 Udemy reported a mixed set of results amid its transition to a subscription model. The monthly average number of buyers declined 5.4% YoY to 1.25 million, while Udemy Business customers decreased 0.39% YoY to 17,029 in 4Q25. Udemy reported 343,000 subscribers in the Consumer segment, indicating that 27% of the consumer base has transitioned to the subscription model. The subscription offering (£144 per year or £22 per month in the UK, depending on the billing period) generated $13.3 million in revenue, up 53% YoY (compared to 102% YoY growth in paid subscribers to 343,000). In 4Q25, Udemy reported $59.8 million in Consumer segment revenue (down 14% YoY) and $134.2 million in Enterprise segment revenue (up 3% YoY). Segment gross margin was 56% in Consumer and 76% in Enterprise. Total revenue reached $194 million, down 3% YoY, including $146.8 million in subscription revenue (+7% YoY). Gross profit totaled $128 million, up 1% YoY, while Adjusted EBITDA reached $21.4 million, up 10% YoY. For FY2025, revenue reached $789.8 million, flat YoY, including $566 million in subscription revenue (up 8% YoY). Gross profit increased 5% YoY to $518.4 million, and Adjusted EBITDA rose 122% YoY to $95.3 million. The Adjusted EBITDA margin improved to 12% in FY25, compared to 5% in FY24. Subscription revenue accounted for 72% of total consolidated revenue, in line with previously announced plans. However, the strategy of stabilizing ARR may come at the cost of slower growth. The net dollar retention rate stabilized at 93% in the Udemy Business segment. Operating expenses totaled $522.6 million, reflecting a YoY improvement. Sales and marketing expenses declined 5% YoY to $326.5 million, while R&D expenses decreased 19% YoY to $101.5 million. Stock-based compensation expense declined 24% YoY in FY25. Udemy generated $87.7 million in net cash from operating activities in FY25. Cash, cash equivalents, and marketable securities totaled $359.1 million. Free cash flow reached $70 million, the highest level in the company’s history. Udemy Business added several new customers, including Arm, BCI (Canada), Capgemini (France), Coldwater Creek (US), Dubai Academic Health Corporation (UAE), Ericsson (Sweden), Genpact (US), Group Astek (France), Infosys (India), Kellanova (US), Mercado Libre LatAm (Argentina), NNE (Denmark), and Red Hat (US). The company also announced new partnerships in the training and content market, including LG CNS (Korea), Workera, Emtrain, HSM (Brazil), and Entri (India). Overall, results were broadly in line with the company’s guidance; however, they leave some uncertainty regarding the platform’s future growth trajectory.  The complementary strengths of Coursera in the Consumer segment and Udemy in the Enterprise segment, following the expected completion of the merger in 2026, could create a stronger and more diversified player in the global learning market. The two companies bring complementary marketplaces and regional reach. Udemy and Coursera entered into a merger agreement in December 2025, under which Coursera will combine with Udemy in an all-stock transaction. Udemy shareholders will receive 0.8 shares of Coursera common stock for each Udemy share. Coursera has 191 million registered learners and 2,000 enterprise customers, while Udemy has 82 million learners and 17,000 enterprise customers. On a pro forma basis, the combined company generated over $1.5 billion in LTM revenue as of the end of September 2025. Anticipated annual run-rate cost synergies are estimated at $115 million within 24 months of closing. Based on our updated standalone model for Udemy, we revise our 12-month price target to $8.81 from $10.56 and reiterate our Buy rating on the stock.