Udemy, Inc.

quarter 2023 earnings conference call all participants will be in listen-only mode should you need assistance please signal a conference specialist by pressing the star key followed by zero after today's presentation there will be an opportunity to ask questions to ask a question you may press star then one on your telephone keypad and to withdraw from the question queue please press star then two I would now like to hand the call to Dennis Walsh, Vice President, Investor Relations. Please go ahead.

Thank you, MJ. Joining me today are Udemy's Chief Executive Officer, Greg Brown, and Chief Financial Officer, Sarah Blanchard. During this conference call, we will make forward-looking statements within the meaning of federal securities laws. These statements involve assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated. For a complete discussion of risks associated with these forward-looking statements, we encourage you to refer to our most recent Form 10-K and Form 10-Q filings with the Securities and Exchange Commission. Our forward-looking statements are based upon information currently available to us. We caution you to not place undue reliance on forward-looking statements, and we do not undertake and expressly disclaim any duty or obligation to update or alter our forward-looking statements except as required by applicable law. In addition, during this call, certain financial performance measures may be discussed that differ from comparable measures contained in our financial statements prepared in accordance with U.S. generally accepted accounting principles referred to by the Securities and Exchange Commission as non-GAAP financial measures. We believe that these non-GAAP financial measures support management and investors in evaluating our performance in comparing period to period results of operation in a more meaningful and consistent manner as discussed in greater detail in the supplemental schedules to our earnings release. A reconciliation of these non-GAAP measures to the most comparable GAAP financial measures is included in our earnings press release. These reconciliations, together with additional supplemental information, are available on the investor relations section of our website. A replay of today's call will also be posted on the website. With that, I will now turn the call over to Greg.

