My name is Josh Baer, covering ed tech and software at Morgan Stanley. Greg and Sarah, CEO, CFO, thank you so much for joining us. I have some research disclosures first, four important disclosures. Please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Thank you so much for joining us. Really excited for this conversation. Greg, I wanted to start it off with a little bit of a recap of 2023. The way I see it, we had macro headwinds that sort of met AI tailwinds, or maybe vice versa. So I was hoping you could kinda walk through some of the largest positive and negative drivers of demand.
Like, while all this is happening, growth decelerated, but you still held the line with UB Growth around 25% on what's becoming a really big business.
Yeah.
Kick it off. Like, what happened in 2023?
Yeah. No, happy to just first, I'd like to just say thanks for having us back. It's great to be here with you. Yeah, 2023 for Udemy really was a transformational year. As you alluded to, you know, Udemy Business, you know, from a revenue perspective, grew 34% year-over-year, which really was best in class for software businesses that are around $500 million in revenue. So, you know, very proud of that. In addition, we saw the first year of profitability. We turned the corner on profitability for Udemy, well in advance or well ahead of expectations. And that's a testament to some strong execution and focus across the organization. We added 10 million learners to our platform. We added 1,800 new customers to Udemy Business. So, you know, on a lot of fronts, you know, very, very excited about the progress we made.
You know, I think we're gonna talk more about AI later. But we saw AI have a significant impact on usage on the platform, over 3 million learners, you know, taking courses and enrolling in courses across now what is 1,700 AI, GenAI courses on platform. And that continues to accelerate. And I'm sure we'll get into AI more, as you just mentioned. But we did see some headwinds as well. There's no doubt. You know, although we did stay above the 25% ARR growth threshold, which was a focus for us. And we did see some downward pressure. And that was as a result of the macroeconomic and geopolitical, you know, challenges that we did face. But now, that being said, you know, we've called out in the last guide that we do expect ARR to accelerate in the back half of this year.
In the areas or pockets where we did have some challenges, we absolutely understand what those challenges were. We are in the process of addressing some of those challenges and are confident that we'll have those challenges addressed as we move toward the back half of the year. Being able to maintain Udemy Business growth from a long-term perspective, exiting this year and beyond, north of 20%. So very durable, attractive growth for a software business, is, is, what we expect. And we're excited about it.
Great intro. Before we dig into all the, those different areas, I was hoping you could lay out the case broadly for investors. Why do companies need a sophisticated skills platform when you think about where the world is headed?
Well, so there's a lot that's been written about this transition to a skills-based organization or a skills-based economy, and for good reason because it is about skills, within organizations, not necessarily degrees or experience, but it's the skills necessary to accomplish work against organizational outcomes, which is ultimately what's most important. So we now see organizations around the world starting to embark on this transition to a skills-based organization, but they don't necessarily know how to get that done, and what tools and resources and support they're gonna need, to effectively transition in that vein.
So for us, it was critical that we develop not just the platform, which we've invested heavily in, but the services and the support capability to help organizations develop the right strategy, and then have the platform of tools and capabilities, in our case, based on the foundation of our, our global marketplace of content, but the tools and learning modalities that we've layered into our platform to be able to meet the needs of a global enterprise, where their learners live, and meet them where they, where they are, so to speak, in the flow of work or in the flow of learning. And we've talked a lot about the investments we're making in generative AI recently. We did a press release just before earnings.
And we talked about an AI Learning assistant, how that's gonna transform how learning happens within an organization as a result of the personalization that we can bring to a learning experience. Not just asking learners to go through a series of courses, but we can personalize down to the lecture level based on the skills gap that an individual has through an assessment, and have that personalized, curated learning path be presented automatically or being automated through GenAI, to significantly improve the efficiency by which we go through learning in companies, and drive to much more valuable outcomes, is the best way to frame it.
So that whole skills intelligence platform's enabling us to transform learning, to personalize it in ways that we did not have the ability before, and to be much more comprehensive and expansive so organizations feel comfortable standardizing on one platform, Udemy, for their enterprise learning needs across the, you know, the entire array of functions that they have to serve.
