Ladies and gentlemen, thank you for standing by, and welcome to Coursera's First Quarter 2022 Earnings Call. [Operator Instructions]. Now at this time, I'll turn the call over to Mr. Cam Carey, Head of Investor Relations. Mr. Carey, you may begin.

Hi, everyone, and thank you for joining our Q1 earnings conference call. With me today is Jeff Maggioncalda, Coursera's Chief Executive Officer; and Ken Hahn, our Chief Financial Officer. Following their prepared remarks, we will open the call for questions. Our press release, including financial tables, was issued after market close and is posted on our Investor Relations website located at investor.coursera.com, where this call is being simultaneously webcast and where versions of our prepared remarks and supplemental slides are available. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP measures to the most directly comparable GAAP measure can be found in today's press release and supplemental presentation, which are distributed and available to the public through our Investor Relations website. Please note that all growth percentages refer to year-over-year change, unless otherwise specified. Additionally, all statements made during this call relating to future results and events are forward-looking statements based on current expectations. These forward-looking statements include, but are not limited to, statements regarding trends and their potential impact on our industry and our business; our ecosystem, platform, content and partner relationships; our strategy and priorities; and our business model mission, opportunities, outlook and long-term financial framework. Actual results and events could differ materially from projections due to a number of risks and uncertainties discussed in our press release, SEC filings and supplemental materials. These forward-looking statements are not guarantees of future performance and plans, and investors should not place undue reliance on them. We assume no obligation to update our forward-looking statements. And with that, I'd like to turn it over to Jeff.

Thanks, Cam, and good afternoon, everyone. Today, I'm pleased to share that Coursera had a strong first quarter of 2022 as we celebrate 2 significant milestones. First, this month marks the 10-year anniversary of Andrew and Daphne's bold experiment, and it is inspiring to reflect on our evolution over the past decade. What began as a few popular computer science programs on the Internet has grown into a global learning platform where anyone anywhere has the power to transform their life through learning. For a decade, Coursera's catalog of world-class content and credentials has broadened access to educational opportunity, allowing individuals across the world to learn from anywhere. The pandemic worsened inequality across the world, but the legacy of the pandemic could do the opposite. Over the past 2 years, online learning accelerated, and we were ushered into a new world of remote and hybrid work. With online learning, anyone anywhere has more equal access to learning opportunities. And with remote work, anyone anywhere has more equal access to job opportunities. That's why we believe that the combination of online learning and remote work hold the promise of a more just world. Increasingly, learners are coming to Coursera for high-quality, affordable education that can unlock access to high-quality jobs, even if those jobs are not in their city, their state or even in their country. This brings me to the second milestone. I'm excited to report that we have surpassed more than 100 million registered learners. Coursera's #1 goal has been and always will be to serve learners. Our world-class catalog of branded content and credentials helps our learners discover, build and demonstrate job-relevant skills required by employers to address the evolution of work. As you'll hear in this quarter's highlights, and more importantly, in the slate of public announcements…

Thanks, Jeff, and good afternoon, everyone. I'm pleased to report we had a strong first quarter with results that reflect the durable demand we continue to see for high-quality online learning. In Q1, we generated total revenue of $120.4 million, which was up 36% from a year ago on the sustained strength in our Consumer and Enterprise segments. As Jeff and I have discussed, there's a global trend of both individuals and institutions increasingly turning to online learning to supply the digital skills required to compete in today's economy. For individuals, our broad catalog of job-relevant content and credentials from recognized world-class brands is helping to meet the needs of learners no matter the stage of their career. And for institutions, products like our SkillSets, Academies and LevelSets, powered by the data from millions of Coursera learners worldwide, are helping businesses, governments and campuses better understand the in-demand skills of today and where they need to invest for tomorrow. Please note that for the remainder of the call, as I review our business performance and outlook, I will discuss our non-GAAP financial measures, unless otherwise noted. Our non-GAAP adjustments remove only stock-based compensation and related payroll tax, nothing else. Gross profit was $78.2 million or 64.9% gross margin, up 58% from a year ago. This margin was nearly 9 percentage points higher than the prior year period due to the drivers we've discussed in the past several quarters. As a reminder, there are 2 components of our cost of services. First is our content costs, which vary based on both the revenue mix amongst our 3 segments as well as the content margin rate within each segment. Our Enterprise and Degrees segments accounted for 43% of our overall revenue mix this quarter, up a couple of percentage points from the…

