 Udemy reported its 2Q24 results, in line with the guidance. Revenue increased by 9% YoY to $194.4mn, including a 2% negative effect from FX changes. The Enterprise segment’s revenue grew by 19% YoY to $120.6mn, while the Consumer segment’s revenue reached $73.8mn, down 4% YoY in 2Q24, also impacted by a 3% negative effect from FX change. Udemy increased the number of Enterprise customers by 11%YoY to 16,595 in 2Q24, and the Annual Recurring Revenue rose 17% YoY to $482.6mn. The Enterprise segment’s gross profit was $87.2mn, up 29% YoY, with a gross margin of 72%, compared to 67% a year ago. In 1H24, Enterprise segment revenue reached $238.2mn, up 21% YoY and gross profit was $171.9mn, up 32% YoY. The Consumer segment saw a 4% decline in Monthly Average Buyers falling to 1.29mn, generating $73.8mn revenue, a 4% decrease. The segment’s gross profit remained flat YoY at $41.5mn, with a gross margin of 56%. In 1H24, the consumer segment reported $153mn in revenue, down 3% YoY, and gross profit of $85.7mn, down 1% YoY. Udemy also reported an unrealized loss of $10.3mn on strategic investments in 2Q24. The company stated its focus on the highest growth enterprise segment to drive accelerated profitability. Strategic initiatives will include reallocating resources towards enterprise companies with over 1,000 employees, increasing penetration of the existing large customer base, growing strategic partnerships, and optimizing costs by shifting resources to low-cost geographies, reducing organizational layers, and enhancing the operations of the large customer cohort. The company added new or expanded existing relationships with customers such as Amazon, Crayola, Devoteam, K Bank, Kokusai Electric, Abunayyan Group, Miro, NTT Data UK Limited, Seagate Technology, Societe Generale and others. Udemy expects to achieve cost savings of approximately $25mn and provides guidance for Adjusted EBITDA in the range of $130-150mn for FY2026.  Udemy has provided revenue guidance of $191-194mn for 3Q24 and $776-782mn for FY24. The company expects to achieve an Adjusted EBITDA margin of 200-300b.p. in 3Q and 250-350b.p. in FY24. The revenue forecast for FY24 is $10mn lower than our forecast at the top end of the range. The number of shares decreased by 2.2% QoQ but remains 3.3% higher than a year ago. Stock-based compensation in 2Q24 increased by 7% compared to 1Q24 and was 5% higher than the 2Q23 figure. The consumer segment remains a primary concern, as the company’s strategic refocus involves limited efforts to enhance consumer engagement. However, the company may achieve its profitability targets sooner if the Enterprise segment drives both top and bottom-line growth. We updated our model, adjusting growth rates and costs to revenue ratios. We changed our 12-month price target to $12.67 from $13.76 based on 154mn shares (basic for FY24, according to the company). Recent high market volatility contributed to a decline in the stock price. We maintain a Buy rating for the stock.