Ladies and gentlemen, thank you for standing by and welcome to Coursera's Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode and please be advised that this call is being recorded. After the speakers prepared remarks, there will be a question and answer session. [Operator Instructions] I'd like to turn the call over to Cam Carey, Head of Investor Relations. Mr. Carey, you may begin.

Hi everyone, and thank you for joining our Q4 and full year 2023 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 closing as 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 their 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, 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 and beliefs. These forward-looking statements include, but are not limited to, statements regarding the potential impacts of trends affecting our industry and business, and factors affecting the same, the anticipated benefits and impact of our strategic assets and platform advantages, our ecosystem, platform, content, and partner relationships, our anticipated plans and the anticipated advantages and benefits thereof, our strategy and priorities, our share repurchase program and cash and capital allocation, and our vision, business model mission, opportunities, outlook, financial business and otherwise, and future intentions. Actual results and events could differ materially from those expressed or implied in these forward-looking statements due to a number of risks and uncertainties, including those discussed in our press release, SEC filings, and supplemental materials. These forward-looking statements are not guarantees of future performance or plans, and investors should not place undue reliance on them. We assume no obligation to update our forward-looking statements is accepted as required by law. And with that, I'd like to turn it over to Jeff.

Thanks, Cam and welcome everyone. We appreciate you joining us today. I'm pleased to share that our fourth quarter marked a strong finish to a year of continued progress. We welcome 24 million new learners, the most since 2020, growing our global learner base to more than 140 million. We expanded our educator partnerships to over 325 leading universities and companies. We grew revenue 21% over the prior year, with total annual revenue of $636 million, and we achieved this growth with increased leverage, including our first positive adjusted EBITDA quarter, delivering on our commitment to build a platform and business model that scales. I remain encouraged by our momentum and am increasingly confident in our vision for the future of higher education. So let's jump in, starting with the long-term trends that are driving our business. The first trend is digital transformation. For many years, the combined forces of technology, globalization, and automation have accelerated the transformation of every institution in our society. Last year, the sweeping rise of Generative AI provided a glimpse into how profoundly this new general-purpose technology could reshape how we live, learn, and work. This year, organizations will begin to make the shift from experimentation to implementation, but leaders are still grappling with how to make this leap. A new report by Boston Consulting Group surveyed over 1,400 C-suite executives in 50 markets, and found that nearly 90% of executives rank AI and Generative AI as one of their top three tech priorities for 2024. Despite the priority, two-thirds of these execs are either ambivalent or outright dissatisfied with their organization's progress on AI so far, citing three primary reasons. First, 62% of the execs cited a lack of talent and skills. Second, 47% cited an unclear AI and Generative AI roadmap and investment…

Thank you, Jeff, and good afternoon, everyone. We are pleased to report another strong quarter, marked by the growing prominence of our platform for millions of learners around the world, as well as the differentiated value of our focus on high-quality branded credentials. Over the past year, we've continued to enjoy the benefits of our multi-sided platform, including exposure to multiple growth lepers, including the needs of individuals, businesses, governments, and campuses. A common set of assets, with the ability to leverage our content engine, data, marketing tools, and more across our segments, and a broad global lens to better understand and navigate the trends reshaping higher education. In Q4, we generated total revenue of $168.9 million, which is up 19% from a year ago. Growth is driven by double-digit increases across our three segments, in particular, sustained strength in our consumer segment results. Please note that for the remainder of the call, as I review our Business Performance Network, I will discuss our non-gap financial measures unless otherwise noted. Additionally, and for the final time, I would like to remind you that our 2023 results, particularly the year-over-year comparisons of gross profit and operating expenses, reflect the shift of expenses in income statement line items, associated with our contract extension with our largest industry partner that took effect at the beginning of 2023. We've discussed the shift extensively in our prior earnings calls this year and expect the year-over-year comparisons to largely normalize next quarter and for all of 2024. Removing the noise from the shift in P&L geography, we drove strong bottom-line EBITDA performance on a year-over-year basis. In 2023, cost of revenue increased by 11 points as a percentage revenue, while total OpEx decreased 17 points compared to the prior year. I continue to be pleased with…