Thanks, Ken. At Coursera, we believe that learning is the source of human progress, and we are committed to ensuring that learners everywhere have access to the highest quality education. Before we open up the call to questions, I want to highlight 2 recent initiatives. First, we announced several actions that we are taking to support learners in Ukraine amid the growing humanitarian crisis. These include partnering with the Ministry of Education and Science of Ukraine to offer Coursera for Campus for free to all Ukrainian higher education institutions and their students. To date, 7,000 learners at 95 Ukrainian academic institutions have logged over 40,000 hours of learning on Coursera. We're also making our Coursera for Refugee program available for free to nonprofits actively working to support Ukrainian refugees. We're also offering individual learners the ability to receive financial aid or scholarship waiver through the Coursera platform. Second, in March, we announced that Coursera has joined forces with the U.K. Prime Minister, Boris Johnson, and 10 other partners, including Accenture, Microsoft, Pearson, PwC and others, to deliver a GBP 20 million initiative to improve girls' access to education and employment in developing countries. This is the U.K.'s first partnership of its kind. The Girls' Education Skills Partnership will deliver high-quality skills training to around 1 million girls initially in the countries of Nigeria and Bangladesh. The initiative will focus on STEM skills needed for in-demand sectors like technology and manufacturing with Coursera providing 10,000 scholarships for our entry-level Professional Certificates at no cost. The U.K. government believes that private sector involvement will help to ensure that the training delivered corresponds to the requirements of employers, and our entry-level Professional Certificate catalog is precisely designed to help prepare these learners with no college degree or industry experience to enter digital careers. This is how leading institutions on Coursera are moving from ideas to action. Technology is one part of the solution. But it also requires institutional collaboration, bridging public and private sectors, university and industry partners and national and regional borders to meet the needs of our evolving world. Together, we are providing greater access to world-class learning and more equal opportunity for all. Together, we are moving humanity forward. And with that, let's open up the call to questions. Thank you.

[Operator Instructions]. With that, we'll take our first question this afternoon from Rishi Jaluria with RBC.

Wonderful. Wanted to start by looking at the NRR within the Enterprise segment. Obviously, Enterprise continues to show nice growth, but that NRR figure did tick down a little bit from Q4. Q4 itself was down from earlier in the year. Can you maybe help us understand some of the drivers of that number? How much of that is comps versus maybe just mix shift and going more towards government that might have a slower expansion rate? And then I've got a follow-up.

Yes. Rishi, this is Jeff. It's a few things. There's -- a little bit of it is institutional deals in Russia that we have suspended. And so that's part contributor. And then you kind of put your finger on it. The different types of enterprise deals that we have with businesses, with governments and with campuses are at different levels of maturity. So one of the things I will say is that the NRR is not the same among those 3. And I guess what I would say generally is in segments where we are earlier to market and customers are experimenting with different use cases of how to use the content on Coursera to provide the learnings that they want to provide, some are more standard and mature and more predictable. And we -- they have a problem, we deliver it, and it's pretty predictable. In others, it's a little bit more sort of experimentation, and they're trying this or trying that. Sometimes it works a little bit better, sometimes it doesn't. So I think part of what it's reflecting is the early stage of some of these markets in the enterprise space.

Great. That's really helpful. And then on the Degrees side, I just wanted to turn to looking at the students. Surprisingly, it looks like that number actually was up about 280 sequentially in spite of you shutting off a number of universities in Russia, and that was a big surprise to us. Can you maybe talk a little bit about what you're seeing within that segment outside of Russia and specifically within U.S. universities? And then maybe any insight you'd be able to share on what you expect in the coming academic year, which would fall under this fiscal year?

