Core Insights - The online education market is experiencing a structural reset driven by shifts in learner behavior towards flexible, outcome-oriented skill development and the influence of generative AI on knowledge consumption [1] - Chegg, Inc. (CHGG) and Udemy, Inc. (UDMY) represent two distinct approaches to monetizing digital learning platforms, each adapting to similar industry pressures from different starting points [1][2] Chegg (CHGG) Overview - Chegg is undergoing a structural reset, separating its legacy academic services from growth-oriented skilling operations to align resources with long-term demand trends in workforce education [4] - In Q3 2025, Chegg's non-GAAP operating expenses decreased by 46% year-over-year, with adjusted EBITDA exceeding expectations due to aggressive cost actions [5] - Total revenues for Chegg fell by 42% year-over-year in Q3 2025, primarily due to reduced traffic in legacy academic services and advertising revenue pressure [6] - The Chegg Skilling unit is projected to achieve 14% year-over-year revenue growth in Q4 2025, with expectations for sustained double-digit growth beyond 2025 [7] Udemy (UDMY) Overview - Udemy is shifting towards a subscription-led business model, focusing on professional skill development and enterprise learning, which allows for improved revenue quality and visibility [8][9] - In Q3 2025, Udemy's total revenues reached $196 million, slightly up year-over-year, with subscription revenues increasing by 8% and accounting for 74% of total revenues [10] - Despite improvements, Udemy faces challenges with a net dollar retention rate of 93% in its business segment and constrained growth in the consumer segment due to a strategic deemphasis on transactional course sales [11] Stock Performance & Valuation - Chegg's share price performance has lagged behind Udemy's and the broader industry over the past six months [13] - Udemy currently trades at a higher forward 12-month price-to-sales (P/S) ratio compared to Chegg [15] - Chegg's earnings estimates for 2026 have trended upward, indicating a projected year-over-year growth of 228.6% [17] - In contrast, Udemy's 2026 EPS estimates have trended downward, indicating only 0.8% growth [19] Investment Outlook - Chegg is emerging from a significant restructuring with a leaner cost structure and improving earnings visibility, positioning it for potential upside heading into 2026 [21] - Udemy benefits from its transition to a subscription model and expanding enterprise presence, but faces execution risks and a more measured growth outlook [21][22] - Chegg currently holds a Zacks Rank 1 (Strong Buy), while Udemy has a Zacks Rank 3 (Hold), appealing more to investors seeking stability [22]

Summary of Conference Call on Coursera and Udemy Combination Industry and Companies Involved - **Industry**: Online Education and Learning Platforms - **Companies**: Coursera and Udemy Core Points and Arguments 1. **Strategic Combination**: Coursera has entered into a definitive agreement to combine with Udemy, aiming to create a leading technology platform for skills development and mastery for learners and organizations at scale [2][4] 2. **Market Needs**: The World Economic Forum estimates that 39% of key skills will change in the next five years, with 86% of learners using Coursera to transform their careers, highlighting the need for agile platforms that adapt to the evolving labor market [5] 3. **Core Pillars of the Combination**: - Greater value, impact, and choice for learners and organizations - Leading platform capabilities - Accelerated AI-native innovation - Enhanced global reach and market opportunities - Stronger long-term financial profile [5][6] 4. **Combined Strengths**: The merger unites Coursera's verified learning ecosystem with Udemy's dynamic marketplace, allowing for a comprehensive approach to skills development across various learning needs [6][8] 5. **Innovation Acceleration**: The combination is expected to speed up product innovation by sharing resources and eliminating duplicative technology, enhancing the ability to deliver AI-powered learning experiences [9][10] 6. **Global Reach**: Coursera added 7.7 million new registered learners in Q3, bringing the total to 191 million, while Udemy has over 17,000 enterprise customers and generates more than 60% of its revenue outside North America, providing significant global diversification [11][12] 7. **Financial Profile**: The combined entity is projected to have an annual revenue run rate exceeding $1.5 billion, with identified cost synergies of $115 million expected to be realized within 24 months of closing [12][19] 8. **Transaction Structure**: The deal is an all-stock transaction where Udemy shareholders will receive 0.8 shares of Coursera stock for each share of Udemy stock, with Coursera shareholders owning approximately 59% of the combined company [20] 9. **Regulatory Perspective**: The companies believe the combination will deliver better value across the education value chain, although they will need to navigate regulatory approvals [41][42] Other Important Content 1. **Instructor Opportunities**: The merger is expected to provide instructors from both platforms access to a larger learner base, enhancing their ability to monetize their expertise [32][34] 2. **Content Strategy**: Both companies will maintain their distinct content strategies while exploring synergies, focusing on skill-based and outcome-focused learning experiences [42][43] 3. **Geographic Expansion**: The combination presents opportunities to leverage Udemy's international presence to enhance Coursera's offerings outside North America [46][48] 4. **Future Outlook**: The combined entity aims to ensure that human potential keeps pace with technological advancements, creating a platform that delivers more value to learners and greater impact for customers [22][23]

