Coursera, Inc. (COUR) Earnings Call Transcript & Summary

Good. Just stick with me for 1 minute. So in today's discussion, the company may make forward-looking statements based upon current expectations. Actual results could differ materially due to a number of risk factors. For more formation, please refer to Coursera's IR website for the latest SEC filings and safe harbor statements. Okay, with the safe harbor behind us. Ken, maybe we'll just jump right in. I think -- for those who don't know the story as well, I think, one of the most interesting things is you have sort of 3 verticals.

You've got the Consumer piece, you've got the Enterprise piece, you've got the Degrees piece is elements to which they all sort of interplay with each other on a longer-term view. Maybe help set the stage for what is the company built and what are you trying to continue to scale and build in the years ahead?

Sure. So great comment on the front. One of the important things to understand about the 3 segments is that they do interact and build on each other and the way we build the business and the way we compete, so that's important. The Consumer business, which is the roots of the company, it's where we started. It was the original look that was let loosen to the world, roughly a dozen years ago and worked very well, which then led to co-founders to go and seek investment and start a company, which ended up being funded by Kleiner Perkins and NEA. That was the roots of the company. They went around and they found a bunch of university partners for content that went quite well. And that was the base of the business. More recently, over the last 5 years, we added an Enterprise business, which is growing quite nicely now at scale and a Degrees business. And what each -- the largest business where we started, the Consumer business, has a broad offering to consumers. It's a freemium model where you can access essentially any and all of our content for free, if you'd like, less than 5% of our consumers monetize, if you want to talk in Internet, marketing terms monetize. But the way the consumer base, the way our registered learner base ends up interacting with the other parts of the business is very important. They feed our Enterprise channel from a lead perspective, and they fill more than half of our Degree students in that segment. And so the Consumer business is very important to us. What's been interesting recently with the Consumer business is this kind of job-ready programs we have in place, entry-level certificates. And it trains up someone without any background, no prerequisites, no degree required to perform some skill. And it might be Google IT administration as an example of their business suite or might be Meta front-end developer. But you can take -- if you have the aptitude you can take this class with no prerequisites. It's pretty significant. It's multiple classes. It's a lot like a college quarter, if you will. And you can get that done in 3 months or 4 months, but people take 6 to 8. But at the end of that, you go from no skill to assuming you get through it, you're job ready and one of these disciplines, and for a job that might pay $50,000 to $80,000 a year, depending which part of the country you're in. And so that's done particularly well since we've been public over the last couple of years, and it's an interesting business, and it's become important for Enterprise and Degrees as well. The Enterprise business, we talk in some more detail if we want as we move on. But there's 3 subsegments there. There's Coursera for Business where we're serving enterprises and the learning and development departments, L&D departments, people talked to them as well as some of the operating departments to deliver skill sets for employees, so that's the Coursera for Business side. There's Coursera for Government, which might just be viewed as a vertical industry stripe, but it's different for us because we compete so well. What's important there, it plays very nicely with our assets, which is the highest quality brands, both on the university partner side and the industry partner side. It plays very well and it's job-ready. That's what governments are interested, high quality, be associated with great brands and make our citizens more job-ready as we go through whatever transition or a higher unemployment. And the last is Coursera for Campus in the subsegment, which is us selling to enable professors and students to take those classes and which is morphing into actually content that's delivered for credit over time. That's one of the interesting things where it starts to touch on our Degrees segment. Lastly, our Degrees segment is we offer with our industry partners, they're not Coursera degrees. I don't think they ever will be Coursera degrees. But it's our partner school degrees on our platform where we also source the students for them -- The Degrees students. That's our newest vertical. It's our smallest vertical. It's our largest market over time and probably the one most right for transformation.

And you also talked a little bit about how the interplay of them together. Maybe talk a little bit about some of the synergistic benefits and scaled platform benefits you're trying to build around these products over the long term?

