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

Let's get started. My name is Josh Baer. I cover ad, tech and software at Morgan Stanley. Greg, and Sarah, CEO, CFO. Thank you so much for joining us. I have some research disclosures first, for important disclosures. Please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Thank you so much for joining us. Really excited for this conversation.

Greg, I wanted to start it off with a little bit of a recap of '23. The way I see it, we had macro headwinds that met AI tailwinds or maybe vice versa. I was hoping you could walk through some of the largest positive and negative drivers of demand. And while all this is happening, growth decelerated, but you still held the line with UB growth around 25% on what's becoming a really big business. So kick it off, what happened in '23?

Yes, '23 for me really was a transformational year. As you alluded to, UB business, from a revenue perspective, grew 34% year-over-year, which really was best-in-class for software businesses that are around $0.5 billion in revenue. So we're very proud of that. In addition, the first year of profitability, we turned the corner on profitability for Udemy, well in advance, are well ahead of expectations, and that's a testament to some strong execution and focus across the organization. We added 10 million learners to our platform. We added 1,800 new customers to Udemy Business. So on a lot of fronts; we're very excited about the progress we made. I think we're going to talk more about AI later. But we saw AI have a significant impact on usage on the platform, over 3 million learners taking courses and rolling in courses across now what is 1,700 GenAI courses on platform, and that continues to accelerate. And I'm sure we'll get into AI more, as you just mentioned. But we did see some headwinds as well. There's no doubt. Although we did stay above the 25% ARR growth threshold, which was a focus for us, and we did see some downward pressure, and that was as a result of the macroeconomic and geopolitical challenges that we did face. But that being said, we called out in the last guide that we do expect ARR to accelerate in the back half of this year. And in the areas of pockets where we did have some challenges, we absolutely understand what those challenges were. We are in the process of addressing some of those challenges and are confident that we'll have those challenges addressed as we move toward the back half of the year, being able to maintain Udemy Business growth from a long-term perspective, exiting this year and beyond north of 20%. So very durable, attractive growth for a software business is what we expect, and we're excited about it.

And before we dig into all those different areas, I was hoping you could lay out the case broadly for investors, why do companies need a sophisticated skills platform when you think about where the world is headed?

Well, so there's a lot that's been written about this transition to a skills-based organization or a skills-based economy and for good reason, just because it is about skills within organizations, not necessarily degrees or experience, but it's the skills necessary to accomplish work against organizational outcomes, which is ultimately what's most important. And so we now see organizations around the world starting to embark on this transition to a skills-based organization, but they don't necessarily know how to get that done. And what tools and resources and support they're going to need to effectively transition in that vein. So for us, it was critical that we developed not just the platform, which we've invested heavily in, but the services and the support capability to help organizations develop the right strategy and then have the platform of tools and capabilities in our case, based on the foundation of our global marketplace of content, but the tools and learning modalities that we've layered into our platform to be able to meet the needs of a global enterprise where their learners live and meet them where they are, so to speak, in the flow of work or in the flow of learning. And we've talked a lot about the investments we're making in generative AI recently. We did a press release just before our earnings and we talked about an AI Learning Assistant, how that's going to transform how learning happens within an organization as a result of the personalization that we can bring to a learning experience, not just asking learners to go through a series of courses, but we can personalize down to the lecture level based on the skills gap that an individual has through an assessment and have that personalized curated learning path be automatically presented or being automated through GenAI to significantly improve the efficiency by which we go through learning end companies and drive to a much more valuable outcomes is the best way to frame it. So that whole skills intelligence platform is enabling us to transform learning to personalize it in ways that we did not have the ability before and to be much more comprehensive and expansive so organizations feel comfortable standardizing on one platform, Udemy for their enterprise learning needs across the entire array of functions that they have to serve.

And while we're on that topic, where are we as far as that vision of hyper Personalized Learning, incorporating the Learning Assistant like what's available today? How long will it take to get that complete picture that you just painted?

We're going to be releasing capability throughout the year. As far as the AI Learning Assistant specifically, we're in alpha on that. We do have customers engaged. We will come out hopefully in the next few months to be a little bit more specific around exactly the timing of that release this year as far as the first phase of the Learning Assistant. But I can tell you the early feedback has been just tremendous and validating for us in terms of the experience that we're going to be able to deliver. So this year, we'll be the start and that will carry forward into next year and beyond as far as the level of personalization that we're going to be able to provide.

