensation, and payroll tax expense related tostock-based activities. We believe the presentation of operating results that exclude these noncash or non-recurring items provides useful supplemental information to investors and facilitatesthe analysis of our operating results and comparison of operating results across reportingperiods.Adjusted EBITDA and Adjusted EBITDA MarginWe define Adjusted EBITDA as our net loss excluding: (1) depreciation and amortization; (2)interest income, net; (3) stock-based compensation; (4) income tax expense; and (5) payroll taxexpense related to stock-based activities. We define Adjusted EBITDA Margin as AdjustedEBITDA divided by revenue.Free Cash FlowFree Cash Flow is a non-GAAP financial measure that we calculate as net cash used inoperating activities, less cash used for purchases of property, equipment, and software, and5

Earnings ReleaseQ1 FY21capitalized internal-use software costs. We exclude purchases of property, equipment andsoftware, and capitalized internal-use software costs as we consider these capital expendituresto be a necessary component of our ongoing operations.Reconciliations of the non-GAAP measures to the most directly comparable GAAP financialmeasures are included in the Appendix.Special Note on Forward-Looking StatementsThis press release contains forward-looking statements that involve substantial risks anduncertainties. Any statements contained in this press release that are not statements ofhistorical facts may be deemed to be forward-looking statements. In some cases, you canidentify forward-looking statements by the words “may,” “might,” “will,” “can,” “could,” “would,”“should,” “expect,” “intend,” “plan,” “objective,” “target,” “anticipate,” “believe,” “estimate,”“predict,” “project,” “potential,” “continue,” and “ongoing,” or the negative of these terms, or othercomparable terminology intended to identify statements about the future. These forward-lookingstatements include statements regarding: the impact of the COVID-19 pandemic on our market,business and operations; trends in the online learning market, including with respect todeveloping skills for a digital future; trends in the higher education market; opportunities to drivegrowth for Coursera; the benefits of Coursera’s freemium model, including allowing Coursera toacquire learners at a low cost; features and anticipated benefits of our content and platformofferings; Coursera’s ability to scale its business; and our financial outlook, future financialperformance, and expectations, among others. These forward-looking statements involveknown and unknown risks, uncertainties, and other factors that may cause our actual results,levels of activity, performance, or achievements to be materially different from the informationexpressed or implied by these forward-looking statements. These risks and uncertaintiesinclude, but are not limited to, the following: our ability to manage our growth; our limitedoperating history; the COVID-19 pandemic’s impact on our business and our industry; thenascency of online learning solutions and risks related to market adoption of online learning; ourability to maintain and expand our partnerships with our university and industry partners; ourability to attract and retain learners; our ability to increase sales of our Enterprise offering; ourability to compete effectively; regulatory matters impacting us or our partners; risks related tointellectual property; cyber security and privacy risks and regulations; potential disruptions to ourplatform; and our status as a B Corp, as well as the risks discussed in our Quarterly Report onForm 10-Q for the quarter ended March 31, 2021 and as detailed from time to time in our SECfilings. You should not rely upon forward-looking statements as predictions of future events.Although we believe that the expectations reflected in the forward-looking statements arereasonable, we cannot guarantee that the future results, levels of activity, performance, orevents and circumstances reflected in the forward-looking statements will be achieved or occur.Moreover, neither we nor any other person assumes responsibility for the accuracy andcompleteness of the forward-looking statements. Such forward-looking statements relate only toevents as of the date of this press release. We undertake no obligation to update any forwardlooking statements except to the extent required by law.6

Earnings ReleaseQ1 FY21Coursera Inc.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)(In thousands, except number of shares and per share amounts)Three Months Ended March 31,20202021(in thousands)Revenue 53,847 88,362Cost of revenue(1)24,95138,826Gross profit28,89649,536Research and development(1)15,78322,140Sales and rating expenses:(1)General and administrativeTotal operating expensesLoss from operationsOther income (expense):Interest incomeOther expense, netLoss before income taxesIncome tax expenseNet lossNet loss per share attributable to commonstockholders—basic and dilutedWeighted average shares used in computing netloss per share attributable tocommon stockholders—basic and diluted (14,314) (18,663) (0.40) (0.45)35,666,17241,218,355(1) Includes stock-based compensation expense as follows:Three Months Ended March 31,20202021(in thousands)Cost of revenue Research and developmentSales and marketingGeneral and administrativeTotal stock-based compensation expense 110 1071,2772,0287091,3479181,8023,014 5,2847

Earnings ReleaseQ1 FY21Coursera Inc.CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)(In thousands)December 31, 2020March 31, 2021Assets:Current assets:Cash and cash equivalents Marketable securitiesAccounts receivable, net of allowance fordoubtful accounts of 48 and 146Deferred costsPrepaid expenses and other current assetsTotal current assets79,878 318,666355,071351,198Property, equipment and software, net18,64421,080Operating lease right-of-use assets21,62220,276Intangible assets, net10,57010,313Restricted cash2,5482,548Other assets9,1699,407Total assets 417,624 414,822Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Deficit:Current liabilities:Educator partners payable 39,005 41,360Other accounts payable12,8979,813Accrued compensation and benefits12,9978,354Operating lease liabilities, currentDeferred revenue, currentOther current liabilities7,9267,97376,08085,2544,7395,052Total current liabilities153,644157,806Operating lease liabilities, non-current18,30516,676Other liabilitiesDeferred revenue, non-currentTotal 2,293Commitments and contingenciesRedeemable convertible preferred stock:Stockholders’ deficit:Common StockAdditional paid-in capitalTreasury stockAccumulated other comprehensive incomeAccumulated deficitTotal stockholders’ deficitTotal liabilities, redeemable convertiblepreferred stock, stockholders’ deficit 2,214)(221,824)(226,089)417,624 414,8228