Perfect. And while we're on that topic, like, where are we as far as that vision of hyper-personalized learning, you know, incorporating the learning assistant like, you know, what's available today? How long will it take to kinda get that complete picture that you just painted?
It's a good question. We're gonna be releasing capability throughout the year. We're in the early stages, as far as the AI learning assistant specifically. We're in alpha on that. We do have customers engaged. We will come out, as hopefully in the next few months to be a bit more specific around exactly the timing of that release this year as far as the first phase of the learning assistant. But I can tell you the early feedback has been just tremendous and validating for us in terms of the experience that we're gonna be able to deliver. So this year will be the start, and that'll carry forward into next year and beyond as far as the level of personalization that we're gonna be able to provide.
Okay. Great. Take one step back before we jump forward. Wanna intro loop Sarah into the conversation, thinking about the impressive margin expansion that we saw in 2023, nearly 900 basis points to finish the year and positive EBITDA margins. So I was hoping you could sort of recap what we saw in 2023 as far as, you know, where did that leverage come from, what drove that efficiency?
Yeah. Thanks for the question. And thanks for having me here as well. A few areas. One of the easiest to understand is G&A. We had a lot of work to do in 2021 and 2022 to build up our capabilities to function as a public company. And so we saw a lot of leverage off of that throughout last year. From a sales and marketing perspective, we had been ramping up the go-to-market team and building that team, pretty aggressively for a number of years to take advantage of the secular trends that are happening in kind of our position to take advantage of it. And so we were able to, you know, really slow down the go-to-market expansion as the macro became a little bit tough and started getting leverage off of the teams that we had.
We also drove some efficiency from a direct response marketing spend, both in reallocating some of that spend, spending it in different channels that were showing higher ROIs. But what I will say is it was a real team effort. The entire organization leaned in to find operating efficiencies across the organization and make sure that we were really prioritizing investments and things that were gonna drive the long-term growth and/or sustainable operating efficiencies through processes, through system investments, that sort of thing. So it was across the organization, we saw people leaning in. And it's a real testament to the culture that we have at Udemy, that we work together as one team, and everyone really rose to the occasion.
Great. Thanks, Sarah. Greg, last quarter you listed your strategic priorities for 2024. I think there were five of them. Today you mentioned skilling. You mentioned platform. But I was hoping you could, expand a little bit, remind us between brand and partnership and international, like, what are the key takeaways from those strategic priorities looking ahead?
You know, the way we look at it internally is I think overall, you know, our, our focus on becoming the global leader in the transition to a skills-based economy is what our singular focus is right now. Those strategic, you know, kinda strategic areas of investment that we that we lined out, the investment in third-party channel, and additional routes to market, building the brand, and international investment expansion, all serve our ability to effectively, you know, be that, that global leader and be the undisputed global leader. All are important. I, I don't necessarily think one trumps the other. But we've got massive opportunity right now with the 16,000 enterprise customers that we have and less than 10% penetration to develop capabilities, invest in our platform to enable them to broaden and deepen the learning experience that we provide.
You know, that's something we're really excited about, because, you know, we're already seeing, and we talk about this on an ongoing basis. We're starting to see our average deal sizes every quarter rise. We're seeing our percentage of multi-year deal revenue increase every quarter. So, you know, the investments are actually having a desired impact, and that's gonna continue. Internationally, we've got the highest brand awareness of any country, any of our countries in the world, in India and Brazil. We have some of our largest customers in India, and we're gonna double down and invest, and build into India and Brazil as a result of that. Really excited about the investments there and the impact that's gonna have.
We've talked about our investment in the channel, AWS specifically, and could not be more excited about the alignment that we have between our organization and theirs, the value and impact that this relationship is gonna have on Amazon's customers as we move forward as being one of their premier partners that they're bringing to market to support the deployment of their technology, and having Udemy being there to assist an organization with adopting that technology and developing the skills to effectively use that technology. So, you know, in all of those key areas that we outlined, there's a lot of leverage and levers that we expect to pull to enable us to accomplish our singular goal.
That's great. You mentioned less than 10% penetration. Is that on a seat basis within those 16,000 customers?
It is. It's purely that's exactly what it is. Seats, seats sold versus available seats to sell versus employees in those companies.