Thanks, Ken. I want to close today's remarks by highlighting a recent recognition by the World Economic Forum. The World Economic Forum believes that skill and talent shortages are one of the most critical challenges facing society today. It impedes business growth, timbers economic prosperity, and inhibits individuals from realizing their full potential. In January, their Insight Report on Putting Skills First recognized multiple organizations, including several of our educator partners and customers like IBM, PWC, and Sanofi, for their innovative efforts to resolve labor shortages, solve the skills gap, and better equip workers for the jobs of tomorrow. I'm proud to share that Coursera's Credit Recommendation Initiative for our professional certificates and pathway degrees was chosen as a government and education sector lighthouse this year. The report highlights how our efforts are bridging the divide between traditional and non-traditional learning pathways. Our collaboration with industry partners fosters education that is accessible, affordable, and aligned with the evolving labor market needs. And with a growing number of credit recommendations by ACE and ECTS, we have respected third-party support that furthers our ability to extend the reach and depth of the integration use cases we are seeing with traditional academic institutions and systems of higher education. This is another validation of how our business strategy remains deeply intertwined with our founding mission. And I find it inspiring to see members of the Coursera Learning Ecosystem recognized for the important role that they play in enabling the future workforce, addressing skill shortages, transforming the global economy, and equipping the next generation with the education and opportunities they need to succeed in a rapidly evolving digital world. Now, let's open the call for questions. Thank you.

Thank you. [Operator Instructions] Our first question comes from the line of Josh Baer with Morgan Stanley. Josh, your line is now open.

Great. Thanks for the question and congrats on a good finish to the year and a strong guide. I wanted to ask on marketing spend and marketing efficiency. The sales and marketing expense declined year-over-year versus a really strong revenue growth, and that's been the theme this year. So I was hoping you could dig in a little on marketing spend, just as your products, your certificates, catalog of offerings expand, are you spending more or less on a dollar basis? And then how has the efficiency of that spend changed?

Sure, Josh. This is Ken, of course. So two quick things. So yes, one of the things that happened year-over-year and we continue to talk about, and this gets to be the last time we do that, is we had a large partner that was spending, we were spending marketing dollars, their marketing dollars, which helped. And then in their absence have been spending some of our own online. There was a shift in the line items between cost of sales and sales and marketing. So that's a portion of it, but the more fundamental answer to your question, which is important, is we are seeing greater efficiency and we've been able to deploy more marketing spend to drive some of that consumer growth in a highly profitable fashion. So I think you'll see our absolute dollar spend continue go up with marketing because I see that trajectory continuing it's good business.

Great. And if I could just add one for Jeff. Over the last year, there's been a lot of changes with degree competitors, a couple exiting their businesses and others navigating some other challenges. I'm just wondering how all of that evolving competitive landscape has impacted Coursera's degree business and outlook. Thanks.

Yes, thanks, Josh. I would say it clearly reflects a pretty difficult environment in North America to be in the business of providing college degrees. I mean, the sentiment in America has gone pretty negative, especially among elite degrees. Labor markets remain tight and where there's often been historically counter cyclicality between degrees and labor market. I think we're seeing the same thing. You're right. Our competitors have faced very, I mean, to say headwinds is an understatement. I think that partly explains why it's taking us a bit of time to crack this pathway degrees opportunity. But we really do believe that there is a new need for working adults to get new skills and distinguish themselves with credentials like professional certificates and college degrees. And the traditional college degree could be improved dramatically by this new pathway degrees opportunity. So I'd say that we are facing a lot of the same headwinds as others have. And we have something pretty distinctively different and more advantageous that we're still trying to figure out, frankly, how to nail down and market appropriately the right degree to the right students and educate people on what degree pathways are. But what's kind of cool is when we find individuals who are in professional certificates where they understand that there's a degree pathway, we see retention and satisfaction to actually be higher. And to your question around marketing efficiency, we think that marketing into these distinct of valuable professional certificates could improve as people realize that the value of a professional certificate can extend beyond the certificate to a college degree that you could earn, not only more flexibly, but more affordably, because those credits that you're buying on Coursera can count as credit towards the college degree. So we think it's a pretty tough environment in the U.S., and we've got something pretty different, and we feel good about our long-term prospects there.

Great, thank you.

Thank you. Your next question comes from the line of Stephen Sheldon with William Blair. Stephen, your line is not open.

Hey, thanks, and a lot of encouraging updates here. But first of all, for me, just thinking about more about Coursera for Business, it sounds like companies are going to need a lot of support and hand-holding as they try to develop AI skills across the organization. But it's also coming at a time when learning and development budgets are under pressure. So from a timing perspective, when you think of fear about getting left behind on AI skills development at the organizational level, it starts to overpower the cost containment efforts they put in place. It seems, and with the guidance that you put out there for enterprise, it seems like you may not be assuming much in the 2024 guidance. So you think it's something that they could start to move the demand needle later this year, 2025, 2026, I guess. How are you thinking about it?

