Udemy, Inc. (UDMY) Earnings Call Transcript & Summary

All right. Good morning, Boston, and thank you very much. It's my honor to be here with my friends, Gregg and Sarah, who are the CEO and CFO of Udemy. So Gregg and Sarah, thanks for being here today. What an amazing journey, and it's been an honor to be a part of that. But starting many, many years ago with the founder, Eren Bali's vision coming from Turkey of democratizing the way we learn to becoming one of the most scaled and fastest-growing companies across learning and really taking that deeply, deeply into the enterprise, which we're going to talk a lot today. So it's really exciting to be here. Thank you guys for coming.

You're welcome.

So I want to start with what I thought was one of the most exciting things coming out of the first quarter earnings, which was just the scale growth and just really the success you're having in UFB or Udemy for Business. So can you guys just kind of walk through and get us into how you're doing overall and then talk about Udemy for Business?

Yes. Thank you for the questions.

Absolutely, Gregg.

The -- our enterprise business, we have an exceptional enterprise business that's being driven by our consumer marketplace. And our consumer marketplace is scaled. It's growing nicely. It has -- we're publishing -- we publish 5,000 courses a month on our platform, and we take the best courses and bring it into Udemy Business. And we have one of the fastest-growing SaaS businesses that there is. We -- the last quarter, it was $280 million ARR, growing at 80%. And it has very high net retention, net retention is 120%. And in enterprises over 1,000 employees, it's 127%. So we have an exceptional SaaS business.

Okay. So one of the -- as this business comes into focus, and I think you've announced that even that this year, I think it was Q3, that, that business may eclipse the size of the rest of the business in the consumer side. So let's talk a little bit about the genesis of this business. So these businesses hang together, maybe this is for you, Sarah. But to start with, how these businesses hang together, what the corpus of that platform is and why it's so great that you have both and how they feed each other?

Yes, thanks for the question. So really, the -- our consumer marketplace is the engine that really fuels Udemy Business. So the marketplace brings instructors from all over the world onto the platform and we've aligned our incentives with them so that they are publishing and operating courses all the time. It's the 5,000 courses a month that Gregg spoke about. Those courses are in local languages, completely global. And the reason they do that is because the more successful we are, the more successful they are. And so those instructors come to the platform, they stay on. The other benefit of that consumer marketplace for Udemy Business is the fact that it is this filtering mechanism. So we get those millions of eyeballs on these courses, and they're rating them. They're providing feedback. Again, those instructors are incentivized to continue upgrading them. So it's this really virtuous cycle that delivers really fresh, broad, high-quality content that we can put in the Udemy Business. The other piece is our consumer business generates a meaningful number of leads into Udemy Business. So the 2 of those businesses are very symbiotic. And that marketplace as the fuel for Udemy Business is a true differentiator for us.

So let's just -- so the go-to-market, just on the overall, is you guys -- let's talk about instructors a little bit, so the corpus of the content. So I guess a couple of questions here on the instructor side. But maybe just for folks who are a little bit newer to the story, walk us through how instructors and content is created, how those 5,000 new courses a month come on to the platform and then how they're applicable across the system to both consumers and to Udemy for Business?

So we have this open platform where anybody can publish anything. And so instructors from all over the world publish all kinds of different courses. And as Sarah said, we use it as a filtering mechanism. We have 195,000 courses on our platform, 5,000 more every month. We have 68,000 instructors today, and we had 4,000 new ones in the last quarter. So there's constant publishing going on and it's global in nature. So 70% of our revenue on the consumer side is outside the U.S. So it's a true global platform. So we're getting all of these courses coming in and we have the largest EdTech website in the world as far as traffic. We have over 30 million unique visitors a month. So -- and they come over 3x a month. So we have about 100 million visits a month into our website. So all of that traffic filters all of this content, and we take the best of the best content and we package it for our Udemy Business subscription. And that changes over time as the corporate tastes change, we add more courses. So we added -- in the last quarter, we added 1,500 new courses to Udemy Business. We have about 15,000 today. We have 13 different languages in Udemy Business, so a number of different languages. And in the 1,500 courses that we published in the first quarter on Udemy Business, about 700 in English and about 800 in local languages. So we're constantly building out various local languages. Like today, we're -- the 2 newest languages that we're building out is Mandarin because we're in Mainland China and in Korean because we just launched with a partner in South Korea.