Sure. Absolutely. So it's an important question that lets us compete somewhat uniquely, and I think provide some opportunity so a couple of quick examples of that would be using the registered user base in our Enterprise business, depending on the quarter, 15% to 30% of the Enterprise leads in a given quarter come from the consumer base, come from the registered user base. We have 107 million registered users on the platform today. What those are? It's people who've registered on the platform, and their e-mail is still valid. They're not currently active. It's kind of funny around the IPO, which was 1.5 years ago. We had some of the early people working on saying, isn't that just -- it's a press-worthy data point, it's not real, right? Because it's like, no, no, it's real because we actually do go back to that consumer base. They're important, both for the Consumer business, for the Enterprise business, as I just said, 15% to 30%. It's because so much of its technical content. So for instance, you're an IT lead, a lot of it, what we do is data. It's data and business and IT related. If you've been successful in your personal development, in our courses on the consumer front, you might be very likely to want to employ us on the Enterprise front while you're training up your department now that you're 5 years into your career. So that's the example of the synergy on the Enterprise side. There are lots of others like the core data. On the Enterprise side, what we sell, the product isn't content with these different offerings you might look at that's not -- you sell skill set development. That's what L&D and business operators care about. We have more data because of that consumer base than anybody else in the world because we have assessments within all of our content. And so the consumer platform serves the product itself as well as the go-to-market on the Enterprise side. On the Degrees side, roughly half our Degrees students come from registered learner base. And that one is pretty interesting and tells you a little bit about the longevity of that user base, even if most of them aren't active on the platform day to day, as people progress through their careers and through their lives, they may want to access in a different way our other products. Again, developing a Degrees student online to figure out the marketing sourcing one is very expensive. I think in the neighborhood 3, depends on the degree, to $10,000 per head, extraordinarily expensive, very important part of that whole business model half of ours are free. And so if you look at the S-1, when we went public, of course, we had a graphic to show this. And in that graphic, we showed the roughly 4,000, if I remember right, it was 4,012 of the 8,000 users on this graph came free from the registered user base, and then we strike those by cohort when they first became a registered user in Coursera. And to me, the interesting part of that was there were 3 little stripes that represented about 1/4 of 25%. So 1,000 students. We're not talking big material here but those came from Coursera registered users from 7, 8 and 9 years previous. So to get across the longevity and that these people tend to stick with the platform -- and actually, for that business, it is fairly material. So those are 2 long-winded response as to how the overall business all the way together.

Yes. I find a lot of companies in the education and tech space get lumped together. Sort of how do you view the competitive intensity or the competitive landscape? Who do you think you compete against in your various offerings? And is that competitive intensity sort of rising, neutral, falling? How do you see the broader landscape playing out as we exit '22 and go into 2023?

So it varies very much by segment. The Consumer business, it's loosely competitive because people -- but it's not like we get comparison shopped to take things. It's more about being at the intersection of where finding the consumer, right, on the Internet, which we do pretty well because we have great Google rankings because we have backlinks to all these great education -- to all these universities, which ranks very high. But it's more about us each individually. It's not a super competitive space. It's about how we each really perform and execute individually. Maybe some people do an occasional comparison. The Enterprise side and Coursera for Business particularly is the most competitive. It's a great market, it's growing across the board. There are a number of companies doing very well. Within the subsegments of that, aside from Coursera for Business, Coursera for Government is a little bit less competitive. We tend to do very well there again because of our assets because it just happens to fit exactly what we do in our competitive assets. And then Coursera for campus, we really compete in uniquely, again, selling to the universities, for the professors and the students. And it's -- we're still sorting product market fit with exactly how it works. It's -- there's real traction there, but we're very open around. We're still sorting that one. It's a smaller part of the business. We're excited about what it means for the Degrees business over time, but it's watch this space kind of play. And then the Degrees side, the competition -- there's a lot of competition, I'd say, broadly in Degrees, but the way people compete is very different. So while it's -- while there's broader competition, I'd say, usually someone is in the wrong place, if we're facing a lot of competition because someone's naturally going to win just due to the different business model approaches. And it's been a challenging time for some of the competition for the space broadly there with Degree enrollment declining during a period of high employment.