Stephen, this is Jeff. Thanks. I think you're spot on, and it's an open question for sure. Will this recognition turn into reality in 2024? As you mentioned, it's not built into the model. The way I see this from my perspective is that the evolution of general AI in businesses is going to happen in certain phases. And the way I like to think about it is, phase one is kind of conversation. It was kind of 2023 was a lot about, oh, look at chat GPT, this is amazing. What's going to happen? It's going to take over the world, blah, blah, blah, blah. That is giving way to a phase two, which is experimentation in a lot of companies. A lot of companies are moving into that, but as I said in the script, 66% of execs are dissatisfied with the progress that they're making, and BCG puts 90% of companies in that category of being observers, just kind of playing around, but not really doing anything. I think that the next phase is going to be what I call separation. Certain companies are going to actually figure out how to unlock the productivity and the innovation that comes from this, and a bunch of other companies will not. That will then lead, I think, to a next phase, which is recognition. Recognition that the leaders are pulling away from the laggards, and then there's going to be a scramble that happens where companies say, what's happening? Why am I losing? Why am I not getting kind of leverage that these other companies are, and then they're going to try to pile in and catch up? Now, I might be wrong, and I don't know the timing of it, but one of the things we're dealing with here is institutions and individuals who are frankly overwhelmed by how fast things are changing, and how much certainty exists in so many facets of the business. But as the leaders pave the way, I think there will be sort of pathways and roadmaps to say, this is what you're supposed to do to figure this out, and I feel pretty confident that learning and training is going to be a major part of what separates the leaders from the laggards, and it might be a matter of time, but I see this as almost inevitable. I mean, I just think scaling is going to be a really important part of taking advantage of this new technology.

Very helpful. Thank you. And then there's just a follow-up on the consumer segment. I guess I wanted to ask a little bit about gross margins there. You've seen it. It looks like it stepped up pretty nicely sequentially over the last two quarters, so it's kind of the second half of the year. I know year-to-year comps get a little tricky with the things that you talked about, Ken, and I've been talking about last year, but just generally, how are you thinking about gross margins, I guess, on the consumer side as we think about 2024 and going forward?

Sure, Stephen. One of the things that's happened there, the biggest reason for that more recent improvement, we're not forecasting that into the mix necessarily going forward, but we have seen a shift towards some of the lower payout degrees where we've worked with our partners and provided funding. It coincides with our change in free cash flow definition, by the way, because we're hopeful that we're going to do more of that going forward, where we fund some of the content, and as a result, we get higher margin business as well as proprietary great content, which we like, as you know, most of our content is not proprietary. People tend not to multi-source. We're the biggest platform and the biggest channel, but when we can get it for the cost of funding, and we're also, by the way, figuring out quickly how to produce that content much more cheaply. So it's a great thing for us. The more we do of it, I'll do those deals all day long, but that's the primary reason. So a couple of our big, almost everybody's on a 50-50 rev share, but there's a few where we get better terms because we've funded on the front end, and as a result, get paid back. So you see a little bit of a shift that in Q3, Q4. We'd like to rinse and repeat, and we'll continue to do that where we get the opportunity. It's a great payback for Coursera.

Great. Thank you.

Thank you. And your next question comes from the line of Jeff Silber with BMO Capital Markets. Jeff, your line is open.

Thanks so much. I was intrigued when you talked about the partnership you're having with the New York State Department of Labor. Are there any other state thinking of doing what you're doing there? It sounds like a really interesting initiative.

