Udemy's Research with Indeed Highlights Upskilling Gaps Amid Financial Softness

What happened

Udemy and Indeed released joint research emphasizing a disconnect between proactive employee upskilling and employer focus on immediate job openings. This promotional move aligns with Udemy's Enterprise segment strategy to tap into corporate training demand. However, Udemy's recent financials show softness, with UB net dollar retention at 93% indicating weaker expansion and upsell challenges. The company's subscription pivot is boosting margins to 66% in Q3 2025, but consumer transactional revenue remains under pressure. Overall, this news reinforces market positioning but does not directly address key financial weaknesses.

Implication

The collaboration with Indeed reinforces Udemy's positioning in the corporate upskilling market, potentially aiding brand awareness. Investors should remain cautious, as UB net dollar retention has dropped to 93%, reflecting difficulties in upselling existing clients. Udemy's margin improvements from the subscription shift are positive, with gross margin reaching 66% in Q3 2025. However, the consumer business is transitioning to subscriptions, leading to near-term revenue pressure and uncertainty. Consequently, the news is neutral for the stock, with focus remaining on execution against key financial indicators like NDRR and subscription growth.

Thesis delta

The research announcement does not change the investment thesis; Udemy remains a HOLD. Key watch items—UB net dollar retention rebounding to ≥100% and consumer subscription traction accelerating—are unchanged, and this news does not address these core financial drivers.