One of the other -- to add to that, one of the other things we do on the instructor side is we have these Marketplace Insights tools. So we're using data and technology to help instructors and potential instructors understand where is their demand for courses. Where is their demand, and there are in a lot of courses. It's a great place to publish, get in there, get in there first. Where is there a lot of demand, but there is a lot of supply already. And so if you're going to publish there, you need to just make sure you bring your A game so that you can put out a really high-quality course, get it into our marketing algorithms and then be able to sort of rise to the top.

Go ahead, Gregg.

Yes. The other point is that the -- there's a huge amount of upgrading of courses going on our platform. And that's one of the secret sauces that on Udemy Business, they -- we monetize it over by [ viewage ]. So there's an incentive for the instructors to keep their courses fresh and to keep upgrading their courses. So we published in the last earnings that 59% of our top 2,000 courses were upgraded in the last 90 days. And so it's not only are we getting more and more publishing on the platform, more and more courses, but we're also getting better and better courses because they're being upgraded constantly because of the economic incentive.

And how much -- so you have one of the most adaptive marketplaces ever because the feedback goes basically into income for your creators or instructors. You're adding 4,000 of them, I think you said last quarter. 68,000 overall. Let's have a little fun here. So what is the most random course on the platform in your mind? Just give us like one of those. And then in terms of the 1,500 courses for Udemy for Business, let's talk about where enterprises are getting value, where they're focused and how you're able to adapt to that quickly. So either one of you. Maybe Sarah has a view.

Well, most random. I think surprisingly, there's like horseback riding. I don't know how you learn horseback riding online. So I think that would fall in there. From a -- where is the learning happening, what are the enterprises really interested in, it's really, really broad. I think technology, first and foremost. And our solution specifically around technology, because it's so adaptive, because it's so flexible, it keeps up. Our content keeps up with the pace of technology and change in innovation in a way that the publishing models can't. So there's a lot of technology learning that happens on our platform, but also business skills across the board, be it marketing, finance, you name it, power skills around leadership, time management, meeting management, all those sorts of things. So one of the things about having this really broad global marketplace is that you have this solution that really can help with learning across entire employee bases regardless of what their specialty is.

And as far as how it evolved...

Do you have a favorite course, by the way, Gregg?

Well, I -- somebody asked me if they had -- we had horse jumping on our platform. And I, of course, had no idea and looked it up and sure enough, we have a whole bunch of horse jumping courses, so...

You have a catalog of almost everything and then you narrow it down very, very succinctly for...

To what the enterprises want. And so that's my point. Of the 1,500 courses that we added, that's basically enterprises telling us what they want. So it's evolving by their taste. Like the enterprise will say, well, we saw this kind -- do you have more of this type of course? Yes, we do. Or I saw this course on your consumer platform, can we have that? Well, no, you can't have that because it's not high quality enough, but we have one like it. So we're -- it's evolving because of the corporate taste. So -- and our ability to add 500 new courses a month, but we also take some out. So we might have added 600 courses and took away 100. So the catalog itself just keeps getting better and better and broader and broader, depending on the taste of the corporations.

As the business evolves to UFB, and maybe this is for you, Sarah, just how do you think about some of the key KPIs to judge your success on Udemy for Business? And as you go forward, how is that going to adapt as Udemy becomes a majority of the -- UFB becomes the majority of the business?

Yes. So there's kind of the metrics on Udemy Business overall that we're looking at. It's adding customers, it's penetration of those customers, net dollar retention. Really, really important. That is, I think, a sign of that quality that they're looking for and that they're getting the value. So our net dollar retention is 120% overall. And like Gregg said, 127% on our largest customers. As we're scaling the business, also really important that we're watching the success of the team that we're scaling. So we have ramping quotas for all of our reps by segment. You name it, and we're watching very closely to see how are these people that we're bringing on board ramping, what are the tools we're giving them. It's all about the right sales management, the right sales processes, the sales enablement and then having great products. If you have those 4 things and you're monitoring it, I think you can build a really incredible business.

And how do you see it as the environment is adapting and changing a bit given the market and macroeconomic uncertainty? Why is it more important than ever for enterprises and businesses to invest in UFB? Like why are you seeing acceleration in that?

Well, the world has changed. The future of work is different. The pandemic changed everything. It sent everybody home. The majority of the online learning -- the learning was on -- was actually in person. So it went from 80% to 90% in-person learning, which no longer was effective. And so everybody needed a solution. They needed an online solution. There's also a digital transformation that's happening, that accelerated. And so people, they send -- almost every company sent their people home. They needed a way to train them. They needed a way to up-skill them. They needed a way to keep them engaged. And they found that we have a very effective solution that's very cost-effective. So not only are we broad and very effective, we're very cost-effective for them also.

