COUR Q3 Deep Dive: Consumer Momentum and AI Initiatives Offset Enterprise Uncertainty

Online learning platform Coursera (NYSE:COUR) reported revenue ahead of Wall Street’s expectations in Q3 CY2025, with sales up 10.3% year on year to $194.2 million. Guidance for next quarter’s revenue was better than expected at $191 million at the midpoint, 1.8% above analysts’ estimates. Its non-GAAP profit of $0.10 per share was 19.6% above analysts’ consensus estimates.

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StockStory’s Take

Coursera’s third quarter drew a negative market reaction, reflecting investor concerns despite exceeding Wall Street’s revenue and non-GAAP profit expectations. Management attributed the results to robust growth in the Consumer segment, driven by higher demand for AI-related courses and improvements in the Coursera Plus subscription. CEO Gregory Hart cited the company’s expanded course catalog and international pricing adjustments as factors fueling new learner registrations. However, management expressed dissatisfaction with muted growth in the Enterprise segment, noting mixed trends across business, government, and campus customers.

Looking ahead, Coursera’s updated guidance centers on continued Consumer growth, ongoing investments in product innovation, and expectations for a challenging Enterprise environment. Management emphasized their focus on leveraging partnerships, such as the new integration with OpenAI’s ChatGPT, to enhance top-of-funnel engagement and drive paid user conversion. CEO Gregory Hart stated, “We are investing in AI-driven innovations and personalized learning to meet the evolving needs of learners and organizations worldwide,” while also highlighting that spending will be balanced with a commitment to annual margin improvement.

Key Insights from Management’s Remarks

Management pointed to product-led innovation, international demand, and AI-driven features as key contributors to performance, while acknowledging persistent Enterprise headwinds.

• Consumer segment acceleration: The Consumer business saw strong momentum from Coursera Plus subscriptions, now representing over half of segment revenue, fueled by targeted marketing and an expanded catalog in high-demand topics like generative AI.
• AI content and partnerships: Management highlighted a sharp increase in enrollments for generative AI courses, with 14 enrollments per minute and a doubling of catalog size. The addition of Anthropic as a content partner and integration into ChatGPT are expected to enhance the relevance and accessibility of AI offerings.
• International pricing optimization: Adjustments to pricing in select international markets, sometimes lowering prices by up to 60%, improved accessibility and supported new user acquisition, particularly in emerging economies.
• Product enhancements and learner experience: Coursera rolled out features like the AI-powered Coach, real-time translations, and Course Builder authoring tools, which management believes are improving engagement, conversion, and retention across the platform.
• Enterprise segment softness: Despite growth in campus customers, the Enterprise business continued to face a muted corporate spending environment and lower retention, with management maintaining a cautious outlook and focusing on new offerings like Skills Tracks to address client needs.

Drivers of Future Performance

Coursera’s outlook is shaped by further Consumer expansion, ongoing investments in AI-driven products, and persistent Enterprise headwinds.

• Marketing and product investment: Management plans to prioritize spending on marketing and product development, particularly in Q4, to drive lasting growth in paid users and recurring revenue. This includes continued enhancement of Coursera Plus and new AI-powered features to maintain competitive differentiation.
• Enterprise recovery efforts: While the Enterprise segment remains challenged by cautious corporate spending, the recent appointment of a new general manager and the rollout of Skills Tracks are intended to better align offerings with customer needs and potentially improve retention.
• AI partnerships as growth levers: Coursera expects partnerships with OpenAI, Anthropic, and other technology leaders to expand its reach and serve as a strategic entry point for new learners, though management noted it is too early to quantify financial impact from these relationships.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will monitor (1) the effectiveness of AI-powered product launches and their impact on user retention, (2) progress in Enterprise segment turnaround under new leadership, and (3) continued growth in international markets following pricing adjustments. Execution on partnerships with leading AI companies and improving conversion from free to paid users will also be pivotal.

Coursera currently trades at $9.19, down from $10.53 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

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