Udemy, Inc. (NASDAQ:UDMY) Q2 2023 Earnings Call Transcript

Greg Brown: Yeah, it’s a good question. Thank you for it. Without question that is the case. And we saw an opportunity as we’re looking forward and projecting from a strategic perspective, the capability we need to have in our business to deliver the value and impact to our customers and that really led us to bring on Genefa and Prasad. Prasad to help us — Prasad comes with a tremendous amount of depth and capability around AI. The company he was just with he rearchitected their entire platform founded based on generative AI in terms of the rearchitecturing of that. And without question bringing him in to help do the same thing here both in terms of how we get operational leverage and embedding AI in how we run our business, as well as how we develop products and the value that that product is going to have externally on customers as we move forward and better understand how we can leverage AI to improve the overall learning experience.

And then on the marketing side, we really have not invested historically in building Udemy into a global brand that everybody is well-aware of and understand how we can help them as an individual, a team or an organization transform lives through learning whether it be their life or the lives of the individuals in their organization. And Genefa got just tremendous relevant background and experience that we can’t be more excited to have in our business now to help carry us forward, not only helping to build the brand but to optimize our go-to-market motion as we come out of this economic downturn, step on the gas and really start scaling on a global basis. So both executives are going to have a significant impact on our ability to take the next step in our evolution of realizing our vision to transform lives through learning.

Connor Passarella: Great. That’s really helpful. Appreciate the color. Maybe just as a quick follow-up just wanted to touch on immersive learning and UPro. So, I guess, how’s the adoption of UPro continue to trend this quarter? And then maybe what kind of additional immersive learning capabilities are you looking to maybe layer into the platform? Thank you.

Greg Brown: Yeah. Thanks for the question. Really happy with the continued adoption and growth of UPro within our global customer base. And we’re really starting to see that global expansion happen with respect to UPro. And just last quarter talking about global nature, a large Latin American bank came inbound and had a bake-off, which is usual competitive bake-off and selected us for two primary reasons; the immersive learning capability that we provide with UPro and the badging capability that we’re launching that we’ve already launched the first phase of and we’re — Phase II is in flight. And their focus at that point in time is consolidation. They want to consolidate to one platform that they believe was going to be the right platform and company to help lead them forward in their digital transformation and they selected us to do that.

And their quote to us was, you’ve saved us months of work by being able to consolidate onto one platform and do all of the work with one partner that we were doing with multiple. So really excited about the impact UPro is having and expect that to continue. What was the second part of the question? I lost that.

Connor Passarella: Yeah, no. Just any additional immersive learning capabilities, maybe looking at as well, but not UPro, just in general?

Greg Brown: It’s a good question. Yes. We are looking at other immersive learning capabilities and modalities that we believe could be an extension of into — of our platform nothing to speak of to date, in terms of new modalities that we’re layering into the platform. But we are exploring, a number of different options. And for us, it’s build partner buy. And as we’ve talked about on prior calls, we do have an opportunity and are sitting in a good position, to acquire capabilities that would potentially enable us to extend the modalities on our platform. And that’s something that we’ll talk about when the appropriate time comes.

Connor Passarella: Got it. Thanks, Greg

Operator: The next question comes from Brett Knoblauch with Cantor Fitzgerald. Please go ahead.

Brett Knoblauch: Hi. Thanks for taking my questions, So I guess, we’re seeing kind of GDP growth accelerate in the US at least hold up a lot better than we all anticipated, I guess it’s not really accelerating. And you combine that with seems like every company making AI their number one priority. So I guess like what specifically in macro is leading to the weakness? Is it just like L&D not being, as mission-critical as we thought, it was going to be in a post-pandemic world? So it seems like you guys are very well positioned to capture this unique moment in time where AI is just beginning to kind of reverberate through, enterprises and they need skills for that. So like there should be more I feel like a tailwind for you guys. And I know you talked about demand on the platform minutes for ChatGPT and AI. But I guess, how is that not translating into more kind of enterprise demand?

Greg Brown: Hi, Brett, thanks for the question. We actually are seeing it translate into enterprise demand. We had a couple large wins, one in particular with the European engineering and technology firm that purchased our platform, if you will or selected us as their partner for — specifically for upskilling across the organization, but embedding AI is a critical component of that buying decision based on the breadth and depth of the AI content that we have on platform. And there were a number of those. So we are seeing it impacting our ability to win in the enterprise. But now, let me just take a step back, and talk a little bit about, what’s going on in the business that I believe will help answer this question. The top funnel for us is, extremely encouraging right in terms of pipe generation, lead generation into the top of the funnel.