Coursera, Inc.
For the period ended Mar 31, 2026. Filed Apr 30, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 30, 2026
COUR$3.75+0.3%Stored close · as of Nov 9, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-31.
0001651562-25-000061
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0001651562-26-000030
Item 1A. Risk FactorsUnregistered Sales of Equity Securities and Use of ProceedsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 426 previous paragraphs and 467 current paragraphs.
377 unchanged; 44 reworded; 46 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (46)
Current report
•the expected timing and realization of the expected benefits of our Merger with Udemy;
Current report
•our ability to complete the Merger and the impact of such failure on our business and financial results and the price of our common stock;
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•the Merger Agreement contains contractual restrictions to pursue alternatives to the Merger and provisions that could require us to pay a termination fee or other amounts to Udemy;
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•business uncertainties and contractual restrictions while the Merger is pending;
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•the impact of lawsuits filed in connection with the Merger, if any, resulting in substantial costs and/or delaying or preventing the completion of the Merger;
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Finally, our operating costs have increased and may continue to increase due to rising inflation, and as a result, we may be required to take measures to respond to the impact of inflation. Among other things, we could be required to change our pricing model to offset inflationary pressures on our operating costs, but doing so could adversely affect learner and customer acquisition and retention, negatively impact our long-term growth, and could impair our competitive position if our competitors choose to absorb the cost of inflation. Alternatively, if we choose to absorb the cost of inflation to prioritize growth, our business, financial condition, and results of operations may be negatively impacted.
Current report
The market for online learning solutions is relatively new and continues to evolve rapidly. These factors may make it difficult to accurately assess our future prospects and the risks, challenges, and uncertainties that we may encounter. These uncertainties include:
Current report
•maintaining and increasing a base of learner, customer, or content creators using our platform;
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•successfully competing with existing and future participants in the market for online learning solutions;
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•successfully expanding our business in existing markets and entering new markets and geographies;
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•anticipating and responding to market and broader economic conditions;
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•avoiding interruptions or disruptions in the service of our platform;
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•accurately forecasting our revenue and operating expenses on a quarterly and annual basis;
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•maintaining and enhancing the value of our reputation and brand;
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•attracting, hiring, and retaining qualified personnel to manage our operations and further develop our platform;
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•effectively managing growth in our operations, including personnel; and
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•successfully implementing and executing our business strategies.
Current report
Our university partners must comply with complex and frequently changing regulations, including accreditation, state and international authorization, and Title IV federal funding requirements. Changes or new interpretations of these laws may affect their ability to offer online learning programs or access federal funds. Some regulations were not designed for online learning and may be difficult to interpret or apply. Degrees, certifications, or other credentials earned in one jurisdiction may not be recognized in all jurisdictions, which could affect student employment prospects, eligibility for advanced education programs, and other opportunities. Our international university partners are subject to similarly extensive legislation, regulation, and oversight.
Current report
Our platform and services are also subject to a range of accessibility and consumer protection requirements, including Title II and Title III of the Americans with Disabilities Act, Section 504 and Section 508 of the Rehabilitation Act of 1974, the Web Content Accessibility Guidelines 2.2. Failure to comply with these evolving statutory and regulatory standards could result in our offerings being less attractive to content creators, learners, and customers, and may expose us to legal claims, regulatory actions or other liabilities. As such, we expect to incur ongoing costs of compliance.
Current report
We cannot provide assurance as to how a court would interpret or uphold the DCL exception. We also cannot predict the impact of a material reduction in the DOE’s workforce, or the DOE’s reorganization or elimination, on the DCL’s enforceability. If Congress, the DOE, or a court revises, removes, or invalidates the bundled services exception, we may need to change our degree offerings and renegotiate university partner agreements, which could adversely affect our business and operations.
Current report
We are subject to taxation in multiple jurisdictions.
Current report
We are a U.S.-based multinational company subject to tax in multiple U.S. and foreign tax jurisdictions. Significant judgment is required in determining our global provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis. While we believe our tax positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that these positions may be challenged by jurisdictional tax authorities, which may have a significant impact on our global provision for income taxes. We re-examine and evaluate tax laws globally, and take into account new laws and interpretations of the laws for financial statement purposes in the quarter or year that they become applicable. Tax authorities are increasingly scrutinizing the tax positions of companies. These changes and scrutiny could have a materially adverse impact on our business, results of operations and cash flows.
Current report
Risks Relating to our Combination and Merger Agreement with Udemy, Inc.
Current report
The Merger may not be completed, the Merger Agreement may be terminated in accordance with its terms, and failure to complete the Merger could negatively impact the price of shares of our common stock, as well as our future businesses and financial results.
Current report
On December 17, 2025, we, Merger Sub and Udemy entered into the Merger Agreement, which provides for our combination with Udemy in an all-stock transaction. The Merger is subject to a number of conditions that must be satisfied or waived prior to the completion of the Merger. These conditions to the completion of the Merger may not be satisfied or waived in a timely manner or at all, and, accordingly, the Merger may be delayed or may not be completed.
Current report
If the Merger is not completed for any reason, our business and financial results may be adversely affected and, without realizing any of the benefits of having completed the Merger, we would be subject to a number of risks, including: (i) we may experience negative reactions from the financial markets, including negative impacts on the market price of our common stock, (ii) we may experience negative reactions from our learners, customers, partners, and other third parties with whom we do business, which in turn could affect our marketing operations or our ability to compete for new business or obtain renewals in the marketplace more broadly, (iii) we may experience negative reactions from employees, (iv) we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting, financial advisor and printing fees, and (v) we will have expended time and resources that could otherwise have been spent on our existing business and the pursuit of other opportunities that could have been beneficial to us, and our ongoing business and financial results may be adversely affected.
Current report
The Merger Agreement limits our ability to pursue alternatives to the Merger, may discourage other companies from trying to acquire us and, in specified circumstances, could require us to pay Udemy a termination fee.
Current report
The Merger Agreement contains provisions that may discourage a third party from submitting a proposal to acquire us that may be more beneficial to us and our stakeholders than the Merger or may result in a potential acquirer proposing to pay a lower per share price to acquire us than it might otherwise have proposed to pay. The Merger Agreement further provides that under specified circumstances, including after a change of recommendation by our board of directors and a subsequent termination of the Merger Agreement by Udemy in accordance with its terms, we may be required to pay Udemy a cash termination fee of $40.5 million. In addition, if the Merger Agreement is terminated under specified circumstances and we enter into an agreement for or consummate an alternate transaction within one year following such termination, we may be required to pay Udemy a cash termination fee of $40.5 million. Further, if the Merger Agreement is terminated under specified circumstances after the requisite approval of our stockholders is not obtained at our stockholder meeting, we may be required to pay Udemy a transaction expense reimbursement of $8 million.
Current report
Our business relationships may be subject to disruption due to uncertainty associated with the Merger, which could have a material effect on our business, financial condition, cash flows and results of operations.
Current report
Parties with whom we do business may experience uncertainty associated with the Merger, including with respect to current or future business relationships following the Merger. Our business relationships may be subject to disruption as our customers, partners, and other third parties with whom we do business may attempt to delay or defer entering into new business relationships or negotiate changes in existing business relationships. These disruptions could have a material and adverse effect on our business, financial condition, cash flows and results of operations, regardless of whether the Merger is completed. The risk, and adverse effects, of any disruption could be exacerbated by a delay in completion of the Merger or termination of the Merger Agreement.
Current report
Uncertainties associated with the Merger may cause a loss of our management personnel and other key employees, or impact our ability to attract or retain content creators, which could adversely affect our future business and operations.
Current report
We depend on the experience and industry knowledge of our officers and other key employees to execute our business plans. Our success after the Merger will depend in part on our ability to retain key management personnel and other key employees. Our current and prospective employees may experience uncertainty about their roles following the Merger or other concerns regarding the timing and completion of the Merger or our operations following the Merger, any of which may have an adverse effect on our ability to retain or attract key management and other personnel, regardless of whether the Merger is completed. If we are unable to retain personnel, including our key management, who are critical to our future operations, we could face disruptions in our operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment and training costs. In addition, the loss of key personnel could diminish the anticipated benefits of the Merger. No assurance can be given that we, following the Merger, will be able to retain or attract key management personnel and other employees to the same extent that we have previously been able to retain or attract our employees.
Current report
Additionally, our business depends in part on our ability to attract and retain content creators. If we are unable to retain or attract content creators, including as a result of uncertainty related to the Merger, we could face disruptions in our operations, loss of existing learners or customers and unanticipated additional costs. In addition, the loss of content creators could diminish the anticipated benefits of the Merger. No assurance can be given that we, following the Merger, will be able to retain or attract content creators to the same extent that we have previously been able to retain or attract our content creators.