Got it. Then you also talked about deal sizes increasing. I'm wondering, to what extent is that the difference between customers thinking about Udemy to just bring in content into their organization versus the content plus all the platform features?
Yeah.
All the skilling. Like, can you talk a little bit? Is that part of what's going on and, you know, what's driving that, that shift?
It's, it's a very good question because that's exactly what's going on. And it was about 18 months ago that we started the journey of changing the way that we sell from point solution, selling just primarily content into the IT side of the house, to selling a platform of capabilities into the CLO and the Chief People Officer, to give them the tools and the capability to deploy globally as our platform to aid them in, in the skilling journey that they're going on. And so, yes, that's exactly right because we're now starting to see not just seat expansion, but product-level expansion with Udemy Pro and with Udemy Leadership Academy, in addition to indicative of the partnership we just announced with ServiceNow, the strength and the bolstering that we've done in the investment we made in soft skills and power skills content on our platform.
We now have the full complement of content and learning modalities on our platform to enable us to have a very different conversation with the CLO than we were able to have 18 months, 2 years ago, with respect to how we can be the strategic partner. They don't need multiple vendors. We can handle all of their global needs across the enterprise with respect to upskilling and reskilling. That's a different motion. That has led to the deal sizes increasing and the percentage of multi-year contract revenue increasing as well.
Great. Is there any context for what happens from a financial perspective when a customer adopts Udemy Pro or Leadership or some of the other, you know, modules?
Yeah. So those are additional per-seat fees. You can imagine Udemy Pro is, you know, most applicable to the technology teams. And so per-seat on that. And then Leadership Academy is the same across the management team.
Okay. Got it. On net new customer adds, I think that was a little bit weaker in Q4, just looking at the data going back for a few years. I was hoping you could dig in a little bit what was driving that weakness, between churn or gross adds and, yeah, let's start there.
Yeah.
Yeah. So, that's a great question. What we saw in Q4 and we actually saw it in the previous Q4 as well is we saw churn on the, you know, smaller side of the SMB side of the business, our self-service Team Plan, where those annual contracts, many of them, did not renew at as high of a rate as they did in some of the other quarters. So the enterprise business remained very stable. We added lots of new logos. But when you're talking about a logo count, that SMB side can, you know, drive a lot of logos, but 80% or more of our revenue comes from the enterprises. So it doesn't have the same impact on ARR or on our revenue.
I'll just add that, as Sarah just mentioned, 80% of our revenue comes from our larger enterprise customers, but roughly inverted in terms of the actual number of customers. Roughly 80% of our 16,000 come from SMB customers. But again, the revenue comes from the larger customers. So again, it gets a little bit muted from that perspective when you see those churn numbers, but not necessarily coming from the large enterprise.
Got it. And so the reported net dollar retention rate of the enterprise customers, or those with 1,000-plus.
Yeah.
Employees, I think, was 113.
Mm-hmm.
Overall, 106.
Mm-hmm.
So that's kind of implying that the SMB was, well, you know, below, below that, obviously.
That's right.
accurate.
How should we think about the trajectory of those metrics going forward?
Yeah. Great question. So, you know, there was a lot of pressure on net dollar retention last year as the macro became really volatile, and it took longer and longer to do our upsells. The sales cycles elongated. Feels pretty stable right now. We actually saw some of those sales cycles pull in a little bit in Q3 and remain stable in Q4. They're nowhere near what they used to be prior to 2023. So, you know, when we think about this year and where that's going, you know, it has stabilized somewhat. There will remain to be, you know, remaining a little bit of pressure, but not as much pressure as we saw in 2023.
As we get into the back half of the year and as we start to see that acceleration in ARR growth again, we do expect that to start to increase and see improvement in the Net Dollar Retention. That will continue to remain strong on the enterprise side.
Could you lay out where some of the confidence comes from as far as that acceleration in the back half of the year? Is it a function of easier comps? Is there an assumption that macro improves? Is there an assumption that some of these, you know, platform features and AI starts to take over?
