Revenue growth has stalled at 0.4% YoY in 2026Q1, but gross margin expanded to 67.5% and operating margin improved to -6.5%, reflecting a 970 and 700 basis point improvement respectively since 2023Q4.
Udemy, Inc. (UDMY) annual income statement — 7-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 |
|---|
| Sales/Revenue | 780.95M | 789.84M | 786.57M | 728.94M | 629.1M | 515.66M | 429.9M | 276.33M |
| Revenue Growth % | -1.15% | 0.42% | 7.91% | 15.87% | 22% | 19.95% | 55.58% | - |
| Cost of Goods Sold | 262.72M | 271.44M | 294.63M | 309.6M | 275.32M | 236.02M | 209.25M | 143.51M |
| COGS % of Revenue | - | 34.37% | 37.46% | 42.47% | 43.76% | 45.77% | 48.67% | 51.93% |
| Gross Profit | 518.23M | 518.41M | 491.94M | 419.34M | 353.78M | 279.63M | 220.65M | 132.82M |
| Gross Margin % | 66.36% | 65.63% | 62.54% | 57.53% | 56.24% | 54.23% | 51.33% | 48.07% |
| Gross Profit Growth % | - | 5.38% | 17.31% | 18.53% | 26.51% | 26.73% | 66.13% | - |
| Operating Expenses | 530.42M | 520.98M | 581.27M | 541.23M | 504.97M | 357.54M | 294.03M | 200.85M |
| OpEx % of Revenue | - | 65.96% | 73.9% | 74.25% | 80.27% | 69.34% | 68.39% | 72.68% |
| Selling, General & Admin | 426.96M | 419.47M | 439.14M | 410.64M | 400.41M | 291.43M | 243.38M | 166.47M |
| SG&A % of Revenue | - | 53.11% | 55.83% | 56.33% | 63.65% | 56.52% | 56.61% | 60.24% |
| Research & Development | 103.35M | 101.51M | 125.44M | 120.33M | 104.56M | 66.11M | 50.64M | 34.38M |
| R&D % of Revenue | - | 12.85% | 15.95% | 16.51% | 16.62% | 12.82% | 11.78% | 12.44% |
| Other Operating Expenses | 109K | 0 | 16.68M | 10.26M | 0 | 0 | 55K | -384K |
| Operating Income | -12.19M | -2.58M | -89.33M | -121.89M | -151.19M | -77.91M | -73.38M | -68.03M |
| Operating Margin % | -1.56% | -0.33% | -11.36% | -16.72% | -24.03% | -15.11% | -17.07% | -24.62% |
| Operating Income Growth % | - | 97.11% | 26.72% | 19.38% | -94.06% | -6.17% | -7.86% | - |
| EBITDA | 13.33M | 22.78M | -63.91M | -97.31M | -129.97M | -62.61M | -62.33M | -59.29M |
| EBITDA Margin % | 1.71% | 2.88% | -8.12% | -13.35% | -20.66% | -12.14% | -14.5% | -21.46% |
| EBITDA Growth % | 129.01% | 135.65% | 34.32% | 25.13% | -107.59% | -0.46% | -5.12% | - |
| D&A (Non-Cash Add-back) | 25.52M | 25.36M | 25.42M | 24.59M | 21.22M | 15.3M | 11.05M | 8.74M |
| EBIT | -920K | 8.34M | -89.26M | -103.12M | -150.34M | -78.62M | -73.38M | -68.03M |
| Net Interest Income | 12.99M | 14.21M | 19.29M | 20.15M | 4.3M | -16K | -1.15M | 87K |
| Interest Income | 13.46M | 14.21M | 19.67M | 20.67M | 5.55M | 16K | 0 | 87K |
| Interest Expense | 470K | 0 | 379K | 518K | 1.25M | 32K | 1.15M | 0 |
| Other Income/Expense | 10.8M | 10.91M | 8.39M | 18.25M | -399K | -936K | -1.09M | -297K |
| Pretax Income | -1.39M | 8.34M | -80.94M | -103.64M | -151.59M | -78.84M | -74.47M | -68.33M |
| Pretax Margin % | -0.18% | 1.06% | -10.29% | -14.22% | -24.1% | -15.29% | -17.32% | -24.73% |
| Income Tax | 5.65M | 4.53M | 4.35M | 3.65M | 2.29M | 1.18M | 3.15M | 1.38M |
| Effective Tax Rate % | -406.19% | 54.34% | -5.37% | -3.52% | -1.51% | -1.5% | -4.23% | -2.01% |
| Net Income | -7.04M | 3.81M | -85.29M | -107.29M | -153.88M | -80.03M | -77.62M | -69.7M |
| Net Margin % | -0.9% | 0.48% | -10.84% | -14.72% | -24.46% | -15.52% | -18.06% | -25.22% |
| Net Income Growth % | 89.76% | 104.46% | 20.51% | 30.27% | -92.28% | -3.1% | -11.36% | - |
| Net Income (Continuing) | -7.04M | 3.81M | -85.29M | -107.29M | -153.88M | -80.03M | -77.62M | -69.7M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -0.05 | 0.03 | -0.56 | -0.71 | -1.09 | -0.56 | -0.56 | -2.17 |
| EPS Growth % | 88.28% | 104.59% | 21.13% | 34.86% | -94.64% | 0% | 74.19% | - |
| EPS (Basic) | - | 0.03 | -0.56 | -0.71 | -1.09 | -0.56 | -0.56 | -2.17 |
| Diluted Shares Outstanding | 145.24M | 150.01M | 151.32M | 150.1M | 140.87M | 139.16M | 139.6M | 32.1M |
| Basic Shares Outstanding | 145.24M | 148.21M | 151.32M | 150.1M | 140.87M | 139.16M | 139.6M | 32.1M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying UDMY stock.