Yes. No problem. So it definitely is the case that we are seeing what has historically been true, which is that Degrees generally are countercyclical. When there's a really strong labor market, people will sometimes defer their expensive -- more expensive long-term education credential investments and go into the labor market and make more money in a job. We are seeing some of that, we think, in the U.S. Like you said, Russia is clearly what it is. We suspended our operations there. In other non-U.S., non-Russia markets, we're still in the earlier stages. But we've got Degrees in Latin America for a while. We just announced a couple more, and we are not quite seeing the same kind of headwinds because I think the economies and employment rates are in different sort of levels of intensity. The U.S., I will say, is exhibiting those countercyclical qualities that they have before. I mean, clearly, there's a lot of job availability, and that's showing up across the board in the U.S. across many providers and higher education institutions in the U.S.

We'll take our next question now from Josh Baer at Morgan Stanley.

I wanted to ask a couple on margins. We've sort of gotten used to seeing the Consumer segment margins coming in higher than expected, driven by the Professional Certificates mix. In the Enterprise segment, that jumped quarter-over-quarter, year-over-year. What's causing that big swing up in Enterprise segment, part 1? And part two on margins is beyond the mix of professional certifications, is there anything else that you're doing more proactively to work on the segment margins? Are you taking on more parts of the content generation process that would potentially have more favorable economics and revenue share for you?

Yes. Ken?

Josh, it's Ken. Yes, thanks a lot. Great questions. So firstly -- well, firstly, we've enjoyed this margin expansion far earlier than expected. So the trending has been really nice. And Consumer has continued to, I guess, unexpectedly though, we should start to expect it done well. The -- on the Enterprise side, it's really a lot of the same. It's consumption, which is how we measure and how we allocate the cost to our partners or their revenue, our cost. It's based on consumption. So we continue to see these higher-margin specializations continue to be more popular and hence, drive up the margin because they have a lower content cost. So really, Enterprise, to a lesser degree, the same result as the Consumer, but it's based on content usage, whereas Consumer, it's purchasing. Secondarily, on the mix and what we're doing even within Consumer, we are starting to do a few things differently. Certainly, as these certs have taken off, we've looked to do more certs. There's -- it's amazing how well it's done. But we have also started to think, based on that success, about sponsoring more of the content, helping pay. And so those are other things we do that can drive the margin up over time. And I expect we'll continue to do it. It makes it easier, lower risk for some of the partners. And for us, it's proprietary, which is not usually where we go, but proprietary content. So anyway, that's a little bit more on what we're doing there.

Got it. And then just wanted to clarify or highlight maybe some of the comments on the cash balances ending '22. I mean, with some CapEx in there, is that sort of an implicit guidance for positive operating cash flow for 2022?

It's -- to be honest, we're not trying to be exactly precise on it. What we've been saying is we burned minimal cash last year. We expect that to continue to be the case on the operating side. There is a mix, though, of still stock exercises and stock sales. We'll do some incremental investment in some of our programs that may end up on the balance sheet. So roughly, yes, I'd agree with your statement. But I just want to be clear, our intent is not to be that precise. We have 800 -- $780 million in the bank, and we have minimal cash burn. We're solving for growth. But as a result, in seeing -- with the growth we're seeing and some of the leverage we're seeing, yes, we expect the cash burn to be minimal on the OpEx side. It's not an immediate focus, but that's the result we're seeing.

We go next now to Terry Tillman at Truist Securities.

Yes. Jeff and Ken, congrats on the Consumer and Enterprise strength. And just all the color on this call, there's a lot of detail, really much appreciated. I have two questions. The first one actually has two parts, and maybe it's for you, Jeff. Anything you can call out in terms of certificate strength that's like really kind of surprising you and outlier oriented? And then the second part of that first question is just where are we with Coursera Plus? And any more kind of quantification on the kind of success you're having? And then I have a follow-up for Ken.