Take one step back before we jump forward, loops there into the conversation, thinking about the impressive margin expansion that we saw in 2023, nearly 900 basis points to finish the year and positive EBITDA margin. So I was hoping you could recap what we saw in 2023 as far as -- where did that leverage come from? What drove that efficiency?

A few areas. One of the easiest to understand is G&A. We had a lot of work to do in '21 and '22 to build up our capabilities to function as a public company. And so we saw a lot of leverage off of that throughout last year. From a sales and marketing perspective, we had been ramping up the go-to-market team and building that team pretty aggressively for a number of years to take advantage of the secular trends that are happening and our position to take advantage of it. And so we were able to really slow down the go-to-market expansion as the macro became a little bit tough and started getting leverage off of the teams that we had. We also drove some efficiency from a direct response marketing spend, both in reallocating some of that spend, spending it in different channels that we're showing higher ROIs. But what I will say is it was a real team effort. The entire organization leaned in to find operating efficiencies across the organization to make sure that we are really prioritizing investments and things that were going to drive the long-term growth and/or sustainable operating efficiencies through processes through system investments, that sort of thing. So it was across the organization, we saw people leaning in and it's a real testament to the culture that we have at Udemy that we work together as one team and everyone really rose to the occasion.

Greg, last quarter, you listed your strategic priorities for '24. I think there were 5 of them. Today, you mentioned skilling, you mentioned platform. I was hoping you could expand a little bit, remind us between brand and partnership and international. What are the key takeaways from those strategic priorities looking ahead?

The way we look at it internally, I think overall, our focus on becoming the global leader in the transition to the skills-based economy is what our singular focus is right now. Those strategic areas of investment that we lined out, the investment in third-party channel and additional routes to market, building the brand and international investment expansion, all serve our ability to effectively be that global leader and be the undisputed global leader. All are important. I don't necessarily think one tramp to the other. We've got massive opportunity right now with the 16,000 enterprise customers that we have and less than 10% penetration to develop capabilities, invest in our platform to enable them to broaden and deepen the learning experience that we provide. And that's something we're really excited about because we're already seeing and we talk about this on an ongoing basis, we're starting to see our average deal sizes every quarter rise, we're seeing our percentage of multiyear deal revenue increase every quarter. And so the investments are actually having a desired impact and that's going to continue. Internationally, we've got the highest brand awareness of any of our countries in the world in India and Brazil. We have some of our largest customers in India, and we're going to double down and invest and build into India and Brazil as a result of that. Really excited about the investments there and the impact that's going to happen. And we've talked about our investment in the channel, AWS specifically and could not be more excited about the alignment that we have between our organization and theirs, the value and impact that this relationship is going to have on Amazon's customers as we move forward as being one of their premier partners that they're bringing to market to support the deployment of their technology and having Udemy being there to assist an organization adopting that technology and developing the skills to effectively use that technology. So in all of those key areas that we outlined, there's a lot of leverage and levers that we expect to pull to enable us to accomplish our singular goal.

You mentioned less than 10% penetration. Is that on a seat basis within those 16,000 companies?

It is. That's exactly what it is, seats sold versus available seats to sell versus employees in those companies.

And then you also talked about deal sizes increasing. I'm wondering to what extent is that the difference between customers thinking about Udemy to just bring in content into their organization versus the content plus all the platform features, all the skilling. Is that part of what's going on? And what's driving that shift?

It's a very good question because that's exactly what's going on. And it was about 18 months ago that we started the journey of changing the way that we sell from point solution selling just primarily content into the IT side of the house to selling a platform of capabilities into the CLO and the Chief People Officer to give them the tools and the capability to deploy globally, our platform to aid them in the skilling journey that they're going on. And so yes, that's exactly right because we're now starting to see not just seed expansion but product level expansion with Udemy Pro and with Udemy Leadership Academy in addition to indicative of the partnership we just announced with ServiceNow, the strength and the bolstering that we've done and the investment we made in soft skills and power skills content on our platform. So we now have the full complement of content and learning modalities on our platform to enable us to have a very different conversation with the CLO that we were able to have 18 months, 2 years ago with respect to how we can be the strategic partner. They don't need multiple vendors. We can handle all of their global needs across the enterprise with respect to upskilling and reskilling. And that's a different motion and that has led to the deal sizes increasing and the percentage of multiyear contract revenue increasing as well.