How do you quantify that for a business in terms of cost-effectiveness? Is that a key item that people look at?

Yes. So we've put out some ROI studies that we've done with some of our enterprises that shows incredible ROI, like 8x. We're not talking on the fringes here, we're talking about very, very solid ROI on those investments. And it's because this content is so engaging and it's so practical. We have mostly practitioners on our platform, putting these courses out. And because it's been filtered, we know that it's high quality. We know that you're going to get the learning out of it that you need. And so that's how we measure the ROI and the cost efficacy.

Got it. So the term EdTech has been abused, used, misused, et cetera. And you're often labeled as EdTech company. Obviously, you provide learning. But help us understand is your broad sense of what people mean when they think about EdTech and then really, how you think about the business because a majority of your revenue this year will be from enterprises buying to help their employees learn. They'll be paid, to your point, on all the metrics we see from a traditional SaaS enterprise business. So talk to us, I was thinking about calling it a de-risked enterprise learning company or something like that. But how do you think about EdTech? Is it appropriate framing? Is it not? And what's right and wrong about it?

Yes. So I think, I love what you said, which is it's been used, it's been misused, that sort of thing. Yes, we provide learning, but practical learning of skills. We're all about the outcomes. What is it that you are trying to achieve in a really practical way as a business. In order to achieve that as a business, what is it that your team needs to know how to do and how do they keep up with things like technology and the transformation and how quickly that's changing. So we are in the skills business. We are delivering skills to learners. We are delivering the skills to the businesses that they need, which I think is very different than a lot of traditional EdTech, much of which was really just bringing traditional learning mechanisms online. Really, we are investing in technology and using our data, and we're able to take advantage of the creator economy in a way that I think traditional EdTech companies don't. So I think we're very different than what people think of when they hear that.

So if I just read through that, it's the way that you source content or the skills content that you're building, it's the end customer, it's themselves, and it's the value and ROI that they measure? Is that...

That's right. And it's our partnership with them to help drive that, right? So it's the enterprise tools that allow them to engage their populations in a really meaningful way to drive those outcomes.

So can we talk about competition and basis for competition? So in terms of your -- in your markets, you've got most of the EdTech companies, we call them, are publisher model, right? They go to a publisher, they source the content, they figure out how to distribute it. And a lot of times, they work with educational institutions. But where do you think -- let's just start with the consumer marketplace and competition, what's the basis of competition for the consumers that you serve? And where do you see your levers of success? And then who do you compete against?

So on the consumer side, it varies. It varies by country, and it varies by obviously the enterprise plus the consumer side. In the U.S., there's a couple of competitors, Coursera probably being the biggest one. We're a very different business. We have -- we're not a publisher. All of our competitors are publishers, and that's -- it's a very different model. Nobody has ever had the publishing engine that we've had. The 5,000 courses a month is just extraordinary, and nobody has ever seen anything like that. So -- but when you get into other languages, it's very different. One of our fastest-growing markets is Japan. In Japan, we have literally almost no local language Japanese competition. We have a consumer marketplace in Japan that has 6,000 courses. We have an enterprise business that has about 1,000 courses, and there's almost no local Japanese business content other than our own. So when you get into the different languages because we're so global and so broad, that the competitive set gets -- is much different than it is in English.

And your instructors basically walk you into a global business, correct? So let's double-click on the global nature of this business because most of the business we've seen in the last 25 years start in one country, then they try to splinter off and grow more, sometimes taking off and biting off more than they can chew. But like talk about what it costs to be in Japan or so a country like that. How do you know it's the right thing to do? And how is it economically advantaged for you to be in Japan?

Yes. So we have a playbook that's fairly straightforward. I'll talk about Indonesia because it's a little bit further, it's earlier days. So what happens is we look for countries where we have -- that have a big population, obviously, but that have a good-sized English business. So we see that there's -- that people are coming to our platform, they're buying English courses. Then typically, we will put a person in the marketplace, and we started building Bahasa, we started building the local language into Indonesian content. And usually, we get in -- and we have all these different tactics, but it's basically one person. And we get critical mass. Once you get to about 1,000 courses in a local language, it just takes off, then the flywheel just takes off and we don't have to get involved anymore. Like for example, we have 12,000 Portuguese courses. We have not had anybody working on our Portuguese content in years since well before I've been here. So once you build the flywheel, it just takes off by itself. And so the playbook goes, English language courses to local language courses, to local payments, local currencies, to local marketing and then we bring in our go-to-market teams in Udemy Business. So that would be a playbook. So it's actually very inexpensive to ramp up. So we're always ramping up multiple countries at the same time. As I said today, we're working in Indonesia, we're working in South Korea, we're working in the management work in Mainland China. So we're constantly building out that playbook.