And maybe that dovetails probably the #1 question we get from investors now unfortunately, is elements of the macro environment, how it sort of solves back into your business? Anything you're seeing from the macro environment that's either acting as a tailwind or a headwind to your business just as we continue to remain in fairly volatile times on the economy?

Sure. So it matters a lot. And people talk about cyclicality. This has been kind of interesting. Traditional cyclicality, people talk about business trends and business cycles. But really, as it relates to us, it's both the business cycle and it depends on the vertical and subvertical. It's the business cycle and it's the employment market. And those 2 used to travel in tandem this time they aren't, which makes it very interesting in the education space, and it might not be intuitive, but I think as we walk through it, it is somewhat. On the Consumer side, because what we do is a job-ready type thing. We've done very well there just because there's been a lot of demand for the product for this -- as you've had people reskilling and job changing. We believe unproven, we'll see if it works. If we go into a period of lower employment, we think there will be -- that will be countercyclical. We should do well there would be our expectation. Again unproven, it would be the first time it's happened like that, but it makes sense given on how we compete there, what we provide the consumer. On the Business side, I would say it's quite cyclical. Corporate budgets for L&D spend tend to travel with the economy. People look at discretionary spend when things get tight. And so I'd say that'd be a traditional normally cyclical product. Coursera for Government partially countercyclical, high unemployment. Governments want to fix high unemployment. A lot of it's retooling of economies that might be more traditional energy focused as an example. And so somewhat independent, but countercyclical with employment broadly [ C for C ] again. Coursera for Campus, new products are when focused. And Degrees are clearly countercyclical with employment, right? Opportunity cost, all the traditional, which is pretty well known in the space. But again, I think important to understand countercyclical to employment versus the business environment. Right now, we've had what recession and could be getting worse, but it's really about the employment part of that where individuals make decisions to go back and get degrees or not.

Got it. Maybe turning to the Consumer business. Last quarter, there were sort of 2 narratives. There was some weakness in the consumer segment, that was due to elements of conversion rates in Europe as well as some pricing-related tests that led to some weakness. But then you outperformed on the gross margin side. So can you talk us through a little bit of some of the narratives you're seeing in your consumer business? Any trajectories we should be keeping in mind to extrapolate some of those trends outward through the remainder of this year into next year?

Sure. We -- it's funny, Eric, because we had a lot of questions, we went out pretty early. We were the first ones in the broader space to have earnings release. So we had a lot of questions around EMEA, which, of course, weren't just focused on us, but all the other investments people had to understand. So it was a little bit -- put us on edge as we're answering the questions. We think this is what we're seeing, let's see if everybody else does when it comes out, and it did, in fact. What we saw in EMEA was the consumer was weak. We were starting to see inflation there. It was just a tight market. There's a lot of fear and uncertainty. And you also saw it on the Business side and the Enterprise side, people were reducing discretionary spend given an uncertain outlook. We look at and do the same things as a company. So it's kind of a natural reaction that we expected. We did find that everybody echoed what we said after but it was predicting. So -- but on the Consumer side, that's what we saw. We talked a little bit as we gave guidance. We missed last quarter, which was excruciating, which we don't like to do, obviously. But as we set expectations, we described to people the basis on which we set those expectations which was we took a look at the trends as they ended the quarter, and we understood most of the things throughout the quarter that happened. And we did not assume anything became better. We did not assume a rebound in EMEA, for example, nor has anybody seen a rebound in EMEA. At the same time, with some questions later on, which were interesting in the opposite side of the coin, which was, did you assume the U.S. gets -- looks like Europe from an economic standpoint? The answer is no, because we don't think we're economists and smarter than everybody else. But we assume the same trend, which we had pretty good visibility and then built in some conservatism of course, because we missed and the expectation should be you don't miss twice. But that's what we saw from a trend perspective. We haven't really seen anything different since I don't think there's been any -- there have been no surprises.