Yeah. So, a few things. The first is, for sure, the platform features and the AI. That's really exciting and a huge opportunity for us. The second thing is, you know, we did mention on our last earnings call some execution issues we saw in certain pockets. So there were regions and segments that were performing really, really well. One of our largest quota-carrying segment actually hit over 100% of their quota in total for the second half. And we hadn't seen performance like that since 2022 and before that. But what that allowed us to see was there were some regions and segments who hadn't really adapted to the environment, weren't grabbing onto the playbooks, and the things that we knew were working and we saw working in the regions that were performing at over 100%.
So sales enablement around that, making sure that everybody is consistently applying our playbook, is one thing. The second thing is one of the things we saw in Q4 was Vietnam and Korea. Those two are reseller partnerships that are relatively new, a little over a year old. And we saw some performance issues as far as how they are managing their pipeline and forecasting what they were going to do. So the model that we had was more of a regional oversight model. We have a similar partnership in Japan, which has been very successful, and they have continued to perform quarter after quarter. So in the meantime, we have the head of Japan helping Korea and Vietnam start to adopt the best practices as we're hiring country managers. And so all of those factors combined give us a lot of confidence in the back half of the year.
It just will take some time for this work, and these initiatives that we're doing to play out in the form of closed bookings, ARR, and then ultimately revenue.
Great. Do wanna come back to the international story, but first wanna ask one on competition. And, Greg, you talked about kinda being the—I forget the exact word—but preeminent skills platform or.
Yeah.
Can you help describe your current competitive environment, besides Coursera, LinkedIn Learning? Who else do you run into? Where do you win? Where might a customer, potential commercial customer, select another vendor?
Yeah. That's a good question. So it really is for us the usual suspects in the enterprise as far as competition. And I'll name them for you. I mean, in Pluralsight, Skillsoft has been around for some time now. You've mentioned Coursera, LinkedIn. And those are the primary players that we see in the enterprise. SMB is different. There's a lot of folks that focus down market. But we'll stay on the enterprise now. Now, as far as the competitive landscape, yeah, well-documented. LinkedIn, you know, is bundling their learning product in with their recruiting suite as well as, you know, with their Glint products. So they're selling in a portfolio of products and services, not necessarily with intense focus on the learning product specifically. Coursera, you know, conversely, you know, very different.
Coursera does a great job on the consumer side of their business, reflective in the numbers they're putting up. You know, Jeff and team have a lot of respect for what they're doing. Their focus is not primarily in the enterprise. So we don't see Coursera nearly as much in the enterprise, reflective of their numbers. You know, they report those publicly. So you know, all they'll do from time to time, you'll see an organization adopt for specific purpose around degrees. But it's primarily LinkedIn, Skillsoft, and Pluralsight more focused on the technical side of the house, right, with you know, a deeper capability around assessments and labs. So those are the usual suspects.
What we are seeing, and this is manifested in a lot of the stories that I tell on the earnings announcements around consolidation, around replacement, is we're seeing organizations that are getting serious about upskilling and reskilling and making a strategic imperative, running an RFP or running a process to downselect to one platform that they believe is gonna meet the majority, if not all, of their needs across the enterprise to, to upskill and reskilling, to actually develop skills capability from a talent management perspective. And look, look, that and we know that.
In fact, a lot of the reasons why we've developed on top of our core content capability, which is best in class, the learning modalities on our platform, and there's been, you know, very, very much, a strategy and, you know, a commitment to developing the capabilities we have so that organizations that need management leadership development, you have that capability on our platform, that need immersive learning, assessments, labs, workspaces, and validation in the form of badges and certificates, have access to that on our platform. The soft skills and power skills, the array of capabilities we provide on our platform now is very unique. I can tell you that the competitors that we just talked about, none of them have the breadth of learning modalities on top of the content generation engine that is our marketplace, holistically in and one offering.
We don't have a competitor that has a similar offering. And so that does make us very unique. And it's one of the reasons why we're seeing the disproportionate amount of consolidations and replacement wins that we're now able to execute and win.
Perfect. Very clear. Wanted to come back to international and sort of can tie in some, some competition to that to this question. You at least used to have close to 70% of revenue from outside of the U.S. I think maybe that's close. So a big, big part of your business and had a really interesting differentiated playbook, in my opinion, where sort of create this local content in, in local languages and build up the consumer side of things and then bring that over to the to the business side, once you reach a threshold. So a few questions with that in mind. One on generative AI and, and the use maybe of some of those competitors to use GenAI to translate their content.