For fiscal year 2025, Udemy, Inc. (UDMY) reported total revenue of $789.8M. This represents a 185.8% increase compared to $276.3M in 2019.
Udemy, Inc. (UDMY) is profitable, generating $3.8M in net income for the fiscal year ending 2025 with a net profit margin of 0.5%.
Udemy, Inc. (UDMY) reported an operating income of $-2.6M, resulting in an operating profit margin of -0.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Udemy, Inc. (UDMY) generated $518.4M in gross profit for the year, representing a gross profit margin of 65.6%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
LLM cannibalization of content demand
Metrics are mathematically derived from official filings.
Growth Stalls as Pandemic Tailwind Fades
Revenue growth has decelerated sharply from 14.6% YoY in 2023Q4 to just 0.4% in 2026Q1, indicating the post-pandemic demand pull-forward has fully exhausted, according to recent SEC filings.
The sequential revenue decline from $200.3M in 2025Q1 to $191.4M in 2026Q1 suggests a contracting top line, not just a slowdown. This deceleration appears driven by a maturing Consumer segment and a slower-than-expected ramp in Udemy Business, as the company struggles to offset legacy D2C weakness. Investors should monitor whether the enterprise segment can reaccelerate growth, as the current trajectory implies a low-growth utility-like profile.
Gross Margin Expansion Reflects Mix Shift
Gross margin improved from 57.8% in 2023Q4 to 67.5% in 2026Q1, a 970 basis point expansion, as reported in financial statements, likely driven by a higher mix of Udemy Business subscription revenue.
The consistent quarterly gross margin expansion suggests the enterprise segment's more fixed content costs are scaling favorably, while the Consumer marketplace's variable instructor revenue share remains a structural ceiling. However, the pace of improvement has slowed in recent quarters, indicating the mix shift may be maturing. If competitive pressures force higher instructor payouts, this margin trajectory could reverse, warranting close monitoring.
Operating Leverage Emerges from Cost Discipline
Operating margin swung from -13.5% in 2023Q4 to -6.5% in 2026Q1, a 700 basis point improvement, as per income statement data, despite flat revenue, indicating significant cost discipline.
The near-breakeven operating margin in 2025Q3 (-0.1%) and positive operating income in 2025Q2 ($3.9M) suggest that the company has achieved a degree of operating leverage, with SG&A and R&D growth lagging revenue declines. However, the thin margin buffer leaves little room for reinvestment or demand shocks, and the recent dip back to -6.5% in 2026Q1 highlights fragility. The sustainability of this leverage depends on maintaining cost discipline while reigniting growth.
SBC Dilution Masks Underlying Profitability
Stock-based compensation averaged $18.4M per quarter over the last ten quarters, exceeding net income in most periods, as disclosed in financial statements, suggesting reported GAAP earnings overstate cash profitability.
Despite reaching near-breakeven GAAP net income in 2025Q3 ($1.6M), SBC of $18.3M in that same quarter implies a significant gap between GAAP and cash-based earnings. This persistent dilution suggests that shareholders are bearing the cost of employee compensation, which may not be fully reflected in EPS growth metrics. Investors should adjust for SBC to assess true cash generation, as the company's path to positive free cash flow remains unclear.
SG&A Dominates Cost Structure, R&D Streamlined
SG&A averaged $107.9M per quarter over the last ten quarters, representing over 55% of revenue, while R&D was cut from $33.0M in 2024Q3 to $26.8M in 2026Q1, as per reported figures.
The heavy SG&A burden reflects the high cost of enterprise sales and marketing, which is typical for a company pivoting to B2B. The reduction in R&D spending may indicate a focus on efficiency over innovation, which could be risky given the rapid emergence of LLMs that threaten content demand. The near-flat SG&A despite revenue declines suggests management is protecting margins, but the lack of investment in product development may undermine long-term competitiveness.
2024Q3 Marks Turning Point to Profitability
The inflection occurred in 2024Q3 when operating margin improved from -15.1% to -0.1% by 2025Q3, a 1500 basis point swing, based on income statement data, signaling a strategic pivot toward profitability.
This dramatic margin improvement was driven by a combination of gross margin expansion and aggressive cost controls, particularly in R&D and SG&A. The company transitioned from deep losses to near-breakeven within four quarters, suggesting a deliberate shift from growth-at-all-costs to sustainable profitability. However, the subsequent dip in 2026Q1 indicates that the inflection may not be durable, and the company must balance cost discipline with the need to invest in growth.
Growth Stagnation Undermines Margin Gains
Despite margin improvements, revenue growth has stalled at 0.4% YoY in 2026Q1, as per financial statements, suggesting that cost cuts alone cannot sustain shareholder value.
Short-sellers would argue that the company is shrinking its way to profitability, with no evidence of a growth catalyst. The Consumer segment appears to be in secular decline, and the Enterprise segment's growth may be insufficient to offset it. Additionally, the rise of LLMs could cannibalize demand for entry-level coding and writing courses, which are core to Udemy's catalog. If revenue continues to decline, the recent margin gains will prove temporary, and the company may face a valuation re-rating to reflect its mature, low-growth status.