Coursera CEO Jeff Maggioncalda joins Yahoo Finance Live to discuss the company's 10-year anniversary and recent earnings report.

Video Transcript

KARINA MITCHELL: Welcome back. Online course provider Coursera reported fourth quarter earnings after the bell Thursday. That came in short of analysts' estimates. Yahoo Finance's Akiko Fujita joins us now with Coursera's CEO, Jeff Maggioncalda, for more. Akiko.

AKIKO FUJITA: Thanks so much for that, Karina. Jeff, it's great to talk to you today. We are seeing the stock down just a bit. But let's walk through the numbers in your most recent quarter because you did have revenue growth of nearly 40% here. But your net losses did widen in the quarter. How do you think investors should be looking at these numbers right now in the context of where the company is in its growth trajectory?

JEFF MAGGIONCALDA: Yeah, well, first of all, thank you for having me. I love talking about the business, and more important, the reason the business exists. We're just hitting our 10-year anniversary here. So it was founded by Andrew and Daphne, two Stanford professors. And their thought was, we've got to provide high quality access to education everywhere in the world. And 10 years in, you know, we're making our way. You're right. We grew-- for the year, we grew revenues 41%, all organic. We posted 38% revenue growth year on year in Q4. That was up from 33% year on year revenue growth in Q3. So we saw a nice tick up.

And on the spend side, we've said, since we went public last year, the way we try to pace our spend is, we don't want to be super twitchy and try to go back and forth on spend based on what's happening with revenues. We try to manage our adjusted EBITDA as a percentage of revenue on an annual basis. And where we have some upside on revenue growth, we try to invest more in growth for the following year. So we kind of pulled forward some of our expenses for next year. We're investing heavily in R&D. We're investing in our direct sales force, but it was all according to plan, the adjusted EBITDA spend in Q4.

AKIKO FUJITA: And you've highlighted the three pillars for the company. I want to point to a specific one here because you saw a lot of strength on the enterprise side. Revenues are up about 70% year on year. Talk to me about the conversations you're having with these companies because this push to upskill was something that existed pre-pandemic. Where do things stand right now? And what are you seeing in your pipeline that suggests where things are shifting?

JEFF MAGGIONCALDA: Yeah, well, so the enterprise segment is growing fast. We did 72% year on year in Q4 to Q4. And that's a pretty good-sized business now. It's 31% of our revenues. We have three pieces to that. There's Coursera for Business, which is the more mature one.

That was the first one that we launched, serving institutions who are employers, who are trying to upskill and reskill their employees so that they can do things like data science and cloud computing, machine learning, agile business practices, et cetera. That has been a big market. The estimates are something like $365 billion is what companies spend on training. We see that going up as companies try to go faster and faster to accelerate their competitiveness by bringing in and training new skills.

But there's two pieces to the segment, the enterprise segment, which is Coursera for Government and Coursera for Campus, which is for universities. We're seeing a very different landscape post-pandemic with governments and campuses. Governments are realizing that they really need to reskill their citizens to have a healthy economy and good employment rates. And frankly, universities are realizing that the world will never be the same. Not all the students are coming back to campus. They'll be much more of a hybrid mix between on campus and online. So we think that the pandemic has fairly durably shifted the appetite for online learning from governments and campuses.

AKIKO FUJITA: This, of course, Jeff, comes at a time when we've seen a record number of Americans leave their jobs. 4.3 million people left their jobs in January, which is kind of off the-- or in December, which is kind of off that high that we saw in November. But in terms of what this means for Coursera, how big of a tailwind does that provide?

JEFF MAGGIONCALDA: It's been pretty good. There have been a lot of folks who've been wondering. And we didn't know for sure what would the year after the pandemic look like, 2021, in our consumer segment. So this is the segment that allows individuals to come directly to coursera.org. We saw good health. We grew 28% year on year, revenue growth in the consumer segment. A lot of that is being driven by entry level professional certificates. Two years ago, we had two. Today we have 18.

And these are certificates designed for people with no college degree, who don't have any prior experience in a career, thinking, I want to switch to a different career with more flexibility, better pay, and better long-term prospects. These are jobs in IT support, UX design, project management, social media marketing, a lot of digital jobs. And so we're seeing a really outsized appetite for people who come to Coursera to get these professional certificates to change careers and get a better job.

Also we have something with the American Council on Education where if you get these professional certificates, you can earn credit towards a college degree. So it's a pathway to a job. It's also a pathway to greater learning opportunity with the college degree.

AKIKO FUJITA: And really quickly, Jeff, we always like to ask you, what skills are most in-demand right now? When you look at the courses that are being offered, whether that's from Google or a university, what are you seeing right now? What's the most in-demand?

JEFF MAGGIONCALDA: People-- I mean, a lot of people want to learn Python. Like, a lot of people want to learn Python. A lot of people want to learn Java. A lot of people want to learn machine learning. And there's a certain part of that which is deep learning. This is AI. These skills are really, really valuable. You know, there's an emerging field called ML Ops, machine learning operations, which is, how do you set up your enterprise in order to be more consistently able to build and maintain your AI models? We also see a lot of interest in blockchain, distributed finance. Web3 is becoming a bigger thing.

So-- and this is kind of why I think the growth factors are so durable, is that it's based on rate of change. And things are just changing faster and faster. As soon as we think we've got our arms around one topic, something totally new comes up, like the Metaverse or Web3 or decentralized finance. And so, yeah, I think there's always something to be learning. And it's just getting faster and faster.

AKIKO FUJITA: Yeah, it's always fascinating to see that visibility from your end. Jeff Maggioncalda, Coursera CEO, good to talk to you, as always. Thanks so much for joining us.