Core Perspective - The combination of Coursera and Udemy aims to address the growing need for upskilling and reskilling in the workforce, with the World Economic Forum predicting that 39% of skills will need to change by 2030 [2] Company Synergies - The merger will create a comprehensive ecosystem by uniting Coursera's consumer business with Udemy's enterprise strengths, resulting in over 270 million learners and nearly 20,000 enterprise customers [3] - The combined company anticipates annual run rate cost synergies of $115 million within 24 months of closing, focusing on efficiencies in sales, marketing, and general administrative expenses [4][5] Brand Strategy - Both brands will be integrated under the Coursera brand, with a thoughtful approach to leveraging Udemy's strengths in enterprise and instructor marketplace [6][7] Technology and Innovation - The merger is expected to enhance the technology platform, allowing for better service delivery to learners and enterprise customers, particularly through the use of AI [7][8] - Udemy's enterprise customers will gain access to Coursera's extensive content catalog, enhancing the value proposition for enterprises looking to upskill their workforce [9] Investment and Integration - The integration will involve one-time costs, but the consolidation into a single platform is expected to lead to greater efficiency and investment opportunities across a larger customer base [11][12]

+ Empowering the Global Workforce with Skills for the AI Era Non-GAAP financial measures This presentation con tains non-GAAP measures (includ ing non-GAAP gross p rofit, Adjust ed EBITDA, and cost synergies) used by our man agement to help us an alyze our fin ancial results, estab lish budgets and operational goals for man aging our business, evaluate our performan ce, an d make strategic decisions. We believe these pro vide useful supplemen tal information for investors to an alyze our core results and be ...

Coursera (COUR) and Udemy (UDMY) have entered into a definitive merger agreement under which Coursera will combine with Udemy in an all-stock transaction. Based on the closing prices of Coursera and Udemy common stock on December 16, the implied equity value ...

Summary of Key Points from J.P. Morgan's US Internet 2026 Outlook Industry Overview - The report focuses on the **US Internet** sector, providing insights into market performance, macroeconomic factors, and company-specific forecasts for 2026. Core Insights and Arguments 1. **2025 Performance Recap**: - The internet sector outperformed the S&P 500 by 17% in 2025, with average performance across market caps showing significant variation: - Large Cap: +19% - Mid-Cap: +42% - Small Cap: +21% - Smaller Cap (<$2B): -16% [12][13] 2. **2026 Macro Outlook**: - J.P. Morgan economists estimate a **35% risk of recession** in 2026, with expectations of resilient global growth driven by fiscal stimulus and capital expenditure [19][23]. - Key economic indicators include: - GDP Growth: 1.8% in 2026 - Inflation: Expected to remain above 3% CPI - Unemployment: Projected to peak at 4.5% in Q1 2026 [21][19]. 3. **Investment Recommendations**: - **Top Picks for 2026** include: - Alphabet (Overweight, $385 PT): Growth driven by AI and cloud services [46]. - Amazon (Overweight, $305 PT): Expected growth in AWS and retail segments [51]. - DoorDash (Overweight, $300 PT): Anticipated GOV growth of 18% CAGR from 2025-2028 [57]. - Spotify (Overweight, $805 PT): Projected revenue growth driven by premium subscriptions [66]. 4. **AI and Cloud Growth**: - AI is expected to significantly drive cloud growth, with Google Cloud projected to grow in the mid-40% range and AWS adding the highest estimated revenue in 2026 [101][102]. - The report highlights the importance of AI in enhancing operational efficiencies and driving revenue growth across various sectors [78]. 5. **Valuation Metrics**: - The S&P 500 is projected to have a price target of **$7,500** by the end of 2026, suggesting a 9% upside [26]. - Internet companies are trading at an average of **10.2x 2027E EV/EBITDA**, with expected revenue growth of approximately **13% CAGR** from 2025 to 2027 [40]. Additional Important Insights 1. **Market Dynamics**: - The report discusses the competitive landscape in the AI space, noting that leading model developers like Google and OpenAI are pushing the frontier, but competition remains intense [89][94]. - The potential for AI-driven advertising and e-commerce growth is highlighted, with expectations for significant market share shifts in the online ad market [112]. 2. **Company-Specific Catalysts**: - Alphabet's AI tools are expected to enhance productivity and revenue, while Amazon's AWS is set to double its capacity by 2027 [56][88]. - DoorDash is focusing on expanding its marketplace and improving unit economics, while Spotify is ramping up its free cash flow and operating margins [60][68]. 3. **Key Questions for 2026**: - The report raises critical questions regarding AI monetization, the impact of AI on cloud growth, and the potential for disruption in various sectors, including travel and e-commerce [76][124]. This summary encapsulates the essential insights and projections for the US Internet sector as outlined in the J.P. Morgan report, providing a comprehensive overview of the anticipated trends and investment opportunities for 2026.