Current report
The Merger Agreement subjects us to restrictions on our business activities prior to the Effective Time.
Current report
Under the Merger Agreement, we face several restrictions until the Merger is complete. We cannot enter into certain corporate transactions or take other specified actions without Udemy’s consent. We must also use our reasonable best efforts to continue our business operations in the ordinary course. If the Merger’s completion is delayed, these restrictions will continue to apply for a longer period, which could prevent us from pursuing attractive business opportunities that arise.
Current report
We expect to incur significant costs in connection with the Merger, which may exceed the costs we anticipate.
Current report
We have incurred and expect to continue to incur a number of non-recurring costs associated with negotiating and completing the Merger. These expenses have been, and will continue to be, substantial. The substantial majority of non-recurring expenses will consist of transaction costs related to the Merger and include, among others, employee retention costs, fees paid to financial, legal and accounting advisors, severance and benefit costs and filing fees. We will bear many of these costs even if the Merger is not completed.
Current report
Litigation relating to the Merger, if any, could result in an injunction preventing the completion of the Merger and/or substantial expenses.
Current report
Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, merger or other business combination agreements like the Merger Agreement. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on our financial condition. Plaintiffs who sue us or our directors could seek injunctive or other equitable relief, including an order to rescind parts of the Merger Agreement or prevent the parties from consummating the Merger. One of the conditions to the closing of the Merger is that no injunction issued by a governmental entity of competent jurisdiction shall be in effect and no law shall have been enacted by any governmental entity of competent jurisdiction which prohibits or makes illegal the consummation of the Merger. Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, that injunction may delay or prevent the Merger from being completed within the expected timeframe or at all, which may adversely affect our business, financial condition, cash flows and results of operations.
Showing the first 40 of 46 passages. Open the source sections for the rest.
Removed paragraphs (4)
Previous report
The regulations, standards, and policies of our university partners’ regulators are complex, change frequently, and are often subject to differing interpretations. Changes in, or new interpretations of, applicable laws, regulations, or standards could compromise our university partners’ accreditation, authorization to offer online learning in various states or countries, permissible activities, or access to federal funds under the Title IV programs. We cannot predict with certainty how the requirements applicable to our university partners will be interpreted, including in the case of new laws or regulations for which no, or insufficient, interpretative guidance exists, or whether our university partners will be able to comply with these requirements in the future. Some regulations were designed to regulate in-person correspondence or other types of learning experiences not offered online and may be difficult to interpret or apply to the types of programs offered by our university partners on our platform. In addition, there is no assurance that degrees, certifications, or other credentials earned in one jurisdiction will be recognized as valid or sufficient in other jurisdictions, including internationally. This could affect employment prospects, eligibility for advanced degrees, and other opportunities. Our international university partners are subject to similarly extensive legislation, regulation, and oversight.
Previous report
Our platform is also subject to various requirements relating to accessibility for learners with disabilities. Certain requirements of Title II and Title III of the Americans with Disabilities Act apply to us and to our public and private university partners, Section 504 of the Rehabilitation Act of 1974 (the “Rehabilitation Act”) applies to our content creators that receive federal funding, and Section 508 of the Rehabilitation Act, which sets accessibility standards for websites of federal departments and agencies, applies to certain of our government customers. Further, in the absence of definitive federal rulemaking, the Web Content Accessibility Guidelines 2.2, a set of recommendations and technical standards for making websites accessible to individuals with disabilities published by the World Wide Web Consortium, have become the effective standard for learner-facing aspects of our platform. We may not be successful in ensuring that our offerings and services meet these changing statutory and regulatory requirements, which could make our solutions less attractive to our content creators, learners, and customers. This could also subject us to third-party lawsuits, regulatory fines, or other action or liability. As such, we expect to incur ongoing costs of compliance.
Previous report
We can offer no assurances as to whether the exception in the DCL would be upheld by a court or how it would be interpreted. Neither can we predict the impact a material reduction in the DOE’s workforce, or the DOE’s reorganization or elimination, would have on the DCL’s enforceability or its perceived viability. The revision, removal, or invalidation of the bundled services exception by Congress, the DOE, or a court, whether in an action involving our Company or our university partners, or in an action that does not involve us, could require us to change our degree offerings and renegotiate the terms of our university partner agreements and could compromise our ability to generate revenue, thereby potentially materially and adversely impacting our business and operations.
Previous report
The application of indirect taxes, such as sales and use taxes, value-added taxes, provincial taxes, goods and services taxes, business taxes, digital service taxes, and gross receipt taxes to businesses like ours is complex and constantly evolving. Significant judgment is required to evaluate applicable tax obligations, and we record estimates that could change. In many cases, the ultimate tax determination is uncertain because it is not clear how existing statutes may apply to our business. Federal, state, local, or foreign jurisdictions may seek to impose additional reporting, recordkeeping, or indirect tax collection obligations on businesses like ours that facilitate e-commerce. For example, in 2018, the U.S. Supreme Court ruled that, in certain situations, states can require online merchants to collect and remit sales taxes on transactions in the state despite not having a physical presence in the state. Changes to indirect tax law could lead to substantial costs for tax collection, remittance, and audit responses, which could affect our operating results or harm our business in the event that we change our pricing to account for the increased obligations.
Reworded paragraphs (44)
Previous wording
•our historical growth may not be indicative of our future growth and our growth may be adversely impacted by macroeconomic conditions;
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•our historical growth may not be indicative of our future growth and our growth may be adversely impacted by macroeconomic conditions, including inflation;
Previous wording
Our historical growth may not be indicative of our future growth, and our revenue may not grow or could decline compared to prior years due to a variety of factors, including macroeconomic conditions.
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Our historical growth may not be indicative of our future growth, and our revenue may not grow or could decline compared to prior years due to a variety of factors, including inflation and macroeconomic conditions.
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Our offerings continue to evolve, and given our limited operating history, predicting our future financial and operating results may be affected by a number of uncertainties.
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Our industry and offerings continue to evolve, and given our limited operating history, predicting our future financial and operating results may be affected by a number of uncertainties.
Previous wording
Our future success will depend, in part, on the growth of demand for online learning solutions. The market for online learning solutions is less mature than the market for in-person learning and training. It is difficult to predict learner, customer, or content creator demand to use or be on our platform, their adoption and renewal rates, the rate at which they expand their engagement with our platform, the size and growth rate of the market for our platform, the entry of competitive offerings into the market, or the success of existing competitive offerings. Additionally, while we believe that generative AI technology will lead to increased demand for online learning solutions given its potentially disruptive impact on society, governments, businesses, and academic institutions contending with the need for their workforces and learners to reskill and improve productivity and agility, these expected societal changes and the resulting increased demand for our online learning offerings may not materialize as expected or may take longer than anticipated. Also, there can be no assurance that generative AI technology will not displace or otherwise adversely impact the demand for online learning solutions, including our offerings.
Current wording
Our future success will depend, in part, on the growth of demand for online learning solutions. The market for online learning solutions is less mature than the market for in-person learning and training. It is difficult to predict learner, customer, or content creator demand to use or be on our platform, their adoption and renewal rates, the rate at which they expand their engagement with our platform, the size and growth rate of the market for our platform, the entry of competitive offerings into the market, or the success of existing competitive offerings. Additionally, while we believe that generative AI technology will lead to increased demand for online learning solutions given its potentially disruptive impact on society, governments, businesses, and academic institutions contending with the need for their workforces and learners to reskill and improve productivity and agility, these expected societal changes and the resulting increased demand for our online learning offerings may not materialize as expected or may take longer than anticipated. Also, there can be no assurance that generative AI technology will not displace or otherwise adversely impact the demand for online learning solutions, including our offerings as these technologies could enable organizations and individuals to use generative AI systems to perform tasks directly, potentially reducing the need for human learning or training altogether, or generate their own educational and training content.
Previous wording
We collaborate with our content creators to deliver a broad portfolio of educational content and credentials on our platform. For our Enterprise offerings and a significant portion of our Consumer offerings, we incur content costs in the form of fees paid to content creators. In addition, the portion of our Consumer revenue attributable to our degree programs is determined based on a percentage of the total tuition paid by students enrolled in degree programs. As a result, changes in university tuition rates, increases in content costs, or other changes in our content creator agreements could significantly impact our revenue, gross profit, and operating results. For example, starting in 2025, we updated our revenue share allocation arrangements to compensate our content creators based on the level of learner engagement their content generates, rather than learner enrollment rates. We have experienced opposition to our content fee terms, and we anticipate similar challenges in the future. Further, we have in the past and may in the future change the terms of these agreements, including the pricing terms or contract length, due to competitive, regulatory, or other reasons. Any significant change in our pricing, content costs, or other contract terms with our content creators could impact whether content creators continue to partner with us and materially and adversely affect our business, financial condition, and results of operations.
