 Udemy reported $200.3mn in revenue for 1Q25, a 1.8% YoY increase, exceeding its guidance range of $195-199mn. This figure includes a 2% negative impact from exchange rate fluctuations. Revenue from the Enterprise segment (UB) rose 9% YoY to $127.7mn, compared to $117.6mn in 1Q24 and $130.1mn in 4Q24. However, UB customer growth slowed to 7% YoY in 1Q25 from 9% in 4Q24 and 12% YoY a year ago. UB’s net dollar retention rate was 100% in 1Q25, while UB Annual Recurring Revenue increased 8.3% YoY to $519mn, up from $479mn in 1Q24. The Consumer segment revenue declined 8% YoY to $72.6mn, attributed to a 2.2% decline in Monthly Average Buyers, which dropped to 1.41mn. Nevertheless, this figure was higher QoQ, compared to 1.32mn in 4Q24. UB gross profit reached $96mn, up 13.5% YoY, while gross profit for the Consumer segment declined 6.5% YoY to $40.4mn. Overall performance exceeded guidance. Adjusted EBITDA rose to $21.1mn in 1Q25, up from $6.2mn a year ago, with an Adjusted EBITDA margin of 11%. Udemy incurred $1.5mn in restructuring charges in 1Q25. Stock-based compensation decreased 14.5% YoY to $18mn. The company reported $190mn in cash and cash equivalents, along with $167mn in marketable securities. Udemy added 2mn new learners and approximately 120 net new Enterprise customers, including Anheuser-Busch InBev (Belgium), ARCO Human Resources Company (Saudi Arabia), Babel Sistemas de Informacion (Spain), Binance, dunnhumby Limited, Grupo FEMSA (Mexico), Iveco Group (Italy), Isuzu Motors Limited (Japan), LATAM Airlines Group(Chile), Norah AIMalahi Foundation(Saudi Arabia), NTT East (Japan), Ricoh Europe (Netherlands), Riyad Bank(Saudi Arabia), Sony India Software Centre Private Limited (India). Udemy also launched Career Accelerators, which include curated collections of courses aimed at helping learners gain the skills for high-opportunity roles. Subscription-based revenue accounted for 68% of total revenue, supporting a more sustainable revenue-generation model compared to the company’s transactional model. According to management, this shift, along with targeted course packaging such as AI-specific content for defined roles or customer segments, could drive future revenue growth. Hugo Sarrazin joined Udemy as its new President and CEO, bringing prior experience in technology through roles at HCM and McKinsey.  Udemy has provided 2Q25 guidance of $ 195- 199mn in revenue and $22-24mn in Adjusted EBITDA, including a 1.5% headwind from FX. For FY24, the company forecasts revenue of $772-794mn and Adjusted EBITDA of $77-87mn. As part of its transitional strategy in 2025, Udemy plans to implement several changes to its business model. These include a revised instructor revenue-sharing structure, a continued shift toward Udemy Business, greater emphasis on the subscription model, operational efficiency initiatives, and increased operating expense leverage. Research and development expenses declined as a percentage of revenue in 1Q25; however, the company has not yet achieved net profitability. The transition from a transactional to a subscription-based model is expected to support top-line growth through improved merchandising and course packaging. Nevertheless, this shift carries the risk of losing some transactional customers, particularly within the Consumer segment. These efforts are intended to help the company achieve its previously announced medium-term targets of $130-150mn in Adjusted EBITDA by 2026 and a 20% Adjusted EBITDA margin in 2027. However, the current challenging macroeconomic environment may hinder progress, potentially resulting in flat top-line and bottom-line performance. We assume a conservative scenario for both the Consumer and UB segment growth. We updated our model and revised our 12-month price target to $12.21 from $13.85. We maintain a Buy rating on the stock.