Mm-hmm.
Does that, I think maybe you don't need that because you have the local language content, like, does that close the gap between your competition? Does that aspect give an advantage, like, a way for the others to catch up to you?
We have that same ability to leverage GenAI in countries where we don't have as much local content, that are emerging for us and to do the same thing. And so, you know, that's available to all of us now. But the reality is it's a very different experience. If you happen to be, you know, Japanese living in Japan and you have an opportunity to take a course from a local instructor that understands the culture, obviously speaks the language, and understands, you know, the native storytelling and way by which learning happens in that country versus an English course that was developed by an instructor here in the United States and dubbed and subtitled, it's a very different experience. It's a very different experience.
We're told that over and over and over again by our customers in Japan and in Brazil, where Portuguese is obviously the language, and so on and so forth. So, the short answer is it gives them the ability to actually compete in that country where they did not have the ability to compete because they didn't have local language content at all. But are they on par, or is it a level playing field? No. We believe that it's a superior experience, far superior experience, available to provide local content developed by local instructors that are still some of the best instructors in the world in those chosen disciplines. So, we still believe we have a competitive advantage, and we will in that way. I don't believe that's going away anytime soon.
Makes sense. And are sticking with international, but thinking about consumer for a moment, like, with the broader somewhat de-emphasis of consumer, does that international playbook that I kinda outlined, like, does that need to change? You know, if you're not maybe not seeing growth in certain markets, does the way that you build up the Udemy business in the international markets have to change?
We're still very committed to the consumer although we're not investing in the consumer business as aggressively as we historically have, make no mistake that that is the flywheel that enables Udemy Business to spin. And meaning that that's where our content comes from on a global basis. Instructors initially enter a, you know, a relationship with Udemy through the marketplace. We still use that marketplace as the catalyst to open new markets in new countries around the world. And that the motion that you just described, Josh, is still persistent. We haven't deviated from that.
Now, if we decide to accelerate penetration in a specific market that we may not be in today, we always have the ability to turn the spigot up, right, and goose that until we get to a level of, not saturation, but, you know, a level of, you know, kinda course development and volume that's gonna support us being successful within Udemy Business to actually launch into the business community there. That's a lever we can pull at any time. And we do, and we will, and we will continue to do that. So it doesn't change our strategy with respect to how we leverage the consumer business to open up a new market, really at all.
Okay. Got it. There has been, like, we have seen on the consumer business has seen some modest declines as.
Yeah.
Massaged and planned. That should continue this year with, I think, the guidance for low single-digit declines.
Mm-hmm.
In 2024 in consumer. I'm wondering, like, broadly, is this, as you say, like, adjusting the spigot like, is this kinda your decision to pull back on marketing spend, and that's what's causing some of the consumer performance, or are there other elements around macro student learning behaviors?
Yeah. It's a great question. It really is related to the spend on the marketing side within consumer. So for us, we're really thinking about where are dollars best spent right now. Our investments, we have shifted over the past year, year and a half really to focus on Udemy Business as our growth engine. And so the capabilities that we're building out on our platform, we're building out on the Udemy Business side first. But a professional learner is a professional learner, whether they're Udemy Business or whether they're consumer. So we will be porting some of those capabilities, for instance, badging and certification, our learning assistant. We will be porting those over to consumer over time. And that is a better time to actually really think about more marketing dollars on the consumer side because you will be you will have increased the LTV of those learners.
From an ROI perspective, the dollars will be better spent at that time. It really is about the timing of our investment dollars, where they're going, and what makes the most sense. We love to invest and innovate once and monetize twice, but it doesn't always happen at exactly the same time.
Got it. Once some of those capabilities come over from UB to consumer, how should investors think about the growth profile of consumer, you know, down the road?
Yeah. So getting back to what we'll call modest growth for now as we see, you know, how things evolve around AI and some of these capabilities. But, you know, low to mid single-digit growth is in our line of sight.