Got it. And just -- I want to sort of click back to that competition and then wrap in this global piece. But let's go to the business side and talk a little bit about the basis for competition. What advantages your business? Why are you growing so much faster than anybody in the market today in this business? And how do you continue to scale that to multiple times the size you are today?

I think it's the broad, fresh, high-quality content as the key differentiator and what that does is it engages their employee populations in a way that they haven't seen much of before. So we have many customers on the larger side who tend to run multiple content providers at once, not just a Udemy but they'll have some of our competition in there. And when they do comparisons of engagement in our platform and learning that happens on our platform compared to theirs, we are hands down the winner. And we'll apply that...

And how do they measure that? Do they look at...

Time spent.

Time spent.

Time spent on the platform, learning and engaging.

And is that -- and you click that back to the fact that you're adaptive with your instructors, you know what they want and then you can learn very quickly from both the consumer marketplace and from the learners in the enterprise?

Yes. I think it's because we have the eyeballs from the consumer marketplace on the courses so that only the best ones actually come over. I think that is the secret sauce.

Got it. And then another question on the go-to-market sales motion. So a lot of your competitors in the B2B side do not have anywhere they could see a business domain in the consumer marketplace and link that back. So how much of an advantage is it that people often come to you in an enterprise before the enterprise comes to you?

It's a huge advantage. Huge. As Sarah said, a large number of the leads for the business come from our consumer marketplace because people know us. And so -- and that's how we started this business. We were a consumer business for a number of years before we started our enterprise business in 2015. And so when people are looking to get into a content provider, what they're finding is that people are buying Udemy courses on their corporate credit cards. So they can see that people are actually in there buying, and so then they give us a look and then they -- it's a land-and-expand motion. We'll start anywhere at any size because we know once they get it in there, it will be engaging and then it will grow. So there's a land and expand, but that's also -- leads are a huge -- because we have the largest EdTech website, we have 30 million unique visitors, we have hooks all over the website that says would you like these courses for your company, just fill this out and send it into us, and we'll call them. So that makes our go-to-market -- the ability to expand our go-to-market team very efficient because we know where the leads are. So oh, I'm getting a lot of leads in Argentina, let's hire some enterprise people in Argentina. So that's how it works. But we also use it as a lead gen. So we'll go to a company and saying, hey, here's what -- here's all these people that have your IBM e-mail address, here's what they're taking. We have thousands of people take on our platform and here's the courses that they're taking, you might want to think about buying a subscription for your teams. And so there's just lots of synergies across it. Having the big consumer business is a big advantage because we get in the consideration set on many, many deals because people know us. And we started in heavily technology. And when we started the business, engineers know Udemy. The engineers were always on Udemy taking courses. So we used to go in just with the CIO and now it's much broader than that. We do -- about half of the time, we're selling HR professionals and half of the time, we're going into the CIO because, again, our technology has always been our strength. And that's the area that changes so fast. So that's...

Does that continue? And do you think that will continue to be a majority of the business? And is your net dollar expansion moving beyond the tech part of the organization? Or is it just...

Yes. It's way beyond tech at this point. We -- it's much, much broader. So we go wall to wall. We have -- we're wall-to-wall with huge corporations. So we fit everybody, but we'll start wherever we can. And again, technology is always going to -- has been the strength from the beginning. It always will be. It's the thing that changes the fastest. So it's the most obvious differentiator.

So if I put my enterprise or software head on, I would look at your go-to-market sales motion on an acquisition side and say, you get a signal, which should make -- give you a competitive advantage on margin overall because you have a warm lead before you start. And on the content side, you have a variable content model.

That's right.

And so you should be able to -- I mean as you price, you only pay out what you get in and what's consumed?

That's right.

And let's talk about the instructors a little bit. So the business, when I think we first met, Gregg, it was in the tens of millions of dollars for Udemy for Business and the consumer business was growing. And then obviously, in COVID, it began to explode and expand on the consumer side even further. As you adapt and you become a majority and then a significant majority in the future, for -- on the business side, how does that change your instructors? How does that change their payouts? How does it change your focus on them? Do you become more reliant on a smaller number of them? Give us a sense of the instructor side.

