Udemy Inc (UDMY)

Udemy stock (UDMY) plunged by 22.34% , due to the release of its 2023 fourth-quarter results, primarily driven by apprehensions regarding potential worsened operating losses in 2024.

• Mixed Performance in 2023: While Udemy reported a commendable 16% increase in revenue to $729 million for 2023, with Q4 revenue surpassing expectations at $190 million, concerns arose due to cautious statements from CFO Sarah Blanchard regarding the volatile macroeconomic environment.
• Conservative Outlook for 2024: Udemy's guidance for 2024 forecasts revenue in the range of $795 million to $810 million, representing modest growth of 9% to 11%. Additionally, the company anticipates higher operating expenses, raising apprehensions, especially considering the $122 million operating loss recorded in 2023.
• Evaluation of Investment Opportunity: Despite the conservative revenue projections, Udemy's enterprise segment is showing promising growth, with a 13% increase in customer count in Q4 and Udemy Business revenue constituting 61% of total revenue. The company's shift towards offering subscription-based courses to enterprises could contribute to revenue stability.
• Long-Term Potential Amid Profitability Concerns: While Udemy's long-term prospects remain favorable, its current attractiveness as an investment hinges on its ability to address expense management and improve profitability. Investors must evaluate whether management can effectively navigate the challenges ahead.