And is there any context for what happens from a financial perspective when a customer adopts Udemy Pro or Leadership or some of the other modules?

Yes. So those are additional per seat fees. You can imagine Udemy Pro is most applicable to the technology teams. And so personalized Learning and then Leadership Academy is the same across the management team.

On net new customer adds, I think that was a little bit weaker in Q4, just looking at the data going back for a few years. I was hoping you could dig in a little bit what was driving that weakness between churn or gross adds?

What we saw in Q4, and we actually saw it in the previous Q4 as well as -- we saw churn on the smaller set of the SMB side of the business, our self-service team plan, where those annual contracts, many of them did not renew at a yard as they did in some of the other quarters. So the enterprise business remained very stable. We added lots of new logos. But when you're talking about a logo count, that SMB side can drive a lot of logos, but 80% or more of our revenue comes from the enterprises. So it doesn't have the same impact on ARR or on our revenue.

I'll just add that, as Sarah just mentioned, 80% of our revenue comes from our larger enterprise customers, but roughly inverted in terms of the actual number of customers. Roughly 80% of our 16,000 come from SMB customers. But again, the revenue comes from the larger customers. So again, it gets a little bit muted from that perspective when you see those churn numbers, but not necessarily coming from the large enterprise.

And so the reported net dollar retention rate of the enterprise customers are those with 1,000-plus employees, I think it was 113, overall 106. So that's implying that the SMB was below obviously accurate. How should we think about the trajectory of those metrics going forward?

So there was a lot of pressure on net dollar retention last year as the macro became really volatile, and it took longer and longer to do our upsells. The sales cycle is elongated. It feels pretty stable right now. We actually saw some of those sales cycles pull in a little bit in Q3 and remains stable in Q4. They're nowhere near what they used to be prior to '23. So when we think about this year and where that's going, it has stabilized somewhat. We're meeting a little bit of pressure, but not as much pressure as we saw in '23. But as we get into the back half of the year and as we start to see that acceleration in ARR growth again, we do expect that to start to increase in the improvement in the net dollar retention and that will continue to remain strong on the enterprise side.

And could you lay out where some of the confidence comes from as far as the acceleration in the back half of the year? Is it a function of easier comps? Is there an assumption that macro improves? Is there an assumption that some of these platform features and AI starts to take over?

So a few things. The first is, for sure, the platform features in the AI, that's really exciting and a huge opportunity for us. The second thing is we did mention on our last earnings call, some execution issues we saw in certain pockets. So there were regions and segments that were performing really, really well. One of our largest quota-carrying segment actually hit over 100% of their quota in total for the second half. And we haven't seen performance like that since 2022 and before that. But what that allowed us to see was, there were some regions and segments who hadn't really adapted to the environment, weren't grabbing on to the playbook and the things that we knew we're working and we sell working in the regions that we're performing at over 100%. So sales enablement around that, making sure that everybody is consistently applying our playbook is one thing. The second thing is one of the things we saw in Q4 was Vietnam and Korea. Those 2 are reseller partnerships that are relatively new, a little over a year old. And we saw some performance issues as far as how they are managing their pipeline and forecasting what they were going to do. So the model that we had was more of a regional oversight model. We have a similar partnership in Japan, which has been very successful, and they have continued to perform quarter after quarter. So in the meantime, we have the Head of Japan helping Korea and Vietnam start to adopt the best practices as we're hiring country managers. And so all of those factors combined give us a lot of confidence in the back half of the year. It just will take some time for this work and these initiatives that we're doing to play out in the form of closed bookings, ARR and then ultimately revenue.

I do want to come back to the international story. The first want to ask one on competition. And Greg, you talked about being the -- I forgot the exact word, but preeminent skills platform. Can you help describe your current competitive environment besides Coursera, LinkedIn Learning, who else do you run into? Where do you win? Where might a potential customer select another vendor?

