Okay. I think we'll get started. Thanks everyone so much for coming today to JP Morgan's TMC conference. My name is Noah Herman. I cover mid-cap software here at JP Morgan. Delighted to have both Greg Brown, CEO of Udemy, as well as Sarah Blanchard as CFO of Udemy. Thanks so much for coming, guys. Really appreciate it.
Great to be here. Thanks for having us.
Yeah. So, maybe just to kickstart things, if you could just provide a brief overview of Udemy and the value proposition you provide?
Yeah, happy to. So, for those of you that don't know us, we are a skills development platform, very, very much focused on developing skills or enabling skills development for both tech skills as well as soft skills and power skills. We serve individuals as well as organizations, from SMBs all the way up to the largest multinational enterprises. We've got on board today over 50% of the Fortune 1000, over 70% of the Nikkei 225, so a very global platform. Over 60% of our revenue is outside of North America. What makes us a little bit unique is that we're. Our competitive set are publishers of content.
Our content comes out of a global marketplace that today hosts 220,000 courses, with over 75,000 instructors around the world developing local content that enables us to curate about 26,000 courses today that we sell and serve up to our enterprise customers. That is a very unique aspect of our business and really does enable us to serve up the freshest, broadest, deepest, most international set of content in our category. Then on the Udemy Business side, which is the growth engine of the company, we've got 16,000 customers on platform today. As I mentioned, over 60% of our revenue is outside North America, and we're very focused on our enterprise segment, which is our strength.
Over 80% of our revenue comes out of companies of over 1,000 employees around the world. And we have a platform that sits on top of our rich content array that supports all of the various learning needs or learning modalities that enterprises have as requirements to enable us to be the platform of choice for upskilling and reskilling across the entire organization, entire enterprise. So that gives you a bit of a flavor.
No, that's a great overview. So I mean, Greg, you, you became the CEO roughly about 15 months ago. Before that, was leading the, the Udemy Business portion of the company for a little more than 2 years. You know, now that you've sort of settled into the, the CEO role, you know, what do you think is really going well within the company? Where do you think there's room for improvement, and, and what are your, some of your top priorities, both short term and long term for the company?
Yeah, very proud of the durable growth that we've been able to deliver on the Udemy Business side over the last, you know, three or so years. You know, in 2022, we had 68% year-over-year growth. Last year, 34% year-over-year revenue growth in a very tough macro, and we're projecting solid growth again for this year on the Udemy Business side. Our product roadmap is something that we're all extremely excited about in the organization, and we're right now on tap to deliver some AI-enabled capabilities in the back half of the year that we believe are gonna start the transformation of how learners engage with our platform. So couldn't be more excited about those investments and really the opportunity that, that lies ahead there.
The success we've had building multiple, you know, multiyear strategic relationships with organizations is something Sarah and I could not be happier about. You know, when we came into the business, about the same time, 3.5 years ago, we had less than 10%, significantly less than 10% of our relationships were multiyear relationships with organizations. Now it's over 50%. It really substantiates the value and the strategic nature of the relationships that our team is establishing, and in a very, again, a very tough macroeconomic environment. So, you know, it further validates this, you know, transition that we talk a lot about that's happening to a skills-based organization and our platform being the platform of choice to helping organizations in that endeavor.
You know, I would say looking forward, we've talked, you know, publicly about the fact that we are very focused on establishing Udemy as the brand synonymous with skills and skills development. We're making concerted investments in that area. Our teams are doing a great job making progress, you know, you know, in that endeavor, from the relationship we've established with McLaren Sports and McLaren Racing and some of the other partnerships that we've developed, as well as just the execution through social media and the various channels that have enabled us to really start to elevate the brand and, and, and really start to become synonymous with skills and skills development. So those are some of the areas of investment, some of the areas that we're proud of as far as what we delivered over the last couple of years.