Yes, thanks, Jeff. We are certainly talking to many states about this. And if you just read, obviously, if you read the news and you hear what's happening in terms of perceptions of college, the ROI of buying a college degree, state funding of state schools, and also the need for services for big portions of the population that are being displaced and left behind, this kind of a program that says, look, we'll put something at scale and efficient to people who need upskilling. And we will also create pathways to make more relevant and affordable the degrees that are being offered, especially for state institutions. We're seeing a lot of interest. And by the way, it's not just in the U.S. In Kazakhstan, I think I might have mentioned a few quarters ago, we see national governments buying Coursera for campus licenses and giving them to public and private universities throughout the country. We also mentioned the University of Texas system, which is not yet tied up with the Department of Labor there. But you can see state by state, sometimes with educational systems, sometimes with the government, oftentimes in collaboration, putting together these systems. What I think is really, I mean, there's a lot of things exciting about it, but one of the things that's really great is there's been a real challenge. You talk to almost anybody in government who recognizes that higher education systems are not fully meeting the needs of either students or employers. And then you say, well, how do you help an entire system adapt quickly to the new needs of employers and the new needs of students? Educational institutions are not highly adaptive, but let's just not built that way. Being able to bring in industry certificates via a credit recommendation system with an existing entity like an ACP, ACE or an ECTS, or we're working in Saudi Arabia, we're working UAE, we're working in India, country after country after country is working on this pattern. And I think it's going to be in India, for example, if something called the National Skills Qualification Framework, which under the new education policy, the NEP, NASCOM is the designated body that actually does it, the IT accreditation to see if it is the standard of the National Skills Qualification Framework. And then the Indian policy has something called ABC, which is the Academic Bank of Credit, to make college credits mobile for a doubling, what they expect to be a doubling of the number of people in college in India from 35 million to 70 million. So this is something that's happening well beyond New York, well beyond states in America. I believe this is going to be a global phenomenon.

Okay, that's really helpful. And my second question, I guess it has to do with the change in definition [indiscernible]. You talked about, and I'm just reading from your remarks, in certain arrangements, we will help fund the production of courses and credentials in exchange for more attractive economics, as well as exclusivity on your platform. How common is it, what segments are this in, and should we expect gross margins to potentially go up as you move towards more of these arrangements?

Hi, Jeff. This is Ken Hahn, as you know. So, yes, we are starting to see a more opportunity there with some of our partners. A lot of it has been on the tech side, and it's highly attractive content. It's content that's our bread and butter. And so we do seek to do more of those as our partners, certain partners, appreciate doing the relationship. If those continue to increase as a percentage total, obviously they'll drive the margin higher. And, in some instances, these are 70% or 80% , and some of them, it's pure margin. It depends on the individual relationship and how much we're funding and the proprietary. I wouldn't bake anything in from an increased standpoint, but we are seeing more interest. And again, back to the free cash flow comment, that's exactly what that is, is us setting aside funds. So we're excited to do as many of those as our partners want to. We don't need to. If we do, it'll have a salutary effect on the gross margins. And again, we'll do those deals all day long.

And I would add, I mentioned in the script the platform certification from ACE. We see this fundamental pattern around these pathway degrees happening, state by state, around countries. And we know that working with institutions is a big part of that. We are trying to institutionalize the know-how. The know-how of what does the professional certificate look like? Which ones do you want? Who do you want to get them from? What's the basic structure of these things? How do you build them? I am seeing, we are seeing now, the ability to use Generative AI tools to produce these certificates at the same quality level, much more quickly and less expensively. But there's a lot of know-how that's required to do that. There's know-how in the people, the process of the tools, and also the underlying platform, which ACE has done a review and said, look, this platform has capabilities to protect academic integrity and ensure certain levels of rigor. So institutionalizing that know-how, I think, will give us certain advantages in terms of competitive advantages, as well as scale advantages that Ken's talking about that will cause us to want to lean into this more and more.

Okay, really helpful. Thanks so much.

Sure.

Thank you. Your next question comes from the line of Rishi Jaluria with RBC Capital Markets. Rishi, your line is now open.

Wonderful. Thanks so much for taking my question. It's nice to see continued strength in the business and the crossover to precast for positives. I want to maybe go back to thinking about the enterprise side, because we're now starting to see the first signs of job disruption or maybe even potential job losses as a result of AI. It still feels like enterprises are not taking reskilling and upskilling as seriously as they need to. Maybe asking the kind of same question in a different way. What do you have in your power to kind of make that message resonate deeper within actual enterprises that there is a sense of urgency around this, given it's going to start with jobs, but it's probably going to be entire industries that will get disrupted as a result of this? And then I've got a quick follow-up.

