Coursera, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Coursera's second quarter 2026 earnings call. All participants are in a listen-only mode and this call is being recorded. Following the prepared remarks, we will hold a question and answer session. To ask a question, please click the raise hand button and be prepared to unmute your line when prompted. I would now like to turn the call over to Cam Carey, Vice President of Investor Relations. Mr. Carey, you may begin.

Good afternoon. Thank you for joining us for Coursera's Q2 2026 earnings conference call. Today, I'm joined by Greg Hart, our President and Chief Executive Officer, and Mike Foley, our Chief Financial Officer. Today's prepared remarks will also include brief comments from Andrew A., CEO of LearnVector and Chairman and Co-Founder of Coursera. Following the prepared remarks, we will open the call for questions with Greg and Mike. Thank you for joining us. Unless otherwise specified, all growth percentages refer to year-over-year change, and all financial results discussed today are presented on an as-reported basis. As-reported financial results include Udemy only for the period following the transaction close on May 11. References to normalized performance include Udemy's pre-closed results, as if the transaction had closed on January 1, and are provided solely for illustrative comparability. All statements made during this call relating to future results and events are forward-looking statements based on current expectations and beliefs. Thank you, Cam, and good afternoon, everyone. We appreciate you joining us.

Q2 marked an important step in unlocking Coursera's next chapter of growth and value creation. On May 11th, we completed our transaction with Udemy and began operating as a combined company. When we announced the combination last December, our objective was clear. The goal was never simply to become larger. It was to build a stronger, more capable company with the scale, data, and innovation capacity to create next-generation learning experiences faster than either company could alone. With integration efforts well underway, our early results are beginning to show why that stronger foundation matters. First, the composition of our revenue base is improving. In Q2, we reported revenue of $299 million. For full year 2026, we are increasing our outlook from June, now expecting to deliver between $1.22 and $1.245 billion of reported revenue, driven by our enterprise segment and consumer subscriptions. Our increasing focus on our subscription business drove an increase of 44% year-over-year in paid subscribers to more than 1.6 million. And now, more than 85% of our total revenue comes from recurring subscription streams within our enterprise or consumer segments. Second, our earnings profile is strengthening. For full year 2025, Coursera delivered an adjusted EBITDA margin of 8.4%. This year, with the combined impact of our structural gross margin expansion, cost discipline, and accelerated synergy realization, we are confident in increasing our full year adjusted EBITDA margin target by another 100 basis points versus our June outlook to approximately 14%. Compared to Coursera's 2025 results, that target represents more than 550 basis points of margin improvement. And as Mike will discuss in more detail, reflects a 16% adjusted EBITDA margin we expect to deliver in Q4. Third, we are executing at a faster pace. Following close, our teams moved immediately from planning to execution. We now expect to achieve at least $85 million of annual run rate net synergies by the end of 2026 and are tracking well ahead of the original 24-month timeline to deliver the $115 million synergy goal. I'm encouraged by these early proof points, but integration is just the starting line. With an improving financial profile and a leaner, more agile operating model, we are in a stronger position to accelerate the next phase of our strategy. Faster, more continuous product innovation. As we integrate, we are executing against a clear market reality. AI is changing work and skills faster than traditional learning models can keep pace. The pace at which people and workforces build new capabilities must accelerate with it. Learners around the world are asking the same questions. How do I stay relevant? What should I learn next? And how do I know it's credible? How do I prove I have the skills that employers actually value? Helping learners and organizations answer those questions and act on them represents one of the defining opportunities of the AI era. We believe that opportunity expands as AI makes answers more abundant and puts a greater premium on demonstrated capability. Put simply, AI raises the bar for learning. Every major technological shift has created demand for new skills. What makes AI different is its pace. As AI diffuses through the global economy, skill requirements are changing continuously and basic information is becoming a commodity. In this environment, more content is not enough. Consuming content alone does not build skills and an answer is not an outcome. Learners and organizations need personalized pathways that help them identify the skills that matter, develop them in context, and demonstrate capability in ways employers and institutions trust. That is why AI increases the need for continuous skills development, clear proof of mastery, and workforce transformation at scale. We are building a trusted platform for skills, one that connects skills, learning, proof, and outcomes and ensures that human development has a platform designed to keep pace with technology. That is the opportunity we are positioning Coursera to lead, and we are moving on two fronts to get there faster. The first is our unified platform. We are bringing together the data, skills, intelligence, and product capabilities of Coursera and Udemy on a modern architecture. And the second is LearnVector. Yesterday, we announced a $100 million strategic investment in LearnVector, a newly formed AI-native learning company founded and led by Andrew Ng. As the co-founder of Coursera and one of the world's foremost experts in AI, Andrew needs no introduction. His vision for LearnVector is to fundamentally transform what learning can become. A trusted, one-to-one experience designed to adapt to the personal goals of every individual learner. As Andrew accelerates the design, testing, and development of AI native learning experiences, we are exploring opportunities to connect and scale LearnVector's advancements in agentic AI with the unified platform we are building to power one of the world's largest and most trusted learning ecosystems. I'm pleased to have him join us today and share the vision behind LearnVector. Andrew, over to you.