Yeah, and just sticking with the product roadmap, you know, I thought last quarter, you threw out some interesting stats around Gen AI, just the fact that you already have 4 million enrollments in some of these Gen AI-related courses, 2,000 AI courses already on the platform itself already. So, I mean, it really just seems like this could act as a catalyst for upskilling employees in different ways, and you're sort of seeing that demand come into the platform. So how do you sort of envision AI, you know, playing out within this category? Because on one hand, it is going to be a catalyst for upskilling employees, but at the same time could, you know, be somewhat of a potential threat as maybe another avenue for people to reskill. How do you sort of think about those two dynamics?
Yeah, we see it very much as a catalyst. In fact, Jamie Dimon yesterday came out and talked about the fact that all new employees coming into J.P. Morgan are gonna go through an AI boot camp to take courses on prompt engineering and, you know, a number of other courses in that array that's gonna help them develop an AI literacy as they start to embark on a career within the bank. And we're seeing that across all industries and all sizes of companies, and you know, that has us really excited about the future. You mentioned the strength of AI content on our platform. We also recently saw that Boston Consulting Group came out and said that 90% of companies today are still in the observation or discovery mode.
They're still determining how they're going to enable their organization, their employees, and their customers to take advantage of this transformational technology development. And so, for us, we're in the first inning of this in terms of the opportunity to help organizations in this endeavor. As far as the risk associated with it, you know, I do get asked this quite a bit: "You know, is AI are you worried about AI taking over the world and taking over, you know, the opportunity," if you will, "or being able to just become an instructor?" The reality is, Sam Altman talked about this recently with Reid Hoffman.
I'm very much in his camp and feel the same way, that, you know, what a world-class instructor can do, and we've all been in courses, in university, where you have that amazing instructor that you can't wait to get to that class to learn what they're gonna say because of the examples and the stories and the personal experiences they bring to life through that learning process, through that lecture or series of lectures in that course. And then we've all had those instructors that are reading from the book and that are just staid, and that you're really actually not engaged with at all, and you'd rather stay at home and just read the book on your own, right?
There is not right now a world to where I can see, or we see, or Altman sees generative AI being able to replace what a world-class instructor does to write a course and bring that course to life. Now, are we gonna be able to provide tools so that, much like Reid Hoffman's video recently, for those of you who saw it, has an avatar that looks like me, sounds like me, and sounds like me in multiple languages, to be able to deliver that course so I no longer, as an instructor on our platform, have to video it, produce, and then publish it? The answer to that is yes, and we're working on that.
I'm not gonna go into more detail around, you know, where we are on the product roadmap on that, 'cause that's future stuff, but that's something that we are absolutely going to enable over time so that our instructors can focus on what they do better than anyone else in the world, in some respects, which is develop that course and that content and allow the avatar and the voice recognition to bring that to life. So yes, AI is gonna help transform learning. We believe it's gonna help transform learning on our platform in a way that's gonna give us a further competitive advantage than we have today. But do I see a situation to where we're gonna get disintermediated in the near term or midterm? The answer is no.
Well, I thought it was really interesting, you had the product demo, I believe in April, with a small group of investors, and you were sort of displaying the instant summarization y eah a nd the skills mapping that comes with some of the capabilities you're rolling out. You also highlighted last quarter one customer, I believe, who decided to, you know, pretty much go all in with Udemy to expand the number of seats they had from, I think, 3,000- 9,000 because of some of the IT and AI courses you provided.
Yeah.
So just curious, like, what has been the feedback so far from some of these capabilities you're rolling out from customers? 'Cause it seems like it's gaining a bit of traction.
Yeah, it is, and we've got a number of customers that are in alpha with us, that are helping us continue to refine and develop the product as we get closer to beta and then general availability, and the feedback has just been tremendous. You know, feedback like some customers, large multinationals, saying, "This is gonna save us hundreds of hours," the skills mapping capability you referred to, and months of work that they're doing today, and then now being able to automatically refresh on an ongoing basis, to where today it's all manual. It's gonna transform how they map skills to jobs and roles in the organization.