Core Insights - Udemy has announced a partnership with LG CNS to expand into Korea's corporate learning market [1] - The partnership will leverage LG CNS's distribution network, which includes over 500 enterprise clients and millions of professionals [1] - Udemy will provide its AI-powered platform, including features like MCP Server, AI Assistant, and Role Play [1] Company Overview - Udemy is positioned as a global AI-powered skills acceleration platform [1] - The collaboration with LG CNS marks a strategic move to enhance Udemy's presence in the Asian market [1] Market Impact - The partnership is expected to significantly increase Udemy's reach within the corporate learning sector in Korea [1] - Access to LG CNS's extensive client base may lead to increased adoption of Udemy's learning solutions [1]

Core Insights - Udemy has announced the phased rollout of a new AI-powered microlearning experience aimed at transforming skill development on its platform, catering to the evolving needs of learners and instructors [1][4]. Group 1: AI-Powered Microlearning Experience - The new microlearning approach will convert long-form video courses into adaptive, engaging, and interactive experiences optimized for both mobile and desktop learning [2][3]. - Instructors will utilize a "human-in-the-loop" method to review and validate microlearning content, ensuring quality before it reaches learners [3][4]. - The rollout of these instructor-validated microlearning experiences is scheduled to occur throughout 2026, accessible via Udemy.com, the mobile app, and enterprise learning environments [3][4]. Group 2: Instructor Engagement and Role - Instructors are viewed as central to the skill development process, acting as creative directors who curate and validate learning experiences [4][7]. - The AI-powered microlearning model emphasizes the importance of human insights and lived experiences in teaching, reinforcing Udemy's commitment to its instructor community [4][7]. - Opportunities for both existing and new instructors specializing in short-form, interactive learning experiences will be expanded [7]. Group 3: Market Position and Clientele - Udemy serves thousands of companies, including notable clients such as Ericsson, Samsung SDS America, and Volkswagen, providing enterprise solutions to build agile teams [8]. - The platform combines on-demand, multi-language content with real-time innovation to deliver personalized learning experiences [6].

Core Insights - Udemy has introduced new instructor-focused offerings to enhance the role of human expertise in the AI-driven learning landscape [1][2] - The global demand for upskilling is increasing, with nearly 60% of professionals requiring reskilling due to rapid changes driven by AI [1] Group 1: New Offerings - Instructor Subscriptions will allow instructors to offer live sessions, short-form content, and community features, aimed at generating recurring revenue and enhancing learner engagement [3] - AI-Powered Micro-Learning tools will enable instructors to convert long-form courses into interactive micro-learning experiences, catering to learners' needs in real-time [3] - A $2.5 million Content Innovation Fund will support instructors in developing next-generation learning formats, including subscription models and AI-driven content [4] Group 2: Market Trends - Learner expectations are shifting towards modular, continuous, and skills-focused learning experiences, prompting Udemy to adapt its offerings [5] - The innovations are designed to create new revenue streams for instructors beyond traditional course formats, thereby strengthening Udemy's subscription ecosystem [5] Group 3: Company Overview - Udemy is positioned as an AI-powered skills acceleration platform, helping organizations and individuals develop essential skills for a rapidly evolving workplace [7] - The company serves thousands of enterprises globally, including notable clients like Ericsson, Samsung, and The World Bank, emphasizing its role in workforce development [7]

Core Insights - Udemy and Mila have announced a partnership aimed at accelerating responsible AI skill development for the global workforce [1][2] - The collaboration will focus on creating scalable AI learning programs that emphasize ethical and responsible AI application [1][3] Partnership Details - Starting in January, new responsible AI learning programs will be launched, combining Udemy's global reach with Mila's expertise in responsible AI research [2] - The programs will blend technical skills with strategic and ethical decision-making, catering to organizations at various stages of their AI journey [2][3] Organizational Impact - The partnership aims to equip organizations with practical skills and frameworks necessary for safe and strategic AI adoption [3] - Professionals will gain access to courses on responsible AI, ethics, governance, and practical decision-making [6] Educational Offerings - The learning solutions will include applied training on integrating responsible practices into workflows and insights from Mila researchers on emerging trends [6] - Flexible learning formats will be available, including on-demand content and expert-led sessions for enterprise teams [6] About Udemy - Udemy is an AI-powered skills acceleration platform serving 82 million learners and over 17,000 organizations globally [1][4] - The platform provides personalized experiences to help organizations develop the necessary capabilities for a rapidly evolving workplace [4] About Mila - Mila is the world's largest academic AI research center, specializing in deep learning and dedicated to advancing AI for the benefit of all [5] - Founded by Yoshua Bengio, Mila is supported by the Canadian government and recognized for its influential research and leadership in responsible AI [5]