Yes, so Rishi, I think you're on to it. I think there is urgency. I mean, I think you look out there, everyone's talking about it. Everyone is doing something. I think there's not clarity. The executives don't really know what to do. On this question of impact on labor market, over a long period of time, we have tried to position ourselves in terms of our business model structure. We want to make sure that we can serve institutions who need to reskill and upscale their employees, but we also want to upskill and reskill individuals. There's this question of separation that you're sort of identifying, which is some companies are going to say, we don't need 1,000, 2,000, 5,000 employees that are currently with us today. So what? Reskilling is not really going to be our problem. We want to reskill the people who stay at our company, not the people who separate from our company. I think there's going to be kind of two main types of tailwinds that are going to hit us, I think. But again, this is really hard for any of us to really know. I think there is going to be part which is serving institutions who will invest in their current and future employees who say, if I really want to improve the innovation and the quality of services I can deliver to my customers and improve the productivity of those employees who remain in my organization, I'm going to have to educate them to do that. But then I think there could be a consumer piece of this too. For all the employees who separate, they're going to separate because their careers have been largely impacted and substantially automated. You're not going to go to some other company and get…

Wonderful. That's really helpful. And then maybe just quickly sticking on the enterprise segment, but moving a little bit to the government side. I guess if you've gone abroad and talked to different governments, what's the willingness to not only adopt these solutions, but to bring about country-wide sponsorship of these? So it's not just solutions targeted at government employees, at the wider cities, and I know you've had some success with that prior, but again, thinking to kind of the destruction of the society coming from AI, how are those conversations with government agencies and that use case involved? Thanks.

Yes, sure. If academic institutions are not built for adaptability, government institutions also are generally on the slower side to adapt. That being said, there are a lot of countries, particularly with younger populations, who are realizing there's almost two paths. If you do invest in education and upgrade your educational system, give them the globalization of talent, the ability for people in your country to work for companies, domiciled in other countries, there could be pretty good job prospects for young people if they get the skills and if you can up-level these educational systems. On the other hand, if you don't do that and you have a lot of young people in your country, if those young people are not facing good economic prospects, it becomes a problem. So what I've been seeing is generally in smaller countries with younger populations, lower general disposable income, but an upwardly mobile middle class. This is Southeast Asia, this is India, this is Africa, this is certain parts of Latin America. We see governments more receptive and interested in moving more quickly. In more established countries that are a little bit wealthier with older populations, think Europe, it's been the slowest. And frankly, North America has really come along in the second half of 2023. So we're seeing some pretty nice innovation in North America. And I think there's a lot of people on both sides of the political spectrum saying, we need to create a better value proposition for Americans who are trying to get good access to jobs in a world that's changing. And frankly, should not have to pay so much and spend so much time trying to get a traditional degree. So it's a pretty wide spectrum out there.

Wonderful. Thank you.

Yes.

Thank you. Your next question comes from the line of Terry Tillman with Truist Securities.

Yes, thanks for taking my questions. And yes, I'm sorry, can you hear me?

Yes, go ahead. Thank you.

Okay, thanks. Solid job on the corner here in the outlook. I guess first question, Ken, for you, is the multi-parter in terms of appreciate all the color on the purchase of content assets. And it sounds like there's a strategic rationale for that. $5 million, I think you said in '23. Any sense on what that could look like in '24? And then on the GenAI kind of courses, anything you can share about the materiality now of revenue being generated from the GenAI content? Then I have a follow-up for Jeff.

So perfect. In fact, I'll let Jeff answer your second question embedded there. In regard to the content assets in the $5 million, we spent this last year as we announced this transition. Next year, this coming year, the year we're in, sorry, we expect to see roughly $20 million. That's where we're budgeting today. We'll see if we can produce it less expensively. The Jeff's points before with the scaling we're getting there, but I would hope we can invest that amount of money because, again, it's a great deal. So going from $5 million to $20 million, if that number becoming material is the reason we changed the definition. It made us look at it. Again, it works against us. It makes the number lower, but it's actually, in our mind, more accurate. We'll track EBITDA closer, and we're going to have a great year this coming year from a free cash flow standpoint as we forecasted that in the EBITDA. We're quite pleased with so on --

In terms of the Generative AI courses, we're certainly seeing a lot of demand for those Terry. We had one enrollment per minute in 2023 on average. And if you look at enrollments in Generative AI, if you look at enrollments in January of 2024 in Generative AI, they're four and a half times higher than the number of Generative AI enrollments in June of 2023. So we are seeing a lot of demand, and this is in the consumer side. I would say enterprises are trying to figure out what to do. And I think what's going to happen is once they start getting their bearings, they're going to really ramp up. When we think about what kinds of Generative AI content is producing the biggest results, I mean, Andrew Ng said in the script, you've got Generative AI for everyone. It's kind of almost public interest. What is this stuff? Let me play around with it. I launched the course for CEOs. Now we're starting to have AI for, if in law, AI in this, we have a number of our university partners creating domain specific courses, which I think will be really great. One of our most popular, it started as a course from Vanderbilt University. It's called, it was called Prompt Engineering with ChatGPT from Jules White from Vanderbilt. It's one of our most popular courses in 2023. He followed a page out of Andrew Ng's playbook and took a popular course and turned it into a four-course specialization. So now it is a Prompt Engineering specialization, which is more subscription based. And there's a lot of people, it was, that course was written up in the Wall Street Journal basically saying, if you want to double or triple your income, become a Prompt Engineer. And…