Okay. Got it. Related to sort of another form of competition around GenAI and, and sticking to on the consumer side, do you think that there are learners out there that are meeting some of their more basic learning needs through GenAI, you know, ChatGPT or other GenAI solutions? Like, is that at, you know, maybe not impacting the bottom line, but maybe impacting top of funnel?
They're very well. I'll start, and you can jump in, Sarah. There may be some of that transpiring. But look, we've had over three million enrollments in our GenAI courses across 1,700 courses and growing. I mean, the volume has been unlike anything we've ever seen with the new technology development. And so as much as I'm sure that there are a lot of very, you know, varied options for learners to get access and information, we're very pleased with the engagement on our platform. And it's not slowing down at all. So, you know, that's one aspect of the answer. The other aspect of it is that, make no mistake, we are very focused on creating a variety of different types of learning experiences. And microlearning is, without question, one of them.
So that in the future and I won't—I'm not gonna go into tremendous detail, but you can expect us to be investing in microlearning experiences that do not require a learner to take a course, that you can actually have a very, very high-impact three- to five-minute learning experience on our platform depending on what your needs and desires and interest is. And so that's something that we will absolutely be releasing as well. I don't know if there's any you wanna add.
No. I think that's exactly right.
Got it. Any updates on the consumer subscription, you know, how big is it? How many?
Yeah. We did announce 100,000 subscribers, two quarters ago, which was really exciting. But as you know, Josh, we've been very methodical about the rollout because it is a different payment model for instructors. So just being really thoughtful, we're very pleased with what we see. And when we talk about the capabilities that we're building first for the Udemy Business side of things and the Udemy Business learner, a lot of those capabilities are most applicable for the Personal Plan, not for the transactional purchases. So we think that it's going to continue to increase the percentage of our consumer revenue that comes from the subscription side of things.
Got it. I'm gonna ask a couple more questions, and then I'll pull the audience after one or two more from me. Wanted to ask about margins, the guidance for this year.
Mm-hmm.
Not too long ago, we had a big positive surprise as far as a change in the content, content cost, the revenue share, that would bring significant gross margin increase, like, 300 basis points this year, maybe close to 9% once that rolls through. This year's EBITDA margin exp guidance is for expansion, but below that 300 that we're getting.
Mm-hmm.
Clearly, like, a lot of investments there. I guess to start, if you could level set or lay out how you think about that trade-off between growth and margins.
Yeah. It's a great question. So we really focus on being very balanced. We are sitting at the front of a massive shift to a skills-based economy, and we're in a really good position to take advantage of that. So making sure that we're investing in the things that are gonna help us capture that growth is really important. Operating profitably, also very important. So we really think about it in a from a balanced perspective. And when we announce the revenue share change and the and the decrease in content cost, you know, we try to be very clear. We are gonna be investing the majority of that 300 basis points that we would be generating back into the business. We last year hired a Chief Product Officer for the first time ever, a Chief Marketing Officer, and a Chief People Officer. We have an incredibly exciting roadmap.
Generative AI is a massive tailwind for us because we are sitting on mountains of data. We have almost 70 million learners across the globe. We have 200,000-plus courses. What we can do with that data as far as personalized learning and really helping organizations stay on top of the skills they need is really exciting. So when we looked at this year and we were thinking about that balance, it really made sense for us to have this year as an investment year to make sure we're capturing that growth, but we were still really committed to our long-term EBITDA margin targets of 15%-20% by 2027. So what that means for us is investing this year. You saw last year we made, as you mentioned, significant expansion from an EBITDA perspective of 900 basis points.
We will be back in bottom-line expansion mode again next year.
Okay. Got it. Any questions in the audience? One up front.
For your enterprise business, I'd like if you could tell us a little bit about churn, retention dynamics in that business and kind of the rough levels that you see. When you see churn or when you see downsells from customers, what are the primary reasons for that?
Yeah. Happy to. So from a, you know, we don't report the gross numbers, gross retention numbers. But what we do comment on is we've been very durable and very stable through the macro on the growth side. So, foundationally, I feel really good about that. And then the NDRR numbers, the net dollar retention numbers of 113 for the large enterprise and 106 we talked about earlier.