Yes. Really quickly on the certificate strength, it is, as we've talked about, a major factor that's been driving good performance of Consumer segment revenue growth. Part of that is good conversion characteristics. It looks like people who are thinking about switching careers have a little bit more intent to not just watch a 10-minute video but to really learn skills to get in a new job, and they'd like to have a credential that they can show to an employer that says, "Hey, I don't have a college degree, I don't have any experience in this -- prior experience in this industry, but I completed this course of study. I've learned the skills over the course of maybe 4 or 5 courses with the Professional Certificate. I've got the certificate that says I've demonstrated my skills." Increasingly, we have projects built into them where there's a portfolio of work that someone can show to land that job. And I think that those learners are more likely to buy and more likely to retain. And so part of what we're seeing is a margin enhancement because as we talked about, we invest a bit more in producing these. We've seen better conversion rates. We've been seeing better retention rates. On the question of Coursera Plus, I think we continue to see interest in that as people are maybe thinking about switching careers. They're not sure what career they want to get into, but they just know they want more flexibility in their job and they want higher pay. They might explore 3 different jobs or careers. And so that would be a consumption across multiple Professional Certificates, for which Coursera Plus really helps. So yes, we're seeing that. Are there any particular outliers? I mean, obviously, Google IT Support Certificate was the first back in January of 2018. They have followed that up with 3 additional certs in the first quarter of last year. They continue collectively to do really well, but we are really excited about the number of jobs for which we now have Professional Certificates. And these Professional Certificates have been increased. We mentioned HubSpot. But the number of different brands and different domains that are helping prepare someone who wants to switch jobs to a greater range of possible career options, all of which are digital jobs that pay well, they don't require a college degree, they don't require prior experience. And increasingly, the skills can be learned online, and the jobs can increasingly be done online. So we're just really leaning into these sector tailwinds that we don't think are going to abate anytime soon. All right. And then maybe one for Ken, you said?

Yes. Ken, I'm going to ask you the real hard question. In terms of the net revenue retention, there was a question on it. I think, Jeff, maybe you talked about it. Look, there's actually 3 tails to that story in terms of the 3 different parts of the Enterprise business, and they do have varying kind of retention rates and just different kind of maturity dynamics. But as we look through the rest of the year, should we expect maybe kind of stability? Is that what you're modeling for NRR? Or could it drift a little lower or maybe just a little higher? Just any color there would be helpful.

Yes. Sorry, firstly, it's something difficult to forecast, but we've looked at the numbers. I'd expect it around where it is now for the rest of the year. Most importantly, that mix that Jeff was talking about in the area that's newer, hence, most volatile, almost by definition, that's growing quite rapidly. And so my guess is we'll stay right around these levels. The other businesses, as we start to grow the other businesses on a relative basis, I think we'll start to see some expansion there. But I'd look for that a year out. I would tag on, however, to the conversation around Coursera Plus just to give you a little bit more data. We talked about it being 25% of Consumer revenue. A couple of quarters ago, I think, is when we were talking about that. And at the time, we said, "Look, we're not focused. We're happy with the result. It's done a lot for visibility around the business and really utility for the consumer, if you think about the economics around that pricing." And as Jeff mentioned, it's been driven a lot by people wanting to see multiple career-related specializations. And so that has continued to grow. We're seeing north of 30% there now of Consumer revenue. So again, nice from a stability standpoint and visibility standpoint on the Consumer segment. We're not forecasting that going up or down necessarily, but we're really very, very pleased with that result.

Yes. One other thing I'll just add, Terry, that might not be obvious to folks. There's obviously a lot of content out there, that's pretty obvious. The vast majority is short-form content created by lots of different people. It turns out, it takes a lot of money to build a full college degree that this is a 2-year program. It also is a considerable investment to build a 5-course Professional Certificate. That's not short form. That's not something that a bunch of individuals will sort of piece together. There's a really nice sort of, I think, combined effect of long-form learning to get into a new career that creates higher monetization, longer persistence. And also, it's a more distinct type of content, and the credential matters because you're trying to get into a job. That's where the brands matter. So another reason we really like these Professional Certificates is they're pretty distinctive. They're not the only things in the world that kind of are bigger than a 30-minute video and shorter than a college degree, but we're seeing a really nice big segment of long-form credential branded learning for career advancement that we're leaning into pretty hard.

We'll go next now to Stephen Sheldon with William Blair.

