 Udemy reported revenues of $199.9mn in 4Q24, a 5% YoY increase, exceeding its guidance range of $193-196mn. The Enterprise segment (UB) revenue rose 13% YoY to $130.1mn in 4Q24. The UB net dollar retention rate was 98% for 4Q with UB Annual Recurring Revenue increasing by 11% YoY to $516.9mn. The Consumer segment revenue declined 7% YoY to $69.8mn, due to a 3% decline in Monthly Average Buyers, which fell to 1.32mn. The UB gross profit reached $97mn, up 23% YoY, while the Consumer segment gross profit was $37mn, a 3% decline YoY. Overall figures exceeded guidance. In FY24, Udemy reported $494.5mn in revenue from the Udemy Business segment, up 18% YoY, and $292.1mn in the Consumer segment, down 5% YoY. Gross profit reached $361.7mn in the UB (up 28% YoY) and $159.4mn in the Consumer segment (down 3% YoY). The company’s total revenue increased 8% YoY to $786.6mn, including the impact of a 2% FX headwind. Adjusted EBITDA reached $19.5mn in 4Q, up 390% YoY, and $43mn in FY24, up 451% YoY. Adjusted EBITDA margin was 10% in 4Q24 and averaged 5% in FY24. Udemy incurred $16.7mn of restructuring charges in FY24. Stock-based compensation decreased 4.9% to $90.2mn. The company ended the year with $355.7mn in cash, cash equivalents, and marketable securities. Udemy acquired 8mn new learners and around 1,400 net new Enterprise customers in 2024, bringing the total to 77mn learners and 17,096 enterprise customers. New business customers on the platform included: Akbank (Turkey), ANALOG Devices (US), Arm (UK), Atlas (US), Dropbox (US), E.ON(Germany), Grupo Bancolombia (Colombia), Innovaccer Analytics Private Limited (India), Itau Unibanco (Brazil), Kellanova(UK), Krungthai Bank (Thailand), Nasdaq (US), and Novin Fluorine International Limited (India). The rise of Generative AI further accelerated reskilling and upskilling needs, driving corporate interest in employee training through Udemy as an efficient way to close the skills gap. Udemy offers over 250k courses on its platform, adding 5k new courses per month. The number of instructors reached 80k, while the total number of learners exceeded 77mn in 2024. The company remains cautiously optimistic about its growth prospects and aims to enhance operating efficiency, targeting 20% Adjusted EBITDA margin by 2027. Udemy also completed its $150mn share repurchase program in 4Q.  Udemy has provided revenue guidance of $787-803mn for FY25, including a 2% headwind from FX. The revenue forecast includes a 10% decline in the consumer segment, negatively impacted by a 3% FX rate change. The company expects Adjusted EBITDA of $75-85mn, or 10% of revenue at the midpoint. For 1Q25, Udemy forecasts $195-199mn in revenue, reflecting a 5% YoY increase, including a negative 2% impact from FX headwinds. The Consumer segment revenue is expected to decline 6%YoY, while UB revenue is projected to grow 7% YoY, with a 1% FX headwind. Adjusted EBITDA is anticipated to reach $17-19mn in 1Q25. The company plans to allocate resources to support the UB segment, while also working on revitalizing the Consumer marketplace. In 2025, Udemy expects to implement changes to its business model, including instructor revenue share change and mix shift to UB, operational efficiency initiatives, and operating expense leverage. These efforts aim to achieve medium-term targets of $130-150mn in Adjusted EBITDA in 2026 and a 20% Adj EBITDA margin in 2027. To reach these goals, Udemy must significantly reduce operating expenses as a percentage of revenue – a challenge given the current weakness in the Consumer segment and the need to invest in UB growth. We updated our model, adjusting our 12-month price target to $13.85 from $13.53, based on 148mn shares as of 4Q24. We maintain a Buy rating for the stock.