Current wording
We collaborate with our content creators to deliver a broad portfolio of educational content and credentials on our platform. For our Enterprise offerings and a significant portion of our Consumer offerings, we incur content costs in the form of fees paid to content creators. In addition, the portion of our Consumer revenue attributable to our degree programs is determined based on a percentage of the total tuition paid by students enrolled in degree programs. As a result, changes in university tuition rates, increases in content costs, or other changes in our content creator agreements could significantly impact our revenue, gross profit, and operating results. For example, starting in 2025, we updated our revenue share allocation arrangements to compensate our content creators based on the level of learner engagement their content generates, rather than learner enrollment rates. In addition, in 2026, we introduced a platform fee assessed on sales of Consumer and Enterprise offerings to help fund our ongoing investments in our platform. We have experienced opposition to our content fee terms, and we anticipate similar challenges in the future. Further, we have in the past and may in the future change the terms of these agreements, including the pricing terms or contract length, due to competitive, regulatory, or other reasons. Any significant change in our pricing, content costs, or other contract terms with our content creators could impact whether content creators continue to partner with us and materially and adversely affect our business, financial condition, and results of operations.
Previous wording
The success of our business depends in large part on the development, maintenance, and volume of engaging educational content and credentialing programs in collaboration with our content creators. We have faced, and may continue to face challenges in establishing, maintaining, and expanding these relationships. For instance, our content creators may need to invest significant time and resources to modify or develop their content and credentialing programs to suit an online learning environment. Online degree programs delivered through academic institutions are not yet widely accepted. Administrators and faculty members may feel they have less control over the educational process and be concerned about the effectiveness of asynchronous learning, potential misuse of generative AI tools by learners to cheat, and the challenge of maintaining on-campus quality standards in an online format. There can be no assurance that online degree programs, such as those offered on our platform, will ever achieve significant market acceptance, and universities may therefore decline to engage with our platform. Further, if we were to lose a significant number of content creators, especially those who provide a significant portion of the content and programs on our platform, or if we can no longer offer certain high-demand content or programs, our reputation, growth, and revenue would be materially and adversely impacted. For the nine months ended September 30, 2025, we generated approximately 23% of our total revenue from the content and credentialing programs of our top five content creators. Total revenue includes both revenue directly attributable to content creators and revenue that we do not consider directly attributable, such as revenue from site-wide subscriptions or our Coursera for Teams offering. The loss of or reduction in content and programs from these and other content creators could negatively affect our ability to sustain or generate revenue or reach future profitability, and would materially and adversely affect our business, financial condition, or results of operation if we are unable to timely secure comparable educational content and credentialing programs at a favorable cost from other content creators.
Current wording
The success of our business depends in large part on the development, maintenance, and volume of engaging educational content and credentialing programs in collaboration with our content creators. We have faced, and may continue to face challenges in establishing, maintaining, and expanding these relationships. For instance, our content creators may need to invest significant time and resources to modify or develop their content and credentialing programs to suit an online learning environment. Online degree programs delivered through academic institutions are not yet widely accepted. Administrators and faculty members may feel they have less control over the educational process and be concerned about the effectiveness of asynchronous learning, potential misuse of generative AI tools by learners to cheat, and the challenge of maintaining on-campus quality standards in an online format. There can be no assurance that online degree programs, such as those offered on our platform, will ever achieve significant market acceptance, and universities may therefore decline to engage with our platform. Further, if we were to lose a significant number of content creators, especially those who provide a significant portion of the content and programs on our platform, or if we can no longer offer certain high-demand content or programs, our reputation, growth, and revenue would be materially and adversely impacted. For the three months ended March 31, 2026, we generated approximately 21% of our total revenue from the content and credentialing programs of our top five content creators. Total revenue includes both revenue directly attributable to content creators and revenue that we do not consider directly attributable, such as revenue from site-wide subscriptions or our Coursera for Teams offering. The loss of or reduction in content and programs from these and other content creators could negatively affect our ability to sustain or generate revenue or reach future profitability, and would materially and adversely affect our business, financial condition, or results of operation if we are unable to timely secure comparable educational content and credentialing programs at a favorable cost from other content creators.
Previous wording
•Negative perceptions about online learning. Online education programs may not be successful or operate efficiently, which could create the perception that online education in general is ineffective. Learners may also be reluctant to enroll in online programs due to concerns about the quality of the learning experience, potential employer hesitation to hire learners who received their education or credentials online, or reluctance from organizations granting professional licenses or certifications to grant them based on credentials, including degrees, earned through online education or training. Further, concerns about the potential misuse of generative AI tools by learners to generate their coursework may be heightened with respect to online programs.
Current wording
•Negative perceptions about online learning. There is uncertainty regarding remote, online and asynchronous learning and training, as well as skills-based learning, compared to the traditional models of education and training. Online education programs may not be successful or operate efficiently, which could create the perception that online education in general is ineffective. Learners may also be reluctant to enroll in online programs due to concerns about the quality of the learning experience, potential employer hesitation to hire learners who received their education or credentials online, or reluctance from organizations granting professional licenses or certifications to grant them based on credentials, including degrees, earned through online education or training. Further, concerns about the potential misuse of generative AI tools by learners to generate their coursework may be heightened with respect to online programs.
Previous wording
•Lack of financial resources for learners. Developments that reduce the availability of financial aid for higher education or reduce disposable income for potential learners (including macroeconomic developments such as inflation, government shutdowns, currency and interest rate fluctuations, recessions, unemployment, or pandemics) could impair learners’ abilities to meet their financial obligations, which in turn could result in reduced enrollment and harm our ability to generate revenue.
Current wording
•Lack of financial resources for learners. Developments that reduce the availability of financial aid for higher education or reduce disposable income for potential learners (including macroeconomic developments such as inflation, government shutdowns, tariffs, currency and interest rate fluctuations, recessions, unemployment, or pandemics) could impair learners’ abilities to meet their financial obligations, which in turn could result in reduced enrollment and harm our ability to generate revenue.
Previous wording
•General economic conditions. Enrollment in the courses and credentialing programs offered on our platform may be affected by changes in the U.S. economy and by global economic conditions. For example, an improvement in economic conditions may reduce demand for adult learning as potential learners may find adequate employment without additional education. Conversely, a decline in employment opportunities or economic conditions may reduce employers’ willingness to sponsor adult learning opportunities for employees given a lack of employer need for enhanced skill sets or an inability to fund such programs. This could discourage learners from pursuing further education due to an inability to afford our programs or a perception that the financial investment may not result in increased earning potential or improved employment opportunities. In addition, if current macroeconomic conditions persist or deteriorate, our ability to attract and retain paid learners in our Consumer segment, as well as current and prospective customers in our Enterprise segment, or to maintain and grow relationships with our content creators, could be adversely affected by reductions or resources, shifting priorities, or delays in decision-making.
Current wording
•General economic conditions. Enrollment in the courses and credentialing programs offered on our platform may be affected by changes in the U.S. economy and by global economic conditions. For example, an improvement in economic conditions may reduce demand for adult learning as potential learners may find adequate employment without additional education. Conversely, a decline in employment opportunities or economic conditions may reduce employers’ willingness to sponsor adult learning or workforce skilling opportunities for employees given a lack of employer need for enhanced skill sets or an inability to fund such programs. This could discourage learners from pursuing further education due to an inability to afford our programs or a perception that the financial investment may not result in increased earning potential or improved employment opportunities. In addition, if current macroeconomic conditions persist or deteriorate, our ability to attract and retain paid learners in our Consumer segment, as well as current and prospective customers in our Enterprise segment, or to maintain and grow relationships with our content creators, could be adversely affected by reductions or resources, shifting priorities, or delays in decision-making.
Previous wording
We incurred net losses of $8.6 million and $13.7 million in the three months ended September 30, 2025 and 2024, and we had an accumulated deficit of 884.4 million as of September 30, 2025. We may not achieve profitability in the future, and even if we do, we may not be able to maintain or increase our level of profitability.
Current wording
We incurred net losses of $20.5 million and $7.8 million in the three months ended March 31, 2026 and 2025, and we had an accumulated deficit of $931.7 million as of March 31, 2026. We may not achieve profitability in the future, and even if we do, we may not be able to maintain or increase our level of profitability.