So the consistency of registered learner growth, I think, has been pretty notable. So it would be great to get some more detail on maybe 2 things. One, what's kind of working on the marketing side to support this and how you're finding learners or, I guess, maybe it's more that they're finding you? And then two, anything notable about the location and demographics of recent learner additions? Or has it been pretty broad-based?

Yes. I think that with respect to registered learner growth, it's been interesting to watch some of the other big announcements during this earnings season and those are -- those that are more subject to kind of stay-at-home activities, seeing some headwinds as I think the pandemic gets under more control and people go outside. And they're doing relatively fewer things online than they were doing during the midst of the lockdown. We are seeing some of the same things, too. I mean, I think that to some degree, the Consumer revenue growth does not reflect a lot more people coming to Coursera than, say, during the pandemic. I think it shows the kinds of things that are coming from -- the propensity to pay, the propensity to persist are higher. That being said, what seems to be working has been what's working in the past. We do not spend very much money on paid marketing. We never have. Now you look at the content fees, and the reason we pay the content fees is we have these great partners with great brands who are investing money and building courses and putting it out there. The videos can be seen by individuals for free. That free high-quality content, just watching the videos, not the credentials, draws a lot of people to Coursera. And then also, the URLs, the authors of this content, have very high domain authority on search engines. And so when they back link to their courses, we enjoy some of that benefit. And so I would say that SEO and other organic means of attracting learners continues to stay quite strong because we don't really want to be spending too many dollars in the paid media business because it's pretty tough out there to be buying customers these days. You asked about the location. I don't think that there's really any major tilt in any region. Ken, you see anything on that?

Exactly. It's been fairly even across the board. I think the one thing I'd highlight is India and Asia Pac have been growing a little bit faster than the other 3, but it's been relatively evenly distributed, the overall growth.

Got it. Yes, that's really helpful. And then just as a follow-up, I just would love an update on where you guys are at in terms of expanding the availability of local language content on the platform.

Yes. So there's a few different ways that we do that. The easiest -- the least expensive, highest volume way to do it is with machine learning. And there are certain language pairs that are easier to translate with machines. And there are certain domains that are easier to translate as well, where the language is more commonly used by people that the big cloud companies use to train all their algorithms. What we are mostly doing is creating subtitled language pairs using machine learning, and that is good and getting better. We have like 5,000 -- no, maybe 3,000 in Arabic. Most of those have been done through machines on the subtitle side. There are often cases where big institutional customers want the full course to be translated with a high degree of accuracy. In those cases, we'll use human translation services of the full course. That -- and that includes assessments and everything else. Those are a lot more expensive. I don't know that, that's ever going to become a really high scale activity for us. I think what you're going to find and what we're counting on is the machines get better and better and better, and the humans become less and less important in this process. I will say, and this is as a strategic matter, the core part of our catalog with all these great global brands, most of whom teach in English, we're not going to try to replicate every major title natively in every language. That -- we just don't think that is very cost-effective. But also, it really forfeits the ability on quality and brand to do that. We'd much rather do translations of these big global brands and then supplement it with shorter-form native language content. And so what we've been doing more and more of that's working quite well is the big content, that longer-form branded content, we'll translate, subtitles. And then we'll pair it with native language, say, 30- to 60-minute hands-on projects by a subject matter expert in region who can crank out the local context with local tools and the local language, local businesses, et cetera. And we could do that at dramatically lower cost. And so it's a bit of a bifurcated language strategy that we'll be taking on that counts a lot on machines to do better and better at this. So we feel pretty good about where we're going. We do think that these techniques will open up larger and larger markets with higher quality and low cost.

We'll go next now to Brian Peterson with Raymond James.

So Jeff, there were a lot of partnerships that you guys announced this quarter, and the Michigan one is near and dear to my heart. But curious on, I guess, the breadth of the number of, I guess, university partnerships that you may look at for Degrees. And how has that changed versus a year or 2 ago? And I know you expanded or enhanced the Canvas partnership there. What do you think the impact could be of that enhanced data ingestion?