Thank you, Jonas, and good afternoon to everyone on the call. I'll start today with comments on our results, highlight some achievements from 2023, and then provide an update on our strategic priorities for 2024. Udemy closed out 2023 with strong results that exceeded expectations for both revenue and adjusted EBITDA margin. Despite the challenging macroeconomic environment, Udemy increased full year revenue by 16% year over year. Within that, Our leading growth engine, Udemy Business, delivered impressive 34% year-over-year revenue growth as companies around the world are prioritizing investment in the upskilling and reskilling of their talent. From a profitability perspective, we delivered our first full year of positive adjusted EBITDA well ahead of plan. As a company, we made meaningful progress in 2023. I stepped into the CEO role last February, and we further bolstered our leadership team with new chief marketing, people, and product officers, who all bring deep experience within their respective functions to Udemy. On our Q4 call last year, we laid out our strategic priorities for investors and other stakeholders. I'm proud to say that we delivered on each of those priorities, which included, first, establish Udemy as the platform of choice for professional learners and increasing skills development through new learning modalities. Last year, we significantly grew our learner base, adding 10 million new learners to our platform and more than 1,800 net new Udemy business customers. We leveraged generative AI technology to create more personalized learning experiences, including capabilities that enable microlearning. We empowered our instructor partners with tools that help create high-quality, on-demand, and immersive content faster and more efficiently. Further, we shared our generative AI product roadmap that will transform how professionals develop skills. Organizations recruit and manage talent, and instructors create content. Second, introduce validation of skills acquisition through badging and professional certifications. We partnered with One EdTech to bring the open badges standard to our platform. We introduced curated learning paths, hands-on labs, and assessments to support Udemy business learners' preparation for nearly 200 branded third-party certifications and badges. We also enabled learners to import those badges and certifications onto our platform to signal skills proficiency and to empower organizations with valuable data about their workforce's capabilities. Later this year, we will be extending our professional badging and certification capabilities to our consumer marketplace. Third, accelerate global expansion. We leaned into our partner strategy, further developing our relationships with AWS, Benesse, and other technology and regional reseller partners that extend our reach domestically and internationally. To further our commitment to upskilling and reskilling, Udemy also entered into new partnerships with Docker, a leading provider of development tools, and ServiceNow, a leading digital workflow company. And finally, increased company-wide operational efficiency and progress toward profitability. Thanks to our disciplined approach to driving efficiencies throughout the organization, we delivered positive adjusted EBITDA for the full year ahead of plan. Building on that momentum, we entered 2024 well positioned to capitalize on a large and growing opportunity. AI is changing the way the world works and is expected to have a $4 trillion impact on organizations. This unprecedented transformation, driven by rapidly evolving technology, is expected to affect nearly every professional role in every industry and region. This represents a massive long-term opportunity for Udemy since skills are at the heart of this revolution. More than ever, employers are recognizing the importance of prioritizing proficiency and specific skills rather than solely looking at traditional degrees and job histories. A recent study found that more than 90% of companies believe skills-based hiring is more effective than traditional resume-based approaches, leading to a reduction in mishires by nearly 90%. This shift to skills-based practices is becoming increasingly necessary to support workforce retention, facilitate internal mobility, and enhance workplace diversity. In addition, corporate leaders around the world are concerned about a pending talent shortage. A new study found that by 2030, less than six years from now, there will be a global talent shortage of more than 85 million people. This could significantly restrain companies' growth, resulting in trillions of dollars of unrealized annual revenues. In the technology space alone, the U.S. could lose out on more than an estimated $160 billion worth of revenues annually, unless more adequately skilled high-tech workers are found. As the business landscape further evolves, so do the skills required. as demonstrated by the powerful impact of generative AI in just one year. In this current environment, developing workforce skills, especially AI proficiency, is essential for organizations to remain competitive over the long term. The number one topic we're discussing with leaders in almost every company is how Udemy can help them develop a digital transformation strategy. As an example, Genpact. a leading global professional services company committed to leveraging data, tech, and AI services, recently expanded their relationship with Udemy. Genpak collaborated with Udemy to develop its GenAI Talent Academy, a comprehensive 12-week program focused on developing AI skills. With the introduction of this innovative learning program, Genpak not only achieved its goal of upskilling its specialized workforce in generative AI, but it also merged as one of the pioneering entities in the industry. GEMPACT achieved this goal two times faster than expected, equipping their team with the essential readiness to address escalating client demands. Another example is Marriott International, which expanded their relationship with Udemy this quarter as they are in the midst of a similar transformation. Marriott will leverage the Udemy learning platform including our Udemy Pro offering and local language collections as they further invest in growing their global digital and technology workforce. Forward-thinking companies like Genpak and Marriott recognize the importance and value of investing in employee upskilling and reskilling. Those that don't risk falling behind. We believe skills-based organizations with robust internal L&D programs see increased employee retention, and also achieve better business outcomes. It's for these reasons that many companies today are redefining jobs as collections of required skills, considering each role's evolution over the long term. During the fourth quarter, one of the largest financial institutions in the world engaged Udemy to provide a comprehensive learning solution that supports their goal of upskilling across the organization. This new customer entered into a seven-figure, multi-year, multi-product deal, partnering with our team to accelerate the development of cloud and other technology skills with high quality and immersive learning experiences. We continue to see a trend of financial institutions becoming early adopters of AI technology, thus driving meaningful demand from that sector. Another new customer that engaged Udemy during Q4 to support their L&D efforts is Airbus, a global aerospace and defense company. As Airbus is shifting focus towards becoming a technology company, reskilling and upskilling existing employees is fundamental. Udemy was selected as their partner due to our agile content model that aligns with their shift towards becoming a skills-based organization with emphasis on digital badges and professional certifications. An initial focus is on digital profiles via the Airbus Digital Academy. a central hub for all data and tech content, where Udemy provides the skills development that helps their employees keep up with the accelerated pace of technology change. Taking all of that into account truly illustrates the importance of creating a culture of continuous learning as central to the future of work. Traditional L&D models, which were primarily in person, as well as publisher models, can't keep pace with today's ever-evolving skills needs. With our on-demand, immersive, and cohort-based learning modalities, Udemy is well-positioned to become the exclusive partner to support any company's transition to a skills-based organization. Looking ahead, we are refreshing our strategic priorities for 2024, which include, first, establish Udemy as a skills development platform of choice for professional learners and organizations. Second, Elevate the Udemy brand globally so that it becomes synonymous with skills. Third, support Udemy business growth through strategic partnerships, strengthening our global distribution capabilities, opening up new routes to market, and additional ways to access the Udemy platform. Fourth, accelerate global expansion. And finally, further transform the Udemy platform from an on-demand learning content provider to the most innovative skills development platform, utilizing AI-powered capabilities to accelerate skills acquisition and validation. We're already off to a great start delivering on those priorities. Two weeks ago, we unveiled our near-term generative AI product roadmap and the Udemy Intelligent Skills Platform, a next-generation software solution powered by a rich content model. Udemy's comprehensive platform is set to redefine the L&D software landscape by incorporating a suite of cutting-edge AI-powered capabilities, including a learning assistant, skills mapping, and several new content creation enhancements for instructors. At the same time, Udemy's platform will serve as a rich repository of learning data and actionable insights, enabling Udemy business customers to make informed talent management decisions regarding internal mobility and recruitment strategies. Ultimately, Udemy's platform will revolutionize the way organizations future-proof their workforce by fast-tracking the acquisition and validation of critical professional skills required to more efficiently develop talent and thrive over the long term. We are excited about the prospects of our product roadmap and are committed to continuing our journey of innovation and transformation. All of this progress sets the stage for 2024. Although the demand environment hasn't changed meaningfully since our last call in November, we are confident in our ability to grow our business and continue capturing market share. We believe the investments we're making in brand, product, and our go-to-market capabilities will support our long-term performance, giving us confidence that we will re-accelerate ARR growth this year. Sarah will provide more details on our outlook in a moment. One final point before I close. In conjunction with today's results announcement, we also shared that our board of directors has approved a stock repurchase program to acquire up to $100 million of the company's outstanding common stock. This repurchase program not only underscores the confidence that our board and management team have in the future of Udemy, but it also allows us to leverage the strength of our balance sheet and deliver returns back to shareholders. In closing, we remain focused on executing our strategy, as we help enterprises around the world transition to skills-based organizations. I want to thank all Udemy's employees for their hard work and contributions to the results we delivered in 2023, as well as to our valued instructors, customers, partners, and shareholders for your continued support. Now, I'll turn the call over to Sarah for a financial review.