So it really is for us the usual suspects in the enterprise as far as competition in all names for you. In Pluralsight there, Skillsoft has been around for some time now. You mentioned Coursera and LinkedIn. And those are the primary players that we see in the enterprise. SMB is different. There's a lot of folks that focus on market, but we'll stay on the enterprise now. Now as far as the competitive landscape, well documented, LinkedIn is bundling their learning product in with their recruiting suite as well as with their Glint products. So they're selling a portfolio of products and services, not necessarily with intense focus on the learning product specifically. Coursera, conversely, are very different. Coursera does a great job on the consumer side of their business, reflective in the numbers they're putting up. And Jeff and team I have a lot of respect for what they're doing. Their focus is not primarily in the enterprise. So we don't see Coursera nearly as much in the enterprise reflective of their numbers. They report those publicly. And so all they do from time to time, you'll see an organization adopt for specific purpose around degrees. But it's primarily LinkedIn Skillsoft, and Pluralsight more focused on the technical side of the house, with a deeper capability around assessments and labs. And so those are the usual suspects. What we are seeing, and this is manifested in a lot of the stories that I tell in the earnings announcements around consolidation, around replacement as we're seeing organizations that are getting serious about upskilling and reskilling and making a strategic imperative. Running an RFP or running a process to down select to one platform that they believe is going to meet the majority, if not all of their needs across the enterprise to upskill and reskill to actually develop skills capability from a talent management perspective. And look we know that. In fact, a lot of the reasons why we've developed on top of our core content capability, which is best-in-class, the learning modalities on our platform, and there's been very much a strategy and a commitment to developing the capabilities we have, so that organizations that need management leadership development, you have that capability on our platform that need immersive learning assessment, labs, workspaces and validation in the form of badges and certificates have access to that on our platform. The soft skills and power skills, the array of capabilities we provide on our platform, now it's very unique. I can tell you that the competitors that we just talked about, none of them have the breadth of learning modalities on top of the content generation engine that is our marketplace holistically and one offering -- we don't have a competitor that has a similar offering. And so that does make us very unique. And it's one of the reasons why we're seeing the disproportionate amount of consolidations and replacement wins that we're now able to execute and win.

I wanted to come back to international and can tie in some competition to this question. You at least used to have close to 70% of revenue from outside of the U.S. I think maybe that's -- so a big part of your business and had a really interesting differentiated playbook in my opinion, where create this local content in local languages and build up the consumer side of things and then bring that over to the business side once you reach a threshold. So a few questions with that in mind. One, on generative AI and the use maybe of some of those competitors to use GenAI to translate their content, where I think maybe you don't need that because you have the local language content, does that close the gap between your competition? Does that aspect give an advantage like a way for the others to catch up to you?

We have that same ability to leverage GenAI in countries where we don't have as much local content, that are emerging for us and to do the same thing. And so that's available to all of us now. But the reality is it's a very different experience. If you happen to be Japanese living in Japan, and you have an opportunity to take a course from a local instructor that understands that the culture, obviously speaks to language and understand the native storytelling and way by which learning happens in that country versus an English course that was developed by an instructor here in the United States and [indiscernible], it's a very different experience. It's a very different experience. We're told that over and over and over again by our customers in Japan and in Brazil where Portuguese is the language and so on and so forth. So the short answer is, it gives them the ability to actually compete in that country where they did not have the ability to compete because they didn't have local language content at all. But are they on par? Or is it a level playing field? No, we believe that it's a far superior experience to be able to provide local content developed by local instructors that are still some of the best instructors in the world in those chosen disciplines. So we still believe we have competitive advantage, and we will in that way. I don't believe that's going away anytime soon.

And sticking with international, but thinking about consumer for a moment, like with the broader somewhat de-emphasis of consumer, does that international playbook that outlined, does that need to change? If you're maybe not seeing growth in certain markets, is it the way that you build up the Udemy Business in international markets have to change?

We're still very committed to the consumer. Although we're not investing in the consumer business as aggressively as we historically have, make no mistake that, that is the flywheel that enables Udemy Business to spin. And meaning that that's where our content comes from on a global basis, instructors initially enter a relationship with Udemy through the marketplace. We still use that marketplace as the catalyst to open new markets in new countries around the world. And the motion that you just described, Josh, is still persistent. We haven't deviated from that. Now if we decide to accelerate penetration in a specific market that we may not be in today, we always have the ability to turn this picket up right, and goose that until we get to a level of not saturation, but a level of course development and volume that's going to support us being successful with Udemy Business to actually launch into the business community there. That's a lever we can pull at any time. And we do, we will, and we will continue to do that. So it doesn't change our strategy with respect to how we leverage the consumer business to open up a new market really at all.