And then, you know, the learning assistant capability to help hyper-personalize a learning path so that I'm not having- I'm not being asked to take a course that 50% of it I already know and I already have those skills. You're gonna be able, through the dialogue between myself and a chatbot, be able to hone down on exactly the lectures I need to take, down to the lecture level, not just the course level, to develop the skills necessary to acquire that badge or certificate, regardless of what technical discipline that may happen to be.
So we're gonna that's gonna transform learning in that way, in addition to that assistant being along for the ride with me throughout the entire process of taking those lectures so I can ask questions. Think Copilot, right? But we're enabling that on platform, right? So, the feedback has been tremendous, and we expect that to continue. We now have clickable demos of these products in our sales team's hands as of this week. That's enabling them to bring to life the experience that we're gonna deliver in just a few months, and, you know, I couldn't be more excited about it.
No, that's a great overview. I wanted to shift gears a little bit. You did have a pretty important announcement this morning.
We did.
You, you did hire a new CRO and completed that search for Rob Rosenthal.
Yeah.
Just wanted to get your, you know, first insight on, you know, why was Rob fit for the job, and, what went into that process, and how are you sort of positioning the go-to-market going forward for the rest of the year?
Yeah, yeah, good question. You know, so this hire was all about us taking the next step in the maturation of our Udemy Business business unit. We're now just under $500 million in revenue, and when you go from what we have done, which is from primarily a point solution, with direct sales being the vast majority of our, you know, revenue acquisition approach, to now a multi-channel strategy, very international in nature, with the opportunity to now activate a partner like an Amazon Web Services, as a super scaler, that now we're going to market hand in hand with around the world, and selling Udemy alongside the Amazon Web Services sales team.
It really helps to have somebody that has, with Rob's experience at both Adobe and SAP, as well as Bloomreach, to bring the experience doing exactly what we're embarking on doing, developing the channel capability to sell through an international, you know, what is for us, an international global opportunity, with India and Brazil still very under-penetrated, and develop the right strategy, both on the internationalization side, as well as layering in the multi-channel approach. Having somebody that's done that before is going to be hugely beneficial. He's also a wonderful culture fit, couldn't be more passionate about what we do and the, and the impact we have on the world as far as transforming lives through learning, and we're thrilled to have him and, you know, looking forward to getting moving with him.
Just, like, with respect to that, you know, anytime, like, a new right head of sales or new CRO comes into the fold, there's always the questions around, you know, how much time is it going to take for that person to adjust to the sales force and the company itself. So, you know, do you think that this might take, like, a quarter or two until, you know, Rob sort of gets settled into the role, and you're able to execute on some of the go-to-market initiatives that you really want to accelerate on the back half of this year? Or how should we think about that?
Yeah, you should think about it as follows, which is my guidance to Rob is going to be, and has been, that, "There's nothing broken that we need you to come in and fix right now." This is about preparing us to take the next step, as we just laid out, in terms of the opportunity we have ahead. I've been sleeves up for the last four months, working very closely with sales leadership and customer success leadership, to identify opportunities for us to optimize, and we have been doing that. You know, as we're working through some of the challenges and opportunities we have, both in Europe, with the continued slowdown that we've seen, as well as around the world, I feel very good about some of the adjustments and adaptations we've made, the execution that I'm seeing right now.
I'm meeting with the teams weekly, and that's going to continue as Rob onboards and takes the time to get up to speed. So really, really what I want him to do in the first 90 days is get out and meet with our customers, meet with our employees, meet with our teams, ask a lot of questions, listen, learn our business. It is somewhat complex with the consumer business and the dependencies and interplay between consumer and the enterprise.
Take the time to really get your feet underneath you and learn the business, and I'm going to be co-piloting and, and ride, ride along with him through that whole process as he comes up to speed. So, you know, you should not expect any major changes in the near term and, you know, we're going to take our time and make sure that he has an opportunity to onboard appropriately.