Yes. It's interesting. But at a really big level, Brian, the basic idea, we made a strategic bet well before I got here 5 years ago. It was really Daphne and Andrew at the very beginning. When they launched Coursera, they launched Coursera with 5 universities. From its inception, Coursera has been an institutional play, and they believe that institutions have a number of things that they do well. One is, of course, having the resources and the brand to create high-quality content. But we're also finding obviously that institutions are a great way to reach a lot of people. So the kinds of -- so we have lots of institutional partnerships. On the content side, it's the brands that -- and the institutions that create the content. On the distribution side, it is working with governments and also working at multiple levels. So we mentioned the Ministry of Education in Ukraine is connecting us with each academic institution in Ukraine that then connects us with learners who have been displaced in Ukraine. And then you can imagine which we see, let's say, in the Philippines, where we're working with government agencies who coordinate with businesses who coordinate with campuses to make sure that the educational policies and skill development is producing graduates that the businesses really want. So -- and what's happening now, what we're sort of seeing is more and more institutions are coming to us because they want to play in some part of this institutional ecosystem. On the authoring side, with these Professional Certificates, you can imagine with the great resignation and the interest in especially tech companies of training up developers and certifying them and also being known in multiple societies as job creators, they want to be in the education business. Of course, businesses who are helping upskill their employees are seeing a great competitive advantage to upskilling. And then campuses are like, "Yes, we're in the education business, too, and we got to move online." So it's really a wide range of reasons why institutions are partnering with us. You mentioned the Degree partnerships. We are seeing more interest in Degrees more nationally. I think the U.S. was ahead of everybody else to some degree with online -- traditional online program managers. I think other countries post-pandemic are starting to see, "Wow, we should be offering online degrees as well." In India, there's a lot of regulatory support for creating online degree programs. And so we're seeing some tailwinds there. Canvas is a different kind of sort of institutional relationship where we're really looking at the ability to more easily allow institutions to get content that they created in one system to get it into our system. And so that's really more about lower cost and faster hosting -- publishing of content on Coursera because it was created on one platform that we can just ingest it more quickly and get it available to learners on the Coursera platform.

Understood. And maybe just a follow-up there on Coursera for Government. You mentioned some more large wins this quarter. I'm curious, how many of those like large or, let's call it, 6-figure learners are in the platform? Are those -- I guess, are we seeing more of these large deals like go up in the pipeline? I'm just curious to get your thoughts there.

Yes. I do think that part of what's happening -- I mean, we could talk about institutions kind of one institution at a time. With certain universities, the university will do a deal with us, and each school has a different dean. And they'll sometimes start with one school. And like a business school will say, "Hey, I need to teach my business school students Java and computer science." Well, the professors over the other school aren't really available to teach those students. And so we're seeing a lot of multidisciplinary applications within the university. On the government side, what's interesting is you take a set of institutions like academic institutions, and those things are a system, a higher education system. And so what we're starting to see is not only institutional leverage and change, but system-level leverage and change, where a Ministry of Education can say, "Hey, I want to try to upgrade 50 institutions at once. I'm going to change policy. I'm going to help support this financially, and I want to make sure that my entire higher ed system is starting to avail themselves of the kinds of workforce development and other job-related skilling that you guys can do online that maybe my system of higher education would take longer to accomplish." And that systems-level change is where we're seeing the MOEs, the Ministers of Education, come more into the picture. And yes, we are -- this is -- like this is a pretty interesting phenomenon. And it really -- I think we are seeing an unrelenting pace of acceleration in digitization in the world. And institutions, including institutions that are responsible for systems of institutions, are saying "We need to move more quickly to be responsive to this global change." And we are -- again, we're leaning right into that.

We go next now to Eric Sheridan with Goldman Sachs.

Maybe I wanted to follow up on the conversation from last quarter where you talked about wanting to lean in against investments for the longer term because you continue to see the opportunity set continue to expand, and you talked a lot about the learner base and how that creates a flywheel effect. Can we get an update on how you're thinking about balancing investments versus harvesting for profitability against the growth opportunity for the long term? We noticed that continues to come up as a pretty consistent investor debate broadly across all of technology. But I wanted to bring it back to what we talked about last quarter thematically.