Helpful color. I'll leave it at that actually, thanks.

Sure.

Thank you. And your final question comes from the line of Ryan MacDonald with Needham. Ryan, your line is open.

All right. Congrats on a quarter. And thanks for taking my question. Jeff, in one of the earlier questions, I think it was Steven's first one on, on sort of Coursera for Business and sort of the phases we're in terms of generative AI adoption. You talked about sort of being in this phase two on the experimentation side. I think it's interesting sort of the Gen AI Academy, new product launch you have associated with that. I'm curious, it seems like a really great product to be able to maybe capture some demand in this experimentation phase. Just curious what you're seeing sort of in terms of initial interest and adoption on that. And does this create a sort of an upsell, cross-sell opportunity for Coursera in 2024 for where maybe we can start to see some of the recovery in those NRR metrics?

Yes. And that's definitely what we're thinking about. We launched, the Generative AI Academy has multiple pillars. We have more to come, but the first two are Generative AI for everyone and Generative AI for execs. It's intentional, why we did it that way. The Generative AI for everyone, as you can imagine, it's not about the quantity of courses. Everybody doesn't need to know everything. Everybody sort of universally needs to know a few things about what it is, how it works, what the risks are, what this might mean for change and how your job might be done differently. We are seeing and we are intending that Generative AI, especially for everyone, can be a way of just adding a bit more value, getting out in front of a lot more employees, becoming a lot more relevant, even before the companies know exactly who needs to with skills and how will my software engineers job change? It's like, start by laying the foundation and readiness that things are going to be changing around here. We're not charging a ton of money for it, but to your question, everybody's taking the calls. Everybody wants to talk about it. They're not all yet organized to act on it. They don't have really big budgets yet that I've seen saying, yes, I got $5 million for Generative AI training, but everybody knows that they're going to do Generative AI. Everybody knows that training is going to be important and they're trying to figure out how do you structure it, what should the design look like, what kind of courses, what kinds of skills, and so we'll be figuring that out. So I would say early, I think it'll help with retention. I think there will be some upsell, but again, where it will be really interesting is when you can say these specific job roles with these specific skills taught by these courses and these hands-on labs will unlock this kind of business productivity and leverage for your company. That's why I think it's going to get more interesting and we're not there yet.

Super helpful. Maybe the follow up quick for Ken. In the preparatory marks, I'm talking about the consumer segment here, it was noted that nearly 7 million enrollments came in for the AI courses in 2023. He talked about how many of those were sort of roughly net new enrollments to Coursera and then in that context, how that, how you're thinking about sort of that 20% growth algorithm between sort of new enrollments coming to the platform versus sort of maybe higher conversion rates in 24. Thanks.

Yes, Ryan. I don't have that data in front of me, that breakdown between new and existing. Generally with new courses, it's bringing people in from the outside more, but I don't have the, I'd be happy to share with you after [indiscernible] can find it. I don't think it's material non-public information. It's a good question and I don't know the answer, but I'll find that for you and you can.

Yes, so I've got the statistic.

You had time to look it up.

I did. If there's a metric that we track internally and I'm not going to get, obviously, Ken is glaring at me right now, but there's a metric called first-time payers. So this is someone who came to the platform and paid for the first time. If you look at that quarter-on-quarter throughout 2023, the percentage year-on-year growth is quite a bit higher in Q4 than it was in Q3, which is quite a bit higher than it was in Q1. So hopefully that reflects, I can't tell you for sure that that was Generative AI courses, but we are seeing higher year-on-year rate of growth in first-time payers on platform.

Helpful.

Given it's a new topic, it would make sense.

Yes. Yes.

All right. Great. Thanks, Ryan. That wraps today's Q&A. A replay of this webcast will be available on our Investor Relations website along with a transcript in the next 24 hours. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you for joining. You may now disconnect.