Got it, and you sort of mentioned a little bit on the... Oh, do you have a question?
Sorry, can I ask questions as we go?
We'll probably save it towards the end, with like 10 minutes left. But we'll just. Yeah, maybe like 10 more minutes or so. Well, you briefly touched on just the macro environment a little bit.
Yeah.
What are you hearing from customers at this point? Because it seems like, you know, we're getting mixed signals, especially around SMB seems to be, you know, a mixed bag, and then, you know, enterprises seems to be faring a little bit better. So just curious to, you know, hear where, you know, where are we at in terms of the macro environment impacting the business?
Yeah, it for us, it's fairly similar in that EMEA continues to be impacted by geopolitical events that still are, unfortunately, affecting that region, as well as the macro specific to UK and Germany. And we're staying very close to our customers over there, as you can imagine, and helping, you know, as much as we can as they're moving through and navigating, but that does persist and continue. SMB continues to be an area that, on a global basis, that we're seeing in our business, be a bit more challenged than the enterprise. And then we're seeing pockets of strength. North American enterprise, feel good about where we're at pipeline-wise. I've quite frankly, on a global basis, our enterprise business, and for y'all, our enterprise business is accounts over 1,000 employees.
Right now, our pipeline is building and is supporting us meeting and achieving our expectations. So I feel really good about that, and our teams are doing a whale of a job. We are working down market in the SMB side to do some things to bolster pipeline there as you know, it has been a bit more challenging. So, you know, around the world, you know, it is a little bit of a mixed bag but, you know, all in all, really happy with what we're seeing on the enterprise side. Remember, enterprise is 80% of our revenue, right? So that's really important to us. So I don't know, Sarah, if there's anything you'd add.
No, I think that's exactly right, and to Greg's point, you know, one of the things that we've been doing over the past few quarters, because we do continue to see strength across enterprise, building out that team a little bit more across the globe, some enterprise reps, some strategic account reps that are now in the process of ramping. As well as we've invested a little more on the sales enablement side because now we have this broad platform that we can sell, and so really happy with what we're seeing, really happy with how our new reps are ramping.
Recently, you implemented some of the instructor fee changes, which, you know, is helping, I think, with, you know, the gross margin expansion, but you're using some of those savings to reinvest back into the business. And there were concerns that, you know, possibly would instructors, you know, look somewhere else as the, the fees were contracting, but it seems like you really haven't seen any disruption from that. Is that still fair to say is the case?
Yeah, I think it's really important that, you know, first and foremost, our instructors are our lifeblood, and so we spent a lot of time working with them ahead of that change. Certain, you know, of our top instructors, getting their feedback, but also laying out what we were gonna do with that investment and how that, those investments that we were going to make with some of those additional returns that, or some of that share that we were gonna keep, was gonna benefit them.
And how we're building out our business, how we're building out tools for them to allow them to do more on the platform, with less of their time and energy. So we're really pleased with how the team has been brought along, and we continue to partner with them. Greg spends a lot of time with them. We've got another event coming up later this week, I think, and so, you know, instructor summits, getting that feedback and continuing to work on their behalf is important to us.
And as you're sort of making these investments back into the business, where ... how should we expect to see, you know, right, that inflection in growth start to re-accelerate within the business? Because you are making these investments that are necessary, and when are those starting to maybe eventually pay off and show up in the results, and where should investors sort of see that?
Yeah, so from an external perspective, we're getting close. Next few quarters, you'll see that. Internally, we're starting to see that with the, like I said, the sales enablement, so our new reps now are at over 100% attainment. That's up 40 basis points. We also invested in growing our partnership team to take advantage of the AWS, so we're seeing that in the early stages of our pipeline with AWS. So across a number of fronts where we've been investing, we are seeing the lead indicators, our McLaren partnership, Greg, maybe you can touch on the event we had a few weeks ago there, but really seeing great traction there. We had over 100 customers, 150 was it?