Okay. And the element of the pricing-related tests and what you learned coming out of that and how to think about that going forward?

Yes, the pricing a little bit of that was figuring out process. So you never had a testing that affected the overall results again. It was worthy, I think I would not have missed by more had I had the choice on that. But it's we went through and we forgot a lot. It gave us some interesting data points as to how we run going forward. I think gives us some more economic opportunity going forward without being too specific.

Okay. And then just on the gross margin piece where you actually outperformed on the Consumer side, any key learnings there or any elements that bring us back to what you've talked about longer term on the gross margin side in Consumer?

Sure. Absolutely. So the broader trends, okay, this has been thematic since we've gone public. We've continued to do well and surprised, I think, even ourselves on the upside from a margin standpoint. What that is, it's a content mix and it's about the success of the entry-level search. And the entry-level searchers are sourced through our industry partners, usually on items surrounding their brand and their expertise and sometimes their platform versus our university content partners, which was the origin of the company. We've had industry partners for some time, multiple years, but we started to expand on that a couple of years ago. And through the pandemic and with people's focus on reskilling, we've done extraordinarily well there. Again, these entry-level searches have driven a lot. They've also driven higher margin because the industry players are less interested in generating education revenue. That's not what they're there to do it. They're there to support their brand. They're there to support their platform. They're there to support other community advantages for themselves. And so as a result, we pay a much lower rev share for those, sometimes supporting it in other ways with co-marketing instead of direct payment and cost of sales. And so the Consumer margins on an overall basis have kind of hit what we expected to over the more 10-year like model, which you might remember from us going public, in which we didn't get the share with anybody else. But we've -- it's been -- that mix shift has caused that very positive outcome on the Consumer gross margin side.

Okay. And then turning to the Enterprise, just as you talked about the Enterprise can be more reactive to the macro environment. Any sense of how should we be thinking about Enterprise growth going forward, either the remainder of this year or elements of could it stay more volatile during periods of uncertainty, how to think about coming out of the last set of results and what the key learnings were on the Enterprise side?

Yes. So we updated guidance [indiscernible] with the miss with the reset across the board and provide some vertical guidance. The -- which we're not reiterating or not reiterating, but the situation -- the situation remains the same. Again, we think the Coursera for Business side is affected by the economic trends, but we continue to do -- it's still a good growth business as it has been across the board for us and for the competition. There's more we're looking to do there from a product side on the Coursera for Business side for more short form. Where we do well on the government side is the long form deep skill-based learning. That continues -- again, we think it's countercyclical, continues to do well. The pipeline is as robust as it's ever been. It's a little spottier, but the overall longer term as we get through this period of uncertainty, we feel very good about that market and what it does from an employability standpoint.

Got it. And then just sales force productivity in the Enterprise piece. Obviously, there's been a lot of dislocation in enterprise in general and venture capital [ fuel ] businesses as a start, have you seen a different level of candidate show up against your broader sales force hiring. Have you seen any dynamics around sales force efficiency over the last couple of months and quarters?

It's a good question, and it's something we pay attention to. The -- that's an earlier high growth at some real volume segment for us. So we're pretty focused on it. A lot of it is a capacity model, as essentially you just described. It's very much in enterprise model, a SaaS-like model. One of the nice things we have, the way the sales force is organized is it's by geo and by subsegment. So we have specialists in C for B, C for G, C for C, there's significantly different enough markets that we do that. We've seen real strength in some of those, which you could probably figure out from what I just said about where we've done well and where we haven't. Where we're beating quotas on average and doing well. We've had others that are more experimental where we haven't. And the good news is we can redeploy sales force between the different segments. We can push them to where the money is without having to do a whole new sales rep ramps, which is kind of helpful in the model. But on an overall level, we continue to balance I'd say, overall, from a productivity standpoint, we've been pretty similar across the year. There hasn't been wild changes in that either direction. And part of that is because we can redeploy and adjust as we grow.