Previous wording
Certain expenditures, including those to expand our course offerings and the robustness of our platform, grow our learner and customer base, expand our sales and marketing efforts, and improve and scale our technology and operations, may make it more difficult for us to achieve and maintain profitability. Our efforts to grow our business may be more costly than we expect, and we may not be able to grow our revenue enough to offset our expenses. Restructuring and expense reduction initiatives, including the initiative announced in October 2024 (refer to Note 14, Restructuring Related Charges, included in Part I, Item 1 of this Form 10-Q), could negatively impact our business, our growth, and our operational performance if they do not achieve or sustain the targeted benefits, the benefits are not adequate to meet our long-term profitability and operational expectations, costs are materially higher than expected, management’s attention is diverted, employee attrition is beyond our intended reduction in force or in key roles, we experience lower employee morale, or our reputation as an employer is damaged harming our ability to retain and attract talent. As a result, we can provide no assurance as to whether or when we will achieve profitability. If we are not able to achieve and maintain profitability, the value of our Company and our stock price could decline significantly, and you could lose some or all of your investment.
Current wording
Certain expenditures, including those to expand our course offerings and the robustness of our platform, grow our learner and customer base, expand our sales and marketing efforts, and improve and scale our technology and operations, may make it more difficult for us to achieve and maintain profitability. Our efforts to grow our business may be more costly than we expect, and we may not be able to grow our revenue enough to offset our expenses. Restructuring and expense reduction initiatives could negatively impact our business, our growth, and our operational performance if they do not achieve or sustain the targeted benefits, the benefits are not adequate to meet our long-term profitability and operational expectations, costs are materially higher than expected, management’s attention is diverted, employee attrition is beyond our intended reduction in force or in key roles, we experience lower employee morale, or our reputation as an employer is damaged harming our ability to retain and attract talent. As a result, we can provide no assurance as to whether or when we will achieve profitability. If we are not able to achieve and maintain profitability, the value of our Company and our stock price could decline significantly, and you could lose some or all of your investment.
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The ecosystem for global adult online learning is highly fragmented and rapidly evolving. We expect alternative modes of learning to continue to accelerate as existing players and new entrants in this industry introduce new and more competitive products, enhancements, and bundles.
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The ecosystem for global learning, including online education and broader skills development, is highly fragmented and rapidly evolving. We expect alternative modes of learning to continue to accelerate as existing players and new entrants in this industry introduce new and more competitive products, enhancements, and bundles.
Previous wording
Participants in the global adult online learning ecosystem include, but are not limited to: 2U, Inc., including through its subsidiary edX Inc.; Alison (Capernaum Limited); DataCamp, Inc.; Degreed, Inc.; Eruditus Learning Solutions Pte. Ltd.; Global University Systems, operating the platform FutureLearn; Go1 Pty Limited; Google LLC through its YouTube services; Great Learning PTE Ltd.; Khan Academy, Inc.; LinkedIn Corporation through its LinkedIn Learning services; MasterClass; Noodle Partners, Inc.; OpenSesame Inc.; Pluralsight, Inc.; Risepoint (formerly known as Academic Partnerships); Simplilearn, Skillshare, Inc.; Skillsoft Corp.; Udacity, Inc.; Udemy, Inc.; upGrad Education Private Limited; The Wikimedia Foundation, Inc.; and internal online degree platforms developed in-house by universities. In addition, providers that leverage AI capabilities, including large language models, are increasingly offering education-focused capabilities, such as self-paced learning, custom course creation and on-demand tutoring.
Current wording
Participants in the global learning ecosystem include, but are not limited to: 2U, Inc., including through its subsidiary edX Inc.; Alison (Capernaum Limited); DataCamp, Inc.; Degreed, Inc.; Docebo, Inc.; Eruditus Learning Solutions Pte. Ltd.; Global University Systems (dba FutureLearn); Go1 Pty Limited; Google LLC through its YouTube services; Great Learning PTE Ltd.; Khan Academy, Inc.; LinkedIn Corporation through its LinkedIn Learning services; Noodle Partners, Inc.; OpenAI OpCo, LLC; OpenSesame Inc.; O’Reilly Media, Inc.; Pearson plc.; Pluralsight, Inc.; Risepoint (formerly known as Academic Partnerships); Simplilearn; Skillshare, Inc.; Skillsoft Corp.; Study.com, LLC; Udacity, Inc.; Udemy, Inc.; upGrad Education Private Limited; The Wikimedia Foundation, Inc.; in-person learning; and internal online degree platforms developed in-house by universities. In addition, providers that leverage AI capabilities, including large language models, are increasingly offering education-focused capabilities, such as self-paced learning, custom course creation and on-demand tutoring.
Previous wording
We expect new and existing companies in the online learning industry to continually revise and improve their business models. If industry participants introduce new or improved delivery of online education and technology-enabled services that are more compelling or widely accepted than ours, our ability to grow our revenue and achieve profitability could suffer. New or existing companies in the online education industry provide or may in the future provide offerings similar to what we offer on our platform, and such companies may pursue relationships with our content creators that may reduce the educational content our content creators produce for our platform. In addition, academic institutions, as well as businesses, government, and other organizations, may choose to continue using or developing their own online learning or training solutions in-house. This may become more prevalent as emerging technologies, such as generative AI, provide additional means of developing educational programs. Consequently, they may opt for these alternatives rather than pay for our solutions.
Current wording
We expect new and existing companies in the online learning industry to continually revise and improve their business models. If industry participants introduce new or improved delivery of online education and technology-enabled services that are more compelling or widely accepted than ours, our ability to grow our revenue and achieve profitability could suffer. New or existing companies in the online education industry provide or may in the future provide offerings similar to what we offer on our platform, and such companies may pursue relationships with our content creators that may reduce the educational content our content creators produce for our platform. In addition, academic institutions, as well as businesses, government, and other organizations, may choose to continue using or developing their own online learning or training solutions in-house. Specifically, we increasingly face competition from generative AI offerings that can provide on-demand, conversational responses to user queries, generate customized learning content, or aggregate and summarize educational materials. Consequently, they may opt for these alternatives rather than pay for our solutions.
Previous wording
We may choose to expand our business by making acquisitions that could be material. To date, we have only completed one acquisition, and our ability as an organization to successfully identify, evaluate, acquire, and integrate technologies or businesses is unproven and limited. Acquisitions involve many risks, including the following:
Current wording
We may choose to expand our business by making acquisitions that could be material. To date, we have only completed one acquisition, and while we have entered into the Merger Agreement to combine with Udemy, our ability as an organization to successfully identify, evaluate, acquire, and integrate technologies or businesses is unproven and limited. Acquisitions involve many risks, including the following:
Previous wording
Our future success is substantially dependent on our continued ability to identify, hire, develop, motivate, and retain highly skilled personnel, including senior management, engineers, sales, product managers, operations, and general and administrative functions. The expertise of our senior management team in negotiating with businesses, government organizations, academic institutions, and other organizations is critical in navigating the complex approval processes of these entities. We do not maintain key-person insurance on any of our employees, and our U.S. employees are generally employed on an at-will basis. There have been, and from time to time, there may continue to be, changes in our senior management team and key employees, which could disrupt our business. Some senior management members have been with us for a short period of time, and we continue to develop key functions within various aspects of our business. For example, in February 2025, Mr. Hart joined us as our President, Chief Executive Officer, and Board member. The loss of one or more of our senior management members or other key employees, or the failure of our senior management team to work together effectively, develop strategies, and execute our plans, could harm our business. Further, the failure to successfully transition and assimilate key employees could adversely affect our business operations.
Current wording
Our future success is substantially dependent on our continued ability to identify, hire, develop, motivate, and retain highly skilled personnel, including senior management, engineers, sales, product managers, operations, and general and administrative functions. The expertise of our senior management team in negotiating with businesses, government organizations, academic institutions, and other organizations is critical in navigating the complex approval processes of these entities. We do not maintain key-person insurance on any of our employees, and our U.S. employees are generally employed on an at-will basis. There have been, and from time to time, there may continue to be, changes in our senior management team and key employees, which could disrupt our business. Some senior management members have been with us for a short period of time, and we continue to develop key functions within various aspects of our business. For example, in February 2025, Gregory Hart joined us as our President, Chief Executive Officer, and Board member. The loss of one or more of our senior management members or other key employees, or the failure of our senior management team to work together effectively, develop strategies, and execute our plans, could harm our business. Further, the failure to successfully transition and assimilate key employees could adversely affect our business operations.