150, actually.
And so I think the early signs, we're really pleased with what we're seeing from an investment perspective, and it just takes time for that to turn into pipeline that then gets converted into, into wins, ARR, and then revenue.
Yeah, I'll just mention briefly, the activation we're seeing at the initial events that we've co-hosted with McLaren, most recently at the McLaren Technology Centre, have exceeded expectations. We had over 150 customers attend. We had customer panels. We had industry experts come in, and the feedback and response has, again, exceeded expectations. These partnerships for us are not about logos on a car. This is about activating relationships and enabling us to develop relationships more efficiently and, I would say, more effectively in terms of how we engage with these customers, the kind of conversations we're able to have, and give them an opportunity to engage with customers that are like-minded, that have had similar results that may be a little further in the process as far as their partnership with us. We're seeing all of that happen and transpire, and couldn't be happier with the investment there.
I guess, you know, last quarter, you know, you did mention that you sort of expected ARR growth to accelerate, you know, through the second half of this year, I believe. You know, just trying to get a sense of, are the investments that, you know, you've made into the company and you're saying are starting to sort of, you know, benefit from that, do you still have confidence in that? You know, you'll start to see that acceleration in the second half, and what gives you that confidence?
Yeah, we're feeling really good about that. Like I said, it's the leading indicators that we're watching. And that's not to say that there aren't things that we're gonna continue to improve on and that Rob will come in and help us with, but all the things that we've been investing in, those early signs are good, and that gives us confidence. We are pulling a number of levers across a few different areas that we mentioned, so it's not one thing that we're doing. It's a number of things that are going pretty well so far.
Great. Maybe we could just take a quick pause here to see if there's any questions at all. I know there's, like, a mic maybe in the back. We'll bring it up to you.
Thank you for the presentation. I had a question on the business model, so, maybe, twofolds. One is: what are your key competitive differentiations, like, something that you have and something that cannot be replicated easily? Like, what are your key one or two assets or, like, your marketplace for the instructors
Yeah
or your proprietary way of delivering the content? And, what are two or three entities that do present, like, the major competitive threat to you, either as a competitor or a substitution for your offering?
Yeah, that's a good question. So the marketplace dynamic and the content generation that comes out of the marketplace, the depth, the breadth, the international content, it's probably best brought to life with one quick example. two months after ChatGPT hit the world, I asked our team in preparing for an earnings announcement, "How many courses do we have on our platform versus all of our competitors combined?" The answer was as follows: 125 courses on our marketplace, 25 had been curated based on ratings and reviews and quality into the enterprise collection. Across all of our competitors, all of them, only 1 course had been published. That gives you a sense of the power of this marketplace model.
At the pace of change, when new technology hits the world, or when a new rev of AWS or Google Cloud or Azure hits the market, we've got content hitting the market at or sometimes even ahead of that next rev coming, you know, to GA, right? Versus, again, our competitors, they're all publishers. They have to have a relationship with an instructor to write that update to the course or a new course, fly them in, film it, and then produce, publish, and then off they go. So anyway, that dynamic plays out across every topic, both technical as well as soft skills and power skills across our platform.
On top of that, we have a platform of learning modalities, management and leadership development, which is cohort-based, you go through as a team, soft skills and power skills, and then technical skills, with on top of the tech side, we've got an immersive learning product with assessments, labs, and workspaces. There's no competitor that has the breadth of platform that I just described that we compete against. So our content is very unique, the platform that we provide our customers is very unique, and then the third differentiator is the investment we make in strategic services, customer success, professional services, to help organizations develop the right strategy for them to transition to a skills-based organization, if that is their chosen endeavor, or to develop skills, you know, in really, in for the purpose of delivering organizational outcomes, right?
