UDMYHIGH SIGNALRISK10-K

Udemy's 10-K reveals a pending merger with Coursera that introduces significant business uncertainties and potential litigation risks while the company simultaneously reduced share buybacks substantially.

The merger announcement represents a major corporate development that could fundamentally alter Udemy's business trajectory, with management explicitly acknowledging risks to business relationships and operations during the pending transaction. The addition of merger-related risk factors while removing previous going-concern language about profitability suggests management's strategic focus has shifted from standalone growth concerns to transaction execution risks.

Comparing 2026-02-19 vs 2025-02-19View on EDGAR →
FINANCIAL ANALYSIS

Udemy's financial performance showed meaningful improvement with operating losses substantially reduced and operating cash flow growing notably to $87.7M. The company maintained a strong cash position at $231.5M while reducing R&D expenses by 19.1% and cutting share buybacks significantly from $150.3M to $51.0M. This financial profile suggests improved operational discipline and cash preservation, likely in preparation for the pending merger transaction.

FINANCIAL STATEMENT CHANGES
Operating Income
P&L
+95.3%
-$89.3M→-$4.2M

Operating leverage kicking in — revenue growth outpacing cost growth, a hallmark of scaling businesses.

Share Buybacks
Cash Flow
-66.1%
$150.3M→$51.0M

Buyback activity reduced 66.1% — capital being redeployed elsewhere or cash conservation underway.

Operating Cash Flow
Cash Flow
+65.3%
$53.0M→$87.7M

Operating cash flow surged 65.3% — exceptional cash generation, highest quality earnings signal.

Interest Expense
P&L
-58.6%
$1.3M→$518K

Interest expense declined — debt repayment or refinancing at lower rates improving earnings quality.

Cash & Equivalents
Balance Sheet
+21.5%
$190.6M→$231.5M

Cash grew 21.5% — improving liquidity position supports investment and shareholder returns.

R&D Expense
P&L
-19.1%
$125.4M→$101.5M

R&D spending cut 19.1% — could signal cost discipline or concerning reduction in innovation investment.

LANGUAGE CHANGES
NEW — 2026-02-19
PRIOR — 2025-02-19
ADDED
As of February 13, 2026, 145,421,510 shares of the registrant s common stock were outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 57 Item 7A .
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 122 Item 9A .
The following is a summary of the principal risks we face, any of which could adversely affect our business, operating results, financial condition, or prospects: The pendency of our Merger (as defined below) with Coursera, Inc., or the failure to complete the Merger in a timely manner or at all, could adversely affect our business, financial condition, results of operations and stock price.
While the Merger is pending, we are subject to business uncertainties and contractual restrictions that could harm our business relationships, financial condition and results of operations.
Litigation relating to the Merger, if any, could result in an injunction preventing the completion of the Merger and/or substantial costs.
As a result of the Merger, our current and prospective employees could experience uncertainty about their future with us or the combined company following the Merger, and as a result, key employees may depart.
As a result of the pending Merger, certain learners, instructors, UB customers and other business partners may decide not to do business with us or change their relationship with us.
We have a history of losses, and we may not be able to generate sufficient revenue to increase or sustain profitability in the future.
Our revolving credit facility contains customary affirmative and negative covenants, including financial covenants, that may limit our operating flexibility.
REMOVED
As of February 13, 2025, 147,744,470 shares of the registrant s common stock were outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 54 Item 7A.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 114 Item 9A.
The following is a summary of the principal risks we face, any of which could adversely affect our business, operating results, financial condition, or prospects: We have a history of losses, and we may not be able to generate sufficient revenue to achieve or maintain profitability in the future.
New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Form 10-K.
About Udemy Udemy is a global learning company whose online platform empowers organizations and individuals with flexible and effective professional skill acquisition, development and validation.
Udemy leverages technology, including artificial intelligence ( AI ), as well as data and insights, to deliver personalized, immersive and effective learning experiences.
We believe that our dual focus on organizational and individual skills development places us at the forefront of addressing the evolving needs of the modern workplace.
For example, we are incorporating generative AI-powered features that enhance the learner experience, support content creation and drive course consumption for instructors, increase personalization for learners and optimize productivity for our enterprise customers.
Instructors around the world have created courses in 75 languages, resulting in over 115,000 courses on our platform in non-English languages, as of December 31, 2024.
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