Got it. And last big picture one on the business for me, and then maybe we'll open it up to some questions from the audience if there are any. The Degrees business, you sort of set baseline of thinking about what growth would look like there between now and the end of the year. As we've spoken to other people in the education vertical. -- broadly, overall, Degree businesses seem fairly volatile in this time, and there's sort of this employment versus education dynamic that seems to continue to be playing out in the economy. Any ways we should be thinking about the evolution of growth versus the long-term opportunity set in the Degrees side of the business?

So again, we really like that market and really like that business. With the results last quarter, we shrank, we decreased year-over-year 4% in the Degrees segment, which not a growth business, if anybody's doing math. So we were not particularly happy with that. But in the long term, we believe it's our most important market. And more of that's going to be how we change what's delivered. It's our biggest market. It's the one that we think will be most disrupted, especially as the consumer looks to value delivered versus cost. We think there's real opportunity for what we do there to help the schools source -- to help the schools deliver online at lower prices. So with the right partners. And today, about half of our partners, it's super early today, what -- how our current business reacts or doesn't to the market in the longer term kind of irrelevant. It's such a small business for us. It's our 5 at scale university partners, 4 of which are in the U.S. and 1 of which is EMEA, which is interesting, but like it's a microcosm of what's happening overall, especially from a longer-term perspective. If you look at longer term, we've signed up 5 of the IITs, which are amazing. Some of the best schools in LatAm, these are lower-priced degrees that aren't at any scale for us yet. And they're lower priced by definition, as are all the lower per capita income geos. But historically, higher education is the U.S. and Western Europe. And that will change over the coming decade and how that changes in the price point is going to matter a lot. So we still like what we're building long term. We are making strides to be able to help the universities deliver at lower cost and figure out lower cost today, half of -- and again, the very small numbers were nascent. This is not the outlook for the future, but half of the universities that we have that have a dual platform that deliver hybrid, that deliver online only versus delivering on campus, in person, half of them price the online lower, half of them price the exact same. The ones who price the exact same say you get the same value of the degree doesn't say you took it online. The other half say, you get a different experience that if you're willing to pay for, we'll differentiate. And so you look at the 2. We think if you take that and extrapolate over time, especially when you're crossing international boundaries, that it becomes much more value delivered as an increase in human capital, earnings capability versus price, which is upside down for a lot of the market today. So long-term outlook.

Okay. Any questions in the audience? Happy to take any from the crowd. If not, I can keep going. We've got one of the back. I think if you don't mind, they're just going to hand you the mic just for the webcast, sorry. Otherwise, I got to repeat it, and I've talked enough soon.

It feels from my perspective that at least on the Consumer side, what you're doing is improving the return on investment when it comes to the education piece. Could you maybe talk about how that fits in with the current focus that we're seeing in terms of student debt, legislative intervention in the education market and that broader piece, how do you think that plays out over the next 2, 3, 5 years?