We have seen the consumer business see some modest declines as messaged and planned, and that should continue this year with, I think, the guidance for low single-digit decline in '24 in consumer. I'm wondering, broadly, is this as you say, adjusting the spike? Is this your decision to pull back on marketing spend, and that's what's causing some of the consumer performance? Or are there other elements around macro student learning behaviors?

It really is related to the spend on the marketing side within consumer. So for us, we're really thinking about where our dollars best spent right now. Our investments we have shifted over the past year, 1.5 years, really to focus on Udemy Business as our growth engine. And so the capabilities that we're building out on our platform, we're building out on the Udemy Business side first. But a professional learner is a professional learner, whether they're Udemy Business or whether the consumer. So we will be putting some of those capabilities. For instance, badging and certification and Learning Assistant. We will be putting those over to consumer over time. And that is a better time to actually really think about more marketing dollars on the consumer side because you will have increased the LTV of those learners. And so from an ROI perspective, the dollars will be better spent at that time. So it really is about the timing of our investment dollars, where they're going and what makes the most sense. We love to invest and innovate once and monetize twice, but it doesn't always happen at exactly the same time.

And once some of those capabilities come over from UB to consumer, how should investors think about the growth profile of consumer down the road?

So getting back to what we'll call modest growth for now as we see how things evolve around AI and some of these capabilities, but low to mid-single-digit growth is in our line of sight.

Related to another form of competition around GenAI and sticking on the consumer side, do you think that there are learners out there that are meeting some of their more basic learning needs through GenAI, ChatGPT or other GenAI solutions? Is that maybe not impacting the bottom line but maybe impacting top of funnel?

I'll start, and you can jump in, Sarah. There may be some of that transpiring. But look, we've had over 3 million enrollments in our GenAI courses across 1,700 courses and growing. The volume has been unlike anything we've ever seen with the new technology development. And so as much as I'm sure that there are a lot of varied options for learners to get access and information, we're very pleased with the engagement on our platform and it's not slowing down at all. So that's one aspect of the answer. The other aspect of it is that I make no mistake that we are very focused on creating a variety of different types of learning experiences and micro learning is without question one of them. So that in the future, and I'm not going to go into tremendous detail, but you can expect us to be investing in micro learning experiences that do not require a learner to take a course that you can actually have a very, very high impact 3- to 5-minute learning experience on our platform depending on what your needs and desires and interest is. And so that's something that we will absolutely be releasing as well. I don't know if there's anything you want to add?

No, I think that's exactly right.

And any updates on the consumer subscription, how big is it? How many...

We did announce 100,000 subscribers 2 quarters ago, which is really exciting. But as you know, Josh, we've been very methodical about the rollout because it is a different payment model for instructors. So just being really thoughtful. We're very pleased with what we see. And when we talk about the capabilities that we're building first for the Udemy Business side of things on the Udemy Business layer, a lot of those capabilities are most applicable for the personal plan, not for the transactional purchases. So we think that it's going to continue to increase the percentage of our consumer revenue that comes from the subscription side of things.

I'm going to ask a couple more questions and then pull the audience after 1 or 2 more for me. I wanted to ask about margins, the guidance for this year. Not too long ago, we had a big positive surprise as far as a change in the content cost, the revenue share that would bring significant gross margin increase 300 basis points this year, maybe close to 9% once that rolls through. This year's EBITDA margin guidance is for expansion, but below that $300million that we're getting. So clearly, like a lot of investments there. To start, if you could level set or lay out how you think about that trade-off between growth and margins.

So we really focus on being very balanced. We are sitting at the front of a massive shift to a skill-based economy, and we're in a really good position to take advantage of that. So making sure that we're investing in the things that are going to help us capture that growth is really important. Operating profitably also very important. So we really think about it from a balance perspective. And when we announced the revenue share change and the decrease in content costs -- we try to be very clear, we are going to be investing the majority of that 300 basis points that we would be generating back into the business. We, last year, hired a Chief Product Officer for the first time ever, a Chief Marketing Officer and a Chief People Officer. We have an incredibly exciting road map and generative AI is a massive tailwind for us because we are sitting on mountains of data. We have almost 70 million learners across the globe. We have 200,000 plus courses. What we can do with that data as far as Personalized Learning and really helping organizations stay top of the skills they need is really exciting. So when we looked at this year and we were thinking about that balance, it really made sense for us to have this year as an investment year to make sure we're capturing that growth, but we're still really committed to our long-term EBITDA margin target of 15% to 20% by 2027. So what that means for us is investing this year -- you saw last year, we made, as you mentioned, significant expansion from an EBITDA perspective of 900 basis points. We will be back in bottom line expansion mode again next year.

