Welcome to “Finalyze GPT Analysis” where we break down the financial performance of top companies in a straightforward and clear manner. In this post, we analyze Coursera Reports First Quarter 2024 Financial Results, covering key metrics, profitability, and strategic highlights. Our aim is to provide easy-to-understand insights that help you grasp the company’s current status and future direction.

Overview of Quarter Performance

Coursera, Inc. reported its financial performance for the quarter ended March 31, 2024. The company experienced a notable increase in revenue, driven by growth across its Consumer, Enterprise, and Degrees segments. Despite the revenue growth, Coursera continued to report a net loss, although the loss was reduced compared to the same period in the previous year.

Key Financial Metrics

Revenue

• Total Revenue: $169.1 million (up 15% from $147.6 million in Q1 2023)
• Consumer Revenue: $96.7 million (up 18% from $82.0 million in Q1 2023)
• Enterprise Revenue: $57.5 million (up 10% from $52.2 million in Q1 2023)
• Degrees Revenue: $14.8 million (up 10% from $13.4 million in Q1 2023)

Expenses

• Cost of Revenue: $79.6 million (up 13% from $70.2 million in Q1 2023)
• Operating Expenses: $119.2 million (up 2% from $116.5 million in Q1 2023)
• Research and Development: $34.6 million (down 21% from $43.8 million in Q1 2023)
• Sales and Marketing: $57.6 million (up 9% from $52.9 million in Q1 2023)
• General and Administrative: $24.9 million (down 2% from $25.5 million in Q1 2023)
• Restructuring Related Charges: $2.1 million (compared to a reversal of $5.7 million in Q1 2023)

Profitability

• Gross Profit: $89.5 million (up 16% from $77.5 million in Q1 2023)
• Net Loss: $21.3 million (improved from a net loss of $32.4 million in Q1 2023)
• Gross Margin: 53% (up from 52% in Q1 2023)

Marketing and New App Costs

Marketing Costs

• Sales and Marketing Expenses: $57.6 million

New App Costs

• Capitalized Internal-Use Software Costs: $4.1 million

Customer Acquisition Cost (CAC) Estimate

To estimate the Customer Acquisition Cost (CAC), we use the formula:

CAC=Total Sales and Marketing ExpensesNumber of New CustomersCAC=Number of New CustomersTotal Sales and Marketing Expenses​

Assuming the number of new registered learners (6.6 million) represents new customers:

CAC=57.6 million6.6 million≈$8.73CAC=6.6 million57.6 million​≈$8.73

Unit Economics Analysis

Revenue per Unit

• Revenue per Registered Learner:
• Total RevenueTotal Registered Learners=169.1 million148.5 million≈$1.14Total Registered LearnersTotal Revenue​=148.5 million169.1 million​≈$1.14

Cost per Unit

• Cost per Registered Learner:
• Total Cost of RevenueTotal Registered Learners=79.6 million148.5 million≈$0.54Total Registered LearnersTotal Cost of Revenue​=148.5 million79.6 million​≈$0.54

Contribution Margin

• Contribution Margin per Registered Learner:
• Revenue per Learner−Cost per Learner=1.14−0.54=$0.60Revenue per Learner−Cost per Learner=1.14−0.54=$0.60

Customer Lifetime Value (CLV)

Assuming an average customer lifespan of 3 years and a retention rate of 67%:

CLV=Contribution Margin per Learner×Average Customer Lifespan=0.60×3=$1.80CLV=Contribution Margin per Learner×Average Customer Lifespan=0.60×3=$1.80

Overall Analysis and Industry Comparison

Performance Overview

Coursera demonstrated strong revenue growth across all segments, particularly in the Consumer segment. The company managed to reduce its net loss significantly, indicating improved operational efficiency. However, the company still faces challenges in achieving profitability.

Industry Comparison

The estimated CAC of $8.73 is relatively low compared to industry standards, which can range from $20 to $200 depending on the sector. This suggests that Coursera is efficient in acquiring new customers.

Noteworthy Insights

• Revenue Growth: The 15% increase in total revenue is a positive indicator of Coursera’s expanding market presence.
• Cost Management: The reduction in research and development expenses and general and administrative expenses shows effective cost management.
• Net Loss Reduction: The significant reduction in net loss from $32.4 million to $21.3 million highlights improved financial health.

Noteworthy Insights

• Strategic Investments: Coursera’s investments in marketing and internal-use software are aimed at sustaining long-term growth.
• Segment Performance: The Consumer segment remains the largest revenue contributor, followed by Enterprise and Degrees.
• Operational Efficiency: The company’s ability to reduce its net loss while increasing revenue indicates improved operational efficiency.

In conclusion, Coursera’s financial performance for the quarter ended March 31, 2024, shows strong revenue growth and improved cost management, although the company continues to operate at a net loss. The estimated CAC is favorable compared to industry standards, suggesting efficient customer acquisition strategies.

Disclaimer:
This report has been generated using Finalyze GPT based on publicly available financial data. The information provided is for informational purposes only and should not be taken as financial advice or an investment recommendation. Please conduct your own research and consult a professional financial advisor before making any investment decisions.

Citations:
[1] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/14901955/44a27595-fd74-486a-8434-194015dea766/2024q1.pdf
[2] https://ppl-ai-file-upload.s3.amazonaws.com/web/direct-files/14901955/2e6810bc-5d90-442a-8cd4-376028c7971f/2023.pdf
[3] https://investor.coursera.com/news/news-details/2024/Coursera-Reports-First-Quarter-2024-Financial-Results/default.aspx
[4] https://finance.yahoo.com/news/coursera-reports-first-quarter-2024-201000222.html
[5] https://www.finanznachrichten.de/nachrichten-2024-04/62091936-coursera-reports-first-quarter-2024-financial-results-004.htm
[6] https://www.marketscreener.com/quote/stock/COURSERA-INC-120864967/news/Coursera-First-Quarter-2024-Financial-Tables-46569212/
[7] https://investor.coursera.com/financials/quarterly-results/default.aspx
[8] https://www.coursera.org/articles/customer-acquisition
[9] https://userpilot.com/blog/average-customer-acquisition-cost/
[10] https://firstpagesage.com/reports/average-customer-acquisition-cost-cac-by-industry-b2b-edition-fc/
[11] https://www.venasolutions.com/blog/average-cac-by-industry