In line with the organizational outcomes they're looking to deliver. We make a bigger investment than our competitors do. We know what our competitors invest in customer success and professional services. It's one of the reasons why we've gone from single digits multi-year contracts to over 50% of our revenue in multi-year contracts, because we invest in a strategic relationship with our competitor with our customers. So those are the three I would point out that are the biggest differentiators. And then the second part of your question was, what am I worried about as far as competitive threats? Is that right?
Like, the specific entity, like, Accenture recently bought Udacity.
Yeah.
So how is it different? Like, why did they decide to go that particular entity? They wanted to greenhouse the upskilling and the ability to train people internally, or Coursera. Is it, like, how-
Yeah
how are you guys different? Is this a threat for you or not?
I'll start with the latter.
Okay.
I'll start with the latter, and I'll go quick, just for the sake of time. Coursera does a great job on the consumer side. We really don't see them in the enterprise, right? So we really don't view them as a competitor in the enterprise, you know, when we're selling to small, medium, large companies. But their consumer business, they've done a really nice job with, Jeff and team have. On the question around Udacity, we view that very much as a validator, right? The reason why Accenture bought Udacity was to develop the capability to sell to their 6,000+ customers, the ability to develop skills, right? And this is what we're purpose-built to do.
And so, you know, it validates, you know, really the messaging and everything that we've been saying around the world moving from, you know, a focus on degrees and experience to primarily now focusing on skills and skills development. Skills is the new currency in learning and development, right? Jamie Dimon talks a lot about that. A lot of CEOs are talking about it. You get companies like Walmart, Google, and many others taking degrees largely out of high percentages of the job descriptions in the company
focused on the specific skills they need those individuals to have to be successful in that job or that role. So it's about skills, and that's what Accenture effectively bought, was the ability to deliver and develop skills within their customer base. So, you know, all to say, you know, it's a trend that's on the, you know, on the rise, and we believe we're, you know, one of the organizations, if not the organizations, that's gonna lead the world in that endeavor.
Yeah, maybe just very short follow-up. So, so I understand how it validates the, the, the idea about, can Accenture now go to your customers and, sell them that?
They can sell them Udacity's platform. I will tell you that we don't see Udacity in the vast majority. We don't view them as a primary competitor. We just don't. We don't see them. That could change with the investment that Accenture is making. But today, you know, the primary competitors are the ones that I mentioned earlier. You know, LinkedIn, Pluralsight, Skillsoft, and then Coursera, but not really in the enterprise, on the consumer side.
Thank you.
Yeah.
Just a quick question. You were talking about Jamie Dimon and how there's AI literacy needed, but then do you see that as some sort of cannibalization long term, in terms of, well, now that they're AI literate, they don't need to take other courses that might help them, you know, hone their, hone their skills just because they can use AI instead?
I know that the pace of technology advancement we're seeing with, you know, the Generative AI tech, whether it be Gemini or OpenAI or, you name it, the pace that it's moving right now, I mean, I think one of the things that's probably most difficult for all of us is keeping up with the new tech, the new releases, and being able to use that capability functionally in the roles that, you know, that we're in within organizations, from my role all the way down to, you know, frontline employees coming in from university. And so the need to continue to update your skills is actually more important now than I would say ever, right? So I think that, you know, that's one aspect of it.
And then the second aspect of, of that question, or the thread of that question that I get asked quite a bit is, you know, if organizations are no longer gonna need 20% or 30% of the employees that they have today, what does that mean for your business? The reality is, today, we're less than 10% penetrated in our existing 16,000 customers. So the opportunity for us, as we all go through this process of determining how generative AI, AI is gonna impact our businesses, and that starts to manifest and play itself out, you know, again, it really just comes down to the fact that, you know
there's gonna be an opportunity for employees to be repurposed and repurpose themselves and develop new skills to make them gainfully employable and, and useful in the companies they're in, if the jobs that they're in currently today are potentially gonna be disintermediated. And that's a big opportunity we all have, to open those, to open those doors for our employees. That's something we're surely focused on with our own company, right? In addition to, the skilling that's gonna need to happen as the technology evolves. So, for us, we view it as nothing but opportunity as these new advancements start to evolve. There's a question in the back.
