Coursera (NYSE:COUR) shares surged on Friday after the online learning platform reported second-quarter earnings that exceeded market expectations, driven by accelerated revenue growth across both its consumer and enterprise segments.
The strong performance, which also saw improved profitability, has prompted the company to raise its full-year revenue outlook, signaling a robust operational shift and increased confidence in its future trajectory.
Coursera reported second-quarter earnings of 12 cents per share, which beat the analyst consensus estimate of 9 cents. Quarterly revenue clocked in at $187.1 million, which beat the Street estimate of $180.48 million.
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Bank of America Securities analyst Nafeesa Gupta upgraded Coursera from Underperform to Neutral, raising the price forecast from $7 to $12.
Gupta notes that revenue growth accelerated to 10% year-over-year, up from 6% in the first quarter, driven by improved performance across both the Consumer and Enterprise segments.
The EBITDA margin came in at 9.6%, ahead of the 7.1% Street forecast, supported by stronger top-line results, improved revenue-sharing dynamics, and greater operating efficiency.
In the Consumer business, growth picked up to 10% year-over-year versus 5% in the previous quarter, helped by robust Coursera Plus subscriptions and effective marketing.
While Gupta raises the rating on better near-term growth and margin prospects for the third quarter and FY25, the analyst also flags a likely deceleration in the second half, citing expected 8% revenue growth in the third quarter and softer implied trends for the fourth quarter.
Still, the analyst remains constructive on the company's expanding learner base and its ongoing success in bringing down content costs.
Gupta notes that management expects the $17 million increase in full-year 2025 revenue to primarily come from the Consumer segment, driven by initiatives such as enhancing the site experience, expanding the AI course catalog and enrollments, and introducing promotional and geo-based pricing strategies to improve paid learner conversion.
Reflecting this momentum, the analyst raises third-quarter 2025 revenue estimate by 4% to $190 million on stronger Consumer growth, and adjusts third-quarter 2025 EBITDA upward to $12.1 million (6.4% margin) from $10.4 million.
The analyst also lifts full-year 2025 and full-year 2026 revenue forecasts to $746 million-$796 million, respectively, up from prior estimates of $730 million-$772 million, while boosting full-year 2025 and full-year 2026 EBITDA projections to $60 million-$75 million (8.0% and 9.4% margins) from $54 million-$68 million previously.