When we do see reductions, if you will, in license counts or whatever, it was typically as a result, and still is, but to a less degree, layoffs, workforce adjustments, and/or if there's budgetary concerns, short-term, you know, reductions while folks are getting their house in order. CFOs are doing what CFOs, you know, our CFO does as well sometimes is making sure that, you know, we've got everybody lined out as far as how we wanna, you know, allocate capital for the year. And then they open the purchasing reins back up again, right? So very common, you know, when you're going through an economic downturn or challenges.
When we see, and we don't see this very often in the enterprise as a result of our NDRR numbers, but if, in fact, a customer does decide to move away from us to, you know, another, another partner, it's for one reason and one reason only, and that's price, right? We are not, and we've talked about this, and I will continue to talk about it. We'll never be the low-price leader. That's not our position. We're the high-value leader. All the investments we're making in the broad platform we have, the investments in AI capability, everything Sarah just talked about as far as the investments we're making this year, to enable us to personalize the learning experience and transform how learners engage in the notion of upskilling and reskilling, that takes investment. And we're gonna continue to invest in it.
That is not in alignment with us being the low-cost leader. So that's the one reason why if, in fact, we lose customers in the enterprise, that's why.
You were talking about some of your competitive differentiation around platform and complete learning modalities. Like, to me, that's on-demand learning. You have leadership, immersive learning.
Yeah.
Cohort-based learning. And now you're, you're also alluding to microlearning. Like.
Yeah.
Are there any other types of products from that standpoint that is still left? And how should investors think about M&A, like some of those you've done through M&A?
It's a good question. You know, we've talked a little bit about this in prior earnings calls, but that is an area, Josh, that we have been active and will remain active with respect to potential M&A. We still sit on over $300 million in cash. So we're and we'll remain very active. Yes. Additional learning modalities, there's a number of them. We will continue to explore the possibilities through M&A of getting there faster through acquisition than we may get there on our own through product development. But yeah. It's, and we've talked Sarah mentioned this, I believe, earlier is that we are very discerning on the acquisitions. Acquisitions are, you know, can be difficult.
But, you know, if with the right fit, the right cultural fit, the, you know, from a technology standpoint, if things line up, and the learning modality we believe is gonna have high impact, then we'll strike. And we will move. We just haven't found it yet.
Great. Any other questions? Was hoping to revisit some of the partnerships that, that you mentioned. Starting with, with AWS.
Yeah.
You know, what is the key takeaway from partnership with AWS?
I think the one. Well, there's a couple. The one primary is we're now at a level of partnership with AWS to where on a global basis, their sales reps are quoted dollar for dollar on all Udemy products and services sold through the marketplace. That is very hard to get to. We're told we're in the top 1% of their partners globally. They've got 20,000. They joined us on our sales on-stage for our sales kickoff, both in Dublin, Ireland, as well as in North America. And I had heard this for the first time when our executive was on stage in that all 20,000-plus go-to-market, you know, sales and customer success account management individuals within AWS, when they onboard, they have a three-month onboarding program. One track is just standard onboarding, onboarding into the company.
The other track is they have to pass an AWS certification. All 20,000 of those employees come to Udemy to take the courses in preparing themselves to pass that certification, every one of them. The sales enablement that is usually one of the biggest hurdles when you do a partnership like this, to get the sales folks to a point where they actually understand the value and impact of the partner's technology, we cross that barrier in the first 90 days with every employee they have on a global basis.
So now it's about giving them the tools and resources and field alignment, to make sure that it's a very easy process for them to engage our sales team, to bring them in and co-sell with them where it makes sense, into their customers, being the premier partner for them to upskill and reskill against their technology as they deploy it into an organization. They've got 2.5 million enterprise customers. We've got 16,000. Pretty easy math. There's a big opportunity there for us. And we're aligned and resourcing to take advantage of it. So yeah. I mean, that's where Amazon is right now. Really happy with our team's execution coming out of last year to put us in position to be where we are today.
Excellent. We are out of time. Thank you so much, Greg and Sarah. Really appreciate it.
Thanks, Josh.
Likewise, Josh. Really appreciate you having us. Thanks, everybody.
Thanks, everyone.