Any questions in the audience? [indiscernible].

For your enterprise business, if you could tell us a little bit about churn retention dynamics in that business and the rough levels that you see. And when you see churn or when you see downsells from customers, what are the primary reasons for that?

We don't report the gross rotation numbers. But what we do comment on is we've been very durable and very stable through the macro on the growth side. So foundationally, we feel really good about that. And then the ARR numbers, the net dollar retention numbers are 113 for the large enterprise and 106 we talked about earlier. When we do see reductions, if you will, in license counts or whatever, it was typically as a result and still is, but to a less degree, layoffs, workforce adjustments and/or if there's budgetary concerns, short-term reductions while folks are getting their house in order, CFOs are doing what CFOs, our CFO does as well sometimes is making sure that we've got everybody lined out as far as how we want to allocate capital for the year. And then they open the first strings back up again. So very common and when you go through an economic downturn or challenges. We don't see this very often in the enterprise as a result of our ARR numbers. But if, in fact, a customer does decide to move away from us to another partner, it's for one reason and one reason only, and that's price. And we've talked about this, and I will continue to talk about it, we'll never be the low price leader. That's not our position. We're the high-value leader. All the investments we're making and the broad platform we have, the investments in AI capability, everything Sarah just talked about as far as the investments we're making this year to allow us to personalize the learning experience and transform how learners engage in the notion of upskilling and reskilling, that takes investment. And we're going to continue to invest in it, and that is not in alignment with us being the low-cost leader. So if in fact, we lose customers in the enterprise, that's why.

You're talking about some of your competitive differentiation around platform and complete learning modalities. To me, that's on-demand learning, you have leadership, immersive learning, cohort-based learning, and now you're also alluding to micro learning. Are there any other types of products from that standpoint that is still left? And how should investors think about some of those you've done through M&A?

I've talked a little bit about this in prior earnings calls that, that is an area, Josh that we have been active and will remain active with respect to potential M&A. We still sit on over $300 million in cash. So we are and will remain very active. Yes, additional learning modalities, there's a number of them, and we will continue to explore the possibilities through M&A of getting there faster through acquisition than we may get there on our own through product development. Sarah mentioned this, I believe earlier is we are very discerning on the acquisitions. Acquisitions can be difficult but with the right cultural fit from a technology standpoint, if things line up and the learning modality, we believe, is going to have high impact and then we'll strike. And we will move. We just haven't found it yet.

I was hoping to revisit some of the partnerships that you mentioned, starting with AWS, what is the key takeaway from partnership with AWS?

There's a couple. The one primary is we're now at a level of partnership with AWS to where, on a global basis, their sales reps are quoted dollar for dollar on all Udemy products and services sold through the marketplace. That is very hard to get to. We're told we're in the top 1% of their partners globally. They joined us on stage for our sales kickoff, both in Dublin, Ireland as well as in North America. And I had heard this for the first time when the executive was on stage, and that all 20,000-plus go-to-market sales and customer success account management individuals within AWS. When they onboard, they have a 3-month onboarding program. One track is just standard onboarding into the company. And the other track is they have to pass an AWS certification. All 20,000 of those employees come to Udemy to take the courses in preparing themselves to pass that certification. Every one of them. So the sales enablement that is usually one of the biggest hurdles when you do a partnership like this, to get the sales folks to a point where they actually understand the value and impact of the partner's technology. We crossed that barrier in the first 90 days with every employee they have on a global basis. So now it's about giving them the tools and resources and field alignment to make sure that it's a very easy process for them to engage our sales team to bring them in and co-sell with them where it makes sense into their customers being the premier partner for them to upskill and reskill against their technology as they deploy it into an organization. They've got 2.5 million enterprise customers. We've got 16,000, pretty easy math. There's a big opportunity there for us, and we're aligned and resourcing to take advantage of it. So yes, that's where Amazon is right now. Really happy with our team's execution coming out of last year to put us in a position to be where we are today.

Thank you so much, Greg, and Sarah. I really appreciate it.

Thank you so much. Thanks, Josh. Really appreciate you having us. Thanks, everybody.

Thanks everyone.