Previous wording
In addition, any changes to our organizational or compensation structure or our workplace culture may be negatively perceived by current or prospective employees and may result in attrition or cause difficulty in the recruiting process. We may periodically implement business strategies that impact our employees, including changes to our organizational structure or workforce adjustments, such as the expense reduction initiative announced in October 2024 (refer to Note 14, Restructuring Related Charges, included in Part I1, Item 1 of this Form 10-Q). Workforce reductions or restructurings could have an adverse effect on our business, including lowering employee morale, harming our reputation as an employer, making it difficult to retain and attract talent, losing key employees targeted for retention, and hindering our ability to meet operational targets due to loss of key employees. To the extent that our compensation and benefits programs are not viewed as competitive, our workplace culture does not resonate, or changes in our workforce or other initiatives are not viewed favorably, our ability to attract, retain, and motivate employees can be weakened, which could harm our operating results.
Current wording
In addition, any changes to our organizational or compensation structure or our workplace culture may be negatively perceived by current or prospective employees and may result in attrition or cause difficulty in the recruiting process. We may periodically implement business strategies that impact our employees, including changes to our organizational structure or workforce adjustments. Workforce reductions or restructurings could have an adverse effect on our business, including lowering employee morale, harming our reputation as an employer, making it difficult to retain and attract talent, losing key employees targeted for retention, and hindering our ability to meet operational targets due to loss of key employees. To the extent that our compensation and benefits programs are not viewed as competitive, our workplace culture does not resonate, or changes in our workforce or other initiatives are not viewed favorably, our ability to attract, retain, and motivate employees can be weakened, which could harm our operating results.
Previous wording
For example, the uncertain nature, magnitude, and duration of hostilities stemming from Russia’s military invasion of Ukraine or conflicts in the Middle East, including the potential effects of sanctions and retaliatory cyberattacks on the world economy and markets, have contributed to increased market volatility and uncertainty, and may impact our customers’ intent or ability to pay for services, which could negatively impact our results of operations. The Israel-Hamas and Israel-Iran conflicts have resulted in significant military activity in the Middle East, which may further escalate regional instability and could disrupt our operations and business with our customers, content creators, and learners in the Middle East and North Africa regions, which could negatively impact our results of operations. The continued turmoil in Ukraine and the Middle East could have a depressing effect on the global economy, which could dampen our business activity and reduce the demand for our online learning solutions.
Current wording
For example, the uncertain nature, magnitude, and duration of hostilities stemming from Russia’s military invasion of Ukraine or conflicts in the Middle East, including the potential effects of sanctions and retaliatory cyberattacks on the world economy and markets, have contributed to increased market volatility and uncertainty, and may impact our customers’ intent or ability to pay for services, which could negatively impact our results of operations. The ongoing Middle East military conflicts have resulted in and may further escalate regional instability and could disrupt our operations and business with our customers, content creators, and learners in the Middle East and North Africa regions, which could negatively impact our results of operations. The continued turmoil in Ukraine and the Middle East could have a depressing effect on the global economy, which could dampen our business activity and reduce the demand for our online learning solutions.
Previous wording
We are subject to complex and evolving laws and regulations worldwide that differ among jurisdictions and affect our operations in areas including, but not limited to: higher education; IP ownership and infringement; tax; import and export requirements; anti-corruption; data privacy requirements; consumer protection; employment and labor laws; and accounting and financial reporting. Compliance with such requirements can be onerous and expensive and may otherwise impact our business operations negatively. For example, unfavorable legal or regulatory developments related to higher education, AI, or privacy may adversely impact our platform, strategy, business, or operations. Legislative or regulatory developments, including the U.S. Department of Education (“DOE”) regulatory activities, may also adversely impact our current and prospective learners, customers, or content creators, which may in turn have an adverse impact on our business, results of operations, financial condition, and growth prospects. In addition, the U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo (“Loper Bright”) in June 2024, overturning the “Chevron doctrine” that provided for judicial deference to federal agency interpretations of statutes, has resulted in regulatory uncertainty and may cause industry uncertainty, increasing the risk of legal challenges to current DOE rules, policies, and guidance, and the potential for future enactment of congressional legislation.
Current wording
We are subject to complex and evolving laws and regulations worldwide that differ among jurisdictions and affect our operations in areas including, but not limited to: higher education, IP ownership and infringement, tax, import and export requirements, anti-corruption, data privacy, consumer protection, employment and labor, and accounting and financial reporting. Compliance with these requirements can be onerous and expensive and may negatively impact our business operations. For example, unfavorable legal or regulatory developments related to higher education, AI, or privacy may adversely impact our platform, strategy, business, or operations. Legislative or regulatory developments, including U.S. Department of Education (“DOE”) regulatory activities, may also adversely impact our current and prospective learners, customers, or content creators, which may in turn have an adverse impact on our business, results of operations, financial condition, and growth prospects. In addition, the U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo (“Loper Bright”) in June 2024, which overturned the “Chevron doctrine” of judicial deference to federal agency interpretations of statutes, has resulted in uncertainty and increased the risk of legal challenges to current DOE rules, policies, and guidance, as well as the potential for future congressional legislation.
Previous wording
In addition, our policies, controls, and procedures designed to comply with applicable laws cannot provide assurance that our employees, contractors, agents, or content creators will not violate such laws or our policies. Violations of these laws and regulations can result in fines; criminal sanctions against us, our officers, or our employees; prohibitions on the conduct of our business; litigation; and damage to our reputation. The education technology industry is subject to media, political, and regulatory scrutiny, which can increase our exposure to regulatory investigations, legal actions, penalties, or reputational harm.
Current wording
Our policies, controls, and procedures are designed to comply with applicable laws, but we cannot provide assurance that our employees, contractors, agents, or content creators will always follow them. Noncompliance may result in fines; criminal sanctions against us, our officers, or our employees; prohibitions on the conduct of our business; litigation; and damage to our reputation. The education technology industry is subject to media, political, and regulatory scrutiny, which can increase our exposure to regulatory investigations, legal actions, penalties, or reputational harm.
Previous wording
Higher education is heavily regulated in the U.S. and most international jurisdictions. Numerous U.S. states require education providers to be licensed or authorized in such state simply to enroll, or market to, in-state learners in an online education program. If we or any of our content creators were found to be non-compliant with any of the laws, regulations, standards, or policies related to state authorization, the content creator could lose its ability to operate in certain states. If such non-compliance extended to a material contingent of our content creators, and they lost the ability to operate in certain states, our revenue could decline.
Current wording
Higher education is heavily regulated in the U.S. and internationally. Numerous U.S. states require education providers to obtain regulatory approval or state authorization to enroll or market to in-state learners in online education programs. If we or any of our content creators were found to be non-compliant with any of the laws, regulations, standards, or policies related to state authorization, the content creator could lose its ability to operate in certain states. If such non-compliance extended to a material contingent of our content creators, and they lost the ability to operate in certain states, our revenue could decline.
Previous wording
Our U.S.-based university partners are required to obtain the appropriate approvals from the DOE and applicable state and accrediting regulatory agencies for new programs, which may be conditioned, delayed, or denied in a manner that could impair our future growth. Similar approvals and reviews may be required for programs from our content creators based outside of the U.S., and for them to offer programs in other countries.
Current wording
Our U.S.-based university partners are required to obtain the appropriate approvals from the DOE, state, and accrediting agencies for new programs, and may also need state authorization. These approvals may be conditioned, delayed, or denied, which could impact our future growth. Similar regulatory approvals may be required for programs offered by our content creators outside the U.S. or in other countries.
Previous wording
We or our content creators, both U.S. and international, may also be required to be authorized in certain states to offer online programs and engage in advertising or recruiting, depending on state and international laws. Although many of our programs are offered by U.S.-based higher education institutions that hold such authorizations or participate in an appropriate state reciprocity agreement, such as the State Authorization Reciprocity Agreement (“SARA”), other content creators are not traditional education institutions or operate outside of the U.S. and do not hold such state authorizations. Further, even U.S.-based higher education institutions could lose a necessary authorization either because it lapses or is revoked by a state agency. Such higher education institutions could also lack, or lose, the ability to participate in a reciprocity agreement that provides the basis for their authorization in multiple states. For example, California higher education institutions currently do not participate in SARA. Unless we choose to seek authorization in our own name, which we have not done to date, the loss of or failure by a content creator to obtain a necessary state authorization would, among other things, limit our ability to deliver content to learners in that state, either for degree or non-degree programs, render the higher education institution and its learners in that state ineligible to participate in Title IV or other financial aid programs, diminish the attractiveness of the content creator’s programs, and ultimately compromise our ability to generate revenue. In the event that we choose to or are required to seek state authorization in the future, such authorization process can be time-consuming and costly. In addition, if we or any of our content creators fail to comply with any state agency’s rules, regulations, or standards beyond authorizations, the state agency could limit the ability of the content creator or us to offer programs in that state or limit our ability to perform our contractual obligations to our content creator in that state.