Earnings ReleaseQ1 FY21Coursera Inc.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)(In thousands)Three Months Ended March 31,20202021Cash flows from operating activities:Net loss Adjustments to reconcile net loss to net cash used in operatingactivities:Depreciation and amortization(14,314) (18,663)1,9932,931Stock-based compensation3,0145,284Amortization or accretion of marketable securities(149)1774098OtherChanges in operating assets and liabilities:Accounts receivable, net(3,414)5,041Prepaid expenses and other assets909260Operating lease right-of-use assets1,2641,345Educator partners and other accounts payable2,133(3,032)Accrued and other liabilities(7,052)(4,330)Operating lease urchases of marketable securities(5,939)—Proceeds from maturities of marketable 170)55,06478,0384218,564Deferred revenueNet cash used in operating activitiesCash flows from investing activities:Purchases of property, equipment, and softwareCapitalized internal-use software costsPurchases of content assetsNet cash provided by investing activitiesCash flows from financing activities:Proceeds from exercise of stock optionsPayment of deferred offering costs—(4,061)4214,503Net increase in cash, cash equivalents, and restricted cash47,94978,194Cash, cash equivalents, and restricted cash—Beginning of period59,84582,426Net cash provided by financing activitiesCash, cash equivalents, and restricted cash—End of period 107,794 160,620 103,935 158,072Cash, cash equivalents, and restricted cash—End of periodCash and cash equivalentsRestricted cashRestricted cash in prepaid expenses and other current assetsCash, cash equivalents, and restricted cash—End of period 3,0902,548769—107,794 160,6209

Earnings ReleaseQ1 FY21Coursera Inc.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited)(In thousands, except number of shares and per share amounts)Three Months Ended March 31, 2021Stock-basedCompensationGAAPRevenue Cost of revenuePayroll taxexpenserelated tostock-basedactivitiesNon-GAAP88,362 88,36238,826(107)(1)38,718Gross profit49,536107149,644Operating expenses:Research ,694(18,361)5,28427(13,050)Sales and marketingGeneral andadministrativeTotal operating expensesLoss from operationsInterest income8080Other expense, net(7)(7)Loss before income taxesIncome tax expenseNet lossNet loss margin (a), (b)Net loss per share attributableto common stockholders—basicand dilutedWeighted average shares usedin computing net loss per shareattributable to commonstockholders—basic and diluted (18,288)5,28427(12,977)375--375(18,663)5,28427 (21)% (0.45)41,218,355(13,352)(15)% (0.32)41,218,355(a) Net loss margin is defined as net loss divided by revenue.(b) Non-GAAP net loss margin is defined as non-GAAP net loss margin divided by revenue.10

Earnings ReleaseQ1 FY21Three Months Ended March 31, 2020Stock-basedCompensationGAAPRevenue Cost of revenueGross profitOperating expenses:Research anddevelopmentSales and marketingGeneral andadministrativeTotal operating expensesLoss from operationsInterest incomeOther expense, netLoss before income taxesIncome tax expenseNet lossNet loss margin (a), (b)Net loss per share attributable tocommon stockholders—basicand dilutedWeighted average shares usedin computing net loss per shareattributable to commonstockholders—basic and diluted Payroll taxexpenserelated tostock-basedactivities53,847Non-GAAP 4)3,014— (27)% 53,847(0.40)35,666,172(11,300)(21)% (0.32)35,666,172(a) Net loss margin is defined as net loss divided by revenue.(b) Non-GAAP net loss margin is defined as non-GAAP net loss margin divided by revenue.11

Earnings ReleaseQ1 FY21Three Months Ended March 31,20202021(in thousands)Net loss (14,314) (18,663)Depreciation and amortization1,9932,931Interest income, net(696)(80)Stock-based compensation3,0145,28489375-27Income tax expensePayroll tax expense related to stock-basedactivitiesAdjusted EBITDA (9,914) (10,126)Three Months Ended March 31,20202021(in thousands, except percentages)RevenueNet loss 53,847 88,362 (14,314) (18,663)GAAP net loss marginRevenueAdjusted EBITDA(27)%(21)% 53,847 88,362 (9,914) (10,126)Adjusted EBITDA margin(18)%(11)%Three Months Ended March 31,20202021(in thousands)Net cash used in operating activities Less: Purchases of property, equipment, andsoftwareLess: Capitalized internal-use software costsFree Cash Flow (7,536) (4,347)(582)(307)(1,774)(3,985)(9,892) (8,639)12