Yes. So the instructors are our partners. So they're the key part of our business. And we have 68,000 of them. But really, the most important part of it is our enterprise instructors, and there's about 7,000 of them. And so one of the biggest challenges that we have is that all of the instructors on the consumer side want to be in Udemy for Business, but of course, we can't have them all. So we're very selective about which ones we move over. But we're spending this year about $200 million in instructor payments. We had last year of '19 instructors that made over $1 million. So as we -- as the business evolves to become more and more enterprise business, what it means is that the top instructors are making more and more, right? Because -- so again, you want the consumer business -- you want a healthy consumer business because it's bringing on new ones. It's filtering it and we're getting the leads. But as we become more and more of an enterprise business, it just means that the people in Udemy Business are making more and more. So it ties them in even tighter than us. I mean the things that we say is we almost never lost a large instructor, so we monetize better than everybody. And so they come on the platform and they stay on the platform. So -- and that's a big advantage. So -- and we've been asked, could somebody -- do you lose a lot of instructors? We do not lose top instructors at all.

I would assume that as you guys continue to get bigger and more focused on the opportunity for business, those 7,000 growing number plus -- 7,000 plus continue to get more and more as you scale that business. And so that should be net attractive? Is that fair?

Yes.

Okay. So let's take a step back, Sarah, unless you had something you want to add on that.

No. Great.

To just sort of the macro. I think everybody is focused, right? Everybody has a plan to get punched in the face. So a lot of the market and a lot of companies are getting punched in the face. It sounds like, in fact, you guys are actually seeing some advantages as the workforce changes. But let's talk about we're in a cycle here and you guys have a global business, so a lot of different places in the world. Walk us around the world, how macro is affecting your business positively or negatively. And just for some of the things you're seeing out there both on -- and we'll get to pricing in a minute, but just what you're seeing out there in terms of the evolution of the workforces as well as what you're seeing on the inflation side and how it affects your business.

So we are very global and different regions are behaving very differently and actually, different countries within different regions. So as an example, EMEA, we're seeing on the consumer side some top-of-the-funnel suppression. There is a conflict there. But when you look at Japan, when you look at India, growing really, really fast, things are looking great there. So I think region by region, there's different things happening. But overall, kind of there is kind of this macroeconomic environment that I think we're all thinking about and dealing with. And for us, there's a few things. There's the -- how does this impact our top line. So we believe we're going to see some countercyclicality, both on the consumer side as unemployment, if that rises, there will be more appetite for the consumer business. On the Udemy Business side, interestingly, there are a lot of efforts that are still going on to drive efficiency for digital transformation, which is also a way to get to more efficiency. And our solution is a way to help employees have the skills they need to undergo those efforts in a really cost-effective manner. So giving the skill, providing the skills that they need to get through this downturn at a cost-efficient price is really going to be impactful. I think the other thing is employee engagement and retention. So even if you're seeing companies that are maybe laying off portions of their population, what's really important is how they retain the rest of their employees and what those employees can do for their business to help them get through this cycle. And we think Udemy Business plays really well in that space. There's also the -- how do we think about our business. And as we look forward, one of the things there has been inflation, there has been increasing salaries -- and this increase in salaries historically. And what we're looking at is how do we take advantage of an unfortunate situation and a downturn to make sure that we are finding the right employees, hopefully able to get them and attract them at a lower price point over time. And so just trying to think about the different sides of the business, how it impacts the top line, but how it can actually impact our ability to continue to innovate going forward so that on the other side, we're continuing to build the things that we think are really important for our customers and our organizations.

But just to play back what I heard, you feel like you have a few conferred competitive advantages in a market downturn as people turn to re-skilling, up-skilling and the mobility changes in the workforce?

That's right.

Okay. I'm going to pause for any questions from the audience or online. Otherwise, I have many, many more questions. Awesome. Anybody have questions? We have a question here. Hold on, we'll get you a microphone so everybody can hear you online.

On the instructor side, they are your partners. They're also -- they bring the intellectual capital to you. First of all, are they exclusive to your platform, especially on the enterprise side? Those are the more important ones.

Yes. So on the consumer side, it's not exclusive. They can publish it anywhere, and they often do. But they often make 80% plus of their revenue on Udemy because we monetize better than everybody. To be on the enterprise side, it has to be exclusive. So we will not bring any of the content on that's not exclusive.