Current wording
We and our content creators, both U.S. and international, may also be required to obtain state authorization to offer, advertise, or recruit for online programs, depending on state and international laws. Many U.S.-based higher education institutions hold these authorizations or participate in reciprocity agreements, such as the State Authorization Reciprocity Agreement (“SARA”); however, some content creators are not traditional education institutions or operate outside of the U.S. and do not hold such authorizations. Notably, California higher education institutions currently do not participate in SARA. If a required authorization is lost or not obtained, we, may be unable to deliver degree course content or fulfill the institution's obligations in that state, and affected institutions and learners may become ineligible for certain financial aid programs, diminish the attractiveness of the content creator’s programs, and ultimately compromise our ability to generate revenue. Seeking state authorization can be time-consuming and costly.
Previous wording
We, or our content creators, may also be required to obtain appropriate approvals under international education laws and regulations. For example, a recent Indian regulation relating to online higher education requires, among other things, that learning platforms utilized by Indian universities to offer online degrees be approved by a technical committee of the Indian regulator. Seeking such approval could be a complex and time-consuming process, since the requirement is new, and as such there is no certainty as to the timing and standard of review for international platforms, or even whether international platforms are permitted to apply for approval. In addition, we may lack the knowledge and resources to successfully pursue an application without the support of one or more of our Indian university partners. International education laws and regulations may prohibit or restrict the delivery of online education by extraterritorial entities, or local policies or practice may favor local providers. India’s Ministry of Education launched its first digital university in 2023, the National Digital University, which allows students to accumulate and combine credits from different higher education institutions. Such a program may negatively impact our ability to effectively expand our degree programs in India.
Current wording
We or our content creators may also be required to obtain approvals under international education laws and regulations. For example, a recent Indian regulation requires that online degree platforms utilized by Indian universities be approved by a technical committee of the Indian regulator. This approval process is new, complex and time-consuming, with uncertain timing and standards, and it is unclear if international platforms can apply. We may also lack the resources to pursue approval without support from our Indian university partners. International education laws and regulations may prohibit or restrict online education by foreign entities, or local policies may favor local providers. In 2023, India’s Ministry of Education launched the National Digital University, which lets students combine credits from different higher education institutions. This program may negatively impact our ability to expand our degree programs in India.
Previous wording
The loss or suspension of a university partner’s accreditation or other adverse action by their institutional accreditor would render the institution or its program ineligible to participate in Title IV programs or similar government funding programs that may be in place and available to students enrolled in degree programs based in and outside of the U.S. This loss, suspension, or other adverse action could prevent the university partner from offering certain educational programs, could prevent our degree students from accessing such funding programs, and could make it impossible for the graduates of the university partner’s program to practice the profession for which they trained. If any of these results occur, it could hurt our ability to generate revenue from that program.
Current wording
The loss or suspension of a university partner’s accreditation or other adverse action by their institutional accreditor would render the institution or its programs ineligible for Title IV or similar government funding available to students enrolled in degree programs based in and outside of the U.S. and international degree programs. Such actions could prevent the university partner from offering certain educational programs, could prevent our degree students from accessing such funding, and prevent graduates from obtaining such degrees. If any of these results occur, it could hurt our ability to generate revenue from that program.
Previous wording
Our subscription plans charge learners on a recurring basis, and as a result, we must comply with complex international, federal, and state laws and regulations related to automatic renewal, unfair competition, and false advertising. These laws, among other things, require us to make specific disclosures in clear and conspicuous ways when a learner purchases a subscription, and obtain the learner’s affirmative, express consent to the recurring charges, as well as provide learners with a simple means to cancel their subscription. The penalties for failing to comply with these requirements can be severe, including rendering the subscription contract null and void, and allowing the consumer to treat any services provided under such a contract as a gift, and any failure to comply with these requirements may constitute violations of more general consumer protection laws, which could subject us to third-party lawsuits, regulatory fines, or other action or liability, and we expect to incur ongoing compliance costs.
Current wording
Our subscription plans charge learners on a recurring basis, requiring us to comply with complex international, federal, and state laws and regulations related to automatic renewal, unfair competition, false advertising, and accessibility. These laws require us to make clear and conspicuous disclosures at the point of purchase, obtain the learner’s affirmative, express consent to recurring charges, provide a simple means to cancel subscriptions, and ensure our services are accessible to all users. Failure to comply with these requirements can result in significant penalties, including regulatory fines, third-party lawsuits, or other liabilities, and will require us to incur ongoing compliance costs.
Previous wording
Our content creators include academic institutions and other education providers, many of which depend substantially on government funding. Any general decrease, delay, or change in governmental funding, including the freezing or withdrawal of grants, at the national or local level for academic institutions and other education providers, in the U.S. or abroad, could cause our current and potential content creators to reduce their use of our platform, or delay content development for our platform, any of which could cause us to lose learners, customers, and revenue. In the U.S., pressures on and uncertainty regarding the U.S. federal government budget, changes in spending and staffing policies and budgetary priorities, including proposed or future changes to the DOE, reductions in federal funding of academic institutions, and changes in the tax status of academic institutions, including due to legislation or executive orders, could negatively impact our content creators’ budgets or operations, and in turn, negatively impact our business, financial condition, and results of operations.
Current wording
Many of our content creators, including academic institutions and education providers, rely on government funding. Reductions, delays, or changes in such funding—such as cuts to grants or changes in U.S. federal budget priorities, DOE policies, or the tax status of academic institutions—could reduce their use of our platform or delay content development for our platform, any of which could cause us to lose learners, customers, and revenue. In the U.S., pressures on and uncertainty regarding the U.S. federal government budget, changes in spending and staffing policies and budgetary priorities, including proposed or future changes to the DOE, reductions in federal funding of academic institutions, and changes in the tax status of academic institutions, including due to legislation or executive orders, could negatively impact our content creators’ budgets or operations, and in turn, negatively impact our business, financial condition, and results of operations.
Previous wording
Each institution that participates in Title IV programs agrees, as a condition of its eligibility to participate in those programs, that it will not “provide any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity who is engaged in any student recruitment or admission activity, or in making decisions regarding the award of Title IV program funds.” The vast majority of our U.S.-based university partners, and some of our non-U.S. university partners, participate in Title IV programs. Although this rule, referred to as the incentive compensation rule, generally prohibits entities or individuals from receiving incentive-based compensation payments for the successful recruitment, admission, or enrollment of learners, the DOE provided clarifying guidance in March 2011 interpreting the incentive compensation rule as permitting tuition revenue-sharing arrangements under what is known as the “bundled services exception.” Our degree programs rely on the bundled services exception to enter into tuition revenue-sharing agreements with our Title IV participating university partners.
Current wording
As a condition of eligibility to participate in Title IV programs, each institution agrees not to “provide any commission, bonus, or other incentive payment based in any part, directly or indirectly, upon success in securing enrollments or the award of financial aid, to any person or entity engaged in student recruitment, admission activity, or in making decisions regarding the award of Title IV program funds.” The vast majority of our U.S.-based university partners, and some of our non-U.S. university partners, participate in Title IV programs. This incentive compensation rule generally prohibits incentive-based compensation for recruitment, admission, or enrollment of learners. However, in March 2011, the DOE issued clarifying guidance (Dear Colleague Letter, or “DCL”) interpreting the rule as permitting tuition revenue-sharing arrangements under the “bundled services exception.” Our degree programs rely on this exception to enter into tuition revenue-sharing agreements with Title IV participating university partners.
Previous wording
Our contractual arrangements with our U.S.-based university partners are designed to follow the bundled services exception in the DCL. However, the inherent ambiguity in the DCL and the incentive compensation rule creates the risk that DOE or a court, including, notably, in the context of a “whistleblower” claim under the federal False Claims Act, could disagree with that interpretation. If the DOE or a court determined that our degree offerings do not meet the bundled services exception, we may not be able to enforce our right to collect revenue sharing from our university partners, and our partners may seek a refund of previously paid amounts. Even if such claims are without merit, they could cause reputational harm, cause us to incur significant defense costs, result in the termination of our Title IV participating university partner agreements, and negatively impact our ability to enter into new agreements.
Current wording
Our contractual arrangements with our U.S.-based university partners are intended to follow the bundled services exception in the DCL. However, ambiguity in the DCL and the incentive compensation rule creates a risk that the DOE or a court, including in a “whistleblower” claim under the federal False Claims Act, could disagree with our interpretation. If it is determined that our degree offerings do not meet the bundled services exception, we may be unable to enforce our right to collect revenue sharing from our university partners, and our partners may seek refunds of previously paid amounts. Even unfounded claims could cause reputational harm, cause us to incur significant defense costs, result in the termination of our agreements with Title IV participating university partners, and negatively impact our ability to enter into new agreements.