Sure. Very good question. The fundamentally, what's -- and I don't want to get too much in the student debt and how it works, but it subsides that, right, is what it is, which causes economic distortions and a lot of you are economists, and I'm not. So I won't go on about that further, you can lead your conclusions. But you're right. The important thing is value delivered. So if education was always delivering what it was worth in terms of economic value only, we can ignore other parts of that, Then you wouldn't have issues necessarily because you could pay it back, it would make sense. You wouldn't need to guarantee it either because people would do it privately. So I think part of what we do, if we're successful, ultimately, and it depends on what kind of degree and where you are. But if you look at some of the schools that aren't ranked at the top of the brackets today. Those tend to be the ones that for price for value delivered is pretty low. If we can assist in pushing down tuition rates significantly because we enable lower cost delivery and there are some things we're working on that could make that very interesting. It would absolutely help those issues, right? Because there wouldn't be an economic problem, there'd be value delivered. You can always have issues. But I do think over time, it changes that as well as I think, over time, we'll see what happens internationally, being able to deliver degrees where people don't have to have debt. There are various things you can do to, if you look at -- we talk about stackable degrees, a lot of this is more of the future, where people take some of the courses and what they've done, what they've learned online, that prepare them for these programs that the universities -- we're doing this today, by the way, with a number of programs, the universities give credit for it. And so which does 2 things. One, it lowers the cost on the front end. Two, it's a little bit tried before you buy. You see if you like this. And one of the issues that was an article last week that came out that talked about this. 40% of students don't graduate from college, so they're stuck with all this debt because they have no incremental earnings power. It's brutal, but it's expensive to not get through. 25% of college grads earn no more than high school grads, Guess what, for that amount of money that wasn't a good ROI. And so making these programs more cost effective, letting people try before they buy, taking lower cost options that converts to credit. There are some other innovations we expect to introduce there over time. We're super early here, but there's maybe a rambly, longer answer to your question. But there's a lot of dynamics in play, which are exciting actually from an opportunity perspective and a reduction of some of the pain people have seen because of the current system.

We've got one more.

Yes. You said it was a tough market for some of the degree other OPMs. Do you expect any consolidation in different types of forms in that market, I guess, bankruptcy and M&A? Or is everyone just going to bumble along because it feels like there's probably too many in that space at the moment?

Yes. It's -- the economics have changed a lot in the space. It's hard to forecast. There's been talks of M&A in the industry for people who are close to it. Some of the models have been really painful. You've seen some restructuring from some of the players out there, which they've needed to do. I won't really estimate where they are. I do think it's a crowded market, and there's been changes in what's being delivered for the price. And so I do think it's going to continue to be a dynamic market as it relates to what different players do. It's nice that it's one part of our market in the earliest and we're developing it a little bit differently. We're not as U.S.-centric I just described, but today, if you look at our business, that's all it is. But that is not our business over time. And the way we're going to compete more internationally is going to be based on how some of the other parts of the business contribute. So I won't hazard a guess to what other players do. But I'd acknowledge that it's a tough space, and I'm sure there will be some change over the coming couple of years.

Anything else from the crowd? Ken, one of the things I always find interesting the way you guys frame it up is that you have a lot of choices around allocating capital to growth. And clearly, the company has been very consistent that we're investing against the long term. We're not maximizing for margins anytime soon. So number one, maybe just help frame up for investors the way you and the whole team think about growth investments, number one. And the second part of it would be, how do you weigh and measure whether to lean into parts of the Consumer business or the Enterprise business or the Degrees business? And how you think about managing relative ROIs as you deploy some of that investment capital.