Yes. Sure, Eric. And I'll start kind of with the way we're thinking about it. And then, Ken, you can maybe just go through what that might imply for some of the ratios. But we are continuing to invest in the longer term. Ken and I have a very like mind, as does the Board. We just met with the Board yesterday, I think. We had a Board meeting. We all want to make sure that we're pacing ourselves for growth. I mean, we want to invest when we know that there's going to be a reasonable time frame and a reasonable certainty of path on that growth. We are growing well. So we're continuing to invest fairly aggressively. You look at our R&D as a percentage of revenue, you compare it with a lot of other folks, we're not just a content company. Like we don't think that content is going to be the way that you win. It's content. It's credentials. It's content from big brands. And it's also a lot of technology that supports sort of institutional-scale administration, measurement of skills, benchmarking of skills and things like that. We are -- Brian mentioned Michigan. We are starting to lean into some new pedagogies associated with VR and XR technologies. Of course, we're investing in sales force because we see a big opportunity across many regions and business and government and campus. So that's a pretty big investment there. But I would say, maybe I'll turn it over to Ken, that we're trying to invest in those areas of most growth. Some of them like this XR were a little bit ahead, and it might not pay off for a while. We think we can afford to do this. And Ken, maybe you could just talk a little bit about what that might mean for some of the operating margins and percentage of revenue as we go through the year.

Sure. No. And I'll do -- because we never stop reminding on how we think about and how we manage the company for profitability. It's based on an EBITDA margin for the year. And so we continue to evaluate our investment opportunities during the year. We spend more or less in a given quarter. And we tend to update that. As you know and as we exhibited last year, but it was true even when we were a private company, we tend to, throughout the year, make adjustments to get to the final goal. As we look at some of the opportunity, and to Jeff's point, I think the most important thing is we don't want to constrain the growth. But we're certainly building the business to scale. It's incredibly important. As Jeff said, we're in complete alignment in how to think about that, as is the Board. And we're getting to a point where the scale is going to start to create margin expansion whether we want it or not. And so I do think we're going to see more scaling as we go into next year, and we'd consider this year, if we continue to overachieve as we did in the past. But it's -- we don't want to commit to any of that on the front end because if there's growth opportunity there where we can have meaningful competitive advantage and start to win these markets, we'll continue to invest. Again, expect improvement no matter what, but it's just the rate of improvement that we're going to monitor and really maximize around the growth.

And ladies and gentlemen, we have time for one further question this afternoon. And that question will come from Ryan MacDonald with Needham.

Congrats on a great quarter. Impressive to look at the reiteration of the outlook despite a two point headwind to growth given the macro environment here. I'd be curious, maybe for Ken as well, to understand how you think about the 3 segments of growth. I believe last quarter, we talked about sort of 20%, 50% and 20% across the 3 segments. Obviously, some strong outperformance on the Consumer side. But maybe you can perhaps give us an update and if there's any updated thoughts on how you think of that segment to growth rate. And perhaps maybe what segments are expected to feel the brunt of that headwind?

Sure. Well, relevant question. As we rolled out some guidance, to try to be helpful for everybody as they put models together for the year so that you were in our shoes and knew how you thought about our view on the different segments, one of the things I think we emphasized was we didn't expect to have ongoing 3-segment guidance. But we can still give you a little color because it's been consistent with what we have expected. We've continued to do great on the Consumer side. It's kind of the standout in the space, frankly. Enterprise continues to be a robust market. We're really excited about each of the 3 subverticals and what they're doing there. Degrees has not been as strong from a growth perspective, but we told you that was going to be the case last quarter. So nothing's changed. What we said on the Degrees side specifically is that the first two quarters, we expect it to be slower and then approximately a 20% growth rate for the year, plus or minus. Again, we won't reiterate guidance. But I think in the near term, it will be shorter. But that's how I think we're feeling similar to where we were three months ago. It's early in the year.

And Mr. MacDonald, did you have anything further, sir? We lost your audio.

So we can wrap up the Q&A for today. Great. So a replay of the webcast will be available on our Investor Relations website, along with the transcript in the next 24 hours. We appreciate you joining us today.

And again, ladies and gentlemen, thank you for joining us, and that will conclude today's Coursera's First Quarter 2022 Earnings Conference Call. You may now disconnect.