Hi, guys. Thank you both for being here. I just had a question on how you track your impact from a qualitative or quantitative or both perspective?
So I'll start. Greg, feel free to jump in, but we really are looking to drive business outcomes. That's everywhere from faster time to certification. We talked in our last earnings call about a company that saw a 17% higher pass rate and a greatly reduced time to certification, to we see increased retention. We use the products internally. We put some of our leadership through our Leadership Academy. They saw the people who went through Leadership Academy saw 9 points higher engagement scores than those.
So there are a number of different ways in which we can track ROI, ROI based on what the customer is looking for, and we continue to refine and hone because we know showing that business impact helps us continue to grow this business. But we're focused on business outcomes. Learning used to be a benefit. That was, that was years ago. That's not where it is today. It really is a strategic imperative.
Do you have a question?
I believe this will be a quick one. Can you just talk about how you guys are thinking about balancing growth and profitability over the next few years?
Yeah, I'll take that. It's a great question. It's one that I think, we spend a lot of time thinking about with this massive opportunity in front of us, but also balancing that with a very weird macro that has been the last maybe five, six quarters at this point. And so how we think about it is making sure that we're investing in the things that are gonna have the most impact, continually finding ways to drive operating efficiency, but really looking for underscoring those investments that are gonna drive that growth. So we think about the Rule of 40. We think about capturing as much of the market as we can, but also continuing to deliver more to the bottom line as we scale and drive operating efficiency.
Thank you so much for this great panel, and we're myself and John, my name is Alex, we're in the education space as well. So, what we saw in edtech prior to COVID, there was growth. Then during COVID, there was immense growth, both in valuations as well as in sort of product market fit and everything. And after COVID, we kind of see that you, for example, Udemy, Coursera, I don't know, GoStudent, many players, us at Educate Online, and just, you know, we're doing great work. We're putting a lot of effort into it, but if you look at the market cap, it's kind of. It's like what you were just saying, the effort that you guys are putting in, the whole team is putting in, it kind of doesn't show up in the market cap.
My question is what has to happen, what do you think, for the market to actually start valuing such an important sector as education and technology, innovation in education, kind of at what it's really worth? What has to happen? And, since you're very committed to running this company, kind of, when do you think, well, what will happen, and when will it happen when it comes to the appreciation of value of the sector overall?
You wanna start?
Uh, I
You want me to go?
Go, go ahead.
I'm happy to start.
Yeah.
Consensus, meaning, you know, we do our homework and ask those questions as well, and there's a disconnection right now. There's no doubt. And from our standpoint, looking at our company, I think it comes down to the fact that we've been very clear that the growth engine of our business is Udemy Business, selling into enterprises, and that we need to show that we can and will stabilize and start to grow Udemy Business again from the floor that we believe is, you know, upon us now, Q2, Q3.
So Q4, and then into Q1, we show that we've bent the curve up. And when that happens, as we are very committed to, as Sarah mentioned, the Rule of 40 and dropping more to the bottom line next year and more aggressively than this year as an investment year. But when those two things coincide, so we believe, which is roughly gonna be Q4 and Q1, we should start to see the stock and the valuation reflect the value of the business. Anything to add?
I would just add that the space generally, to your point, there has been a disconnect. I think historically, companies that were in edtech were doing something very different than what Udemy is doing now, and skilling and the tailwinds and all the things that are happening on a secular basis, it seems like now those are all tailwinds that are very positive. But also, you know, investors haven't seen this story before 'cause it's a very new story. It's an industry that's changing really fast, so it could just take time. But I think the opportunity to get those valuations in line is there.
I think that's it. We have to wrap it up for today, but thanks so much, guys, for coming, and we really appreciate it.
Thanks for having us, Noah.
Thanks, everybody. Thanks, Noah.
Thanks, everyone.
Appreciate it.