Previous wording
Further, because the bundled services exception was promulgated by agency guidance through the DCL and is not codified by statute or regulation, there is risk that the exception could be altered or removed without prior notice, public comment period, or other administrative procedural requirements that accompany formal agency rulemaking. The U.S. Supreme Court’s decision in the Loper Bright case may also result in legal challenges to the DCL or otherwise result in future changes to the bundled services exception. If the guidance is rescinded or amended, such changes may materially and adversely impact our business and operations as we may need to alter or replace the current tuition revenue-sharing models in our agreements with Title IV participating university partners.
Current wording
Further, because the bundled services exception is based on agency guidance through the DCL and is not codified by statute or regulation, it could be changed or removed without prior notice or the formal procedures required for agency rulemaking. The U.S. Supreme Court’s decision in the Loper Bright case may also result in legal challenges or changes to the DCL and the bundled services exception. If the guidance is rescinded or amended, such changes may materially and adversely impact our business and operations as we may need to alter or replace the current tuition revenue-sharing models in our agreements with Title IV participating university partners.
Previous wording
A perceived impairment in the DOE’s ability or desire to regulate higher education could result in increasing state legislation. For example, in 2024, Minnesota enacted a law prohibiting their public universities from entering into revenue share arrangements to procure marketing and recruiting services in support of their online programs. Further, Ohio has enacted a law requiring Ohio universities to disclose the existence of OPM contracts and requiring OPM-employed student recruiters to identify themselves as OPM employees. In the past, other states, such as California, Florida, and New Jersey, have considered similar legislation. Our current degree programs may be negatively affected by such state legislation, and we may be required to make changes to our business model and renegotiate the terms of our university partner agreements with public universities located in such states. If we are unable to comply with the terms of such state legislation or negotiate terms with public universities acceptable under such state legislation, we may have to terminate our degree programs in those states, and our ability to generate revenue may be adversely affected.
Current wording
A perceived impairment in the DOE’s ability or desire to regulate higher education could result in increasing state legislation. For example, in 2024, Minnesota enacted a law prohibiting their public universities from entering into revenue share arrangements for marketing and recruiting services for their online programs, and Ohio now requires Ohio universities to disclose the existence of OPM contracts and for OPM-employed student recruiters to identify themselves as such. Other states, such as California, Florida, and New Jersey, have considered similar legislation. As a result, our current degree programs may be negatively affected by such state legislation, and we may need to make changes to our business model and renegotiate the terms of our university partner agreements with public universities located in such states. If we are unable to comply with the terms of such state legislation or negotiate terms with public universities acceptable under such state legislation, we may have to terminate our degree programs in those states, and our ability to generate revenue may be adversely affected.
Previous wording
Under our contracts with U.S.-based university partners, we are required to comply with other regulations promulgated by the DOE and comparable state laws that affect our marketing activities, including the misrepresentation rule. The misrepresentation rule is broad in scope and applies to statements our employees or agents may make about the nature of an university partner’s program, their financial charges, or the employability of their program graduates. A violation of this rule or other federal or state regulations applicable to our marketing activities by an employee or agent performing services for university partners could damage our reputation, result in the termination of university partner agreements, require us to pay fines or other monetary penalties, injunctions or other remedies and require us to pay the fees associated with indemnifying an university partner from private claims or government investigations. Any such outcomes could have a material adverse effect on our business, financial condition, and results of operations.
Current wording
Under our contracts with U.S.-based university partners, we must comply with DOE and comparable state regulations affecting our marketing activities, including the misrepresentation rule. The misrepresentation rule broadly prohibits employees or agents from making false or misleading statements about a university partner's program, financial charges, or graduate employability. Violations by our employees or agents could harm our reputation, lead to termination of university partner agreements, and result in fines, penalties, injunctions or other remedies and require us to pay the fees associated with indemnifying an university partner from private claims or government investigations. Any such outcomes could have a material adverse effect on our business, financial condition, and results of operations.
Previous wording
FERPA generally prohibits an institution of higher education from disclosing personally identifiable information from a learner’s education records without the learner’s consent. Certain U.S.-based university degree and certificate partners and Coursera for Campus customers and their learners disclose to us certain information that originates from or composes a learner education record under FERPA. Through our contracts to provide services to these institutions, we are indirectly subject to FERPA. If we violate FERPA, it could result in a material breach of our agreements with one or more of our content creators and Coursera for Campus customers, which could harm our reputation. Further, in the event that we disclose learner information in violation of FERPA, the DOE could require a content creator to suspend our access to their learner information for at least five years.
Current wording
FERPA and other education laws generally prohibit institutions of higher education from disclosing personally identifiable information from a learner’s education records without the learner’s consent. Certain U.S.-based university degree and certificate partners, and Coursera for Campus customers and their learners may disclose to us information subject to these laws. Through our service contracts with such institutions, we are indirectly subject to FERPA and similar requirements. If we violate FERPA, it could result in a material breach of our agreements with one or more of our content creators and Coursera for Campus customers, which could harm our reputation. Further, in the event that we disclose learner information in violation of FERPA, the DOE could require a content creator to suspend our access to learner information for at least five years.
Previous wording
In some instances, various articles or other third-party content may be posted to our platform by customers, content creators, or learners. The laws governing the fair use of these third-party materials are imprecise and adjudicated on a case-by-case basis, which makes it challenging to adopt and implement appropriately balanced institutional policies governing these practices. As a result, we could incur liability to third parties for the unauthorized duplication, distribution, or other use of this material. In addition, third parties may allege misappropriation, plagiarism, or similar claims related to content appearing on our platform. Any such claims, including claims of defamation, disparagement, negligence, breach of warranty, misappropriation, or personal harm, could subject us to costly litigation and impose a significant strain on our financial resources and management personnel, regardless of whether the claims have merit. Our various liability insurance coverages may not cover potential claims of this type adequately or at all, and we may be required to, or may choose to, alter or cease our uses of such material, which may include changing or removing content or altering the functionality of our platform, or be required to pay monetary damages. Furthermore, if inappropriate, offensive, or unlawful content is posted on our platform by customers, content creators, or learners, it could harm our reputation, lead to a loss of such users or creators, and potentially expose us to legal liability.
Current wording
Various articles or other third-party content may be posted to our platform by customers, content creators, or learners. The laws governing the fair use of these third-party materials are imprecise and determined case by case, making it difficult to implement clear institutional policies. As a result, we could face liability for the unauthorized duplication, distribution, or other use of this material. In addition, third parties may allege misappropriation, plagiarism, or similar claims related to content appearing on our platform. Any such claims, including claims of defamation, disparagement, negligence, breach of warranty, misappropriation, or personal harm, could subject us to costly litigation and impose a significant strain on our financial resources and management personnel, regardless of whether the claims have merit. Our liability insurance may not adequately cover these claims, and we may need to change or remove content, alter platform functionality, or pay monetary damages. Furthermore, if inappropriate, offensive, or unlawful content is posted on our platform by customers, content creators, or learners, it could harm our reputation, lead to a loss of such users or creators, and potentially expose us to legal liability.
Previous wording
While we rely on a variety of statutory and common-law frameworks and defenses, including those provided by the Digital Millennium Copyright Act of 1998 (“DMCA”), the Communications Decency Act of 1996 (“CDA”), the fair-use doctrine in the U.S., as well as the Digital Services Act (“DSA”), the Digital Markets Act (“DMA”) and the e-Commerce Directive in the European Union (“EU”), differences between statutes, limitations on immunity, requirements to maintain immunity, and moderation efforts in the many jurisdictions in which we operate may affect our ability to rely on these frameworks and defenses, or create uncertainty regarding liability for information or content uploaded by customers, content creators, or learners or otherwise contributed by third-parties to our platform. For example, while Section 230 of the CDA provides certain legal protections to online platforms from litigation related to content posted by users of their platforms, Section 230 has faced increasing litigation challenges and legislative proposals regarding the scope of its protection. These actions may increase the uncertainty of litigation risk for online platforms such as ours. Furthermore, Article 17 of the EU Directive on Copyright in the Digital Single Market affords copyright owners some enforcement rights that may conflict with U.S. safe harbor protections afforded to us under the DMCA. The DSA and DMA have gone into effect in the EU, updating the rules surrounding illegal content and requiring reports on the moderation of content. Moreover, regulators in the U.S. and in other countries in which we operate may introduce new regulatory regimes that increase potential liability for information or content available on our platform, or which impose additional obligations to monitor such information or content, which could increase our costs.