Sure. So those are great questions and always topical, especially as we get into our planning cycle for next year, which we're in the middle of right now. So these are the questions we ask ourselves philosophically on the trade-off of bottom line of profitability of EBITDA margin, which is what we focus on versus growth. We have been pretty clear from the very beginning that -- we're not focused on getting to profitability in the near term. Guess what, since we've been public, the markets have changed and people would like to see near-term profitability with increased interest but we will not go on about models and [ DCF ] and everybody understands why that fundamentally affects valuations for growth companies. So some people are looking at this and saying, maybe bring in profitability sooner. The way we think about it, several different aspects, but one of the things we committed to is we expect will constantly improve our margins or EBITDA margins. And that's because to build a proper business -- a proper growth business a lot of times, companies can grow and do so in a fashion where it can never become profitable. So as soon as they want it to become more profitable, the growth goes away. So it builds some muscle in a company to have to always think about leverage, and we talk about leverage all the time. And we do -- one of the things we're balancing to your second question is we're balancing these very different business. We're a $0.5 billion business. right? But we have 3 growth businesses within us. And so in some, like Enterprise, if you look from a leverage standpoint, a percentage of sales and marketing as an example, and most famously, versus revenue, the high you grow, the worse those numbers look. It's the whole LTV/CAC concept that the analyst figured out some time ago and saved all these undervalued SaaS companies to the benefit of the people who understood it on the front end. So we have within our construct 3 start-up companies, so it's hard, harder to get scale. The engineering platform largely supports all of them. There's some differentiation. G&A is driven by different metrics. So the more scale, the better. But on the go-to-market side of the business, we operate again as 3 start-ups as they are naturally. There's less -- there's some synergy, but there's less synergy there. So figuring out how to deploy capital is about immediate investment versus growth back though to the higher level of the trade-offs, a, will increasingly get better; b, it's about funding growth. So if we grow slower, we expect we'll move that faster. If we grow in a very robust fashion, and we see more opportunity to do so, we'll keep investing. We think that's what's best for everybody. We're cognizant that the market changed, we get it, but we're not -- we don't immediately change strategy. So as we look forward to -- those are the kind of the guidelines and how we think about it. As we look forward, will be this coming February, what we did last year is we provided the annual guidance during that period. And that's how we'll be approaching it as we go through this planning cycle, the trade-off.

Yes. Maybe the other side of that trade-off away from sort of, for lack of a better term, the P&L, but thinking about the assets you have on the balance sheet, your longer-term goals and the potential for either amplifying equity returns or potentially accelerating your business transformation through inorganic growth and M&A. How do you think about the trade-offs from that perspective on the capital allocation piece rather than the OpEx allocation piece?

Absolutely. And the -- there's capital piece, you bring it up. It's kind of funny because I think a lot of people don't get this. It's like because you have the cash doesn't mean you can deploy it against the operating model because it turns upside down and it doesn't make sense for a lot of reasons. We do not burn much cash today. When you look at the cash that comes in from equity sales, just the common employee portion of it. We went public pro forma with $800 million, almost on the nose. We were $783 at the end of last quarter, that's 1.5 years. We've burned very little cash. We're at a relatively low cash burn rate even at the existing margin levels. So we don't think capital is an issue really as it relates to the vitality of the business certainly. So the question is, how would that get deployed. One could deploy towards more growth, we're going to be aggressive and invest in more. It doesn't really work from the economic model. So again, we have to get more leverage. If you're getting more leverage, you shouldn't be burning more cash. And so we do think there will be inorganic activity over time. We're in no rush. We miss numbers. We're not going to do anything soon, but there should be -- it's a big long-term market. And so we do think there's going to be opportunity over time for the right acquisitions. I wouldn't expect us to do anything big in the near term. But when we can add competitive assets, building it yourself is often not the best way to do things. And so taking a little bit -- especially if we end up in distressed times. Having a good amount of cash and not burning much cash right now is a nice position to be in depending how long it lasts. And again, we won't pretend to understand that better than anybody else, but we're in a good position, to some degree, the longer it stays tough, the more advantage will accrue to us.

So I've been ending. I know we've got maybe 1 or 2 minutes left. I've ending with everyone with should look out over the next 12-plus months, what do you think investors should keep top of mind either thematically or from a surprise standpoint, or predictions, elements about how you think the business or the broader industry might evolve looking out over the next 12-plus months?

Yes. I think over the next 12 months from us, I'd continue to monitor what we're doing on the Consumer side because I think we're doing very well. And any new announcements on Degrees, it's going to be a little while. That's a longer-term model. But I think over a period of time, nothing immediately, we'll start to unveil more what those plans look like with metrics and data points. But that's long term in the business, we're super excited about.

Okay. Well, thanks so much for the thoughts. And please join me in thanking Ken and the whole Coursera team for being part of the conference this year.

Thanks, Eric.