Wrapping up Q2 earnings, we look at the numbers and key takeaways for the consumer subscription stocks, including Coursera (NYSE:COUR) and its peers.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a slower Q2. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was 2.9% below.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Thankfully, consumer subscription stocks have been resilient with share prices up 7.5% on average since the latest earnings results.
Coursera (NYSE:COUR)
Founded by two Stanford University computer science professors, Coursera (NYSE:COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Coursera reported revenues of $170.3 million, up 10.8% year on year. This print exceeded analysts’ expectations by 3.5%. Despite the top-line beat, it was still a mixed quarter for the company with strong growth in its users but slow revenue growth.
“We are excited to surpass more than two million enrollments in our generative AI catalog of courses, credentials, and hands-on projects created by the world’s top technology companies and research universities,” said Coursera CEO Jeff Maggioncalda.
Coursera Total Revenue
Coursera achieved the biggest analyst estimates beat of the whole group. The company reported 155 million users, up 20.2% year on year. Unsurprisingly, the stock is up 7.3% since reporting and currently trades at $7.94.
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $178.3 million, up 40.6% year on year, in line with analysts’ expectations. The business had a strong quarter with impressive growth in its users and exceptional revenue growth.
Duolingo Total Revenue
Duolingo scored the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 103.6 million users, up 39.8% year on year. The market seems happy with the results as the stock is up 72.7% since reporting. It currently trades at $279.50.
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Chegg reported revenues of $163.1 million, down 10.8% year on year, exceeding analysts’ expectations by 2%. Still, it was a softer quarter as it posted a decline in its users and slow revenue growth.
Chegg delivered the slowest revenue growth in the group. The company reported 4.37 million users, down 9.1% year on year. As expected, the stock is down 38.8% since the results and currently trades at $1.80.
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.
Udemy reported revenues of $194.4 million, up 9% year on year. This print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it produced underwhelming revenue guidance for the next quarter and slow revenue growth.
Udemy had the weakest full-year guidance update among its peers. The company reported 16,595 active buyers, up 11% year on year. The stock is down 18.1% since reporting and currently trades at $7.58.
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Match Group reported revenues of $864.1 million, up 4.2% year on year. This print was in line with analysts’ expectations. More broadly, it was a mixed quarter as it logged a decline in its users and underwhelming revenue guidance for the next quarter.
The company reported 14.84 million users, down 5% year on year. The stock is up 10.8% since reporting and currently trades at $37.33.
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