Current wording
We rely on statutory and common-law frameworks and defenses, including the Digital Millennium Copyright Act of 1998 (“DMCA”), the Communications Decency Act of 1996 (“CDA”), and the fair-use doctrine in the U.S., as well as the Digital Services Act (“DSA”), the Digital Markets Act (“DMA”), and Article 17 of the EU Directive on Copyright in the Digital Single Market. However, differences between statutes, limitations on immunity, and evolving requirements in various jurisdictions may affect our ability to rely on these frameworks. Section 230 of the CDA, which provides certain legal protections to online platforms, has faced increasing litigation challenges and legislative proposals that may impact its scope. New regulatory regimes in the U.S., EU, and other countries may also increase potential liability for information or content available on our platform, or impose additional obligations to monitor such information or content, which could increase our costs.
Previous wording
Our business activities are subject to various restrictions under U.S. export and import and similar laws and regulations, including the U.S. Department of Commerce’s Export Administration Regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. The U.S. export control laws and U.S. economic sanctions laws include restrictions or prohibitions on the purchase or sale of certain technology, goods, and services to U.S. embargoed or sanctioned countries, governments, persons, and entities. In addition, various countries regulate the import of certain technology and have enacted or could enact laws that could limit our ability to provide learners and customers access to our platform or could limit our learners’ and customers’ ability to access or use our services in those countries.
Current wording
Our business activities are subject to U.S. export and import laws, including the U.S. Department of Commerce’s Export Administration Regulations and economic and trade sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control. These laws restrict or prohibit transactions involving certain technology, goods, and services with embargoed or sanctioned countries, governments, persons, and entities. Other countries may also regulate the import of certain technology and may have or enact laws that limit our ability to provide learners and customers access to our platform or could limit our learners’ and customers’ ability to access or use our services in those countries.
Previous wording
Although we take precautions to prevent our platform from being provided in violation of such laws, our platform could be provided inadvertently in violation of such laws, despite the precautions we take. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export privileges and fines. We may also be adversely affected through penalties, reputational harm, loss of access to certain markets, or otherwise. In addition, various countries regulate the import and export of certain encryption and other technology, including import and export permitting and licensing requirements, and have enacted laws that could limit our ability to distribute our platform or could limit our learners’ ability to access our platform in those countries. Changes in our platform, or changes in export and import regulations, such as the increase of sanctions on Russian parties, and discretionary decisions to suspend activities in Russia, may prevent our international learners from utilizing our platform or, in some cases, prevent the export or import of our platform to certain countries, governments, or persons altogether. Any change in export or import regulations, economic sanctions, or related legislation or changes in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or in our decreased ability to export or sell subscriptions to our platform to, existing or potential learners internationally, or could restrict our ability to acquire technology, services, or content. Any decreased use of our platform or limitation on our ability to export or sell our platform would adversely affect our business, results of operations, and financial results.
Current wording
Although we take precautions to prevent our platform from being provided in violation of such laws or economic sanctions, inadvertent violations may still occur. If we fail to comply with these laws and regulations, we and certain of our employees could be subject to civil or criminal penalties, including the possible loss of export privileges and fines. We may also be adversely affected through penalties, reputational harm, loss of access to certain markets, or otherwise. Many countries regulate the import and export of encryption and other technology, which may limit our ability to distribute our platform or could restrict our learners’ access to our platform in those countries. Changes in our platform, export and import regulations, or the imposition of sanctions, such as those on Russian parties and decisions to suspend activities in Russia, may prevent our international learners from utilizing our platform or, in some cases, prevent the export or import of our platform to certain countries, governments, or persons altogether. Any change in export or import regulations, economic sanctions, or related legislation or changes in the countries, governments, persons, or technologies targeted by such regulations, could result in decreased use of our platform by, or in our decreased ability to export or sell subscriptions to our platform to, existing or potential learners internationally, or could restrict our ability to acquire technology, services, or content. Any decreased use of our platform or limitation on our ability to export or sell our platform would adversely affect our business, results of operations, and financial results.
Previous wording
We are also subject to various domestic and international anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, as well as other similar anti-bribery, anti-kickback laws, and anti-money laundering regulations. These laws and regulations generally prohibit companies, their employees, and their intermediaries from authorizing, offering, providing, and accepting improper payments or benefits for improper purposes. These laws also require that we keep accurate books and records and maintain compliance procedures designed to prevent any such actions. Although we take precautions to prevent violations of these laws and regulations, our exposure to violations increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.
Current wording
We are also subject to domestic and international anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, as well as other similar anti-bribery, anti-kickback, and anti-money laundering regulations. These laws and regulations generally prohibit companies, their employees, and their intermediaries from authorizing, offering, providing, and accepting improper payments or benefits for improper purposes. These laws also require that we keep accurate books and records and maintain compliance procedures designed to prevent any such actions. Although we take precautions to prevent violations of these laws and regulations, our exposure to violations increases as our international presence expands and as we increase sales and operations in foreign jurisdictions.
Previous wording
Such matters can be time-consuming, divert management’s attention and resources, cause us to incur significant expenses or liability, or require us to change our business practices. In addition, litigation expenses and the timing of these expenses from period to period are difficult to estimate, subject to change, and could adversely affect our financial condition and results of operations. Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing could adversely affect our business, financial condition, and results of operations. Refer to Note 9, Commitments and Contingencies, included in Part I, Item 1 of this Form 10-Q for additional information.
Current wording
Litigation can be time-consuming, divert management’s attention and resources, result in significant expenses or liability, or require changes to our business practices. In addition, litigation expenses and the timing of these expenses from period to period are difficult to estimate, subject to change, and could adversely affect our financial condition and results of operations. Because of the potential risks, expenses, and uncertainties of litigation, we may, from time to time, settle disputes, even where we have meritorious claims or defenses, by agreeing to settlement agreements. Any of the foregoing could adversely affect our business, financial condition, and results of operations. Refer to Note 9, Commitments and Contingencies, included in Part I, Item 1 of this Form 10-Q for additional information.
Previous wording
Although we do not directly collect, transmit, and store financial information, such as credit cards and other payment information, except in very limited circumstances related to Enterprise customers, we utilize third-party payment processors who provide payment processing services on our behalf. We also collect and store certain personal information provided by our customers, content creators, learners, and potential learners, such as names, email addresses, and other data pertaining to their activity on our platform. The collection, transmission, and storage of such information is subject to stringent legal and regulatory obligations. Some of our third-party service providers, such as identity verification and payment processing providers, also regularly have access to personal information. In an effort to protect personal, confidential, or otherwise sensitive information, we rely on a variety of security measures, including encryption and authentication technology licensed from third parties. However, advances in computer capabilities, increasingly sophisticated tools and methods used by hackers and cyberterrorists, new discoveries in the field of cryptography, or other developments may result in our failure or inability to adequately protect this information. In addition, there may be scamming or phishing attempts, such as impersonating our personnel, our customers’ personnel, or our content creators’ personnel, in an effort to obtain personal information from our learners or otherwise make inappropriate use of our platform, which could expose us to liability, reduce learner, customer, and content creator satisfaction with our platform, or damage our reputation. For example, we have had several instances of users impersonating professors and inviting learners to off-platform forums in an effort to entice the learners to buy unrelated educational content.
Current wording
Although we do not directly collect, transmit, and store financial information, such as credit cards and other payment information, except in very limited circumstances related to Enterprise customers, we utilize third-party payment processors who provide payment processing services on our behalf. We also collect and store certain personal information provided by our customers, content creators, learners, and potential learners, such as names, email addresses, and other data pertaining to their activity on our platform. The collection, transmission, and storage of such information is subject to stringent legal and regulatory obligations. Some of our third-party service providers, such as identity verification and payment processing providers, also regularly have access to personal information. In an effort to protect personal, confidential, or otherwise sensitive information, we rely on a variety of security measures, including encryption and authentication technology licensed from third parties. However, advances in computer capabilities, increasingly sophisticated tools and methods used by hackers and cyberterrorists, new discoveries in the field of cryptography, or other developments may result in our failure or inability to adequately protect this information. In addition, hackers have become increasingly more active in scamming or phishing attempts such as impersonating company personnel, customers’ personnel, or content creators’ personnel, in an effort to obtain personal information from learners or otherwise make inappropriate use of our platform, which could expose us to liability, reduce learner, customer, and content creator satisfaction with our platform, or cause reputational damage. For example, we have had several instances of users impersonating professors and inviting learners to off-platform forums in an effort to entice the learners to buy unrelated educational content.
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Previous report — wording carried elsewhere
Our business is subject to indirect taxes.