Okay. The -- on the content selection, basically the -- every month, you publish -- well, the instructors publish 5,000. And you -- my rough math is it seems that you pick about the 10% out of the 5,000 and put them on the enterprise side. Could you talk about the mechanism or the filters that you use to select them? And also, do you have like organized efforts? I'm sure you do. So talk about the background and the organization that is behind all this effort because that's the quality and ensures the -- all the update.

Yes. No, that is -- that's the right question. Our secret sauce is the quality of our content, and we have about 8%, so the top 8% of our courses are in Udemy Business. And we have a content strategy team that carefully curates anything that comes over. So they have -- they can talk about their criteria for like an hour, but I'll give you the top line. That -- it has to be a high-quality course. It has to have a lot of views on our consumer side and high ratings. So if you don't have -- there's a threshold that if it's not rated high, it does not come over. That instructor also has to be somebody that handles the Q&A well. So we have Q&A on all our courses and that's really important. So it's our instructors interacting with our students. And that's one of those things that's very important because in some of these courses, they'll have 10,000 views, lots of questions, 100,000 questions. Well, we're making sure that those people answer those questions on a timely basis, and they're doing a good job with the students, obviously very important. But it also has to be a category that we need. So if we have 5 courses in a certain category, we won't bring on the 6th necessarily. So it has to be subject matter. It has to be high quality. It has to be -- they have to be -- make sure they answer to take care of the students well. And there's even more than that. But -- so there's a very -- there's a high bar. So we have a team and it's done by category. So there's somebody that's doing technology. There's somebody that's doing the different categories. So they're an expert in that category. They know who the top instructors are. They know what the content is. And they'll look at the -- they'll make sure that the courses fit our standard because we'll hear it. When you have put a course that's not a right standard, companies will tell us. It's not subtle. So we care about the bar a lot. And again, we think we -- we're -- we sit in trials all the time with our competitors, and we tend to win the trials. We tend to have broader courses, deeper courses, fresher courses, and we're engaging courses because of, again, our advantage of having the big funnel of 5,000, and then we take it down by 8% and just bring just the ones that make sense.

You asked about the organization behind the instructors. There isn't an organization behind them. Our marketplace allows us to capture kind of the brilliance of the world, right? So these are real-life practitioners out there from anywhere and then our marketplace and the eyeballs on help filter and find that great quality content.

Now regarding the team that selects the best 8 -- top 8% of the instructors and their contents, do you actually, in each important regions with enough critical mass, do you have like a dedicated local team that filters and select all these contents for the business side?

Yes, we're ramping up something like -- Japan is a good example. That we will have, yes, a Japanese content person that works on that. Sometimes -- and we're building out management currently. We have a content person maybe to work on that, that they -- we know what people want to learn because we know what they're learning in English. We also know the other categories and the other languages. So we're building up the content. So we know -- so the first 500 courses are the right 500 courses, the next 500 are the right 500. So we're building out each local language like that with very specific content people.

Do I have time for one more question?

Yes. One more question.

Okay. Yes. Could you talk about the pricing side? I mean you have -- you're operating in so many regions. I mean, do you have local pricing and dynamically change as situation changes?

Yes, great question. So we built out a pricing engine that allows us to price per course per country and find that optimal price point, and that's dynamic, right, that's changing and every day on the consumer side. On the Udemy Business side, there is local pricing.

So one final question here, and then we'll wrap it up.

You mentioned earlier that you're seeing some top-of-the-funnel suppression in EMEA. I was hoping you could talk about gross adds versus churn and how that's playing through the system. How big is EMEA within your total business? If you could just maybe put some numbers around some of the market suppression you were talking about?

Yes, so the majority of our consumer business today is actually a transactional model. And so the gross adds and churns are a little bit different. But for us, over 60% of our buying in our platform comes from returning buyers. Our EMEA business is less than 1/3 of our business on the consumer side. And really specifically Russia and Ukraine, about 1%. But there is still -- and I think you'll see all the consumer kind of tech bell weathers, like everyone's seeing this top-of-the-funnel conversion suppression. And so for us, because we're so global, I think maybe we have a little bit lower of an impact than some others, but it's just part of the macroeconomic environment. We are still seeing -- I was just going to say we are still seeing a lot of the returning buyer. Those remain strong.

Great. Sorry, I don't want to cut you off, but we are out of time, unfortunately. Gregg, Sarah, thank you so much. Congrats on being a public company. I was going to ask you, but you can talk to folks separately. But congratulations, and we're really excited about the future of Udemy. Thank you very much for coming on behalf of all my partners at JPMorgan. Thank you.

Thank you.

Thanks for having us, Noah.

Thank you for the questions.

Take care.