Online learning platform Udemy (NASDAQ:UDMY) reported revenue ahead of Wall Street’s expectations in Q3 CY2025, but sales were flat year on year at $195.7 million. On the other hand, next quarter’s revenue guidance of $192.5 million was less impressive, coming in 2% below analysts’ estimates. Its non-GAAP profit of $0.13 per share was 38.7% above analysts’ consensus estimates.
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Udemy (UDMY) Q3 CY2025 Highlights:
- Revenue: $195.7 million vs analyst estimates of $193.1 million (flat year on year, 1.4% beat)
- Adjusted EPS: $0.13 vs analyst estimates of $0.09 (38.7% beat)
- Adjusted EBITDA: $24.27 million vs analyst estimates of $19.55 million (12.4% margin, 24.2% beat)
- Revenue Guidance for Q4 CY2025 is $192.5 million at the midpoint, below analyst estimates of $196.4 million
- EBITDA guidance for the full year is $93 million at the midpoint, above analyst estimates of $87.47 million
- Free Cash Flow Margin: 6.2%, down from 19.5% in the previous quarter
- Monthly Active Buyers: 17,111, up 263 year on year
- Market Capitalization: $1.03 billion
“Our Q3 results demonstrate strong momentum as Udemy evolves towards becoming the world's leading AI-powered skills acceleration platform,” said Hugo Sarrazin, President and CEO of Udemy.
Company Overview
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Udemy’s sales grew at a mediocre 9.9% compounded annual growth rate over the last three years. This fell short of our benchmark for the consumer internet sector and is a tough starting point for our analysis.
This quarter, Udemy’s $195.7 million of revenue was flat year on year but beat Wall Street’s estimates by 1.4%. Company management is currently guiding for a 3.7% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 1.2% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and indicates its products and services will face some demand challenges.
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Monthly Active Buyers
Buyer Growth
As a subscription-based app, Udemy generates revenue growth by expanding both its subscriber base and the amount each subscriber spends over time.
Over the last two years, Udemy’s monthly active buyers, a key performance metric for the company, increased by 8.2% annually to 17,111 in the latest quarter. This growth rate is decent for a consumer internet business and indicates people enjoy using its offerings. 
In Q3, Udemy added 263 monthly active buyers, leading to 1.6% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating buyer growth just yet.
Revenue Per Buyer
Average revenue per buyer (ARPB) is a critical metric to track because it measures how much the average buyer spends. ARPB is also a key indicator of how valuable its buyers are (and can be over time).
Udemy’s ARPB fell over the last two years, averaging 1.7% annual declines. This isn’t great, but the increase in monthly active buyers is more relevant for assessing long-term business potential. We’ll monitor the situation closely; if Udemy tries boosting ARPB by taking a more aggressive approach to monetization, it’s unclear whether buyers can continue growing at the current pace. 
This quarter, Udemy’s ARPB clocked in at $11,436. It declined 1.4% year on year, worse than the change in its monthly active buyers.
Key Takeaways from Udemy’s Q3 Results
We were impressed by how significantly Udemy blew past analysts’ EBITDA expectations this quarter. We were also glad its full-year EBITDA guidance trumped Wall Street’s estimates. On the other hand, its revenue guidance for next quarter missed and its full-year revenue guidance was in line with Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 1.4% to $6.49 immediately after reporting.
So should you invest in Udemy right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.